Defense Policy Bill Excludes Manchin Energy Permitting Changes

The annual defense policy bill released Tuesday night excludes controversial changes to the federal permitting process for energy projects that Sen. Joe Manchin sought to include, likely punting any action on the proposal to the next Congress.

Despite “working and praying,” as Manchin said last week, the West Virginia Democrat was unable to insert language in the must-pass fiscal 2023 National Defense Authorization Act that would streamline the federal environmental review process for fossil fuel and renewable energy projects. Manchin, who leads the Senate Energy and Natural Resources Committee, has wanted to speed up the process for energy projects, including a proposed natural gas pipeline in his state, that often stretches for years and can add uncertainty for developers.

“Failing to pass bipartisan energy permitting reform that both Republicans and Democrats have called for will have long-term consequences for our energy independence,” Manchin said in a statement Tuesday night after the NDAA text was released. “The American people will pay the steepest price for Washington once again failing to put common sense policy ahead of toxic tribal politics.”

Republicans, progressive Democrats, and environmental groups were all unhappy with adding Manchin’s permitting language to the NDAA, albeit for different reasons. Many Republicans ultimately want more aggressive changes to the federal permitting process; several Democrats and green groups feared Manchin’s proposal would undercut disadvantaged communities’ efforts to push back against fossil fuel projects in their neighborhoods. Members of both parties expressed concern over adding non-defense related matters to the critical annual defense policy bill.

“Thanks to the hard-fought persistence and vocal opposition of environmental justice communities all across the country, the Dirty Deal has finally been laid to rest,” Natural Resources Chair Raul Grijalva (D-Ariz.) said in a statement. “House Democrats can now close out the year having made historic progress on climate change without this ugly asterisk.”

The omission increases the chances a permitting overhaul will materialize in the 118th Congress, when Republicans control the House, and Democrats run the Senate with a slim margin. But that scenario presents challenges as well, said Christi Tezak, managing director for research at ClearView Energy Partners, an independent energy research firm.

“Permitting reform is not impossible, but it’s tough, especially the more intent the House folks are on messaging hot out of the gate,” Tezak said. If Republicans jam through partisan bills that are dead on arrival in the Senate, then any efforts to modify permitting will have to focus on regulatory action through the agencies and the White House, rather than legislation.

Photo: Anna Moneymaker/Getty Images

Senate Energy and Natural Resources Chairman Joe Manchin (D-W.Va.) speaks in a hearing on July 19, 2022.

State of Play

Several Democrats other than Manchin, as well as Republicans, have expressed interest in changes to the federal permitting process.

“I’m strongly in favor of permitting reform if we’re going to realize our climate goals,” said Sen. Angus King (I-Maine), who caucuses with the Democrats and is a member of the Energy and Natural Resources Committee. King supported Manchin’s proposal.

Others, including Sen. Tim Kaine (D-Va.) and Rep. Scott Peters (D-Calif.), are open to changes that would help transmission and renewable energy projects get up and running faster. “I see a very working bipartisan majority for permitting reform,” Kaine said in late October.

Sen. Shelley Moore Capito (R-W.Va.) has introduced a permitting bill (S. 4815) with nearly unanimous Republican support that’s more aggressive than Manchin’s in accelerating processing timeframes and other criteria. In the House, Rep. Garret Graves (R-La.) has sponsored legislation (H.R. 2515) that would modernize and expedite the current permitting system for energy projects.

Expected Natural Resources Chairman Bruce Westerman (R-Ark.) has said that bill—the BUILDER Act—could form the basis for what House Republicans promote on permitting next year.

Manchin still has a shot at including his proposal, which would also fast-track the Mountain Valley pipeline in his home state, into a stopgap government funding measure or year-end omnibus in the waning days of the 117th Congress. But incorporating it into the omnibus looks like “a rough lift unless some kind of Jenga” is performed to require it, said Tezak. The current funding measure expires Dec. 16.

She said Democrats are “frustrated because Manchin has been able to dictate a lot of terms to folks and they are just kind of maxed out.”

Lawmakers added Manchin’s proposed permitting language to a stopgap government funding bill in September to fulfill a commitment to him, after the West Virginia Democrat voted for the party’s climate, tax, and health-care spending bill (Public Law 117-169). But Manchin, still a crucial Democratic vote in the Senate, ultimately pulled the language from the bill to avoid a government shutdown when it became clear the measure lacked enough support.

If Sen. Raphael Warnock (D-Ga.) prevails over Republican Herschel Walker in Tuesday’s Georgia Senate runoff, the Democratic caucus will have 51 seats in the Senate next year and Manchin’s outsize influence will shrink a bit, making leadership less beholden to him.

With assistance from Roxana Tiron

To contact the reporter on this story: Kellie Lunney in Washington at klunney@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Robin Meszoly at rmeszoly@bgov.com; Anna Yukhananov at ayukhananov@bloombergindustry.com