A side agreement reached between Democratic leadership and Sen. Joe Manchin III (D-W.Va.) as part of their broader deal on an economic package would overhaul the nation’s process for approving new energy projects, including by expediting a gas pipeline proposed for West Virginia, according to a one-page summary obtained by The Washington Post.
To win Manchin’s support for the climate, energy and health-care package that was etched last week, Democratic leaders agreed to attempt to advance separate legislation on expediting energy projects. These changes would fall outside the bounds of the Senate budget procedure the party is using to pass its budget bill, making it impossible for Democrats to approve that with just 51 votes. The new agreement would require 60 votes to be approved and would need GOP support to be signed into law. Republicans have supported similar measures in the past, but the agreement could face defections from liberal Democrats, who have warned against making it easier to open new oil and gas projects.
The 100-seat Senate is now evenly split between Democrats and Republicans, but Vice President Harris can cast a tiebreaking vote.
The side deal would set new two-year limits, or maximum timelines, for environmental reviews for “major” projects, the summary says. It would also aim to streamline the government processes for deciding approvals for energy projects by centralizing decision-making with one lead agency, the summary adds. The bill would also attempt to clear the way for the approval of the Mountain Valley Pipeline, which would transport Appalachian shale gas about 300 miles from West Virginia to Virginia. This pipeline is a key priority of Manchin’s.
Other provisions would limit legal challenges to energy projects and give the Energy Department more authority to approve electric transmission lines that are deemed to be “in the national interest,” according to the document. One provision in the agreement could make it harder for government agencies to deny new approvals based on certain environmental impacts that are not directly caused by the project itself, said Sean Marotta, a partner at the Hogan Lovells law firm who represents pipeline companies.
“This is a pretty vague outline, but if you had this kind of efficient streamlining it could lead to the necessary build-out of energy infrastructure not just for fossil fuels but for all types of energy that are necessary for reliability and decarbonization,” said Neil Chatterjee, former commissioner and chairman of the Federal Energy Regulatory Commission.
Still, the agreement poses new challenges for Democratic lawmakers who are weighing these permitting changes as the necessary price to pay to secure Manchin’s support for hundreds of billions in new clean energy investments. Climate groups have largely said that trade is worthwhile, because Manchin’s vote on the broader package will unlock long-sought subsidies and tax credits for solar, wind and other forms of renewable energy. But many Democrats have been wary. Sen. Jeff Merkley (D-Ore.) said previously: “I really want to see all the details on the permitting. We all knew that any deal that would be struck between Schumer and Manchin would have a lot of fossil fuels in it. The question is on balance.”
The agreement appears to have been the only way to secure Manchin’s vote for the broader climate deal. Manchin had voiced concerns about approving hundreds of billions of dollars in government subsidies for energy projects that could be defeated by red tape or climate lawsuits, and said the United States must do much more to avoid its dependence on authoritarian petrostates.
“Manchin holds all the cards here, and this is his ante,” said Liam Donovan, a GOP political strategist. “Democrats can only do so much under the reconciliation rules, so they inevitably have to look beyond the scope of the bill to seal the deal.”
The immediate reaction to the details of the agreement were mixed. Christy Goldfuss, senior vice president for energy and environment policy at the Center for American Progress, a center-left think tank, pointed out that “it appears this deal does not circumvent the necessity of gathering information about the impacts of a proposed project,” meaning its environmental impact could be mitigated. She also pointed out that the broader energy package includes additional funding for agencies to review new energy projects.
In both public and private talks, Manchin has made clear that he views approving the Mountain Valley Pipeline as a top priority. Supporters have characterized it as a way to help make the United States an exporter of liquefied natural gas, which the United States is sending to help Europe amid the war in Ukraine.
Climate groups have opposed the project, with a 2017 analysis by Oil Change International, an advocacy group, finding that the greenhouse gas emissions from the Mountain Valley Pipeline would approximate 26 coal plants or 19 million passenger cars.
Democrats’ climate provisions would dwarf the impact of the West Virginia pipeline, in terms of their impact on emissions. The firm Energy Innovation found that greenhouse gas emissions would fall by as much as 41 percent below 2005 levels by 2030 with the bill.
“We must pass the Inflation Reduction Act if we want to get on track to cutting carbon pollution in half by a decade,” said Leah Stokes, an energy policy expert at the University of California at Santa Barbara. “Without this legislation we don’t have a pathway to get there; with it, we have a fighting chance. There are provisions I don’t agree with, but we have to be clear-eyed: Failure is not an option right now. We have to get climate investments over the finish line.”