Chairman Capito Asks Witnesses About the Costs of Federal Permitting Uncertainty

WASHINGTON, D.C. – Today, U.S. Senator Shelley Moore Capito (R-W.Va.), Chairman of the Senate Environment and Public Works (EPW) Committee, led a hearing on examining the federal environmental review and permitting processes. During the hearing, Chairman Capito asked all witnesses to share about the economy-wide costs that federal permitting uncertainty places on businesses, consumers, workers and state governments.

HIGHLIGHTS:

IMPACTS OF PROJECT AND PERMIT CERTAINTY:

Chairman Capito:

“What we’ve seen in administrations as they come in, depending on what their political priorities might be, is disruptions in the permits that have already been issued, and that’s what we’re seeing with the Rhode Island projects. I think all of these projects, whether it’s the [Mountain Valley] Pipeline or others, have gone through the permitting processes and were already under construction, some of them almost at completion phase. So, I’ll start with you, Mr. Bechtel, could you briefly address how the lack of certainty in the permitting process, and the treatment of properly awarded permits during Presidential transition periods can hurt your investment planning, and in turn consumers and households economy-wide?”

Brendan Bechtel, Chair of the Smart Regulation Committee for Business Roundtable:

“Yes. Uncertainty disrupts workforce planning, investment, communities and families. […] Predictability matters for all of these constituents in the process. And I think it’s fair to say that rather than any one project, this is about how the whole system works, including what happens after a permit is issued and what happens with litigation. Something that [Mr. Booker] can speak to as well is that for these kinds of projects, in our case for example, we’re typically making investments in training, in hiring, partnering with vocational schools in the area, doing housing studies ahead of time to make sure we mitigate impacts on local housing for big projects. That all can happen 18 to 36 months before a shovel ever even goes in the ground. And so, unpredictability about when we need to get started on that work is a real issue…”

Chairman Capito:

“You cited two projects in your opening statement, one in Australia and one in Canada. […] Are there any other countries that have to live with the unpredictability of already-permitted projects getting yanked because of political priorities?”

Brendan Bechtel, Chair of the Smart Regulation Committee for Business Roundtable:

“I’m trying to think of examples of other countries. I will point out, I deliberately picked the Australia and Canada examples because I don’t think any of us would say those are countries that cut corners when it comes to environmental and social protections, and so I think they’re leading examples that you can achieve efficiency, speed, scale, while really having important community engagement and environmental protections upfront in the process.”

Chairman Capito:

“Mr. Booker, if you could frame the question on the uncertainty, what does this do to the worker? I think you [explained this well] when you were here before. I remember quite well your impassioned statements, ‘that means I’m not working. I’m not getting paid.’”

Brent Booker, General President for Laborers' International Union of North America (LIUNA):

“That’s the bottom line. It takes time to get the skills you need, whether that’s building offshore wind, whether that’s building a pipeline, a natural gas power plant, a nuclear plant. Whatever the energy source is, it’s actual people who have to go build that and have to apply skills to do that. And it’s our job to partner with our contractor partners to create registered training apprenticeship systems to get the skillsets that are needed to produce a skilled craftsman to build that project safely. When a project is built, when it’s being built […] people move. Our workforce is transient in some cases. A lot of time it’s local as well. But they will move to that job, move their family, because they know they have the two-, three-, four-year job to build that energy infrastructure. And to have the whim of somebody with a pen in their hand say, ‘you know what, I don’t like that energy source,’ completely disrupts their life, their livelihood and their family’s livelihood.”

Dustin Meyer, Senior Vice President of Policy, Economics and Regulatory Affairs for American Petroleum Institute:

“From our industry’s perspective, we’re eager to deploy billions of dollars of capital to build these major infrastructure projects, and we face a real gauntlet to bring them to completion. Everyone agrees that there should be a robust environmental review system, but what really challenges the industry is when you get approval, but the approval does not equal finality. Or even when you are in compliance, that does not end litigation. And we have a long history of several examples of projects meeting exactly that fate. And it really complicates and prevents our ability to build the infrastructure in the first place.” 

Chairman Capito:

“So basically, what you’re saying is, the uncertainty and unpredictability that come from political priorities—if you load that on top of the judicial review piece—it almost becomes an unbearable load in some cases?”

Dustin Meyer, Senior Vice President of Policy, Economics and Regulatory Affairs for American Petroleum Institute:

“That’s absolutely right. It’s a challenge not just for projects that are going through the process, but it chills the decision even to propose new projects.”

Abigail Ross Hopper, President and CEO for Solar Energy Industries Association:

“I will agree with everything my colleagues said and add the impact on consumers. Regardless of whether it happens prior to approval, or especially if it happens after, those electrons are baked into the grid planning. And if those go away, we all know what happens, our prices go up because there’s a scarcity of a much-needed commodity. And so, the impact on homeowners, on businesses, on all of us, is pretty impactful if these projects are either not approved in the first place or, even more egregiously, permits are pulled.”  

David S. Terry, President, National Association of State Energy Officials:

“I think from a state perspective, the energy offices are deeply engaged in grid planning, energy system planning, delivered fuels, etc. When they look out at their resources, both natural resources and human resources, and how they can deliver reliable energy in their state, how they can help their governors and legislatures make this happen from an affordability perspective, the unpredictable nature of federal permitting is essentially a hidden tax as the delays happen. That’s certainly true for large organizations, hyper-scalers, etc. that we read so much about. But for individual homeowners, for farmers, for small businesses, consumers—many of whom don’t have resources—that hidden tax, we don’t really tally. And I think that’s something we’re missing, in addition to the obvious national competitiveness and security issues.”

Click HERE to view Chairman Capito’s questions.

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