A deal on US permitting reform could be harder than ever to find

The debate over permitting reform is often framed as a contest between Democrats’ support for grid lines and Republicans’ support for pipelines. Manchin-Barrasso threw bones to both, enough to pass the bill out of the Senate’s energy and natural resources committee with a 15-4 margin. But the bill treaded lightly around the 1970 National Environmental Policy Act (NEPA), both because it seemed to fall outside the committee’s jurisdiction and because revising the law that’s the cornerstone for assessing projects’ environmental impacts is a nonstarter for many Democrats, even though it is often one of the biggest sources of expense and delay for energy projects of all types. That will likely change now, with the contest reframed around what changes Democrats are willing to tolerate to NEPA in exchange for the transmission and renewables benefits in Manchin-Barrasso. And that’s a much more difficult debate.

“A legislative deal is much further out,” said Emily Domenech, senior vice president at the consulting and lobbying firm Boundary Stone Partners and former senior policy adviser to House Speaker Mike Johnson (R-La.).

In the Manchin-Barrasso bill, in exchange for some Republican concessions — such as setting a higher target for renewable energy leasing on federal land — Democrats agreed to their own, including leasing mandates for fossil fuels and an expedited review process for LNG terminals. Now, Domenech said, many of Republicans’ permitting priorities “are things they don’t need to trade for anymore, because they can get them for free through executive order or the [budget] reconciliation process.”

That strategy shift is already underway. Trump’s day-one executive orders on energy cleared the path for increased oil and gas leasing and LNG terminals, and included a demand that federal agencies “eliminate all delays” in permitting, including by pursuing a “permit by rule” process in which projects can be automatically approved if they meet certain criteria.

Trump also ordered the White House Council on Environmental Quality to roll back some NEPA regulations. But the more durable NEPA reforms sought by many energy executives can only be achieved through legislation, Domenech said. When those negotiations may begin is unclear, and there will likely be many heated budget battles to get through before then; Sen. Mike Lee (R-Utah), who took over from Manchin as chair of the ENR committee, didn’t respond to a request for comment.

When the time does come, climate-concerned Democrats need to get over their NEPA nerves, said former Sen. Mary Landrieu (D-La.).

“NEPA has become redundant,” she said, because of the Clean Air Act and other environmental laws passed since NEPA. “It’s starting to become more of a morass, and it’s just tying people up, costing taxpayers and consumers more money, and not resulting in a stronger environment. The opposition is coming from the hard left against anything associated with fossil fuels, and that’s misdirected.”

Peters, for his part, is open to NEPA reform, but “would not take that to be indicative of Democrats on the whole,” his spokesperson said.

There’s enough bipartisan agreement about the urgency of permitting reform that a deal is still within reach, said Jason Grumet, CEO of the American Clean Power Association, a trade group representing low-carbon energy companies. The urgency is only growing stronger as the data center boom drives an unprecedented spike in power demand, an issue Trump has promised to prioritize.

“There is a sense of shared purpose that there never was before,” he said. “Absent the ability to build more transmission, we will hit a wall at some point in terms of domestic energy production from any source. And nothing about [the Manchin-Barrasso] framework feels implausible going forward.”