Permit me a bad pun to start this newsletter?
This week, I’m tackling the bipartisan permitting reform compromise bill, which sailed through committee with the support of Sen. Catherine Cortez Masto (D-NV). If passed, it would have major impacts on mining, clean energy development in Nevada and the efficiency with which the Western transmission grid is brought online.
And on a programming note, D.C. Download will be in your inboxes on a slightly different schedule for the remainder of the summer — likely every other week, given that Congress is out of session and D.C. is pretty dead this time of year.
Let’s get into it.
The News of the Week: Permitting reform advances through committee
By a 15-4 vote last week, the Senate Energy & Natural Resources Committee passed the Energy Permitting Reform Act, a compromise bill by brought Sens. Joe Manchin (I-WV) and John Barrasso (R-WY) to speed up the development of energy projects — renewable and fossil fuels.
It would make it easier to bring more energy projects online — whether through power line or pipeline.
The bill, which was cheered by renewable energy proponents and the broader energy lobby while criticized by many environmental groups, addresses a number of different permitting efficiencies and energy types, including the buildout of regional power grids. Among the biggest provisions is shortening the time frame in which litigation can be brought challenging energy projects, typically on environmental grounds — a common tactic that can take years to unfold in courts and requires developers to have large amounts of capital to afford the legal fees and delays.
For Democrats, the bill achieves a key priority of reforming how federal energy regulators approve new power lines — a necessary step to building out a nationwide electric grid that can accommodate the vast amounts of new clean energy coming online and moving it across the country. And for Republicans, the bill eliminates some permitting requirements for oil and gas projects and overturns the Biden administration’s pause on liquified natural gas exports.
Several key priorities are likewise balanced between each party’s interest — the bill also streamlines the permitting process for oil and gas extraction and renewable project development on public lands, a major issue for Nevada. It mandates presidential administrations host either an offshore wind or offshore oil and gas lease sale per year. And it includes modified versions of two Cortez Masto bills — the Mining Regulatory Clarity Act, which would overturn a 2022 legal decision that limited how mining companies can use public land adjacent to their claims, and the STEAM Act, to ease the process of geothermal permitting.
Harry Godfrey, a managing director at clean energy industry group Advanced Energy United, touted the bill as a way to unleash the power of renewable energy and federal investments in the Inflation Reduction Act to buoy it — for new energy projects and the transmission lines to carry that energy around the country.
He cited a transmission line through the Southwestern U.S. that has been held up in permitting purgatory for 17 years as an example of how the current permitting system is broken and cannot bring new projects online at the pace required to meet climate goals.
“If we’re going to realize the potential of the Inflation Reduction Act and decarbonize the grid, then we have to change the status quo,” Godfrey said. “There is no way to do that without moving through permitting reform processes.”
The Nevada Angle
Because more than 80 percent of land in Nevada is federal, most large-scale renewable energy projects require going through the permitting process to operate on public lands. Emilie Olson, a senior principal at Advanced Energy United who manages legislative engagement in Nevada, said the tangle of federal regulations for public land, state rules and local permitting processes can deter private investment in clean energy projects.
The bill sets an explicit target and deadlines to double renewable energy production on federal lands — and aims to achieve it through streamlining the environmental review process for projects considered “low-disturbance” to the land, along with some low impact renewable energy buildouts, electric grid projects and storage.
Critically in Nevada, which has more geothermal resources than any other state, the permitting reform bill would also simplify the process for geothermal leasing. It would create a “categorical exception” to the environmental review process for geothermal projects that are proposed on land already considered disturbed, especially through prior oil and gas activity — legislation adopted from a proposal by Cortez Masto and Rep. Susie Lee (D-NV).
And the portions about transmission would affect Nevada greatly, given its geographic location between regions and new renewable activity spurred by investment from the IRA.
“Nevada is very well-positioned as a connectivity hub in terms of energy delivery — or serving as a sort of energy highway, particularly between the Northwest and the Southwest,” Olson said. “This will come even more to the fore as Nevada moves closer to delivering on its mandate for its utilities to join [a] fully operational, regionally integrated Western market.”
But to capitalize on its transmission potential — for jobs purposes and for NV Energy ratepayers — advocates say this bill is necessary to bring transmission projects to market more quickly. An immense amount of new renewable energy has been and will be generated through new solar and geothermal projects across Nevada — but without the buildout of a transmission grid, the electricity produced will have nowhere to go especially given the intermittent nature of renewable power.
Interstate projects have often been bottled up at the regulatory level, where they require approval from the Department of Energy, the Federal Energy Regulatory Commission (FERC) and each individual state.
The bill would require various regions to collaborate on transmission plans and authorizes FERC to approve the plans, including rates and costs. And it creates a one-year timeframe for states to decide whether to authorize any project that would improve the capacity of the electric grid; otherwise, FERC can step in and issue an approval — including ensuring that customers not receiving any benefits do not incur any new costs.
If passed, the ability to bring more renewable energy projects online — and move that energy through the grid via transmission — is expected to eventually lower costs.
“In Nevada, as we grapple with rising affordability challenges left and right, with recent bill hikes, [transmission] is really important,” Olson said.
On mining, the language in the permitting bill is adopted from Cortez Masto’s original bill, though the effect of allowing ancillary activities on mill sites, or nonmineral land, is the same. The bill would allow for new mill site claims of up to 5 acres for activities such as dumping waste.
Patrick Donnelly, speaking on behalf of the Center for Biological Diversity Action Fund, said he worries about potential abuses of what constitutes the “reasonable activity” that the bill would permit on mill sites.
“You can have a mine completely composed of mill sites, except for one mineral site,” he said.
Finally, Donnelly said he also worried about how the rules around oil and gas leases would increase speculation across Nevada, which has no significant fossil fuel reserves but a long history of exploration. The permitting reform bill would change the structure of oil and gas leasing, mandating the Bureau of Land Management (BLM) offer half of nominated acreage for lease in a year — before issuing any rights-of-way for wind and solar on public land — rather than use discretion to decide whether certain parcels are inappropriate for oil and gas exploration.
Donnelly worried that under such a scenario, managing agencies could not deny leases in the scenic Ruby Mountains, where the Forest Service has previously rejected such attempts.
Cortez Masto has introduced a bill to legislatively end oil speculation in the Ruby Mountains, and the Biden administration finalized a rule to limit leasing on land with low or no oil potential. But environmentalists are worried that without a permanent fix, the permitting bill would lead to more speculation.
“We can get these totally off the wall expressions of interest, and BLM may have no choice but to process them, even if it’s totally inappropriate — there’s no oil there,” Donnelly said. “So it puts industry in the driver’s seat, as far as oil and gas.”
The Impact
The permitting reform bill would completely change how energy projects are developed in Nevada — and particularly how quickly companies can bring them online. And it further exposes the fault lines between renewable energy proponents and some environmentalists, who all want to fight climate change but have different ideas of how to get there.
Around the Capitol
🥕Kroger-Albertsons Update — In the latest development in the proposed merger between grocery giants Kroger and Albertsons, Sen. Jacky Rosen (D-NV) is submitting an amicus brief in support of the Federal Trade Commission (FTC) as it seeks an injunction against the merger.
Rosen, who has supported the FTC’s efforts to attempt to block the merger throughout the legal process, says that if the two companies join, the resulting lack of competition could lead to increased food prices.
💸Tip tax politicking — Rep. Steven Horsford (D-NV) hosted an event with the Culinary Union calling on all states to eliminate the subminimum wage for tipped workers — as Nevada has — and for the federal government to end taxation on tips.
Nevada Democrats are doubling down on the proposal, floated by former President Donald Trump at a Las Vegas rally, as Congress prepares to take up a tax package next year.
What I’m Reading
Axios: Senate Dems brace for Harris Cabinet shuffle
CCM for attorney general? I doubt it, as long as Gov. Joe Lombardo (R) gets to pick her replacement — though Nevada law stipulates it would have to be someone from the outgoing senator’s party.
The Nevada Independent: Is Nevada still a swing state? Why Dems, GOP are bullish on their chances
Everything’s coming up Silver (State).
Politico: Why Kamala Harris chose Tim Walz
Because CCM told her to! (Or at least, she got to weigh in.)
Notable and Quotable
“[Rosen] may call this reckless spending an ‘investment,’ but everyday Nevadans know it’s just another corporate giveaway to a political donor.”
— Sam Brown, on his opposition to federal money going toward the Brightline West high-speed rail project connecting Las Vegas with Southern California, to Punchbowl News