Reduce Overly Burdensome Regulations and Opportunities for Frivolous Litigation
Energy infrastructure systems, including both generation and transmission, require massive amounts of new investment in the face of rising difficulty in locating, permitting, and building new infrastructure. Industry estimates that it will take 10 years to license and construct a new nuclear plant in the United States. Construction of numerous electricity transmission lines, natural gas terminals, and wind projects has been abandoned as a result of frustration and the inability to get siting approval. This may require us to address new federal eminent domain issues. Current regulatory uncertainty and liability issues discourage the development of clean energy alternatives and technologies. Failure to reverse this course will imperil our global economic competitiveness.
Siting and building energy infrastructure projects in the United States is a very complex process. Sponsors of such projects must navigate a myriad of regulatory structures to ensure state and local prerogatives are properly evaluated, environmental impacts are quantified and considered, and any interested party can make their opinion known. These public policy priorities are essential to ensure an informed, deliberate, and transparent process is followed. However, this process is inefficient, with multiple layers of overlapping jurisdictions and processes. Moreover, the current process too often allows opportunities for the will of a motivated few with parochial interests to override the best interest of the country, state, and community.
The imperative to move boldly to address our energy infrastructure challenges is clear. We are not suggesting that reasonable opportunities for citizens and groups to intercede in administrative and judicial proceedings be unduly constrained, but it is increasingly clear that it simply takes too long to make a decision to proceed, or not to proceed, with the siting and licensing of an energy or infrastructure project.
The energy business is a long lead-time, capital-intensive industry. Our nation’s demand for more and more energy compels us to move forward immediately on projects that will take years to finance and complete. Lengthy, excessive, and unnecessary regulatory delays and roadblocks during a project will only increase costs, which are ultimately passed on to consumers, and prolong the current imbalance of supply and demand, and imperil our economic progress.
While reasonable opportunities for citizens and groups to intercede in administrative and judicial proceedings rightly exist, abuse of these processes through endless interventions and appeals should not be permitted as the vehicle to stall or kill projects. Among these impediments is the “not in my backyard” (NIMBY) stance. It has become too easy to impede permitting of any energy facility—coal, nuclear, LNG, pipelines, transmission lines, even solar and wind—by exploiting the permit review and appeals process. NIMBY tactics have already stalled some LNG terminals such as the AES Sparrows Point LNG LLC in Baltimore, Maryland. In fact, of the 29 proposed LNG terminals approved by federal regulators, only eight have been built. In addition, local opposition has been able to use authority delegated under federal statutes such as the Clean Water Act and the Coastal Zone Management Act to kill projects on grounds not contemplated by such federal statutes. Streamlining permitting by placing hard deadlines on permit decisions and appeals of those decisions would thwart these ploys while preserving a transparent process with ample opportunity for public input.
With passage of EPAct2005, Congress recognized the urgent need to provide mechanisms to foster the siting and construction of crucial new electric transmission lines that have been stymied by inaction and regulatory delays at the state and local levels. Section 1221 of EPAct2005 created a new authority for DOE to designate corridors of high transmission congestion that adversely affect consumers. Sponsors of transmission projects located in these corridors can petition the Federal Energy Regulatory Commission (FERC) to authorize construction in certain circumstances where state consideration of the project has been delayed. This mechanism does not relieve the project’s sponsor from obtaining necessary environmental permits. On October 2, 2007, DOE designated two such corridors as part of this process. Subsequently, several lawsuits have been filed against DOE attempting to overturn these designations even before FERC could consider any applications. These types of dilatory actions must be addressed if we are to see the expanded energy infrastructure this country needs to continue its economic growth.
An even more direct mechanism to ensure needed interstate energy facilities can be constructed when needed is FERC’s authority in Section 7 of the Natural Gas Act, which gives the FERC authority to approve and site natural gas pipelines. Other energy facilities in interstate commerce - for example, electric transmission facilities and pipelines for CCS and other purposes - should be able to benefit from similar authority.
Another regulatory mechanism that is frequently used to impede energy projects is NEPA. The Act requires agencies to assess proposed actions that may cause significant environmental effects prior to making decisions on those actions. The NEPA process does allow for categorical exclusions for actions that the agency has determined do not individually or cumulatively have significant effects on the environment. Given the vital importance of energy to our country’s national and economic security, and given that the NEPA process has been used as a delay tactic, a categorical exclusion for certain activities related to energy should be considered.
The regulatory process can also be manipulated to attain policy objectives that would otherwise be required to undergo a rigorous legislative process in Congress. The recent listing of the polar bear under the Endangered Species Act can be viewed not only as a backdoor way to limit our country’s energy exploration and use, but also as a maneuver to achieve climate change policy restrictions under the guise of protecting the polar bear. Circumventing the appropriate policymaking apparatus will only lead to endless and frivolous litigation at the expense of our nation’s energy security.
Moreover, it simply takes too long from a project’s inception to its completion. Right now, the time needed to license and construct a new nuclear power plant in the United States is expected to take at least eight years and likely more. It is difficult to acquire the capital necessary to support such a capital-intensive project if the yield on investment is a decade or more in the future. The next administration and Congress must redouble efforts to achieve fair administrative and judicial processes that yield decisions, whether affirmative or negative, in a timely manner that also preserves reasonable opportunities for public participation and input.