The Colonial Pipeline Shutdown May Shift Infrastructure Debate in a More Useful Direction

If there is a silver lining to the cyberattack that shut down the Colonial Pipeline and left many East Coast drivers waiting in line for their turn at the pump, it is that the ongoing debate over infrastructure just may turn in a direction that addresses America’s actual infrastructure needs.

To give an idea of how badly off track things had gotten, a 25-page description of the president’s $2.3 trillion dollar infrastructure plan contains the term pipeline only once, and that is in the context of a proposed $48 billion dollar training program for infrastructure-related jobs that aims to strengthen “the pipeline for more women and people of color to access these opportunities.” Metaphorical pipelines aside, the proposed $2.3 trillion plan has nothing to directly address actual fuel pipelines like Colonial.

Even worse, the parts of the plan that do deal with transportation infrastructure focus on the wrong kind of it. Most notably, the plan promises and eye-popping $174 billion to incentivize electric vehicles (EVs), including generous subsidies to build more EV charging infrastructure. But the reality is that only 3 percent of new vehicle sales are EVs, thus any new spending on them does absolutely nothing to benefit the vast majority who still need gasoline and diesel fuel to get around.

The solution is not to throw $174 billion at pipeline owners instead. The good news is that there is little need for infusions of tax dollars into the liquid fuels infrastructure, but rather a need for cutting federal red tape that is impeding investment.

Getting new federal pipelines approved has long been a problem. To its credit, the Biden administration has occasionally talked about streamlining the infrastructure permitting process, but it has already initiated actions in the opposite direction. This includes an executive order revoking the previous approval of the Keystone XL crude oil pipeline, as well as initiating a reconsideration of important National Environmental Policy Act (NEPA) reforms finalized under the Trump administration. These provisions would serve to streamline the pipeline approval process, allowing for new routes that would lessen the dependence on existing ones. In light of the Colonial closure, provisions facilitating the approval of competing pipelines should be expanded rather than repealed.

In addition, the Northeast has experienced several refinery closures in recent years, which has made the region more dependent on the Colonial Pipeline and its supply of refined products coming from the Gulf Coast. The closures can be explained at least in part by federal policy, including the fact that the Renewable Fuel Standard (RFS) mandating that corn ethanol and other biofuels was especially costly for many of these facilities. The Colonial Pipeline incident provides one more reason to revisit the RFS.

Also, some of the temporary red tape-cutting measures now being imposed in response to the pipeline shutdown should be made permanent. This includes waivers of the Jones Act provisions that greatly restrict tanker shipments of fuel to the East coast, as well as certain local fuel specifications that can preclude excess fuel produced for one metropolitan area from being used to address shortages in neighboring markets. There is no good reason these provisions should be waived only in response to an emergency.

Republican counterproposals would spend considerably less than the Biden plan, but in truth all that is really needed is measures that get the federal government out of the way and allow investment in a more robust fuels infrastructure less susceptible to single incidents causing major disruptions.