US debt deal revises permitting, helps MVP: Update

Adds details on bill's approval of the Mountain Valley Pipeline.

An agreement reached between President Joe Biden and Republicans to raise the limit on federal debt would also fast-track federal permitting and help ease the way for the long-delayed $6.6bn Mountain Valley Pipeline (MVP).

The bipartisan agreement, reached on 27 May and still waiting to be voted on by Congress, would put limits on government spending over fiscal years 2024-25 in exchange for raising the debt limit for two years. As part of the deal, negotiators also inserted language that would end federal permitting difficulties for the MVP by approving its federal permits and prohibiting further legal challenges to those permits.

The 300-mile natural gas pipeline project already holds nearly all of its federal permits but is missing a West Virginia state water permit that was recently struck down in court, which would not be revived by the debt limit deal. But the language in the debt limit bill could be significant by blocking any further litigation risks related to the project's federal permits, including a court ruling within the last week raising issues with the project's federal certificate.

US midstream operator Equitrans Midstream, which is developing the pipeline, did not immediately respond to a request for comment. The company has previously said it expects the pipeline — which would transport shale gas from West Virginia to Virginia — could be completed this year if all of its permits are restored. The company expects West Virginia will be able to reinstate its water permit.

US House speaker Kevin McCarthy (R-California) said the debt agreement was a win for taxpayers that will "rein in government overreach" without raising federal taxes. Biden said the deal represented a compromise that meant no one got everything they wanted.

"I think it's a really important step forward, and it takes the threat of catastrophic default off the table," Biden said Sunday.

The text of the debt limit legislation was released tonight. McCarthy plans to bring the bill up for a floor vote on 31 May, which would give the US Senate about five days to vote on it before 5 June, the day when the US is projected to run out of funding to meet all of its payment obligations.

Biden said the deal would reduce government spending while still protecting Democratic priorities. House Republicans had wanted to use the debt limit to repeal most of the $369bn in climate-related spending in last year's Inflation Reduction Act.

House Republican leaders say the deal will ease regulatory burdens by requiring a new "pay-as-you-go" mechanism that would limit the cost of new regulations. The agreement would also aim to speed permitting of energy and infrastructure projects by putting a 1-year or 2-year limit on reviews prepared under the National Environmental Policy Act (NEPA) and designating a lead agency for permitting, among other changes.

"We're gonna cut the red tape," McCarthy said today in a televised interview. "If you want to build a road, if you want to put renewable energy, you want to have our energy to become energy independent, you now have it streamlined."

But the permitting revisions would fall short of the sweeping changes being debated by Democrats and Republicans in key congressional committees, such as revisions to water permitting rules or revising the scope of NEPA. That creates the chance for the US Congress to vote later this year on a broader bipartisan permitting bill.

"Far more extensive reforms will be needed to expedite the thousands of new energy projects that are pending approval," Progressive Policy Institute strategic adviser Paul Bledsoe said.

The agreement will likely need broad bipartisan support to pass in the House, where far-right conservatives have already vowed to vote in opposition. US representative Ralph Norman (R-South Carolina) said the deal was "insanity" and lacked the degree of cuts that Republicans wanted. US representative Bob Good (R-Virginia) said no one claiming to be a conservative could vote for the deal.

By Chris Knight