Originally published for customers July 31, 2024.
What’s the issue?
Senators Joe Manchin (D-WV) and John Barrasso (R-WY) have jointly proposed the Energy Permitting Reform Act of 2024, a bipartisan bill introducing significant reforms, including judicial provisions to streamline the permitting process for energy infrastructure projects.
Why does it matter?
If passed, this bill could be the most consequential reform to date for the energy industry, particularly for midstream projects. It addresses the persistent issue of litigation delays that have led to uncertainty, unpredictable costs, and project cancellations.
What’s our view?
We applied the judicial reform provisions of the bill to permit litigation associated with the Mountain Valley Pipeline (MVP) and found that they could dramatically compress project schedules by years, increasing certainty for project developers and financiers, and potentially revitalizing infrastructure development across the energy sector.
Senators Joe Manchin (D-WV) and John Barrasso (R-WY) have jointly proposed the Energy Permitting Reform Act of 2024, a bipartisan bill introducing significant reforms, including judicial provisions to streamline the permitting process for energy infrastructure projects. If passed, this bill could be the most consequential reform to date for the energy industry, particularly for midstream projects. It addresses the persistent issue of litigation delays that have led to uncertainty, unpredictable costs, and project cancellations.
We applied the judicial reform provisions of the bill to permit litigation associated with the Mountain Valley Pipeline (MVP) and found that they could dramatically compress project schedules by years, increasing certainty for project developers and financiers, and potentially revitalizing infrastructure development across the energy sector.
Litigation Acceleration
The Energy Permitting Reform Act of 2024 introduces several key provisions designed to accelerate the permitting process for energy projects. For our discussion today, we focus on Section 101, titled "Accelerating Claims," which has three provisions that would be particularly impactful:
- A 150-day statute of limitations for seeking judicial review of agency actions granting or denying project authorizations;
- A requirement for courts to set expedited consideration for litigation related to these authorizations; and
- A mandate that courts set schedules with deadlines no longer than 180 days for any required agency action on remand.
These time limits could have substantially compressed project timelines that were extended by years due to legal challenges and subsequent agency reviews. To illustrate the potential impact of these reforms going forward, we'll examine how they might have affected the permitting and litigation history of MVP, a project that faced numerous legal challenges and delays.
Before diving into our analysis of MVP’s specific permits, it's important to note some areas we won't be focusing on. We did not analyze litigation challenging FERC's eminent domain authority on constitutional grounds as these sorts of challenges are rare. Additionally, we did not look at challenges to the FERC authorization itself as FERC's rehearing process for its certificate orders already includes relatively short deadlines. Finally, we analyzed the Army Corps of Engineers Nationwide Permit (NWP) 12 permits, and found that intervening factors, including modified project applications, a settlement, and the agency’s decision to modify and propose new NWPs in the middle of the project, would have made the provisions of the bill inapplicable for the most part.
Our analysis concentrates on some of the individual permit authorizations from other agencies, which currently lack similar time constraints to FERC’s rehearing process and often default to the Administrative Procedure Act's six-year statute of limitations. With this context in mind, let's examine how the proposed reforms might have impacted some key permits for the MVP project. For an overview, you can see the timeline of these key permits below:
Forest Service and Bureau of Land Management Permits for Jefferson National Forest Crossing
MVP's proposed route through 3.6 miles of the Jefferson National Forest (JNF) required permits from both the U.S. Forest Service and the Bureau of Land Management (BLM) — all of which were challenged. These permits are issued very close together, because the Forest Service Record of Decision on amendments to the JNF management plan serve as concurrence to BLM's right of way and temporary use permits.
As an initial matter, the 150-day statute of limitations would not have sped up the process much because the environmental groups were quick to file their lawsuits — sometimes filing on the same day of agency action.
The requirement for expedited consideration in the courts, while more difficult to quantify precisely, could have further compressed the timeline between legal challenges and decisions, which took 233 days and 379 days for the first two Forest Service decisions, and 204 days and 379 days for the first two BLM decisions under consideration by the Fourth Circuit.
The proposed 180-day deadline for agency action on remands could have significantly compressed the timeline for permits from both the Forest Service (which took 899 days to issue analysis after the first remand) and BLM (which took 477 days to issue its third ROW and temporary use permits). Given that the Forest Service and BLM authorizations are interdependent, if applied to the Forest Service timeline alone, this provision could have potentially reduced the process by over 2.5 years.
Clean Water Act Section 401 Certifications: Virginia and West Virginia
MVP’s Section 401 water quality certifications (WQC) for Virginia and West Virginia faced similar challenges. We analyzed the second issuances of these permits because Virginia withdrew its first WQC and West Virginia asked for its first WQC to be remanded. Because the WQCs were upheld in Virginia, and repeatedly vacated in West Virginia, resulting in new applications, there was no court mandated remand and resulting agency action to analyze.
Regarding the 150-day statute of limitations in the proposed bill, the environmental groups were again quick to file challenges, the longest time period being 78 days from issuance for the West Virginia WQC. As for court process, the Fourth Circuit took 455 days to vacate the West Virginia WQC, and while it ultimately upheld the Virginia WQC twice, it still took 236 days to do so the first time and 462 days to weigh in on the challenges to the second application after MVP amended its path.
U.S. Fish and Wildlife Service Biological Opinion
The USFWS biological opinions (BIOP) for MVP underwent multiple iterations and challenges. The 150-day statute of limitations would have had a significant impact on the initial challenge, which was filed 629 days after the first biological opinion was issued. This provision alone would have shortened the litigation process by over 15 months.
The court process was also extensive. The Fourth Circuit took 60 days to stay the first BIOP, 464 days to vacate the second BIOP, and 92 days to stay the third BIOP. The requirement for expedited court consideration could have substantially reduced these timelines.
The 180-day deadline for agency action on remands could also have dramatically shortened the periods between court decisions and new biological opinions. The USFWS took 329 days to complete endangered species re-consultation and issue a revised BIOP after the initial Fourth Circuit stay, and 390 days to issue a new BIOP after the second vacatur.
A Bridge To Nowhere or a Solid Foundation? Conclusions and Legislative Outlook
Taking a broader view of the entire MVP project, the intricate web of litigation and external factors, such as the Army Corps of Engineers's overhaul of its Nationwide Permit program, makes it challenging to precisely quantify the total time savings if the proposed bill had been in effect. However, it's clear that the potential time saved would be measured in years, not months. Moreover, when considering this in the context of comprehensive permitting reform and similar litigation challenges faced by other agencies, the cumulative impact of this proposed legislation could be far-reaching, potentially transforming the timeline for major infrastructure projects across the board.
While the Energy Permitting Reform Act of 2024 represents a significant bipartisan effort to address long-standing issues in energy infrastructure development, its path through Congress is far from certain. At the time of this article’s publishing, the Senate Committee on Energy and Natural Resources is conducting a meeting to mark up the bill, which faces a constrained legislative calendar as the 118th Congress nears its end — and election year politics add further complexity.
Potential paths forward for the bill include:
- The Farm Bill: Set to expire on September 30th, this could serve as a vehicle for the Energy Permitting Reform Act.
- The National Defense Authorization Act: Although traditionally resistant to non-defense related additions, this annual must-pass bill remains a possibility.
Additionally, both this Congress and Senator Manchin are in their final terms, and it's unlikely that the presumed new Democratic nominee, Vice President Harris, would readily support legislation perceived as beneficial to the fossil fuel infrastructure industry.
Moreover, permitting reform initiatives must always try to balance efficient infrastructure development with thorough environmental review and community input. The proposed reforms would significantly reduce the timeframe for environmental and community groups to voice concerns about projects, which has already sparked opposition. For example, Earthjustice has reported that over 360 environmental organizations have written a letter to Senators Manchin and Barrasso opposing the bill, describing it as “an egregious attempt to fulfill the wish list of the fossil fuel industry… under the guise of promoting renewable energy and developing transmission infrastructure.”
Regardless of the outcome, the Energy Permitting Reform Act of 2024 has already succeeded in one crucial aspect: demonstrating that even in a fractured political environment, there's still potential for cooperation on critical infrastructure issues.