CEI expert analyzes the permitting provisions in the Fiscal Responsibility Act of 2023 

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After several attempts to reform the United States’ broken permitting system for large infrastructure projects, major changes have finally made it to the president’s desk as part of must-pass legislation. The Fiscal Responsibility Act of 2023, a bipartisan law suspending the federal government’s debt limit for 2 years, included reforms to the National Environmental Policy Act (NEPA). In a new paper for the Competitive Enterprise Institute (CEI), senior fellow Mario Loyola summarizes and analyzes the most important changes to the US permitting system. 

Since 1971, NEPA has required federal agencies to study the environmental effects of “major federal actions significantly impacting the human environment.” Court rulings in the 1970s opened the floodgates for litigation and a cottage industry arose, consisting of lavishly funded environmental groups suing to stop virtually every pipeline, highway and export facility in the US over very minor omissions in Environmental Impact Statements (EISs) that can run into the thousands of pages. 

The “NEPA process” – shorthand for our permitting system – takes an average of 4.5 years to complete and requires tens of thousands of staff-hours just for agency employees processing the applications. This bottleneck deprives Americans of modern infrastructure, constricts the supply of energy and transportation, and also puts any transition to lower carbon energy sources hopelessly out of reach. 

Important legislative changes to the permitting process in the Fiscal Responsibility Act of 2023 include

– Empowering lead agencies 

– “Reasonably foreseeable” limitation on environmental impacts that must be studied 

– Guidance on alternatives that must be considered 

– Clearly defined statement of purpose and need for the federal action 

– Time limits and page limits for EISs and EAs 

– Project proponent can prepare their own EISs 

– New definition of “major federal action” 

– Mining, offshore leases, and other Department of Interior issues 

 “The inclusion of permitting reforms in the debt ceiling legislation is a step towards addressing the inefficient systems that have hindered infrastructure development in the United States,” said Loyola. “The amendments to the National Environmental Policy Act aim to streamline the process by focusing on the lead agency, establishing a reasonably foreseeable standard for impacts, and limiting the alternatives that must be considered. These reforms offer a promising framework for balancing environmental stewardship with the need for modern infrastructure.” 

Read the whole report here

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