Permitting reform left off US funding bill, leaving action for Republican-controlled Congress

Legislation to speed permitting of energy infrastructure was left out of a measure to continue funding the US government, ending prospects for a permitting bill passing in the waning days of the 118th session of Congress.

The debate on permitting is effectively postponed until the next Congress, when Republicans will control both chambers and may seek more ambitious changes.

Key committee leaders in the US House of Representatives and Senate had been negotiating in recent weeks over potential changes to the S. 4753, the Energy Permitting Reform Act of 2024, sponsored by Senators Joe Manchin, Independent of West Virginia, and John Barrasso, Republican of Wyoming. However, outstanding differences remained on changes to the National Environmental Policy Act and electric transmission siting provisions in the permitting measure.

Manchin, who is retiring from the Senate, acknowledged the efforts had concluded, in a Dec. 16 statement critical of House Republican leadership.

"By taking permitting off the table for this Congress, Speaker Johnson and House Republican Leadership have done a disservice to the incoming Trump Administration, which has been focused on strengthening our energy security and will now be forced to operate with their hands tied behind their backs when trying to issue permits for all of the types of energy and infrastructure projects our country needs," he said. Manchin suggested Republicans will still need 60 votes in the Senate to enact a measure in the next Congress.

House Speaker Mike Johnson, Republican-Louisiana, in turn suggested Democrats would have started negotiations months earlier if they were committed to reaching an agreement.

"With a Republican White House, Senate and House, we are confident we will secure stronger and more comprehensive permitting reforms in the next Congress," Johnson said in a statement Dec. 16.

The Manchin-Barrasso permitting bill passed in the Senate Energy and Natural Resources Committee by a 15-4 vote in July, reflecting a bipartisan compromise. It included provisions meant to ease permitting for LNG exports, electric transmission, oil and gas production and renewable energy projects. The bill sought to shorten judicial review timelines by setting a 150-day statute of limitations on challenges to final agency action on projects and requiring courts to expedite legal battles.

House Republicans have pushed for farther-reaching steps to curtail NEPA litigation that drew objections from some Democrats. Republicans have been keen to rein in lawsuits under NEPA pursued by groups opposing fossil fuel infrastructure, while defenders of the statute have cautioned against eroding the public's participation and sway in project siting decisions.

In a statement Dec. 16, Senate Environment and Public Works Chairman Tom Carper, Democrat-Delaware, said he was "extremely disappointed" that Republicans walked away from an opportunity to pass a bipartisan bill.

"Democrats offered meaningful NEPA reforms, sought by Republicans, that would shorten project timelines and increase regulatory certainty so that we can build faster in America," he said. "Unfortunately, instead of taking real policy wins, House Republicans let their perfect be the enemy of the good."

An area that generated concern among some conservatives was the effort to spur electric transmission development by strengthening the federal role in siting interstate projects.

The November 2024 elections shifted the political dynamic on permitting, strengthening Republicans' incentives to wait until the next Congress, when the party will control the White House, the Senate and the House, albeit by slim margins in the lower chamber.

Republicans also have been looking for ways to craft permitting measures so that they can be included in a budget reconciliation bill that requires only a majority vote in the Senate.

In the next Congress, natural gas pipeline companies are expected to push for provisions to decrease states' ability to veto interstate gas pipelines by denying Clean Water Act Section 401 water quality permits.

In recent weeks, lawmakers have faced competing pressures on whether to act on the permitting bill the waning days of the 118th Congress.

A large coalition of energy sector trade groups, including the American Council on Renewable Energy, wrote to House and Senate leaders Dec. 10 to encourage action on the bill they argued would deliver "common sense reforms" to provide the predictability needed for large-scale energy and minerals projects.

But conservative groups including the Competitive Enterprise Institute urged Republicans to wait until the next session when they can get more on matters such as NEPA and the Clean Water Act.

"Anything that Republicans and those who want genuine permitting reform can get now they can get next year, and much more," they said Dec. 10.

Congress has been working against the deadline of Dec. 20 to pass a funding bill or face a government shutdown. The text of the so-called continuing resolution to fund the government will likely be released soon. Johnson's office confirmed the permitting measures would not be included in the legislation, expected to be the last major legislative vehicle of this session of Congress.