Let’s Review the (Red) Tape

By Matt Patterson, October 26, 2021

In the race to increase competition and innovation in the energy sector, while reducing emissions and working toward a cleaner environment, one crucial step continues to be lost in the shuffle. New technologies are consistently being discovered and plans to build the necessary infrastructure have been drawn. But around the United States there is a bureaucratic process that slows innovation to a grinding halt: permitting.

Jena Lococo of The Hill wrote an editorial earlier this month titled, “The unsexy but incredibly powerful key to fight climate change: Reform permitting.”[i] Lococo makes an argument that conservatives around the country should be making: if the U.S. is serious about lowering emissions and combating climate change, removing burdensome wait times and unnecessary regulations for the construction of energy projects should be at the forefront of policy changes going forward. TxEnergyProject has highlighted many of the advancements that the private sector is making, such as carbon capture and storage and Oxy’s direct air capture (DAC) of carbon and injection deep underground to reduce emissions. These advancements signal a bright future for the energy industry. However, unless something is done about the permitting process, these wonderful innovations will take longer than they should to be operational. These projects, which already take a significant amount of time to finance and develop, are faced with a permitting process that discourages additional innovation. As Lococo points out, “right now, we can only reduce carbon dioxide emissions as fast as we are able to permit the projects needed to do so.”[ii] She explains the convoluted permitting process well:

Think of a project permit like a driver’s license: You need a permit to build like you need a license to drive. But what if after you took driver's ed, passed the course and applied for your license, you still had to wait a few years before you could drive? That’s what project developers are dealing with. And while we should be putting the pedal to the metal to address climate change, energy projects in the U.S. can take years or even decades to be completed between the siting, permitting and construction processes.[iii]

The Conservative Coalition for Climate Solutions points out that “permitting and approval under the National Environmental Policy Act (NEPA), for example, delays projects by years, driving up costs and disincentivizing investments.”[iv] This is a crucial point, because without significant investment from the private sector, projects that help reduce emissions will be delayed or scrapped altogether. A report from Worley, an engineering services company, found that if the United States continues to build energy infrastructure projects at the current pace, the goal of reaching “net zero” emissions by 2050 is highly unrealistic.[v] To be fair, this goal may be unattainable regardless, but the current permitting process will only exacerbate the wait time.

Fortunately for Texans, the state is ahead of the curve on reforming the permitting process and making it easier for the energy industry to get projects up and running in a reasonable time. In 2019, the Texas Legislature passed HB 2726 (86R, Kuempel) which allows a person who submits a permit amendment to the Texas Commission on Environmental Quality (TCEQ) for the construction or modification of a facility that may emit air contaminants to begin, at their own risk, construction after an initial permit draft approval by TCEQ.[vi] This provision currently only applies to projects on existing plant sites, but it is definitely a step in the right direction. Additionally, earlier this year, Texas enacted HB 1284 (87R, Paddie), which gives the Railroad Commission (RRC) sole jurisdiction over carbon sequestration (carbon capture) wells. This jurisdiction was previously shared by RRC and TCEQ, leading to confusion over the permitting process and the responsible state agency. This clarification will allow Texas to seek primacy over such wells, instead of the federal government, which will expedite the process of carbon capture permitting and allow companies in Texas to construct additional wells at a much more reasonable pace. As one prominent law firm details, despite carbon sequestration being highly touted as a key tool to mitigate climate change, few commercial carbon capture and storage (CCS) projects have been permitted in the United States. Texas and Louisiana are stepping up efforts to assume regulatory authority for an emerging wave of CCS projects.[vii] Once again, Texas is leading the nation in innovation and removing unnecessary burdens for the energy industry to increase production and reduce emissions.

The rest of the United States would do well to follow the lead of states like Texas and Louisiana, which understand that one key component to a cleaner environment and improved energy infrastructure is the reformation of the permitting process. Expediting review times, eliminating unnecessary or duplicative processes, and streamlining government functions will lead to smarter, more efficient energy policy and allow the energy sector to innovate. It may not be sexy, but it’s important.

[i] https://thehill.com/opinion/energy-environment/575203-the-unsexy-but-incredibly-powerful-key-to-fight-climate-change?rl=1 [ii] Ibid. [iii] Ibid. [iv] https://c3newsmag.com/the-unsexy-but-incredibly-powerful-key-to-fight-climate-change-reform-permitting/?utm_source=newsletter&utm_medium=email&utm_campaign=oct-8-weekly-wrap-up [v] https://www.worley.com/~/media/Files/W/Worley-V3/documents/our-thinking/from-ambition-to-reality/from-ambition-to-reality-report.pdf [vi] https://capitol.texas.gov/tlodocs/86R/analysis/pdf/HB02726E.pdf#navpanes=0 [vii] https://www.pillsburylaw.com/en/news-and-insights/state-level-permitting-primacy-carbon-capture-and-storage.html [vii] https://www.nationalreview.com/2021/10/the-energy-crunch-spreads-but-climate-campaigners-press-on/ [viii] https://www.nationalreview.com/2021/10/the-energy-crunch-spreads-but-climate-campaigners-press-on/