US permitting page limits a 'terrible' idea: Danly

Part of a recent federal law intended to fast-track permitting could inadvertently make projects more vulnerable to lawsuits, according to US Federal Energy Regulatory Commission member James Danly.

The Fiscal Responsibility Act, signed into law on 3 June, requires project reviews under the National Environmental Policy Act (NEPA) to be no more than 300 pages and to be finished within two years. Republicans were the primary advocates for those two changes, but Danly, a Republican appointee, says they will be counterproductive.

"I told everybody who would listen to me that that's a terrible idea," Danly said Wednesday at Energy Dialogues' North American Gas Forum in Washington, DC. "The last thing you want to do is to limit the agency's ability to survive review in the courts."

Capping the number of pages is problematic, Danly said, because it gives federal agencies less space to explain their decisions and in turn makes permits more vulnerable in court. The time limits are also a "bad idea," he said, because they can force regulators to make a decision on a complicated project without sufficient time for review.

Even with the changes, NEPA experts expect regulators may find workarounds to the new restrictions, such as attaching appendices not subject to the page limits.

If Congress wants to make meaningful improvements to the permitting process, Danly said lawmakers should be taking steps to revise the standard of review under NEPA, along with changes to "section 401" permits under the Clean Water Act that states have successfully used to block projects.

"In the absence of those two reforms, very little is going to change," Danly said.

Danly's comments come as oil and gas groups, renewable energy producers and others continue to push for Congress to pass substantive permitting legislation. After major permitting changes failed to advance under former president Donald Trump, many industry officials see no reason to wait to take on the issue.

"A lot of times people will say, 'Well, gee, we just get a Republican in as president and we'll have this all solved,'" US midstream company Williams chief executive Alan Armstrong said. "The truth is that it was during the Trump administration that a lot of these projects got stopped in their tracks."

Those stopped projects included Williams' $748mn Constitution pipeline project and its $1bn Northeast Supply Enhancement project, both of which were unable to proceed because of state permitting denials under the Clean Water Act. Armstrong said the company still supports the Northeast Supply Enhancement Project as a way to boost gas reliability, but it cannot proceed without obtaining state permits.

"Over the last several years we've had times where we were barely hanging on to provide gas supply into New York City," Armstrong said on the sidelines of the conference. "The day we can't is probably the day that project is going to get approved."

Newly elected US House of Representatives speaker Mike Johnson (R-Louisiana) did not explicitly include permitting revisions in a 23 October letter listing legislative priorities through year-end 2024. Armstrong said he was not "super optimistic" that permitting legislation can pass this year given how "dysfunctional things have been in DC" but said it remained a high priority.

By Chris Knight