Big, Beautiful Pipelines: The not-so- hidden agenda of HR 1

Not content with rolling back key clean energy tax credits, the big, rather ugly bill that squeaked through the House of Representatives May 22 could also set the stage for expedited permitting of natural gas and other pipelines, with almost no pesky lawsuits or local opposition allowed. 

H.R. 1 clocks in at 1,118 pages, so dedicated scrolling was required to zero in on the permitting sections, 41005 through 41007, beginning on page 254. (Note: A pdf of the bill, with page numbers, can be downloaded here.)

Starting with 41005, the bill serves up a carefully targeted mix of big give-aways and free passes for the natural gas industry. For $10 million or 1% of project costs, as determined by the developer – whichever is less – developers of natural gas pipelines, terminals and other infrastructure can apply for “expedited permitting,” which slashes permitting time to one year. 

Depending on the project, either the Federal Energy Regulatory Commission (interstate pipelines) or the Department of Energy (export terminals) will head up and coordinate the permitting process, which typically includes multiple permits from different federal agencies. 

Any of the agencies involved can ask for a six-month extension, providing the developer agrees. Lacking such an extension, a project without all the needed authorizations by the one year mark will be automatically “approved in perpetuity.”

Once a project has been approved, “no court shall have jurisdiction to review a claim with respect to the approval,” except in very limited and narrowly defined circumstances. The only ones who will be able to file a claim will be the developer or anyone “who has suffered, or likely and imminently will suffer, direct and irreparable economic harm from the approval.”

Organizations will only be able to go to court “if each member of the association has suffered, or likely and imminently will suffer” similar economic harms. Proving an appropriate level of economic harm will require “clear and convincing” evidence, a higher standard of proof than the “substantial” evidence called for in existing law.

The deadline for filing any claims will be 180 days – about six months – after a project is approved, compared to the six years allowed under NEPA, the National Environmental Policy Act. All cases must be filed with the U.S. Court of Appeals for the District of Columbia.

‘Pay to pollute’ 

To make sure I was reading the bill accurately, I reached out to Christopher Psihoules, senior counsel at Norton Rose Fulbright, who focuses on natural gas and other energy infrastructure and regulatory matters. 

“The bill is most certainly designed to accelerate infrastructure permitting,” Psihoules wrote in an email response to a series of questions I sent him. 

Referring specifically to 41005, he said, “There is little flexibility in these terms. The statutory language is explicit in limiting who may sue, the grounds for suit and the standard of review.”

But the impact of 41005 will depend on how it is implemented, and as written, it appears rife with opportunities for corner-cutting, political pressure and over-reliance on industry-produced analyses and studies.  After layoffs, forced retirements and budget cuts, federal agencies are understaffed, and the remaining or newly hired employees might not have the resources, expertise or institutional knowledge to conduct thorough vetting of complex projects on short, tight timelines. 

Will agencies have time for outreach and public hearings in communities likely to be affected by such projects? Beyond economic impacts, will local concerns about air and water quality, land use or wildlife habitat be seriously considered? 

In a worst-case scenario, a developer could pay their $10 million, deny any requests for extensions and just sit tight until their project is automatically approved, knowing that few individuals or groups will be able to take them to court.

Perhaps it is outrage exhaustion and despair, but H.R. 1’s give-aways to the natural gas industry have received only minimal coverage in the mainstream and energy industry media. The primary focus has been on saving the Inflation Reduction Act’s clean energy tax credits, the loss of which will undoubtedly cause imminent and irreparable economic harm to companies and thousands of their employees across the country. 

The spectacle of Republicans whose districts have benefited from IRA grants and tax credits cravenly voting to decimate the law was predictable but still unconscionable. Concerns about expedited permitting appear to be running a distant second.

Environmental groups are speaking out, but in the face of the Republican juggernaut in Congress, their voices and influence are muted. 

“Republicans in Congress are not only trying to stack the deck in the favor of corporate polluters with these ‘pay to pollute’ schemes, but they are also attempting to take away any tools communities, advocates, or landowners have to fight these dangerous, dirty projects in their backyards,” said Mahyar Sorour, policy director for the Sierra Club’s Beyond Fossil Fuels initiative. “The proposed fee to skirt legally required project reviews means there will be virtually no federal oversight into how these projects impact our air, water, or economy.”

Alexandra Adams, chief policy advocacy officer at the Natural Resources Defense Council, similarly slammed expedited permitting as “smack[ing] of the kind of corruption the U.S. government and U.S. corporations have long decried in countries where paying off public officials is part of doing business.”

“It should have no place in this country,” she said in a blog on the NRDC website.

‘De-risking’ project losses

Moving on, Sec. 41006 is another pay-to-pollute provision, this time for carbon dioxide, hydrogen or other fossil fuel pipelines licensed by FERC. According to Psihoules, the intent here is to create “a new permitting regime” for these pipelines, essentially treating them the same as natural gas pipelines.

However, the $10 million application fee does not buy expedited permitting. Rather the big selling point is the potential preemption of state or local permitting once a project is licensed. “No requirement of state or local law that requires approval of the location of the covered pipeline … may be enforced against the licensee.” 

A worst-case scenario would allow a developer with a federal license to build a CO₂, hydrogen or oil or gas pipeline wherever they want, regardless of state or local permitting regulations or concerns about pipeline safety and environmental impacts. 

In the unlikely case local, state or grassroots opposition does manage to halt a pipeline once a developer has started construction, Sec. 41007 provides a “de-risking compensation program” intended to pay them for any related losses. 

The program would cover not only pipelines, Psihoules said, but any “project in the United States for the development, extraction, processing, transportation, or use of coal, coal by-products, critical minerals, oil, natural gas, or nuclear energy, with a total projected capital expenditure of at least $30 million.” 

Developers or other project sponsors would pay an enrollment fee – 5% of their investment in a project – and annual premiums of 1.5% of those costs. In other words, it’s an insurance program that pays developers for any losses incurred if they must stop construction due to a court order or other federal action.

Restructuring U.S. energy development

To recap, what we have here is a set of provisions offering expedited permitting for natural gas and other fossil fuel-related pipelines and infrastructure, a low probability of costly and project-stalling litigation or local permitting delays, and compensation for any resulting losses.  

The hypocrisy is so blatant, it feels almost superfluous to point out the obvious, but I will anyway.

Despite their long-standing arguments to the contrary, Republicans are picking technological winners and losers in the name of an over-hyped, fear-driven “energy emergency.”

The combination of slashing clean energy tax credits and accelerating and protecting the permitting of fossil fuel infrastructure is intended to restructure the existing economic and regulatory landscape for energy development. 

The goal is to upend clean tech arguments that solar, wind and storage are quicker and cheaper to get online and therefore a critical part of the energy abundance needed to meet booming demand from data centers and the electrification of buildings and transportation.

In this context, it is worth noting that the two states that have faced real energy emergencies in recent years – California (wildfires) and Texas (winter storm Uri) – responded by putting more solar and storage online. In both cases, the quickly deployed, flexible power allowed both to ride out subsequent extreme weather events.

What the U.S. needs is not an ideologically driven agenda, but a carefully designed and implemented energy policy based on the strengths and weaknesses of different technologies, both currently available and in the development pipeline, to meet evolving power demands. 

Yes, speeding up permitting for all forms of power generation and infrastructure is imperative — without cutting corners — but new generation should be fit to specific uses and objectives.

Renewables and storage can provide dispatchable, reliable power, backed up with a limited amount of natural gas or other fossil fuels, preferrably with emissions abated. Prioritizing flexibility and speed of deployment could ensure we have abundant power that is clean, affordable and resilient to meet the challenges of our growing power demand and ever-changing climate.