US oil sector sees chance to overhaul permitting

The split control of the US Congress offers a pathway to pass legislation that would fast-track permitting of pipelines and other energy projects, the US oil and gas sector's top lobbyist said today.

Oil and gas companies have spent years pushing for legislation to revise permitting laws they say are delaying needed energy infrastructure, without success. But pent up bipartisan demand for faster permitting and the makeup of Congress have given top industry officials optimism for legislative action on permitting in 2023.

"It won't be easy, but divided government gives us a real chance to build consensus around meaningful reform," American Petroleum Institute president Mike Sommers said today at his group's annual State of American Energy event.

Pipelines, energy projects on public land, LNG export facilities, electric transmission lines and other energy projects often have to navigate a labyrinth of time-consuming permitting requirements. For larger projects, permitting can take years, particularly if there are challenges from residents and environmentalists.

Democrats led by US senator Joe Manchin (D-West Virginia) last year made some progress on permitting through a bill that focused on electric transmission lines for renewables and approving the delayed $6.6bn Mountain Valley natural gas pipeline. Although the bill was thwarted by a lack of Republican support, oil industry officials see the support by Democrats — including President Joe Biden — as a promising sign for permitting advancing this year.

Republicans intend to advance their own permitting bill out of the House Energy and Commerce Committee, which is chaired by Cathy McMorris Rogers (D-Washington). Rogers said although she had concerns with Manchin's bill, including its handling of local input on electric transmission, she applauded the recognition by Democrats of the need for permitting legislation.

"There is a bipartisan recognition and now we'll go to work on the details to actually get permitting reform done," Rogers said at the industry event.

But there is reason for skepticism that permitting legislation can pass through this Congress. Although both parties generally agree permitting should go faster, House Republicans have pushed for major changes to environmental laws that have little chance of adoption in the Democratic-controlled Senate.

Oil industry officials say they want to see negotiations on permitting to be bipartisan, and for legislation to pass by this year before Congress' focus switches to the 2024 presidential elections.

"We want it to move this year," Sommers said. "I think once you get out of 2023, it becomes another political issue."

In addition to permitting, the American Petroleum Institute said this year it would be pushing for expanded federal oil and gas leasing, progress on an offshore leasing plan for 2023-28, expedited approval of LNG export facilities and changes to pending climate disclosure requirements for publicly traded companies.

By Chris Knight