We Don’t Need This Much Permitting

America’s process for permitting infrastructure is a convoluted mess of federal, state, and local procedures, regulations, bureaucracies, lawsuits, judges, activists, and landowners. “Getting approval from all of them, getting every single box checked, is the biggest hang-up to getting projects up and running,” says Cary Davis of the American Association of Port Authorities in a video making the case for reform.

The flaws of the process spare no one: a couple gets threatened with fines for wanting to build a home on their property in Idaho, construction of badly needed housing projects is blocked in California, a Canadian company is stopped from building an oil pipeline to Nebraska, utility companies are stymied in improving electricity supply through upgrading transmission lines, and wind and solar farms are killed in Ohio.

Bipartisan dissatisfaction with permitting has produced some recent legislative reforms and proposals — the Fixing America’s Surface Transportation Act of 2015, the BUILDER Act, parts of which were included in the 2023 Fiscal Responsibility Act, and the Energy Permitting Reform Act introduced in July. These are encouraging signs. The problem is that none of them go far enough. What we need is to rethink the permitting procedure from scratch.

What is the problem with permitting? The short answer is the National Environmental Policy Act, signed into law by President Richard Nixon in 1970. Today, environmental activists often call NEPA (pronounced “Neepa”) the “Magna Carta” of environmental law. This grand label would be news to the law’s drafters, who would find the way it is implemented today unrecognizable, as over time its modest impositions have turned into massive burdens and inefficiencies.

The first thing to understand is that NEPA imposes no substantive requirements to help protect the environment, like emissions standards or new technology requirements. As a report by the Congressional Research Service notes, the law “dictates procedure, not results.” What procedures? NEPA requires that federal agencies provide the public with what the law describes as a “detailed statement” on the potential environmental impacts of actions such as distributing grants and issuing permits. Crucially, NEPA includes several levels of review, with the most intensive and time-consuming being an environmental impact statement (EIS).

While the original law may seem reasonable, it has become anything but. According to the Council on Environmental Quality — the White House office created by NEPA that oversees the law’s implementation — shortly after the bill’s passage in 1970, most environmental impact statements were under 15 pages long, and less than 2 percent were over 85 pages. Fast forward to 2020: the average length of an EIS is now over 600 pages, and this does not even include appendices, which in themselves can total another 1,000 pages or more. The average time for federal agencies to finish an EIS is about four and a half years; some can take over a decade.

This unhappy phenomenon is due to the felt need to “litigation-proof” an EIS. As the authors of a 2020 report from Utah State University put it, “the threat of NEPA litigation has created an incentive for Federal agencies and private applicants to produce encyclopedic environmental documents,” leading to “paralysis, indecision, and high costs as environmental review extends for years and even decades.”

For example, the Federal Energy Regulatory Commission might approve construction of an interstate natural gas pipeline, then an environmental group sues, charging that the commission’s NEPA analysis failed to properly consider the downstream greenhouse effects of natural gas consumption. Or, the Bureau of Land Management issues a right-of-way for an electric transmission line on federal land, and an activist group claims that the bureau should have conducted an environmental impact statement, rather than a lower-level environmental assessment.

Stanford researchers who studied several hundred major transportation and energy infrastructure projects with environmental studies conducted in the 2010s found that over a quarter were litigated prior to development, and almost all of those lawsuits involved a claim of a NEPA violation. Interestingly, the highest litigation rate was in solar energy projects, almost two-thirds of which were litigated, followed by pipelines (half) and wind energy (over a third). This suggests that our broken permitting process may be impacting emerging sectors even more than established ones.

The NEPA process is just the beginning. To start building major infrastructure projects, federal agencies may also need permits under several other relevant statutes, including, among many others, the Endangered Species Act, the Clean Air Act, the Clean Water Act, the Migratory Bird Treaty Act, the Resource Conservation and Recovery Act, the National Forest Management Act, the Solid Waste Disposal Act, and the National Historic Preservation Act.

To put a finer point on it, because we have multiple laws that impose substantive permitting requirements on developers, and because NEPA, passed before most of the nation’s landmark environmental statutes became law, is about procedure more than substance, over time NEPA has become somewhat redundant.

Added to the misery of this initial permitting process for infrastructure agencies is the likely prospect of later being sued under one or many of these laws. District courts, appellate courts, and, at times, the Supreme Court all to one degree or another aggressively police agencies’ procedural missteps and their interpretations of provisions in the relevant statutes. Permitting litigation often means that agencies are repeatedly sent back to the drawing board to satisfy open-ended judicial standards of just how much analysis is enough.

The permitting process must be rebuilt from scratch. To start, policymakers must fundamentally rethink how to approach the issue. The root of the problem is the conceptual and practical conflation of permitting and compliance. Whereas permitting is about authorization to build or do something, compliance is about the legal obligation to abide by all the relevant laws and regulations. Permitting says, “Yes, you may,” whereas compliance says, “You must follow the rules.”

To illustrate how the two are currently conflated, consider the following: If I want to build and operate an interstate natural gas pipeline, the Natural Gas Act requires that I must first obtain a “certificate of public convenience and necessity” from the Federal Energy Regulatory Commission, which serves as the lead agency for purposes of NEPA reviews on pipeline projects. As part of this process, I must demonstrate that my project’s construction and operation will comply with: water quality standards in the Clean Water Act; emissions requirements in the Clean Air Act; operating conditions to protect, or mitigate any impacts on, endangered species and critical habitat under various federal statutes; and safety standards enforced by the Pipeline and Hazardous Materials Safety Administration.

If the pipeline will cross federal land, then it may be subject to operating conditions imposed on the right-of-way granted to me by the Bureau of Land Management, or the Army Corps of Engineers in the case of federal waters. And, to top it off, the Federal Energy Regulatory Commission often issues conditional certificate approvals with scores of “mitigation measures” that address various environmental concerns, such as erosion, sediment control, and spill prevention.

This is precisely where the current permitting process breaks down. In each of these steps, I’m getting permission from the government to build and operate my pipeline. As part of this effort, I need to demonstrate to the bureaucracy’s satisfaction, before any shovels break ground, that I can comply with the various standards and requirements enforced by these federal agencies once I’m up and running.

Imagine if your local HOA could not only fine you occasionally for failing to meet its weekly mowing requirement but keep your house from being built in the first place if you didn’t submit a satisfactory detailed plan for how you intend to do so. That is roughly what is at stake in weighing the permitting process down with the burdens of compliance. The conflation pushes federal agencies to spend an inordinate amount of time, resources, and bureaucracy on the front end of the process, keeping projects in conceptual limbo for months or years. This is a bad deal for jobs, opportunity, and economic growth.

There is a better way. Permitting should be simple and straightforward. Congress should require applicants seeking to build energy and infrastructure projects to submit information about a project’s purpose, size, cost, geographic scope, the number of jobs involved, and other relevant economic and environmental considerations. Company executives should be required to certify, in writing, that, under penalty of perjury, the information provided is accurate and that they will follow the law. All the information used in the process would be made publicly available.

Agencies in their analysis of permit applications would then verify accuracy and completeness, and, in consultation with the developer, correct the application, and, if necessary, seek additional information. Once an application is filed, an agency would have, say, 90 days to review it, and on day 91, absent extraordinary circumstances such as fraud or other illegalities discovered in the process, construction can commence. Agencies would also, when issuing permits, delineate in them the federal statutes that cover the construction and operation of the project.

This approach is called “permit by rule.” Instead of a “mother, may I?” approach, the key to the new system is default approval to proceed with infrastructure projects. According to Curtis Schube, executive director of the Council to Modernize Governance, at least 38 states have implemented this practice for a range of permitting procedures.

The second part of the process is compliance. Any major infrastructure project is subject to, and must comply with, numerous substantive federal laws, distinct from NEPA’s purely procedural requirements — laws that include stringent environmental standards and other measures that must be met, on pain of financial and even criminal penalties, during construction and operation.

The key is that compliance should be demonstrated in practice, not on paper — in reality, not in promises. Consider how this works in the Ohio Environmental Protection Agency’s permit-by-rule program, which applies to certain kinds of air pollution sources, such as gas stations, emergency electrical generators, and natural gas–fired boilers and heaters.

The program includes a checklist of “qualifying criteria, emissions limitations, and conditions for operation and requirements for record-keeping and reporting.” The air pollution facility, according to Ohio EPA, “must continually meet” all those criteria in order to legally operate under the program. If violations occur, Ohio EPA can “deny or revoke a company’s ability to operate” and require it to submit to a more burdensome permitting process.

Because a permit-by-rule process offers quick initial permitting, it shifts agency resources from demonstrations of compliance on paper to a more environmentally beneficial focus: audits and enforcement of environmental standards.

Finally, to ensure the ease and efficiency of a permit-by-rule system, litigation must be kept to a minimum, and standing to sue should be limited only to those who can demonstrate that projects will cause them irreparable economic harm, such as landowners. Activists would no longer be granted standing to sue merely by dint of projects being aesthetically unpleasant.

In an encouraging sign, the permit-by-rule concept appears to be gaining some traction. On July 25, 2024, Senators Cynthia Lummis (R–Wyo.), Ted Budd (R–N.C.), and Pete Ricketts (R–Nebr.) introduced the Full Responsibility and Expedited Enforcement Act, which, according to a press release, “automatically approves permits if the application meets all required certifications and no objections are raised within 30 days.” It also “allows agencies to audit applications and enforce compliance with substantive standards, including denying or halting permits if standards are not met.”

So maybe permit-by-rule is not only practically but also politically possible. To be sure, it will take time and effort to overcome the political and bureaucratic resistance to overhauling the current permitting mess. Hopefully, more debate will help elucidate the problems with the status quo, which concern all of us.

We need new power plants and transmission lines to meet skyrocketing electricity demand from data centers and electric vehicles; more broadband deployment for underserved communities; new nuclear power plants and natural gas pipelines to support the technological revolution in artificial intelligence; new roads, bridges, tunnels, and highways to replace dangerously crumbling infrastructure; and new manufacturing plants to compete with China. Permitting reform may seem like an arcane policy matter, but our prosperity depends on it.