[co-author: Juan Dawson, Sahara Shrestha]
On September 21, Senator Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, released the text of the Energy Independence and Security Act of 2022 (Act). This comprehensive Act was set to be included in the upcoming Continuing Resolution; however, on September 27, Manchin pulled the Act from the Continuing Resolution given bipartisan opposition. The Act sought to improve energy production in the United States by accelerating agency review of certain energy projects and modernizing permitting laws.
The Act proposed to accelerate and streamline the federal agency review processes for energy, natural resources, and other projects of strategic national importance — including for roads, highways, bridges, rail, and transit. Specifically, it would have implemented a new two-year timeline for completing National Environment Policy Act (NEPA) reviews for major energy and natural resource projects. Under this provision, federal agencies would have one year to complete an environmental assessment (EA) or two years to complete an environmental impact statement (EIS). The Act would have required the issuance of all other permits within 180 days of completing the NEPA review process. The Act also would have established a 150-day statute of limitations for challenging projects in court and would have required courts to set a reasonable schedule, not exceeding 180 days, and for agencies to act on judicial decisions that remand to the agency or vacate an issued permit.
Additionally, the Act prioritized energy projects of strategic national importance and would have required the President to designate and prioritize review of a specified list of strategically important energy and mineral projects. Specifically, the President would have needed to identify 25 energy projects for priority review in consultation with the Secretary of Energy, Secretary of the Interior, the Administrator of the Environmental Protection Agency, and the Federal Energy Regulatory Commission (FERC). The President would have also been required to update the list of projects every 180 days for the next 10 years. In the proposal, all identified projects must complete an EA or EIS, be reviewed by two or more federal or state agencies, cost more than $250 million, and have sufficient financial support from the project sponsor to ensure project completion.
The second part of the Act focused on modernizing permitting laws by proposing to amend various provisions of the Federal Power Act (FPA). Specifically, the Act would have amended FERC’s transmission sitting authority to allow FERC, after application by a state or utility, to direct the construction of transmission facilities determined “to be in the national interest.” A similar authority would have been granted to the Secretary of Energy who may designate an electric transmission facility as necessary in the national interest after conducting a hearing. The Act also proposed to permit the exercise of eminent domain on state land but would have required FERC to ensure that costs are allocated to customers who receive project benefits and allowed FERC to approve payments from utilities to jurisdictions that are impacted by a project.
Moreover, the proposed Act took a step toward addressing the regulatory uncertainty of which federal agencies can exercise jurisdiction over hydrogen infrastructure. Specifically, the Act attempted to clarify FERC’s jurisdiction to regulate interstate hydrogen infrastructure under the Natural Gas Act. The Act proposed to amend the definition of “natural gas” to include hydrogen mixed or unmixed with natural gas, giving FERC the ability to regulate hydrogen infrastructure.
Lastly, the Act would have offered an expedited authorization process for the Mountain Valley Pipeline natural gas project. Specifically, the Act eliminated judicial review of certain pipeline permits and directed the U.S. Court of Appeals for the District of Columbia Circuit to maintain original and exclusive jurisdiction over challenges to the pipeline. Also, the Act would have mobilized federal agencies to take necessary approval and permitting actions to find in favor of the pipeline.
Senator Manchin’s Act faced bipartisan criticism, which led to the Act’s failure in the Continuing Resolution. Democrats expressed concerns that the expedited approval process could have undermined environmental protections and objected to the approval of the Mountain Valley Pipeline Project. Republicans contended that the Act did not go far enough and would not speed up approval and development of clean energy projects. The future of the Act is unclear and faces an uphill battle, which may require a compromise bill between Manchin and Republicans’ competing proposal.
See the full text of the Energy Independence and Security Act of 2022 here.
