Republican efforts to unilaterally overhaul federal pipeline permitting through a filibuster-proof budget bill will not provide the certainty needed to make major investments in new energy infrastructure, an industry executive said today.
Republicans in the US House of Representatives will vote as early as this week on a bill that would offer fast-tracked approval of new pipelines and immunity from some lawsuits, in exchange for a fee of up to $10mn. But that bill, along with attempts by the White House to expedite project approvals by executive order, fall short of what industry officials would like to see on permitting, US midstream operator Howard Energy Partners chief executive Mike Howard said.
"Permit reform through an executive order or a reconciliation bill, that doesn't give me the confidence to go spend billions of dollars on new infrastructure," Howard said at a conference held by the news publisher RealClear. "You have to have an act of Congress that both sides of the aisle agree to and make real laws."
Energy industry officials have good reason to be skeptical that permitting provisions in the budget bill will remain intact over the years it can take to plan, permit and build large-scale energy infrastructure. Wind and solar developers, oil companies and others making investments based on the clean energy tax credits that Democrats passed through the Inflation Reduction Act now face a risk those credits will be gutted by the Republican budget bill .
A bipartisan permitting deal would probably be far harder to negotiate if Republicans succeed in using the pending budget bill to dismantle the clean energy spending in the Inflation Reduction Act, given that any agreement would need to fast-track pipelines in exchange for faster approval of electric transmission lines needed for renewables. Pipeline officials say they are continuing to push for permitting legislation, along with other fixes to expedite projects.
"We spend more money on our permitting process than we spend on the steel in modern pipeline projects today, so we are a lot more focused now on the regulatory process and really getting streamlined because we think there's a tremendous amount of value in getting that resolved," US gas infrastructure company Williams chief executive Alan Armstrong said today in an interview on CNBC.
Last week, US gas producer EQT's chief executive Toby Rice said there needs to be "significant reform" on permitting to offer the industry the confidence needed to start investing again in new pipelines, after a series of major projects were blocked over the last five years.
"We're going to have to have more conversations with the pipeline guys," Rice said at an event held by the US Energy Association. "We've had executives that have lost billions of dollars proposing pipelines and having them blocked, canceled or opposed."
