Recent/upcoming developments… House Majority Leader Scalise (R-LA) has indicated that the House would be turning its attention to working on standalone permitting reform legislation when they return from their recess in September.  Senate Majority Leader Thune (R-SD) also referenced permitting reform in a recent interview as an area that has generated interest from Democrats.  Unlike the recently passed One Big Beautiful Bill Act (OBBBA) – which only required a simple majority vote in both chambers – bipartisan cooperation will be required to meet the Senate’s 60-vote threshold.  And although the Trump Administration has taken steps to streamline the permitting process, certain more fundamental reforms (e.g., setting a timeline for otherwise lengthy legal challenges for a permit or Environmental Impact Statements (EIS), consolidating certain decisions at FERC rather than leaving them to state PUCs) that require modifying statutory text, which falls under the purview of Congress.

* The administration has issued several Executive Orders (EOs) aimed at expediting permitting for infrastructure projects.  The first of these, Unleashing American Energy Dominance, was among the flurry issued immediately after President Trump’s swearing-in, and ordered a reassessment of regulations that hinder energy development and a revision of the permitting process to fast-track traditional energy projects.  The Council on Environmental Quality (CEQ) responded to this EO by issuing an interim final rule rescinding its regulations under the National Environmental Policy Act (NEPA).  In March, Trump issued another EO, Immediate Measures to Increase American Mineral Production, which directed federal agencies to streamline the permitting process for mineral projects.  Then, in late July, as part of his efforts to support the development of AI, he issued yet another EP, Accelerating Federal Permitting of Data Center Infrastructure, which instructed agencies to streamline environmental reviews and permitting for data centers and related infrastructure.

* On May 29, the Supreme Court unanimously reversed a D.C. Circuit Court ruling about the breadth of impacts than an agency must consider under NEPA.  The D.C. Circuit had vacated a Surface Transportation Board EIS approving a rail line on the basis that the Board had inappropriately limited its analysis of the environmental effects from upstream oil drilling and downstream oil refining projects.  In its decision, the Supreme Court granted agencies substantial deference about what indirect impacts to include in an EIS, particularly for separate projects that fall under the jurisdiction of another agency.

* The Energy Permitting Reform Act of 2024, introduced by Sens. Manchin (R-WV) and Barrasso (R-WY) last Congress, provides a starting point for negotiations this fall.  The legislation – advanced out of the Senate Energy and Natural Resources (ENR) Committee with bipartisan support but was not brought up for a floor vote – aimed to strike a balance between the two parties’ priorities.  It contained titles addressing judicial review; federal onshore energy leasing and permitting; federal offshore energy leasing and permitting; electric transmission; electric reliability; liquified natural gas exports; and hydropower.

* There have also been several bills introduced this Congress aimed at expediting permitting.  Of particular note is the bipartisan Standardizing Permitting and Expediting Economic Development (SPEED) Act, introduced by House Natural Resources Committee Chair Westerman (R-AR) and Rep. Golden (D-ME).  The legislation simplifies the analysis required in NEPA documents and establishes judicial review limitations for NEPA claims.  Another bill, the Promoting Efficient Review for Modern Infrastructure Today (PERMIT) Act – which codifies Waters of the U.S. (WOTUS) exclusions for water treatment systems, groundwater, etc. – advanced out of the House Transportation and Infrastructure Committee, though on a partisan basis.  Additionally, both the Senate Environment and Public Works (EPW) Committee and the House Natural Resources Committee have held hearings about permitting reform this year, signaling their interest in beginning a broader conversation.

* The early drafts of the OBBBA included permitting provisions addressing issues such as NEPA compliance and judicial review. More specifically, project sponsors would have had access to expedited timelines for their project’s environmental reviews if they opted into a fee set at 125 percent of the review’s preparation cost.  This same provision would have eliminated judicial review for project developers who had paid the optional fee.  Although the provision was ultimately not included in the final bill, it points to Republican priorities that are likely to resurface during negotiations in the coming months.

Our outlook… Permitting reform is an area where we’ve seen a rare degree of bipartisan support, most prominently reflected in passage of the Manchin/Barrasso legislation in the Senate ENR Committee last December.  The policy alignment derives from a Republican interest in facilitating build out of infrastructure of all types, but most prominently oil/gas, while Democrats want to see grid build out that enables more connectivity to renewable sources.  It is quite notable that Republican leaders have visibly signaled an interest in passing permitting reform this Congress, but there are significant partisan policy divides that will need to be overcome (i.e.,  Democratic reluctance to diminish the significance of environmental reviews, Republican reluctance to consolidate too much authority at FERC, at the expense of state PUCs).  There are also no external catalysts propelling action in this area.  For these reasons, our view is that the probability of enactment of permitting legislation is only in the ~20% range this year, possibly rising to ~35% next year.  The level of support for the effort from the White House and key committee leaders will be key variables in determining how much momentum the legislation has.

* Republicans have long pointed to litigation as an obstacle to projects being built expeditiously; we expect they would include a statute of limitations on judicial review.  Their primary goal is to shorten the timeline from when an entity begins the federal permitting process to when a project can begin construction. In that vein, other potential areas of interest include codifying the recent Supreme Court decision narrowing the scope of environmental reviews and limiting the period during which interested parties can provide feedback.  On the other side of the aisle, Democrats have sought to ease permitting for transmission to allow more renewables to come online; we expect they would demand provisions that address interregional transmission planning and that simplify the environmental review process for transmission lines.  The progressive wing of the party will be vocal about ensuring that community input is not curtailed, but we view their involvement as being largely rhetorical rather than substantive.

Watch for these developments… We are watching to see the degree to which House and Senate Republican committee leadership incorporates Democratic demands into permitting legislation.  In addition, comments from key Democratic players on energy policy, such as Sens. Heinrich (D-NM) and Whitehouse (D-RI) and Reps. Huffman (D-CA) and Peters (D-CA), serve as a bellwether for the position of Democrats more generally.  Already, Rep. Huffman, a progressive and Ranking Member of the House Natural Resources Committee, has criticized the SPEED Act, calling it a “polluter wish list.”  Public support from a member like Sen. Whitehouse, who is the Ranking Member of the Senate EPW Committee and is one of the more liberal members in the upper chamber, would be a promising development.  His backing would point to a higher likelihood of support from other, more moderate members of the caucus.  We are also watching the Congressional calendar for scheduled hearings about permitting and the tenor during those hearings.  The Senate EPW Committee and House Natural Resources Committee have already held their own hearings about NEPA, and additional hearings or mark-ups could indicate that the process is moving from the information gathering stage to more formal negotiations.