Infrastructure Permitting Reform Would Help the Economy
Story Stream
recent articles

Taxpayers today are being asked to invest billions of dollars to upgrade aging infrastructure and replace it with new, green technologies and energy sources. This investment would stimulate growth in our economy, provide fiscal stimulus, and create real growth in jobs, materials and manufacturing. Yet, a permitting logjam is stalling this growth: decades-old environmental and permitting rules needlessly add years and billions of dollars to the cost of those upgrades.

Current bipartisan discussions in Washington about reforming these outdated permitting laws have become linked to the debt ceiling debate because of the economic benefit of infrastructure investment. Important structural changes are needed to affect the debt and short-term spending reductions are unlikely to have any meaningful effect. However, if not stopped by a permitting nightmare, infrastructure investments, especially in today’s modern infrastructure, would foster faster growth and renewed productivity.

A quiet technological revolution which should transform our aging infrastructure into a cutting-edge one has already occurred. It includes renewable, distributed electricity generation, new bio-derived fuels, fleet electrification, storage, smart transmission upgrades, innovative methods of carbon capture, “smart” traffic signals, LED streetlights, and low-carbon concrete. But the implementation of these climate-friendly infrastructure innovations are being slowed by rigid, outdated permitting policies. Despite the Inflation Reduction Act of 2022 and its $370 billion-plus spending to support these reforms, changes are slow, and the problem is particularly acute for energy projects intended to quickly replace fossil fuel plants with cleaner, renewable sources connected to the energy grid.

Permitting inflexibility stems from federal and state policies that pit vested interests against community air quality, land use, and energy justice. A central problem is the growth of the National Environmental Policy Act (NEPA), passed with little reflection by Congress in 1970. NEPA requires a comprehensive review of a project’s impact on the environment, including the filing of a detailed Environmental Impact Statement. Although modest in the 1970s, a typical NEPA review now takes over four and one-half years and is over 600 pages long. The overall process regularly takes over a decade to complete. In some cases, NEPA not only slows environmentally friendly projects, but stops them altogether. By comparison, Canada, Australia, and the European Union have reformed their permitting laws and adopted policies to ensure that permitting is completed within three years or less while protecting the environment.

Time is money in infrastructure. Delays only add to the cost of U.S. infrastructure, which is now among the world’s most expensive. It often takes longer to obtain a permit than to build. We cannot achieve energy independence, protect national security, and future-proof our energy work force when projects take a decade. Ten years must be reduced to two, or at most five. “Two is the new Ten!” should be our mantra. In addition, while the general inflation rate is high, it is higher still for basic construction materials used for electricity, concrete, diesel fuel and reinforcing bars. Though there may be signs of improvement, as the latest numbers available show the Associated General Contractors of America reporting that its price index of materials were 24% higher in June 2021 than in 2022.

Fortunately, Congress and the Biden administration support a bipartisan effort to speed up permitting, reform NEPA, and get climate-friendly infrastructure projects in the United States delivered faster and cheaper. Congress appears poised to pass bipartisan permitting reform legislation. The House passed H.R. 1 in March 2023. It streamlines the process for approving energy projects under NEPA, and requires the completion of environmental assessments and impact statements in one year for the former and two years for the latter. It also limits judicial interventions to 120 days following the completion of the environmental review.

There is also bipartisan support for permitting reform in the Senate. Republicans recently introduced a bill called the Revitalizing the Economy by Simplifying Timelines and Assuring Regulatory Transparency (RESTART) Act that would impose a 60-day limit for filing NEPA claims and 180 days for courts to issue final judgements, one year for environmental assessments, and two years for environmental impact statements. Democratic Senator Joe Manchin’s (D-WV) bill, the Building American Energy Security Act of 2023, would accelerate energy permitting by setting maximum timelines for permitting reviews, including two years for NEPA reviews for major projects and one year for lower-impact projects.

The Biden administration strongly supports the Building American Security Act, including legislation to accelerate improvements to America’s electric transmission grid, all critical to America’s shift to more electric power. Will the political class be able to get this to a vote? Congress should work closely with President Biden to ensure that new, clean sources of energy, along with an improved electric grid, come online as soon as possible. This will raise economic productivity and lower debt. Taxpayers spending billions of dollars on recent infrastructure bills deserve no less.

Rick Geddes is a nonresident senior fellow at the American Enterprise Institute, the founding director of the Cornell Program in Infrastructure Policy, an economics professor, and a professor at the Jeb E. Brooks School of Public Policy at Cornell University. Jeff Weiss is Executive Chairman of Distributed Sun and truCurrent, and a member of the Advisory Board of the Cornell Program in Infrastructure Policy.

Show comments Hide Comments