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Long permitting timelines don't fit within clean energy goals Critical Minerals Alliances 2023 - September 12, 2023
American business and policy leaders are pushing for reforms that streamline the permitting process for the large projects needed to build the envisioned clean energy future in the U.S.
S&P Global Vice Chairman Daniel Yergin, who coined the term "permitting pandemic," discusses the low-carbon energy transition with Alaska Gov. Mike Dunleavy.
Aerial view of the South32 Hermosa manganese-zinc project in southern Arizona, the first first-ever critical minerals mining project in the U.S. to be accepted for the Fast-41 permitting process.
The United States has rich deposits of copper, cobalt, graphite, lithium, nickel, rare earths, and other mined commodities needed to build the clean energy future. The often decade-long mine permitting timeline in the U.S., however, means that many of these domestic critical mineral sources will be hard-pressed to get developed in time to help meet the climate goals laid out by the White House.
This extraordinarily long federal permitting process for large projects has global supply chains, and geopolitical experts concerned that the U.S. will find itself in economic lockdown due to a heavy reliance on the highly competitive global energy metal markets and an inability to ramp up enough production at home.
"Our country is suffering from a permitting pandemic – it leads to paralysis, lack of economic resolve, and a great deal of pain," S&P Global Vice Chairman Daniel Yergin, a highly respected authority on international energy and geoeconomics, said during a keynote address.
Yergin, a Pulitzer Prize-winning author who has written three books on international energy and geopolitics, is not the only one concerned about permitting large projects in the U.S.
Executives from across America's energy transition supply chains, and even high-level members of the Biden administration, cited the often decade-long wait for federal authorizations as the single biggest impediment to America's race to be the global leader in clean energy.
"If we are going to be successful in this competition and if we are going to take advantage of these opportunities, the jobs, we need to permit much, much quicker than we do right now," U.S. Deputy Secretary of Energy Dave Turk said during a May address to the Alaska Sustainable Energy conference.
John Podesta, President Biden's senior advisor for clean energy innovation and implementation, may have put it best.
"We got so good at stopping projects that we forgot how to build things in America," he said during a May speech on infrastructure permitting reform.
When you add in the time it takes for federal and state authorizations, inevitable litigation by project opponents, and then development, it often takes the better part of two decades to go from permit applications to producing the first metal at a mine in the U.S.
"So, if we started today, we are talking about the 2040s to get something done," said Yergin.
This timeline falls outside of the Biden administration's ambitious climate goals that include having EVs making up 50% of all vehicle sales in the U.S. by 2030 and the nation achieving net-zero greenhouse gas emissions by no later than 2050.
During a May testimony before the U.S. Senate Energy and Natural Resources Committee, National Mining Association CEO Rich Nolan said the long permitting timelines in the U.S. are "completely out of step with the dramatic increases in minerals production that will be needed in the coming decades to keep up new technologies, infrastructure, manufacturing and even with the administration's own energy and supply chain goals."
And it is not only mining that is feeling the pain of the self-inflicted permitting pandemic in the U.S.
Clean energy power generation facilities, lithium-ion battery gigafactories for electric vehicles, and electrical grid expansion to accommodate an envisioned low-carbon future are subject to a similar unwieldy permitting process that mining companies must navigate to feed metals into the front end of a clean energy supply chain.
"Our self-imposed permitting delays mean lost economic opportunity, increased energy insecurity, eroding global competitiveness, and the inability to effectively address climate change," Thomas Madison Jr., an infrastructure consultant and former administrator of the U.S. Federal Highway Administration, penned in a July editorial. "Furthermore, when regulatory bottlenecks become too onerous within our borders, we inevitably increase reliance on imported materials, thereby ceding essential industries to our rivals as community-supporting American jobs and industries evaporate. Congress must immediately unwind this self-made crisis."
With the entire supply chain at risk, the long permitting timeline in the U.S. is a problem that transcends the traditional divide between environment and resource development, according to Cathy Woollums, senior vice president and chief sustainability officer at Berkshire Hathaway Energy.
"Time is our enemy when we think about investment and when we think about climate," she said during a panel on investing in Alaskan sustainable energy projects.
The Berkshire Hathaway senior vice president said quick but responsible action to minimize permitting timelines is needed to fully capitalize on the clean energy transition and the economic opportunities it offers.
"It is so important to ensure that as we are moving forward on a permitting front in a responsible way that takes consideration of the local resources and communities, and doesn't damage those, but at the same time has a limitation on time," she said.
Former Federal Highway Administrator Madison says, "America is stuck in perpetual permitting crisis" that is holding back the nation's ability to change with the times.
"There is growing bipartisan recognition that to rebuild and modernize our infrastructure and supply chains – from roads and bridges to renewable projects and the mines that supply them - we must have permitting reform," he wrote.
Nolan said mine permitting timelines in the U.S. could be significantly streamlined without compromising the rigor of the review.
The National Mining Association CEO pointed out that it only takes about two to three years to permit mines in Australia and Canada – Western countries with similar environmental, social, and governance standards as the U.S.
"The NMA believes that valid concerns about environmental protection should be fully considered and addressed but permitting processes should not serve as an excuse to trap mining projects in a limbo of duplicative, unpredictable, endless and costly review without a decision point," he testified on Capitol Hill.
With America needing skyrocketing new supplies of minerals and metals critical to clean energy and digital technologies, mine permitting has been called off the sidelines to be a key player in Washington political football.
A push by Republican lawmakers to get some kind of mine permitting reform past the goal line for the better part of a decade has been easily defensed by Democrats, along with the help of some Republicans who did not see the topic as pressing and were unwilling to be associated with the optics of lowering environmental standards.
The ambitious clean energy goals spearheaded by the White House and supported to some degree by most policymakers on both sides of the aisle, however, has upped the urgency and support for streamlining large project permitting in the U.S.
Reforming America's permitting system has become such a hot-button topic that it has been tied to some of the biggest political moves since Biden moved into the White House, including passage of the Democrats' 2022 Inflation Reduction Act and the midnight hour legislation that prevented the federal government from defaulting on its payment obligations in 2023.
In exchange for his key vote in getting the Inflation Reduction Act passed by the Senate, Sen. Joe Manchin (D-WV) secured assurances from Majority Leader Chuck Schumer (D-N.Y.) that mine-permitting reform would be taken up.
As tens of billions of IRA dollars have been allocated to clean energy and other projects, Manchin was still waiting for a mine-permitting reform bill that would be called off the bench and onto the Senate's main playing field.
Mine permitting reform was fielded by President Biden and House Speaker Kevin McCarthy (R-CA) during May negotiations on the Fiscal Responsibility Act of 2023, legislation that raised the debt ceiling in order to keep the U.S. out of default.
In order to gain enough bipartisan support for this legislation, Biden agreed to modest reforms that streamline permitting under the National Environmental Policy Act (NEPA), the foundation for federal permitting of large projects in the U.S.
These changes include:
Time limits: Environmental Impact Statements, which are required for most mining and other large projects in the U.S., must be completed within two years of the date a federal agency determines an EIS is required. Environmental Assessments for smaller projects must be completed within one year.
Page limits: EISs are limited to 150 pages in most cases, with a 300-page limit for extraordinarily complex projects, and EAs are limited to 75 pages. While this change may not reduce the overall size of the documents due to no appendix page limits, moving supporting data to the appendices is expected to make NEPA analysis easier for stakeholders to read and understand.
Lead agency: Where more than one agency is involved in the permitting decision for a project, the federal government is required to designate a lead agency to conduct any required environmental analysis. This is expected to make NEPA permitting less complex for applicants and streamline the process by avoiding duplicated efforts.
NEPA revisions: The core requirements of NEPA would be amended, primarily to limit the obligation to consider environmental impacts to those that are "reasonably foreseeable." This will prevent delays related to assessing speculative impacts or those not directly related to the project being permitted.
Minerals Make Life, a National Mining Association outreach group, says that designating a lead agency for mine permitting may be the single most impactful part of the negotiated reforms.
"This means one federal agency will serve as the coordinator of all other federal agencies conducting environmental reviews and that they will all work to prepare a single environmental review document, which is focused on actual environmental impacts and mitigation," the mining group wrote in a June blog. "This makes so much sense that it leaves many wondering why it wasn't done sooner."
While these and other NEPA reforms included in the Fiscal Responsibility Act are considered a field goal by advocates for mine permitting reform, they are not the touchdown many see as required to ramp up domestic mineral production at the pace needed to win the climate change Super Bowl.
"Targeted changes in the debt-ceiling deal – such as tightening the scope and timetable for environmental reviews – are important steps forward. But we shouldn't declare 'Mission Accomplished' just yet. Half-measures won't deliver the change we need," Madison wrote.
A pair of bills introduced to the Senate in May by Sens. Shelley Capito, R-W.Va., and John Barrasso, (R-Wyo.) – RESTART Act and SPUR Act – have the provisions needed to get large project permitting reform in the U.S. across the goal line.
"The two bills Senator Barrasso and I are introducing fix this broken system with substantive changes that cut red tape, modernize and streamline the permitting process, and prevent endless delays that have plagued job-creating projects across the country," said Capito, who introduced the RESTART Act.
While several of the permitting issues addressed by these bills were covered during debt ceiling negotiations, a couple of key issues that hold back or halt large projects were not.
The biggest issue is lawsuits that are often not filed until a project is about to break ground in order to maximize delays.
The SPUR Act includes provisions that would require lawsuits against permits and licenses for mining projects to be filed within 60 days, and the RESTART Act would require courts to process challenges and issue a final judgment within 180 days.
The SPUR Act addresses another big challenge that has come up in recent years, the withdrawal of federal lands where mining projects are being advanced.
Barrasso's bill requires a congressional resolution of approval for any U.S. Department of Energy mineral withdrawal in excess of 5,000 acres. It also prohibits the Secretary of Interior from imposing a moratorium on issuing leases, claims, or permits for mining on federal lands.
"We need to lower prices for American families and unleash American energy. The way to do that is to impose strict deadlines and stop endless litigation," the Wyoming senator said. "We must also block the administration from hijacking the permitting process to kill worthy projects."
Despite all the political football, the U.S. already has a mechanism in place that, if fully utilized, would achieve most of the goals of mine permitting reform and renewable energy advocates, alike.
This mechanism, known as Fast-41, was first established while Biden was Vice President in 2015 to improve the timeliness, predictability, and transparency of federal domestic infrastructure projects.
Short for Title 41 of the Fixing America's Surface Transportation Act, Fast-41 established the Federal Permitting Improvement Steering Council (FPISC), a federal entity that offers a one-stop-shop capable of coordinating permits across different federal agencies, thereby streamlining and shortening the overall process for large infrastructure projects that are eligible for the program.
In 2020, certain mining projects that supply the materials needed for the energy, communication, and transportation infrastructure in the U.S. became eligible for Fast-41. The Fiscal Responsibility Act of 2023 added energy storage to the projects eligible for the streamlined NEPA review process offered by this program.
A bill to amend and make permanent the Fast Act to improve the federal permitting process was introduced to the Senate in July by Dan Sullivan, R-Alaska, Rob Portman, R-Ohio, Kyrsten Sinema, D-Ariz., and Joe Manchin, D-W.Va.
"FAST-41 improved the federal permitting process to promote expansion, economic growth, and the hiring of American workers right here at home," said Portman. "We need to make this program permanent, apply it to more federal projects to ensure they get done on time and under budget, and expand the authority of the Permitting Council to see to it that those things happen."
The Federal Permitting Reform and Jobs Act introduced by the bipartisan group of senators would:
• Make Fast-41 permanent by eliminating a seven-year sunset clause for the federal program.
• Expand FAST-41 benefits to include infrastructure projects sponsored by or on land owned by tribes, Alaska Native corporations or Native Hawaiian organizations, regardless of size, and the council's annual best practices report would be required to address how to improve engagement with tribal stakeholders.
• Set a two-year goal for permitting Fast-41 eligible projects. Current law requires the permitting council to create template permitting timetables for various types of projects, which agencies must use to set deadlines for permitting covered projects unless they can explain why additional time is needed.
• Encourage permitting coordination by having federal agencies prepare one joint environmental impact statement, whenever possible, to enhance coordination and transparency among the agencies.
• Improve FPIC's day-to-day operations by reducing paperwork burdens, improving information-sharing, and giving the permitting council more clarity for internal deadlines.
"If we are going to grow our economy, build out vital infrastructure, and provide good-paying jobs for hard-working Americans, it's critical that we provide more certainty in the permitting process and continue to improve how we build projects," said Sullivan. "Making the FAST-41 reforms permanent, expanding project eligibility, and speeding up our burdensome permitting process through better coordination are bipartisan reforms that will help ensure the money we spend today on infrastructure puts Americans to work and benefits Alaska and the country now, when we need it most."
These reforms could help reverse the permitting pandemic observed by Yergin and Podesta so that America forgets how to stop large projects and gets good at building things again.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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