Bipartisan Support for Sensible Permitting of Energy Projects

The following article is by Kenneth Costello. Costello is an adjunct scholar on energy policy with the Rio Grande Foundation.

Senator Martin Heinrich’s support for The Bipartisan American Affordability and Jobs Act (BAAJA) is commendable. The bill, which has yet been voted on by the full Senate, would
facilitate the permitting of energy projects. Senator Heinrich backs this bill while opposing an earlier legislation, the SPEED Act. The legislation, which passed in the House on December 18, 2025 with overwhelmingly opposing votes from the Democrats, has a similar goal of expediting the permitting of energy projects. The Senator contended that the SPEED Act fell short in addressing electric transmission barriers, delivering environmental protections, and overly restricts legal challenges to energy projects.

The chief reason for his and other Democrats’ opposition to the act apparently was their belief that it inadequately fostered clean energy projects. The BAAJA is a more comprehensive
legislation that speaks to data-center electricity costs and includes a number of energy-specific reforms (e.g., relaxing transmission barriers), among other things that lured bipartisan support.
Government has a vital role to play in approving energy projects. After all, these projects inflict external effects that often jeopardize the welfare of local communities and the rest of society.

Electric generation and transmission facilities, natural gas pipelines, oil refineries and other energy projects can affect air and water quality, in addition to public safety and health. Private developers on their own lack adequate incentives to consider these effects in their decisions, unless mandated by laws and regulations. Allowing public authorities to
determine whether developers comply with the relevant laws and regulations is a legitimate function of government.

Too often, however, we observe good intentions lead to bad outcomes. Permitting entails trade-offs, where it should balance different societal objectives: mitigating the environmental, public
health and other harmful effects of new projects while looking favorably on new projects that benefit society economically and in other ways.

Regretfully, what we have seen over the past 50 years are decisions that unduly delay or cancel socially beneficial energy projects. This has led to higher costs for new investments, the deterrence of innovation and the stifling of economic development. Consumers lose the benefits of new energy projects, including paying lower prices and enjoying more reliable and resilient
energy services. A major culprit in this story is the National Environmental Policy Act (NEPA).

The most important benefit of the BAAJA comes from changes to the NEPA. This act, enacted in 1970, had the primary goal of ensuring that federal agencies would “assess the environmental
consequences of their decisions.” The intent of the NEPA was to ensure that any decision made by the relevant federal agency is aware of the environmental consequences of a new project. One
requirement is for the federal government to issue permits for projects only if they complied with relevant environmental laws, including the Endangered Species Act and Clean Water Act.
The problem lies in how, over time, the NEPA has led to major energy projects being canceled or delayed because of groundless litigation and dubious interpretation of the act.

To the detriment of New Mexico and the rest of the country, the ongoing abuse of the act reflects “mission creep” rather than the original legislative intent.
Opponents of energy projects have weaponized and abused the NEPA to halt and delay projects that would benefit society. These actions have transformed the NEPA from a disclosure statute to
a litigation-driven morass. This has resulted in delays or cancellations of economical energy projects, like fossil-fuel, solar, wind and electric transmission facilities, and natural gas pipelines.
One energy research center commented that “If sued under NEPA, an energy project might spend a median of three years before obtaining a court decision that, based on historical data,
tends to uphold the reviewing agency’s original environmental analysis in around 3 out of every 4 cases.”

The costs of the NEPA are manifold: time delays and uncertainty for project completions, court proceedings, developers spending more on their projects to avoid litigation, and the stifling of
new technologies to replace old ones. Because of the NEPA, projects often expend additional costs to avoid litigation even when not cost-beneficial. The additional costs mean higher energy
prices for consumers and less diversified energy supplies.

The NEPA required federal agencies to prepare an Environmental Impact Statement (EIS) before taking any major action that might appreciably affect the “quality of the human environment.”
Taxpayers have suffered from footing the bill for costly EIS reports (in 2022 the average EIS took more than four years to complete) and protracted, multiyear litigation before federal courts.
Perhaps most damaging, the NEPA creates a bias in favor of the status quo, which imposes its own environmental risks for example by extending the operation of existing less “clean”
energy facilities and denies society the economic benefits from new projects.

The status quo elicited by the NEPA has jeopardized the well-being of citizens throughout the country.
The NEPA needs reform the sooner the better. It has led to onerous delays and cancellations because of lawsuits and procedural challenges by groups whose agenda is to stifle new projects,
rather than to improve the projects for society. These groups often are well funded, external to and non-representative of the locales most affected by a project. Their engagements have tied the
federal permitting process in knots at a great cost to society.

A dose of common sense would tilt federal permitting of energy and other projects toward a more optimal balance between societal objectives: namely, a healthier, safer and higher-quality
environment against a more economical and consumer-beneficial infrastructure. Especially with the wide support for addressing the affordability problem, in addition to today’s availability of
promising new energy technologies and those on the horizon, the morass of federal permitting must end.

It’s high time to restore the act’s original intent to inform the federal government of the environmental effects of a project before approval, rather than as a bludgeon to halt or delay
socially beneficial projects. The bill backed by Senator Heinrich and others would move the NEPA back toward its original intent.