Advocates and lobbyists are sounding the alarm that senators are running out of time to reach a bipartisan permitting reform overhaul by the August recess — a goalpost identified by negotiators — as they struggle to overcome daunting political hurdles in a midterm election year.
“The window of opportunity there is starting to close this Congress,” Jason Grumet, CEO of the Clean Power Association, told reporters last week, adding the group had hoped that negotiators would have released text already on a deal to ease federal permitting rules for energy projects — from solar and wind farms to long-distance power lines to oil and gas pipelines — in a bid to respond to spiking electricity and gasoline prices.
Democratic and Republican staffers from the Energy and Natural Resources and Environment and Public Works committees — the two panels involved in negotiations — held regular meetings during last week’s recess, said people close to the talks and granted anonymity to speak candidly.
Negotiators are aligned on the broad contours of a potential deal but are haggling over the details that could make or break a potential agreement, the people told POLITICO.
Republicans made a broad offer to Democrats ahead of the recess that included proposals to streamline environmental and historical preservation reviews, ease some transmission permitting and codify many GOP priorities, according to a Democrat close to the situation.
Democrats are reviewing that offer, and continue to press for significant measures to boost transmission and restrain the president’s power to cancel approved energy project permits.
Democrats have shown openness to negotiating changes to bedrock environmental laws like the National Environmental Policy and Clean Water acts, while limiting lawsuits that often stall or kill projects — key demands of Republicans and the Trump administration.
But the biggest hurdle remains the administration’s persistent attacks on solar and wind projects that have shown only small signs of abating after Democrats had previously cut off talks over the issue.
“Everybody is running out of time on the legislative calendar and of keeping the administration at bay on no more cancellations of projects,” said an energy industry executive close to negotiations. “If there is no deal, we will see a restart of cancellations.”
And it’s unclear whether the White House — and its allies on Capitol Hill — would accept any permitting deal that would restrain the president’s powers.
“It’s always the question of what will the administration take on that front, something that they have to actually be able to sell to the president, and what do they get in return?” said an energy lobbyist close to negotiations.
Democrats are skeptical that President Donald Trump’s agencies would faithfully implement changes to environmental laws, a reality that has led to senators — including Republicans — to make moves to rein in the administration’s actions.
Senate leaders this week are planning to take the first procedural vote on their version of the National Defense Authorization Act. which includes language to expedite Pentagon reviews of wind energy projects that the Department of Defense has been stonewalling.
“We’re seeing a pretty solid Republican legislative alignment against improper executive interference,” Environment and Public Works ranking member Sheldon Whitehouse (D-R.I.) recently told POLITICO.
‘Farthest apart’
Senate Energy and Natural Resources Chair Mike Lee’s push to change the National Historic Preservation Act also remains a major sticking point and is dividing Democrats, some of whom are wary of taking on a law that is important to tribes and the preservation community.
“NHPA is the consistent area where they are farthest apart. And that needs to change,” said a Democratic source close to negotiations.
Democrats, meanwhile, are pushing for measures to boost transmission that go beyond those included in a bill proposed last Congress by now retired-Senate Energy and Natural Resources Chair Joe Manchin (I-W.Va.) and Sen. John Barrasso (R-Wyo.).
That bill — the Energy Permitting Reform Act — easily cleared committee, but House Republicans rejected it, in part because of their resistance to provisions that would make it easier to build new large power lines to accommodate renewable energy.
Lawmakers also faced pressure from co-ops and public power providers, who warned against expanding the Federal Energy Regulatory Commission’s jurisdiction over them.
The bill would have tasked FERC with creating a cost allocation model that would require customers to pay only if they benefit from a given transmission line.
“The Democrats feel like [the Manchin-Barrasso bill] is the starting point on transmission,” said a second energy industry lobbyist. “Maybe they want a little more on interconnection, but they still have a public power problem and a big one.”
Some Republicans say the party is becoming more open to transmission action, noting how the context has changed since the last negotiations around the urgency to build and connect more power to serve electricity-hungry data centers.
“In general, the right of center is getting much more comfortable with transmission. Cost allocation will always be tricky, but different regions can tailor their approach to fit their needs,” said Travis Fisher, director of energy and environmental policy studies at the libertarian Cato Institute.
“If it’s just about building new transmission to meet load growth and to have a stronger grid, that’s a very different conversation than, are we building transmission for green policies?” Fisher said.
Deal delay?
Despite signs of bipartisan alignment in recent months, Grumet and other permitting reform advocates expressed concern that the Senate would punt action on any deal to the post election lame-duck session.
“That’s a very freighted strategy, particularly if you anticipate a change in leadership. Imagining that a newly elected Democratic House is going to want to pass legislation that was developed without their involvement, or with very little involvement, it’s always a very tough argument to make,” Grumet said.
One Republican familiar with the talks said Senate Majority Leader John Thune (R-S.D.) would prioritize floor time for permitting reform after the August recess and ahead of the Sept. 30 deadline to fund the government. The chamber is scheduled to be back in recess for all of October ahead of the midterm elections.
While waiting out a deal until after the August recess could limit the amount of time for public scrutiny, it would also make it difficult to corral potential holdout votes.
“The downfall of permitting is always that everybody thinks they can cut this deal in the lame duck, or we’ll be able to cut this deal in September. And the longer you wait to put the bill out there, the longer you go without figuring out what your real problem is. Who can you really get to yes and who are you losing?” said a former House GOP aide active in permitting talks.
