Legislation to Speed Environmental Permits Seen as Best Hope Among Deregulatory Bills

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By Dean Scott

May 1 --A coalition of industry groups, Republicans and moderate Democrats may be within striking distance of getting enough votes in the Senate to pass at least one bill that would streamline and in some cases roll back regulatory procedures--a bill to jump-start environmental reviews and permitting for major energy and infrastructure projects.

More than a half-dozen bills to revamp procedures the Environmental Protection Agency and other regulatory agencies use to develop rules or to roll back regulatory burdens are moving in the Republican-controlled House; it has already passed three of them since the 114th Congress opened Jan. 6.

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ECR story graphic 5/4/2015

But it's the change in the Senate, now under Republican control for the first time since 2007, that has led to new optimism among business groups and other regulatory reform supporters who say they may have the best chance in nearly a decade of getting a bill passed.

The legislation seen as having the best chance of locking down enough Democrats for Senate approval is a bill (S. 280) by Sens. Rob Portman (R-Ohio) and Claire McCaskill (D-Mo.) that would streamline permitting for environmental reviews and permitting under the National Environmental Policy Act for major infrastructure, energy, and manufacturing projects.

The Senate bill would direct the Office of Management and Budget to cut through delays by coordinating reviews by multiple agencies and shorten from six years to 150 days the time opponents would have to challenge a permit decision.

Portman told Bloomberg BNA he is “absolutely” confident he’ll get significant Democratic support for his Federal Permitting Improvement Act, but he expressed frustration with last-minute objections from the minority that scuttled a March 4 vote on the bill in the Senate Homeland Security and Governmental Affairs Committee.

The issue centered on Obama administration concerns with language that would elevate the Office of Management and Budget's role in overseeing and prioritizing permitting by multiple agencies, from the Environmental Protection Agency to the U.S. Army Corps of Engineers.

Administration, Senators Seeking Common Ground

McCaskill told Bloomberg BNA that the administration has worked with the senators to find common ground this year, in stark contrast to past years when the White House offered little cooperation.

“We might just have a miracle here. We might have Republicans, Democrats, and the White House agree on something, and that would be extraordinary.”


Sen. Claire McCaskill (D-Mo.)

“I do think the White House is really working on this--that's not just my assessment, that's Senator Portman’s assessment--they are now finally engaged,” the Missouri Democrat said. “I've had conversations with the head of OMB, and it's clear to me they’re spending a lot of time trying to figure out how to make some changes in the bill, to make it more workable for them.”

That is a departure from the White House engagement in the past over the legislation, she said, when “it didn't appear they were taking it seriously.”

“We might just have a miracle here,” McCaskill said. “We might have Republicans, Democrats, and the White House agree on something, and that would be extraordinary.”

A Portman aide told Bloomberg BNA the Senate committee is slated to essentially resume the postponed March 4 markup on May 6.

Democratic Support Mounting?

Environmental and public interest groups acknowledge that there is room for improvement in the coordination of federal environmental reviews and permitting decisions. But they worry that the legislation is being rushed, particularly in the Senate homeland security panel, which is moving the bill without having held hearings.

They say the Senate bill goes too far by setting a 60-day limit for the public to comment on draft environmental impact statements and by cutting what is essentially NEPA's “default” statute of limitations for challenging a permit decision--currently six years--to just 150 days.

The Senate measure also would direct courts to consider potential job losses or economic harm caused by rejecting a project when considering court challenges.

While the bill has strong support from Senate Republicans, who control the chamber 54-46, they would need at least six Democratic votes to overcome a filibuster threat.

Assuming none of the 54 Republicans defect--and accounting for another four votes from the bill's three Democratic co-sponsors and Maine Independent Angus King, who caucuses with Democrats--would theoretically give the measure 58 votes. The Democratic co-sponsors are McCaskill, Sen. Joe Manchin (D-W.Va.) and Sen. Joe Donnelly (D-Ind.).

Five Other Democrats Possibilities

Other votes come could come from a pool of at least five other Democrats who have either introduced or are co-sponsoring other bills to revamp regulatory procedures or roll back regulatory burdens in the 114th Congress: Virginia Sens. Mark Warner and Tim Kaine and Sens. Jeanne Shaheen (N.H.), Amy Klobuchar (Minn.) and Christopher Coons (Del.).

Other possibilities include Delaware’s Tom Carper (D), who has signaled that he will likely support the expedited permitting bill, and North Dakota Democrat Heidi Heitkamp, the ranking Democrat on the Senate Regulatory Affairs and Federal Management Subcommittee.

Supporters of regulatory reform legislation say the January vote on another energy-related measure--a bill to essentially bypass Obama on approving the Keystone XL pipeline (S. 1)--could be a template for getting the expedited permitting bill passed. Approved 62-36 with support from nine Democrats, the bill was ultimately vetoed by the president.

Different Political Calculation on Permitting

But supporters in Congress say the president would face a different political calculation on expedited permitting legislation, particularly if the measure gets the 60 votes needed to clear the Senate, which would require the support of at least a half-dozen Democrats.

Many of the same Democrats voting yes on the Keystone bill--such as McCaskill, Donnelly, Warner and Manchin--either co-sponsor the expedited permitting bill or other regulatory reform measures; Carper and Heitkamp also voted for the Keystone measure and are viewed as generally receptive to such legislation.

The remaining three pro-Keystone Democrats are all considered moderates on energy issues: Sens. Bob Casey (D-Pa.), Michael Bennet (D-Colo.) and Jon Tester (D-Mont.).

House Passage Near Certainty

In the House, the Republican-controlled chamber is moving its own bill to speed up permitting approvals: the Responsibly and Professionally Invigorating Development, or RAPID, Act (H.R. 348). Passage is a near-certainty: In 2014, the House passed the bill 229-179, one of roughly a half-dozen deregulatory measures it passed in the last Congress.

“I don't think our permitting bill will see a veto threat like the RAPID Act.”


Senate Republican aide

The permitting bills resonate with Republicans and some Democrats, who complain of overzealous regulatory actions from the Obama administration, including the first carbon pollution limits for power plants, which are to be finalized this summer.

The advocates of overhauling regulatory procedures also note that while the volume and complexity of federal regulations have steadily increased over time, there have been relatively few changes made since the Administrative Procedure Act of 1946 first set out notice and comment procedures for agencies to formally propose and finalize regulations.

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ECR 2nd story graphic 5/4/2015

Avoiding Veto Threat

All of those efforts, of course, would come to nothing if the Obama administration opposes the bill, and the White House already threatened to veto the House RAPID Act just before it cleared the House last year.

In the veto threat, it said the administration had made great strides in improving the coordination of the permitting process since launching a series of initiatives in 2011, including an executive order directing agencies to better coordinate their permit reviews and the launch of an online permitting “dashboard” that tracks nearly 30 high-profile highway, energy and port-related projects.

A Senate Republican aide said the White House is less likely to threaten a veto of the Portman-McCaskill bill because it differs significantly from the House RAPID Act. The House bill, for example, includes a provision to consider a project approved if agencies fail to meet the tighter deadlines for them to make a decision under the Senate bill.

“I don't think our permitting bill will see a veto threat like the RAPID Act” did, the aide said.

Fast Action in House

In the House, Republicans wasted no time this year in moving deregulatory bills to the floor, passing three in the first 90 days of the 114th Congress, but most of them face an uphill battle in the Senate and would have to overcome veto threats from the White House.

Already approved are the Regulatory Accountability Act (H.R. 185), to require the EPA and other agencies to clear new procedural hurdles before regulating; the Unfunded Mandates Information and Transparency Act (H.R. 50), to require agencies to estimate the entire cost of a federal regulation, including foregone profits and potential costs to consumers; and the Small Business Regulatory Flexibility Improvements Act (H.R. 527), to give small companies more of a voice in federal rulemakings.

A second wave of deregulatory bills is headed to the floor, including the RAPID Act expedited permitting bill and the Regulations From the Executive in Need of Scrutiny (REINS) Act (H.R. 427) to require congressional approval of all major rules.

Others are the Sunshine for Regulatory Decrees and Settlements Act (H.R. 712) which targets legal strategies environmental groups use to get the EPA to expedite or strengthen environmental rules and the All Economic Regulations are Transparent (ALERT) Act (H.R. 1759) which would require notice of pending rules to be published at least six months before those rules could take effect.

House Majority Leader Kevin McCarthy (R-Calif.) has made rolling back regulatory burdens a constant theme since he took a House leadership position in 2014. But Democrats say House Republicans are more interested in messaging than getting legislation signed into law, noting that there has been little or no coordination between House leaders and Senate Majority Leader Mitch McConnell (R-Ky.) on moving such legislation.

Democrats Likely to Follow Carper's Support

Quick action on the Senate expedited permitting bill will require smoothing over Obama administration objections that torpedoed what was supposed to be a quick markup by the homeland security panel in March. The committee's ranking Democrat, Sen. Carper, told Bloomberg BNA he would support the Federal Permitting Improvement Act (S. 280) as long as those objections are addressed .

“We have been working hard to get Democratic support for the bill--four [non-Republican] co-sponsors is just the start.”


Republican aide, Senate homeland security panel

Portman told Bloomberg BNA he agreed to the delay “with the understanding that we would get more Democratic support--including Senator Carper’s support” once the differences were resolved.

But he and McCaskill expressed frustration over the timing of the administration's objections: Both noted that the bill is little changed from the version they introduced in 2013, a measure that got little attention in the then-Democratic-controlled chamber. A Republican aide with the homeland security panel told Bloomberg BNA additional Democratic support is just around the corner.

“We have been working hard to get Democratic support for the bill--four [non-Republican] co-sponsors is just the start,” the aide said.

The 2015 bill is backed by the U.S. Chamber of Commerce and the Business Roundtable as well as companies, including Dow Chemical Co. But it also was endorsed by North America’s Building Trades Unions representing 14 unions in the U.S. and Canada.

Portman Downplays OMB Concerns

On the issue of OMB's heightened role under the bill, Portman noted that he headed OMB during President George W. Bush’s second term and continues to see it as the logical entity to coordinate federal permitting.

“Having been [OMB] director, I disagreed with them--I think they are the right body to do it,” Portman told Bloomberg BNA. “We may not be able to resolve all of their concerns.”

Carper told Bloomberg BNA he would likely support the bill if the OMB concerns are addressed.

“We’ll get this done,” the Delaware Democrat said.

One Republican Senate aide told Bloomberg BNA that the administration has voiced concerns beyond elevating OMB's role to a kind of permitting czar under the bill. “They also have some objections to litigation reforms in the bill,” the aide said, referring to the bill's tighter deadlines for court challenges.

'Still Some Issues to be Worked Out.'

“There are still some issues to be worked out, but [the talks] have been fruitful, friendly and productive,” the aide said. “I don't see obstacles--I think we'll be at a point where it's enough.”

“We had Senator Carper also express some support for the bill, and I think that will help get some [added] support from other members of the committee,” the aide said. “So with Carper's support, a few other Democrats on the committee--it's a fairly safe [bet] the proposal can be enacted, either on its own or as an amendment” to other legislation, the aide said.

The U.S. Chamber of Commerce has long supported bills to revamp regulatory procedures and curb regulatory burdens; it has made expedited permitting legislation a top priority in the 114th Congress.

“One of the most significant problems plaguing our current regulatory process is the Byzantine maze of approvals and legal challenges that must be navigated before a major development project can be permitted,” Bill Kovacs, the chamber’s senior vice president for environmental, technology and regulatory affairs, said at a March 2 hearing on the House RAPID Act.

Time Consuming Approvals?

“The Hoover Dam was built in five years. The Empire State Building took one year and 45 days,” Kovacs told the Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

“These are not outlier projects--these projects represent the 'rule’ and not the 'exceptions’ when it comes to our federal environmental review and permitting process.”


Bill Kovacs, U.S. Chamber of Commerce

“The Pentagon, one of the world’s largest office buildings, took less than a year and a half. The New Jersey Turnpike needed only four years from inception to completion. Fast forward to 2015,” he said, noting that the Cape Wind project has been under review for more than a decade to obtain permits it needs to build a wind farm off the cost of Massachusetts.

Kovacs said the wind farm has become a sort of poster child for delays in the project approval process, and decade-long or longer delays have become the norm for large projects.

“These are not outlier projects--these projects represent the 'rule’ and not the 'exceptions’ when it comes to our federal environmental review and permitting process,” he said.

Public Health, Environmental Groups Concerned

Public interest, consumer, and environmental groups argue that concerns over long delays and overzealous regulations are overblown; if anything, they argue, the regulatory trend since the 1946 Administrative Procedure Act was passed has been to hamstring regulatory agencies with layers of often duplicative and redundant requirements that make it nearly impossible for agencies to respond quickly to emerging public health and environmental threats.

Opposing the deregulatory agenda are dozens of groups, many of them coordinating their efforts through the Coalition for Sensible Safeguards members, which represents groups including Public Citizen, the Sierra Club, U.S. PIRG, Consumers Union, the AFL-CIO and Friends of the Earth.

Procedural requirements are now “a virtual maze for agencies to navigate,” a result of analyses requirements and procedures that Congress and the executive branch have imposed in recent decades, leaving agencies “in a state of paralysis by analysis,” Amit Narang, Public Citizen's regulatory policy advocate, told a House Judiciary regulatory reform subcommittee March 2.

Agency Delays Called Rampant

“Far from the popular conception of 'regulators run amok,' the reality is that agency delays are rampant, deadlines are routinely missed or pushed back, and ample evidence exists that the situation is getting worse,” he said.

In the Senate, Narang and other opponents of regulatory reform efforts worry that the expedited permitting bill would weaken the ability of communities and environmental groups to fight against large-scale energy and infrastructure projects that could have significant impacts.

But they also are skeptical of pledges by Homeland Security Committee Chairman Ron Johnson (R-Wis.) to seek consensus from committee Democrats before pursuing various regulatory reform bills.

Once the homeland security committee has acted on the expedited permitting bill, other deregulatory bills in the pipeline, especially far-reaching bills like the REINS Act requiring congressional consent of major regulations, are likely to draw strong Democratic opposition, Narang told Bloomberg BNA.

More Party Line Activity Expected

“I think we'll see Johnson having to loosen the reins and go more party line” in the committee, given Republicans outnumber Democrats on the panel 9-7, he said. That approach could backfire, he said, by driving away Democratic support needed to pass the measures on the floor.

If Johnson is able to get the permitting bill through committee, Narang said, the measure could be offered as an amendment to energy or infrastructure legislation, such as the reauthorization of the transportation bill, or as a stand-alone bill.

Once the permitting bill moves, Johnson is expected to rely heavily on the chairman of the Homeland Security's Subcommittee on Regulatory Affairs and Federal Management, Oklahoma freshman Sen. James Lankford (R), to take the lead on other regulatory reform measures in the 114th Congress.

“We expect they'll lay the foundation through that regulatory subcommittee and it will be marking up more of the legislation” in the months ahead, Narang said.

Lankford to Take Broad Look

Lankford told Bloomberg BNA that he plans to take a broad look at the incremental addition of regulatory burdens over the last few decades and whether agencies have overstepped their authority in certain rulemakings; he and the subcommittee's ranking Democrat, North Dakota Democrat Heitkamp, have launched a portal on the committee website, the #CutRedTape Initiative, to solicit feedback from business owners on their experience in navigating regulatory requirements and agencies.

“We’re going to be laying out what the big issues are on regulatory reform.”


Sen. James Lankford (R-Okla.)

“Our interest is on broader areas” than specific Obama administration rules that are being targeted by other senators, Lankford said. Once those hearings are concluded, the subcommittee can look deeper into what legislation is needed, he said.

“We’re going to be laying out what the big issues are on regulatory reform,” the subcommittee chairman said. Those include “basic structural things,” such as whether agencies have overstepped their statutory authority in pursuing certain regulations and to the degree they are adhering to the prescriptive procedural steps set out in the APA, he said.

Lankford's panel held a hearing April 28, for example, that focused on judicial review provisions in various statutes and whether Congress should do more to limit the broad discretion courts often give agencies when reviewing regulations.

Bill Differences Highlighted

The House RAPID Act has some Democratic support--introduced by Reps. Tom Marino (R-Pa.), it is co-sponsored by former House Agriculture Committee Chairman Collin Peterson (D-Minn.)--and it garnered a dozen Democratic votes, including Peterson's, when it passed the House in 2014.

The House and Senate permitting bills differ, but both would require more coordination of the environmental review process, limit the time agencies may take to render decisions on applications and shorten NEPA’s default deadline for opponents to challenge a permit decision.

One key distinction: The House version essentially allows projects to move forward if agencies fail to render a timely decision; the Senate bill doesn't.

Delays on Hundreds of Projects?

The U.S. Chamber of Commerce, which strongly backs the expedited permitting bills, has identified more than 300 projects through its Project No Project effort it launched in 2011 that have been cancelled or significantly delayed by lawsuits or lengthy permit reviews.

As a group, the projects have been delayed “due to significant impediments, such as regulatory barriers, including inefficient review processes and the attendant lawsuits and threats of legal action.”

Accelerating those reviews, the chamber concluded, could produce $1.1 trillion in short-term benefits and 1.9 million jobs a year. One caveat: In some cases, the chamber’s tally includes projects killed by the applicant arguably due to economic reasons, such as terminals for importing more liquefied natural gas that were undercut by the boom in domestic natural gas production.

Types of Projects Involved

Nearly half of the 300-plus projects--140 in total--were renewable energy: 89 wind, four wave power, 10 solar, seven hydropower, 29 ethanol/biomass and one geothermal project.

Also delayed were 22 nuclear projects, one nuclear storage site--the back-burnered Yucca Mountain project in Nevada--21 transmission projects, 38 gas and platform projects and 111 coal projects.

John Graham, former director of the OMB’s Office of Information and Regulatory Affairs, told a Senate panel March 19 that the approval process has become impossible to navigate for all but the largest U.S. companies.

He told the Subcommittee on Regulatory Affairs and Federal Management that a hypothetical sand mining operation to be located in Minnesota, for example, could require 15 separate permits. Those range from a conditional land use permit from a local planning office to various federal permits, according to Graham, now dean of Indiana University’s School of Public and Environmental Affairs.

Permitting Criticisms Exaggerated?

Environmental and public interest groups say the chamber’s tally exaggerates the role NEPA environmental reviews and litigation contribute to project delays or cancellations.

Scott Slesinger, the Natural Resources Defense Council’s legislative director, told Bloomberg BNA environmental permitting isn't as broken as it's portrayed by some and in many cases, it provides local communities with their only opportunity to have input into projects that could impact the environment and public health.

“In many states, NEPA is the only time citizens get a say in what federal government is doing,” he said.

Worse, the Portman-McCaskill bill (S. 280) is going forward without a single hearing in the 114th Congress, Slesinger said.

That means the Obama administration has not testified on the Senate bill, “But neither have we, and neither has the chamber,” he said. “We think this can be fixed, but it’s not a broken system-- it can be improved,” Slesinger said.

“If you read through the chamber’s [project] list, you see many if not most of these delayed or canceled projects had nothing to do with the permit process or NEPA,” he said. “Many of these [delays] have to do with lack of financing, or in some cases you find a hurricane essentially wiped out the project,” he said.

The current system could be improved, Slesinger said, in part by better coordinating multiple agency involvement earlier in the process. But he said the House and Senate bills don't specify how the OMB would prioritize projects for speeding up the environmental reviews.

Key Challenge of Keeping Bill Moderate

Meanwhile, the lead co-sponsor of the Senate expedited permitting bill, Missouri's McCaskill, said she remains optimistic of the bill's chances, as long as the bill doesn't stray too far from what she sees as relatively modest improvements to the process.

“The key here is for this bill to remain moderate,” she told Bloomberg BNA.

“I’m not interested in doing away with the right to make an environmental challenge on an environment project,” she said. “I am in favor of making sure that those rights are asserted in a way that is timely and not used just to obstruct” projects.

“That's why I think this bill works and I think it's why, if we could get to the middle more often, we would have more success,” McCaskill said. “And I do think this bill represents the true middle.”

To contact the reporter on this story: Dean Scott in Washington at dscott@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com