Debt limit deal would complete Mountain Valley pipeline

By Emma Dumain | 05/28/2023 09:27 PM EDT

President Joe Biden.

President Joe Biden at the White House on Sunday speaking about the debt ceiling deal. Manuel Balce Ceneta/AP Photo

Legislation to raise the debt ceiling negotiated by House Republicans and the White House would greenlight completion of the controversial Mountain Valley pipeline.

Paired with changes to the National Environmental Policy Act and near silence on transmission deployment for renewables, the surprise policy rider is likely to enrage environmental advocates and complicate the ability of many progressive Democrats to vote “yes.”

Several dozen House Democrats are on record opposing legislation to overhaul the permitting process for energy projects that put completion of the Mountain Valley pipeline at the centerpiece. Many Senate Democrats were also strongly opposed.

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At that time, their disapproval with the proposal, championed by Sen. Joe Manchin (D-W.Va.), threatened to tank passage of a government funding bill and the annual defense package, and so the provision was removed from the must-pass measures.

It’s not clear whether these lawmakers will dare to rebuff legislation now that it is needed to avoid the first default of the nation’s borrowing authority in history, which could occur as early as June 5.

A person familiar with the closely held deliberations over the debt ceiling compromise told E&E News on Sunday night that ordering the completion of the Mountain Valley pipeline was tantamount to hastening what administration officials and many members of Congress consider a foregone conclusion at this point.

The natural gas project has been held up in litigation for years but has slowly been making its way through the courts. Energy Secretary Jennifer Granholm recently made the case to the Federal Energy Regulatory Commission that completing the pipeline was paramount for energy security purposes.

“This pipeline was going to happen anyway,” said the person, granted anonymity to share private discussions, “so all this really does … is just codifies something that was going to happen.”

Manchin, in a statement, praised the news, giving credit to House Speaker Kevin McCarthy (R-Calif.) and “his leadership team” for
“see[ing] the tremendous value in completing the MVP to increase domestic energy production and drive down costs across America and especially in West Virginia.”

Transmission trade-off

A White House official briefing reporters Sunday evening emphasized that the debt ceiling agreement represents a major victory for climate advocates who feared Republicans would force the Biden administration to roll back a score of clean energy tax incentives codified by the Inflation Reduction Act.

“House Republicans came to the negotiating table with a proposal attached to a vote on paying our country’s bills that represented, really, a broadside aimed at efforts to protect our environment and aimed at efforts to tackle the climate crisis,” said the official.

“We have protected the substantive environmental safeguards in the Clean Water Act, the Clean Air Act, in the Toxic Substances Control Act and the substantive provisions of the National Environmental Policy Act — NEPA — that sustains our people and our planet,” the official said.

It was a “bipartisan compromise,” the official continued, that led the administration to cede on some modest changes to the bedrock 1970 environmental protect law most Democrats consider sacrosanct as a means of accomplishing a modest version of “permitting reform.”

In this agreement to raise the debt limit, a one-year deadline would be placed on the production of environmental impact assessments for new energy projects seeking permits. A two-year maximum would be applied for environmental impact statements.

The agreement would also expand an existing program to expedite federal permitting for infrastructure projects, known as Fast-41.

One thing the debt ceiling bill would not do is facilitate the kind of mass transmission deployment Democrats were insisting was necessary for hastening the clean energy transition in a meaningful way.

Instead, the bill would call for a study of current transmission challenges and prescriptions to overcome them.

The White House official briefing reporters Sunday said the modest changes to NEPA timelines would actually benefit clean energy and transmission projects, citing several examples where the wait time for permits has been extensive and onerous.

The debt ceiling agreement would also include language from legislation recently introduced by Senate Environment and Public Works Chair Tom Carper (D-Del.) and Sen. Brian Schatz (D-Hawaii) relating to “categorial exclusions” to streamline the permitting process under certain circumstances.

“The president has made transmission such a priority, not just because it is a vehicle to the clean energy future but also it is the vehicle to a more affordable, reliable and resilient energy future,” the official added. “This agreement recognizes the importance of that.”

Outlook

Not all congressional Democrats are going to be impressed with the administration’s talking points, however, whether in light of the Mountain Valley pipeline provision or in spite of it.

“What was true a week ago is true now — if we want to fully realize the economic, reliability, and environmental benefits of the Inflation Reduction Act, we need to increase the rate at which we deploy transmission,” said Rep. Sean Casten (D-Ill.) in a statement to E&E News. “The … deal does nothing to change that.”

Meanwhile, in remarks to the press Sunday morning, Rep. Garret Graves (R-La.), one of the chief negotiators on behalf of House Republicans, downplayed the extent to which transmission is dealt with in the agreement, saying the time wasn’t right to go full-bore on transmission policy.

“[Biden and McCarthy] both acknowledge we have major transmission problems across the United States,” Graves said.

“But rather than trying to step in and prescribe a solution — when this issue really is not well understood in the Congress, where we would perhaps cause more problems than solutions — there’s discussion about how we move forward in a bicameral, bipartisan way in really studying this and make sure that we move forward in a way that’s going to solve problems not cause more.”

Graves made permitting reform a major priority in reaching a deal to raise the debt ceiling. He was the author of the House GOP’s opening bid on overhauling the permitting process — legislation known as the “BUILDER Act,” which he’d introduced in previous sessions of Congress and was included, in an updated form, in the energy package House Republicans passed earlier this year.

A section of the 99-page debt limit bill includes the text of the “Builder Act,” but it’s not the version Democrats have rebuffed as a nonstarter.

Graves’ bill, for instance, would have allowed a project sponsor to prepare an environmental assessment, full stop. The bipartisan debt limit agreement would allow a project sponsor to prepare an environmental impact statement but only subject to an agency’s supervision and with the approval of the document by the agency.

Reporter Nidhi Prakash contributed