Calls for Energy Permitting Reform Take Center Stage at Governors Conference

WASHINGTON — Republican and Democratic governors gathering in the nation’s Capitol last week called for a wide range of new policies to streamline the permitting process for vital energy and infrastructure projects.

At the same time, governors participating on an energy-focused panel at the National Governors Association meeting, outlined steps they’ve taken to stay ahead of the competition — nominally China — while they await new rules from federal departments and agencies.

“It shouldn’t take longer to approve a project than it takes to build it,” said Oklahoma Gov. Kevin Stitt, a Republican and also the current vice chair of the association.

“Permitting reform is one of those issues where both Republicans and Democrats recognize the problem, we largely agree on solutions, and Congress gets close year after year to doing something. But somehow it just never crosses the finish line,” he said.

Stitt noted with concern that the United States continues to be one of the slowest nations in the developed world in approving infrastructure projects — particularly when it comes to energy.

These concerns, already on the front-burner for most of the governors in attendance, grew several fold after a joint appearance by new Interior Secretary Doug Burgum and Energy Secretary Chris Wright at the gathering.

Burgum noted that not only is China cornering the global renewable energy market while building at least one new coal-fired plant a week to meet its own energy needs, it’s also, he said, doing all it can to gain a monopoly on critical minerals, including lithium, which is a key component in energy storage. 

“Your role as governors is key to driving America forward,” Burgum told the group. “Give us every idea you have because we have to go faster — not just for reasons of affordability for the American people and for economic opportunity and creating better jobs. 

“It’s because we’re in a competition against other countries … When we generate energy here, it’s cleaner, safer, smarter than anywhere in the world. When we do that, it’s good for the global environment, it’s good for our economy, and it’s good for our allies. We want to champion innovation over regulation,” he said.

Among those leading the charge is Pennsylvania Gov. Josh Shapiro, a Democrat, who highlighted a number of steps his state has taken to address the situation.

These include signing an executive order during his first week in office directing state regulators to catalog all of the permits they’d issued in the past year. That in turn led to creation of a time certain for permits, and backing that pledge with a money-back guarantee.

As a result of these initiatives, Pennsylvania, the second largest net energy exporter in the country, has been able to reduce environmental permit backlogs by 85%, Shapiro said.

The governor said even before he took office two years ago, state officials realized that one of the biggest things holding Pennsylvania back from doing even more in the energy space was its permitting process.

“That’s why fixing it has been a priority of mine,” he said.

While cataloging every single permit application the state had granted might seem the height of bureaucratic paper shuffling, Shapiro said the effort, which had never been undertaken before, led to a number of discoveries.

“One was that we had issued 3,400 different permits,” he said.

“The other thing we discovered was that we were moving too damn slow across the board,” he said, “so we set out to change that.”

The first step was to create a deadline for decisions on various permit requests and then initiating the aforementioned money back guarantee. 

“So if we say it’s going to take 14 days to get your permit, and we hit that 15th day, we will give you your money back,” Shapiro said.

“Now, I know there are a whole lot of folks from industry attending this conference, and you don’t want your money back, you want your permit. But I think the money back guarantee is something that holds our bureaucracy accountable,” he said.

“I can also proudly report that in the first year that the money back guarantee has been in place, we’ve only had to issue four refunds at a time when we were processing thousands of permits a year,” he said.

“The other thing we did — and I think this is an issue for every governor — is we acknowledged that complex projects that involve environmental permits tend to take too darn long,” Shapiro continued.

“So I signed legislation, the SPEED Act, supported by both Democrats and Republicans, that provides third-party review for complex environmental permits, and that’s actually helped to speed up the process,” he said.

Another step Pennsylvania has taken is to implement a fast track permitting process that allows applicants to apply for and follow the progress of their permit request on a public-facing website.

Among other things, Shapiro said, the fast-track process has held both the bureaucracy and the companies or industries accountable throughout the process, and ensured that state regulators have all the information they need to process a permit quickly.

“We are seeing real results from this effort,” Shapiro said. 

As an example, he noted that every business in Pennsylvania, whether it be a local barber shop or a huge multinational corporation, needs a business license to operate in the state.

“The day I was sworn into office, it took eight weeks to get that business license; today, it takes just two days,” he said.

Also speaking about the issue of energy projects and permitting was Henry McMaster, South Carolina’s Republican governor.

“All of us have been subject to a permitting process at some point in our daily lives,” McMaster said. “You need a permit to catch a fish, you need a license to drive a car, and so on, and getting those things doesn’t take that long — although we’d like that to be quicker too.

“That said, getting something like a nuclear reactor permitted and up and running is the slowest thing in the entire world, and we can’t afford that anymore,” he continued.

“Everything we do, everything that everybody’s talking about here today, requires electricity, and I think we’ve all realized that we have got to have nuclear power as part of our arsenal,” McMaster said.

“In my state, we’re about 60% nuclear. We like nuclear power. We’ve had it for a long time. I think we’re also about 23% gas, 19% coal, and we also have biomass and hydro and some solar,” he said. “In other words, we are for an all-of-the-above approach to providing our citizens and businesses with the energy they need.

“That said, I believe we need to expand the nuclear component of our energy mix or we just are not going to be able to survive. Competition around the world is dangerous. So how do we do that?

“In South Carolina, we started building new nuclear facilities and we got about halfway through and had to quit for a variety of reasons — cost overruns being a very big factor,” McMaster said.

“Nevertheless, I’m confident with the leadership we have and the necessity that’s facing us, we will be able to get this done. We’ll be able, as Doug Burgum says, to be clean, safe and reliable — if we can just get the bureaucracy out of the way,” he said.

“If we do that, I think we’ll be in great shape. But we’ve got to learn how to better communicate, collaborate and cooperate with each other,” McMaster said.

Another challenge that was much discussed during the energy session of the conference was the need to build a growing number of data centers to keep pace with the artificial intelligence revolution.

Burgum recalled that when tech companies began building data centers in his home state of North Dakota, of which he was governor at the time, they told him they would need access to about one gigawatt of power — as much as is used to power the entire city of Denver, Colorado.

These facilities, several governors in attendance noted, pose two immediate challenges: One is providing the power, the other is providing the cooling water these massive facilities need.

Talk of the demand these facilities place on the energy grid then turned to the challenge of moving power from one place to another.

New Mexico Gov. Michelle Lujan Grisham, a Democrat, said she believed her state has come up with a “very good model” for addressing the situation.

“SubZia, which took way too long, still took far less time than any other current transmission project that we know of,” Grisham said.

The project she was referring to, SunZia Wind, is a 3.5 GW wind farm being developed in a three-county region in New Mexico. When it is completed, it will be the largest wind project in the western hemisphere.

In addition to the wind farm itself, the development includes SunZia Transmission, a 550-mile, 3 GW transmission line that will carry power to Arizona and California.

Part of streamlining the process, she said, was creating a Renewable Energy Transmission Authority that can nimbly approve transmission projects.

“Right now, we’re on track to add five more transmission projects,” Grisham said.

“The other thing we’ve figured out is how to do better rights-of-way negotiations,” she continued.

Building on these successful steps, Grisham said her administration is now working on legislation to build more transparency into the permitting process, “believing, as the federal government does, that more transparency leads to more innovation.”

Looking ahead, Grishman said that as a governor she would like to see more state and federal partnerships when it comes to energy and infrastructure projects, and a wider proliferation of fast-track permitting not just for huge, multimillion dollar projects, but smaller ones as well.

“On top of all this, I’d say, I think this is a really good time for us, as states, to show the federal government that we can do these things and how we did them,” she said.

Dan can be reached at [email protected] and @DanMcCue