Republicans should wait for real permitting reform in the new Congress

The 2024 election has dramatically shifted the political landscape, with Republicans securing control of both chambers of Congress and the White House. As Washington prepares for the transition to a Trump administration in January, some have suggested that energy permitting reform legislation could move forward during the lame duck session. While streamlining America's byzantine permitting process remains a crucial priority, Republicans would be wise to wait for the new Congress rather than accept a flawed compromise.

One current vehicle for permitting reform in the Senate, the Energy Permitting Reform Act of 2024 introduced by Sens. Joe Manchin (I-WV) and John Barrasso (R-WY), falls far short of meaningful reform. While marketed as a balanced approach to expediting both conventional and renewable energy projects, the bill's benefits for traditional energy development are largely symbolic while its transmission provisions would accelerate an expensive green energy agenda.

Consider the bill's provisions on conventional energy. It requires at least one offshore oil and gas lease sale per year in the Gulf of Mexico through 2029-a minimal floor that is likely to be exceeded even without statutory changes now that Trump has been reelected. Similarly, the bill's requirement that the Energy Secretary make decisions on LNG export applications within 90 days of environmental review completion addresses a problem that courts have already indicated may be illegal.

These token gestures toward conventional energy pale in comparison to the substantive-and problematic-changes the bill would make surrounding transmission line regulation. Republicans have historically been skeptical of federal intervention in transmission policy, recognizing it would empower federal regulators at the expense of state planners while reworking cost allocation formulas in ways that could burden ratepayers. Sen. Kevin Cramer (R-ND), a former state utilities regulator, has emerged as a vocal critic of the transmission provisions, warning they create "perverse incentives to overbuild" while forcing consumers to subsidize projects that may not benefit them.

The bill's transmission provisions help codify and even expand controversial policies from FERC Order 1920 that could force consumers to subsidize costly transmission projects primarily benefiting renewable energy developers.

Perhaps most importantly, the legislation would help unlock billions in renewable energy subsidies created by the Inflation Reduction Act (IRA). Many IRA tax credits can only be claimed once projects are connected to the grid. By facilitating transmission expansion and providing a statutory basis for FERC's pro-renewable policies, the Manchin-Barrasso bill would accelerate access to these subsidies.

With full control of government beginning in January, Republicans will have far better opportunities to pursue genuine permitting reform. This should include meaningful changes to bedrock environmental laws like the National Environmental Policy Act (NEPA) that create endless opportunities for litigation and delay. House Natural Resources Committee Chairman Bruce Westerman (R-AR) has already put forward a discussion draft focused on NEPA reform that could serve as a useful starting point.

The new Congress should also tackle broader energy policy changes, including repeal of the IRA's massive subsidies. Accepting a weak compromise now would only make these more ambitious reforms harder to achieve later.

The permitting process for all types of energy projects urgently needs reform. But rather than rushing through problematic legislation during a lame duck session, Republicans should wait for January when they can craft policies that truly streamline permitting while protecting consumers and taxpayers. The Manchin-Barrasso bill may be labeled as permitting reform, but its primary effect would be accelerating a costly renewable energy agenda that voters rejected at the ballot box.

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