Speeding up permitting “will help America build and help us compete around the world,” said House Speaker

Kevin McCarthy
(R., Calif.). “Cut the red tape so we can build the things that we desire.”

His top deputy on the debt-ceiling talks, Rep.

Garret Graves
(R., La.), has said permitting is an issue where Democrats and Republicans should be able to find a consensus.

But two weeks isn’t much time to smooth over differences over some of the more technical points. And some lawmakers, such as Delaware Democratic Sen.

Tom Carper,
who chairs the Senate Environment and Public Works Committee, are reluctant to see their long-running work on permitting legislation sucked into the debt talks.

“I like the idea of people coming up with ideas, having hearings, giving people the opportunity to debate them, having amendments and so forth,” Mr. Carper said.

His Republican counterpart on the committee, Sen.

Shelley Moore Capito
of West Virginia, who recently introduced a permitting overhaul bill of her own, said reaching a deal by early June “would be difficult but it’s possible.”

The debt-ceiling bill passed by the Republican-controlled House last month included language streamlining the permitting process alongside other GOP demands.

Democrats, Republicans, business groups and environmentalists all agree that the process for getting federal permits for energy projects is too time-consuming and cumbersome. They also agree on some possible fixes, such as the need for federal agencies to better coordinate their environmental reviews and to make more frequent use a less rigorous type of environmental study.

But there are significant differences that will have to be overcome.

Many Democrats want permitting changes to focus on renewable energy while Republicans want oil and gas projects to benefit from speedier approvals as well. 

A priority for Democrats is giving the Federal Energy Regulatory Commission more authority to determine where long-distance power lines should go and who should pay for them. Right now, those decisions are mostly made by states. 

Republicans want to impose two-year timelines for completing environmental reviews and limit opponents’ ability to use the courts to slow down projects. Republican proposals also limit the scope of the reviews. Democrats and environmentalists worry that could increase projects’ environmental impacts.

In between is Sen. Joe Manchin (D., W.Va.) whose proposal is intended to appeal to both sides. Mr. Manchin’s bill would allow developers to sue if reviews last longer than two years. It would impose time limits on lawsuits. And it would grant FERC some additional authority to determine where transmission lines should go.

It would also expedite the permits for the Mountain Valley Pipeline, a roughly 300-mile natural gas pipeline in West Virginia and Virginia that has generated opposition in some communities along the way. 

“Everybody has something to work off of now, and we should be able to come to an agreement,” Mr. Manchin said.

The White House has said it would back Mr. Manchin’s bill.

Last year’s passage of the Inflation Reduction Act, which offered incentives for clean energy projects, raised the pressure to overhaul the process. Mr. Manchin, a critical vote in the narrowly split Senate, agreed to support the IRA after he was promised a vote on a permitting overhaul.

But progress proved elusive. A December vote to pass Mr. Manchin’s bill fell short of the 60 votes needed to advance.

“There’s certainly space there for agreement if everybody is willing to get there,” said John Larsen, a partner at the Rhodium Group, a research firm. “The timeline is really challenging. Some of the proposals you’ve seen out there are so far apart from each other that knowing where the landing spot might likely be for a bipartisan deal is still really hard.”

It takes an average 4½ years to complete an environmental review under the National Environmental Policy Act of 1970, according to a 2020 report by the White House Council on Environmental Quality. Final reviews can be more than a thousand pages long.

In many cases, multiple agencies must examine how projects comply with a thicket of environmental laws enacted a half-century ago, evaluating a project’s impact on the environment, cultural resources, surrounding communities, the economy and elsewhere. Lawsuits filed by those who oppose a project frequently drag out the process.

The pace of growth in electric transmission needs to more than double to reap the full benefits of the renewable energy incentives included in the IRA, said Jesse Jenkins, an energy expert at Princeton University.

In recent weeks, Capitol Hill has seen a flurry of activity on permitting, with bills introduced and hearings held, the latest of which is scheduled for Wednesday in the Senate Environment and Public Works Committee. The White House has also unveiled its own list of priorities, which largely align with Democrats’ in Congress.

In March, the House passed a far-reaching Republican permitting bill that would limit environmental reviews and make it easier to build oil and gas projects. 

Mr. Graves said the bill could serve as a basis for bipartisan negotiations. He also suggested it might make sense to break up a permitting overhaul into several bills to ease passage.

“We could perhaps do some permitting reform now and come back even in months and do some of these other things that need to be done,” he said.

Write to David Harrison at [email protected]