Can America Actually Build the $1 trillion-plus in Clean Energy and Infrastructure Projects Authorized by Washington?

Late last year, Democrats and Republicans in Congress came together to pass the Infrastructure Investment and Jobs Act, which was the biggest federal public works bill in six decades. And recently President Biden signed into law the Inflation Reduction Act (IRA), passed with only Democratic votes, that authorizes $370 billion in clean energy investment over the next decade.

Now comes the hard part. Can America actually build the roads, bridges, transit, power lines, solar arrays, and other infrastructure these bills authorize? Even if we are able to build, will these much-needed projects end up millions over cost and decades delayed?

Before agreeing to cast the deciding vote to pass the IRA, Democratic Senator Joe Manchin got Democratic House and Senate leadership to agree to hold a vote this fall on streamlining the federal permitting process. Earlier this month, Senate Majority Leader Chuck Schumer pledged to include permitting reform in a larger authorization bill Congress must pass this month to keep the government funded. On September 21, Manchin released the draft text of his permitting reform proposal and no one seems happy.

As The New York Times reported, “lawmakers in both parties are balking over a deal they insist they were never a part of, prompting a dispute that threatens to derail a government spending bill that must pass by next weekend to stave off a shutdown.”

Even before Manchin released his proposal, 72 House Democrats had expressed their opposition to including the permitting reforms in the funding bill in a letter to Speaker Nancy Pelosi and House Majority Leader Steny Hoyer, implying the move could risk a government shutdown. Republicans – resentful of the IRA’s passage and Democrats’ political maneuvering – are also not guaranteed to support such legislation. On September 12, West Virginia Republican Senator Shelley Moore Capito introduced her own permitting reform bill with 38 Senate Republican co-sponsors, but given this bill lacks any current Democratic support, this is a bill more designed to send a message than to become law. 

It isn’t yet clear if a robust permitting reform measure can pass. But it is clear that it should. If it doesn’t, Americans could find many of these new infrastructure and energy projects tangled up in red tape for years.

It’s no secret America’s infrastructure planning and approval system is highly inefficient. Major projects in the U.S. rarely get completed on schedule and within budget. Consider California’s high-speed rail system approved by voters in 2008 to link Los Angeles and San Francisco. Initial estimates priced the project at $33 billion and estimated completion by 2020. Fast forward to today, the new estimate sits at $105 billion with a 2033 completion date. Beyond funding setbacks, the project has faced challenges including land acquisition, environmental litigation, permit delays, employee turnover, design adjustments, and political obstacles. In addition to disagreement among state leaders on how and where to allocate funding, in 2019 President Trump called the project a “green disaster” and revoked $929 million of its grant funding. This grant funding was subsequently restored by the Biden administration. 

New York City’s East Side Access extension of the Long Island Rail Road faced similar delays. The project was supposed to be finished 11 years ago at a cost of $2.2 billion. Now it’s expected to cost $12 billion – or $3.5 billion per mile – when it’s finished this year. U.S. rail transit projects are estimated to cost 50% more per mile than in Europe and Canada (or 250% more when including New York), while construction on average takes 6 months to 1.5 years longer. By comparison, an underground Metro Line in Toulouse, France cost $176 million per mile.

There are many reasons why it’s hard to build things in America; a web of rules, regulations, and governing bodies – at the national and local level – are often redundant, sometimes contradict one another, and don’t include clear lines of authority. Processes for public input and lengthy litigation means it is not unusual in the U.S. for a project’s permitting to take significantly longer than the time it takes to actually build the infrastructure. The Permitting Institute, a nonprofit advocating for “removing red tape” in the infrastructure permitting process, crafted a flowchart detailing the types of considerations and barriers a solar power project may face in the permitting process (see below).

Source: The Permitting Institute

Most of the new infrastructure and clean energy projects recently authorized by Congress will be subject to intense regulatory scrutiny and environmental review under the National Environmental Protection Act (NEPA). The law requires federal agencies to coordinate to prepare an Environmental Impact Statement (EIS) and circulate a draft to relevant agencies, the public, and the Environmental Protection Agency. After a 45-60 day public comments period, a final EIS addressing any issues raised is published for a minimum 30 day review period. Finally, the lead agency, with final decision making authority, publishes a Record of Decision explaining their decision and identifying the alternatives considered.

NEPA: Background, Debate, & Reform Attempts

NEPA was enacted in 1970 after passing Congress with overwhelming bipartisan support. It was a landmark reform intended to promote informed government decision-making and create community safeguards by encouraging citizen involvement in the project review process, thereby increasing government transparency and accountability. NEPA’s enactment followed several high-profile environmental disasters in 1969, including a crude oil spill in the Santa Barbara Channel and the Cuyahoga River Fire caused by industrial pollution. The public was clamoring for higher environmental standards as the government undertook some of the most ambitious infrastructure projects in the nation’s history.

But as the size of the government has grown and our scientific understanding of environmental impacts advanced, so too have the demands of the environmental review process. 

According to the nonprofit Common Good, when NEPA was created, government was smaller and less sprawling, and generally the review process could be completed within months or a year of the initial proposal. At the same time, environmental impact statements (EIS) were typically a few hundred pages. Fifty years later, the average review process takes 4.5 years and a typical EIS runs 661 pages. This level of scrutiny comes at a high cost – delays drive up a project’s financing costs, create prolonged inefficiencies, and signal a failure of government to provide necessary public goods. Not to mention the opportunity costs of wasted federal funds that could have flowed to other government programs. 

NEPA’s public comments provisions have empowered local communities and organized interests to often block important and broadly popular infrastructure projects for almost any reason. A 2022 study by MIT professors that examined 53 utility-scale alternative energy projects that were either delayed or terminated between 2008 and 2021 found that the most common source of local opposition was concern about land value and the project’s impact on aesthetics, recreation, or other community uses (62%). This was followed by environmental impact (60%), health and safety (28%), unfair public participation processes (28%), failure to protect tribal rights (23%), challenges to project financing (21%), and intergovernmental disputes (21%). In 80% of cases, there were multiple sources of opposition at play. Further, the study found “no evidence that project developers found a way to work constructively with opposing groups,” indicating many paused or delayed projects fail to ever move forward.

Unfortunately, significantly reforming NEPA has been a red line for most Democrats. Many maintain that strict, broad NEPA provisions actually prevent litigation, reasoning that it’s better to have broad stakeholder buy-in before construction begins instead of having litigation hold it up after it has started. In the words of Brenda Mallory, the Council on Environmental Quality (CEQ) Chair appointed under President Biden, NEPA’s community safeguards “provide regulatory certainty, reduce conflict, and help ensure that projects get built right the first time.”

For their part, Republicans have been seeking ways to reform or, in some cases, radically overhaul NEPA for years. In 2020, 130 House Republicans signed a letter addressed to then-Chairman of the CEQ Mary B. Neumayr calling for NEPA modernization, claiming that NEPA has strayed from its original objectives, and stating: “Now, unending litigation and mountains of paperwork define a permitting process that stretches along an indefinite timeline.” One of the signers, Washington Representative Dan Newhouse, believes NEPA “exemplifies bureaucratic red tape,” and claims: “Our constituents cannot afford these delays when trying to renew, maintain, or develop critical infrastructure projects across the country.”

In the absence of any bipartisan agreement in Congress on how to reform federal infrastructure permitting, both President Trump and Biden have turned to executive action.

In 2017, President Trump issued an executive order creating the One Federal Decision policy and directing CEQ to propose updates to NEPA. Taking effect in 2020, the new rules put limits on NEPA reviews by imposing firm review timelines and page limits, and narrowing the scope of NEPA reviews to “reasonably foreseeable” impacts with a “close causal relationship to the proposed action.” President Trump and his supporters hailed the move as an action to fuel economic growth, create jobs, and remove red tape. Environmentalists and many Democratic officials said the revisions would eliminate key environmental safeguards and enable the building of more oil and gas infrastructure the U.S. should not be building on account of climate change. 

On the day of his inauguration, President Biden issued an executive order initiating a review of Trump’s policy revisions, and he eventually rescinded Trump’s previous order and restored NEPA’s old provisions in April 2022. While the decision was endorsed by environmental groups, Chad Whiteman, the vice president for environment and regulatory affairs at the U.S. Chamber of Commerce’s Global Energy Institute, said it will “only serve to slow down building the infrastructure of the future,” including clean energy projects and public transit improvements.

What’s the Way Forward?

Executive orders are only guaranteed to last as long as the tenure of the president who signs them. That’s why Congress should seize the opening offered by this fall’s promised vote on federal permitting reforms. 

The original intent of NEPA was sound: to create a more transparent and inclusive process to ensure infrastructure projects don’t have an unacceptable environmental impact. But NEPA now inflicts a harm of its own when much-needed, widely popular infrastructure projects are blocked by a small opposition. Rather than ensuring environmentally unsafe projects don’t get built, NEPA often allows few projects to get built at all, regardless of the benefits they would bring to a community or the environment. 

To meaningfully reform permitting while maintaining transparency and safeguarding stakeholder participation, Congress should prioritize reforms that 1) reduce the endless litigation delays, and 2) create a system that prioritizes infrastructure projects based on clear criteria, encourages efficiency, and promotes accountability for all parties involved. Here are a few ways Congress could do it:

Reduce Litigation Delays

Expand FAST-41 litigation standards to all NEPA projects. Litigation, especially cases brought about by public interest groups, is one of the main reasons for NEPA delays. Under Title 41 of the Fixing America’s Surface Transportation Act (FAST-41), signed by President Obama in 2015, parties who file a legal challenge against a project are required to have previously submitted a related comment during the public comments period. This rule was developed to allow federal agencies to adequately study the specific concerns that might bring about litigation or delays later on during the initial environmental review. FAST-41 only applies to “covered projects” requiring investments of at least $200 million. Applying this aspect of FAST-41 to all NEPA projects could optimize the NEPA document preparation phase while limiting unexpected litigation.

Reduce the statute of limitations for court challenges. Currently, the statute of limitations for filing a court case against a NEPA project is 6 years and 2 years for FAST-41 projects (or 150 days for federal highway or public transportation projects). This is not consistent with other environmental statutes, which are typically just 60 to 120 days. Reducing the statute of limitations to 150 days, as Manchin recommends in his proposal, would encourage early active participation in the NEPA process, raising the bar for litigation quality and ensuring that legal challenges are brought forward early in a project’s development.

A Faster, More Efficient Review Process

Expedite permitting for clean infrastructure projects on public lands. As suggested by the Bipartisan Policy Center and based on Sec. 84401 of the Moving Forward Act introduced by House Democrats in the 116th Congress, Congress should expedite environmental reviews for clean energy infrastructure projects sited on public lands that have been pre-approved as “preferred locations” for renewable energy projects. These projects will be given highest priority for review and will rely on programmatic environmental impact statements to the maximum extent possible to expedite reviews while safeguarding environmental standards. Impacted states and counties would receive a portion of the project’s revenues, with additional revenues being directed to permit processing agencies.

Create a nonpartisan infrastructure oversight body. Philip K. Howard, founder of Common Good, proposes a National Infrastructure Board akin to Infrastructure Australia or Infrastructure Canada. He suggests: “Its responsibilities would be not to build infrastructure but to oversee and report on how infrastructure is built. Funding could still go through states, but only on condition that timelines and contracts meet standards and commercial reasonableness.” Such a board could: 

1. Set national infrastructure priorities and select high-priority infrastructure projects based on an unbiased cost-benefit analysis. In assembling an infrastructure priority list, the board would clearly lay out the problem or need a project is proposed to address, while evaluating it based on weighted criteria such as societal impact, deliverability, and “strategic fit” with larger government objectives like decarbonization potential, clean energy production, or reducing consumer costs. To streamline review of our most-needed infrastructure, projects designated as “high-priority” may be subject to expedited environmental review.

2. Streamline permitting and public engagement by increasing agency coordination and clearly tracking a project’s progress. The board could assume responsibility for selecting the lead agency in charge of the NEPA review. By creating a mechanism to track a project throughout the permitting process, similar to the Permitting Dashboard for FAST-41 projects, the public can keep track of important deadlines for participation and monitor which agencies and authorizations are involved as well as the estimated completion timeline.

3. Evaluate agencies’ efficiency and compliance through accountability scorecards. Modeled on the infrastructure permitting accountability scorecards for FAST-41 projects mandated under former President Trump’s executive order, the National Infrastructure Board could oversee the quarterly review of an agency’s performance. Scores could be determined based on data on an agency’s adherence to permitting deadlines, average permitting completion time, implementation status of any permitting reforms, and ability to cooperate with other agencies. Scorecards would allow the board to point to which agencies might be delaying the process and thoroughly examine the people, practices, or culture contributing to inefficiencies. Reinstating them will also reinforce agency accountability and increase transparency with the public.

4. Annually audit projects to monitor project management and spending. The board can use a similar scorecard mechanism to evaluate specific projects by assessing criteria such as their progress towards completion, causes of delays, employee turnover rates, funding gaps, spending patterns and budgetary changes, management practices, design changes, and litigation challenges. Tracking this information will help policymakers and the public understand what kinds of challenges specific projects face and to identify and eliminate wasteful practices.

Infrastructure permitting inevitably requires lawmakers and agencies to weigh an array of tradeoffs. But five decades after Congress created the National Environmental Protection Act, the process has evolved to have a clear bias toward not building projects or at least making them much more costly with endless delays. Presidents Trump and Biden both tried to apply their permitting preferences through executive order, but it’s time for Congress to develop a permanent legislative solution that creates accountability and consistency as opposed to Washington rewriting the rulebook with each new administration.