Want to drill an oil well? File the paperwork now and you may break ground in 10 or 15 years. It might be a little sooner for a windmill, but not much. That’s the current lay of the land under the National Environmental Policy Act. Congress should seize the moment to reform.
For years, energy companies, or any builders really, have been dramatically slowed down by NEPA. The process is notoriously slow and environmentalists weaponize the law to further block or slow down projects at their inception. The problems have been recognized on a bipartisan level, but real reform has not had enough political support to pass.
That political will may now be available, and the House Natural Resources Committee has teed up meaningful reform that should be seriously considered by both the House and the Senate.
The opportunity comes through reconciliation, a process that makes laws easier to pass through the Senate. Congress is currently planning to pass a voluminous number of proposals through this process. When the budget calls for reconciliation, certain committees can make proposals that change spending, revenues, deficits, or the debt limit. If the proposal makes those financial changes, it can pass through reconciliation so long as the financial changes are not “merely incidental” to the policy measures. If the bill is eligible, it cannot be blocked by the filibuster and the president does not have to sign it.
Few would have more impact than NEPA reform. The Natural Resources Committee’s proposal is simple. First, it allows project sponsors (i.e. the builders) to pay a fee of 125 percent of the cost of environmental studies that would expedite the time taken to perform the studies. Second, it eliminates administrative or judicial review of the studies. Both proposals are game changers.
First, the fee—125 percent of the cost of the study amounts to an estimated $5 million for environmental impact statements (EIS) or $200,000 for environmental assessments (EA). For multi-million, or even billion, dollar projects, these fees are well worth the cost when considering the reward.
And the reward is substantial. Currently, the laws afford a two-year EIS and a one-year EA, but even those guidelines are virtually ignored. The average EIS takes five years.
One of the most significant factors causing these studies to take so long is the involvement of the courts. NEPA itself has no specified requirements as to the contents of these studies. An EIS, for example, requires a “document that has a reasonably foreseeable significant effect on the quality of the human environment.” Yet the courts have demanded agencies address an increasing number environmental issues, which has created an ever-increasing length of time for these studies to be completed.
Additionally, NEPA affords impacted parties up to six years to sue over the EIS. A suit may take two years to see itself through the court system. And, courts nearly automatically enjoin projects from commencing during the course of litigation. As a result, it may take 10-15 years for a project to actually commence after its original proposal. Environmentalists know this, and use this hurdle strategically.
This is why the second key portion of the Committee’s reconciliation proposal is so important. Eliminating judicial review makes the EIS and EAs easier to conduct because the courts cannot impose demands that the statute does not require. Additionally, eliminating judicial review nullifies activist litigators who use the court system to slow down the process.
This provision should be a good candidate for reconciliation. Five million dollars for each EIS and $200,000 for each EA without doubt impacts the budget. It could be a significant source of revenue for the government. Additionally, that source of revenue does not exist without the dangling carrot used to incentivize project sponsors to pay up. The revenue does not exist without expediting the process and removing the uncertainties. As a result, an honest parliamentarian should not find the impact on the budget to be merely incidental.
This provision would, ultimately, impact everyone. It should receive bipartisan support. Both oil wells and windmills would benefit. And, key infrastructure developments would also be streamlined. A simple reform can result in major benefit. The House and Senate should pass this reform in the budget reconciliation bill.
Curtis Schube is the Executive Director for Council to Modernize Governance, a think tank committed to making the administration of government more efficient, representative, and restrained. He is formerly a constitutional and administrative law attorney.
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