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Federal Infrastructure Policy and Funding Update: Week of August 8, 2022

This week it’s all about reconciliation and permitting reform. Although the passage of the Inflation Reduction Act takes up a good amount of oxygen this week, don’t forget that there are active funding opportunities open and our funding and finance team has prepared summaries of key transportation programs: Bridge Investment Program, Safe Streets and Roads for All, Reconnecting Communities Pilot Program, Railroad Crossing Elimination Program.

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Inflation Reduction Act Clears First Hurdle

On Sunday, August 7, the Senate voted to approve the Inflation Reduction Act of 2022, representing the most substantive climate investment legislation in over a generation. The bill now heads to the House for debate. Considering the 50-50 split in the Senate and Vice President Harris’ deciding vote, I’d be surprised if we see a lot of changes from the House to the Senate-approved text.

As the bill heads to the House, you can read Speaker Nancy Pelosi’s statement. Reports indicate that the House will consider the legislation this week, and if approved, will move to President Biden’s desk for signature.

HDR’s policy and funding teams are reviewing the legislation and will prepare policy briefs, similar to the ones prepared after passage of the Infrastructure Investment and Jobs Act, to help our clients understand what effect the legislation will have on their programs and projects. Stay tuned for more!

Senator Manchin’s Permitting Reform Framework Released

Before supporting the Inflation Reduction Act, Senator Joe Manchin sought agreement from Majority Leader Chuck Schumer on permitting reform for energy projects. Senator Manchin’s office released the framework for permitting reform of energy projects this past week. The framework provides for several key areas of emphasis (HDR author’s analysis in italics):

  • Designate and prioritize energy projects of strategic national importance

This is similar to efforts under both former President George W. Bush and former President Barack Obama to identify projects of national or regional significance that are supported by focused efforts to expedite/accelerate environmental reviews and approvals. As we’ve seen in the previous iterations of this approach, prioritizing projects means picking winners and losers as there are finite resources to work on these projects and putting an emphasis on one project will necessarily remove capacity to support other projects. As a result, the selection of these “high-priority” energy projects is inherently political and thus subject to all that goes into the political calculus. 

  • Set maximum timelines for permitting reviews, including two years for NEPA reviews for major projects and one year for lower-impact projects

The IIJA already reintroduced certain elements of former President Donald Trump’s One Federal Decision approach by requiring a single environmental document for transportation projects. Senator Manchin’s proposal would also reinstate the timelines for approvals with two years to complete an Environmental Impact Statement and one year to complete an Environmental Assessment. Environmental groups opposed the timelines under Trump and will likely oppose them again here due to the varying complexity of projects and their unique circumstances. Also, the timing of this permitting reform is interesting considering the ongoing effort by President Biden’s Council on Environmental Quality to update the National Environmental Policy Act implementing procedures. Interestingly, Senator Manchin joined all republicans in a vote last week under the Congressional Review Act to overturn Phase 1 of CEQ’s NEPA rule rewrite. This will be an interesting space to monitor for sure.

  • Improve Section 401 of the Clean Water Act by incorporating improvements from both the Trump and Biden administrations

The proposals here seek to clarify requirements for water quality certifications under Section 401 of the Clean Water Act. It proposes to place a one-year timeline on certification requests to issue a decision among other things. Legislative text for these proposals is key to understanding the extent of these proposed changes.

  • Address excessive litigation delays

The framework proposes to set a statute of limitations for certain court challenges as well as requiring courts to establish a 180-day timeline for agencies to take action if a court vacates or remands a permit decision on energy infrastructure.

  • Clarify FERC jurisdiction regarding the regulation of interstate hydrogen pipeline, storage, import, and export facilities

Clarifying Federal Energy Regulatory Commission's authority could help clear up some confusion on projects that sometimes need to shop around for a lead agency to permit and approve a proposed action. This could help to move projects through the process faster, eliminating uncertainty in the process. However, with FERC as an independent agency, it often times does not participate in policy efforts to accelerate approvals so this may or may not result in the time savings envisioned by the drafters.

  • Enhance federal government permitting authority for interstate electric transmission facilities that have been determined by the Secretary of Energy to be in the national interest

Under this proposal, the Department of Energy’s national interest electric transmission corridor process would be replaced with a national interest determination by the Secretary of Energy that would allow FERC to issue a construction permit and require FERC to take additional steps to appropriately allocate costs and mitigation. 

  • Complete the Mountain Valley Pipeline.

A project of particular interest to Senator Manchin and his constituents, the framework would require relevant agencies to take all necessary actions to permit the project.

Rona Spellecacy
Director, Environmental - Power, Industrial, Waste
Nathan Macek
Infrastructure Finance Director

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