Nothing Certain but Death, Taxes… and Permits?

The concept of permit certainty is new. Until recently, project proponents spent most of their time worrying about how to obtain approvals and the time it took to achieve desired outcomes. Navigating governmental bureaucracies, negotiating permit conditions, and managing public outreach were the priorities.

The current administration’s posture regarding renewable energy added something unexpected to the mix – once we get a permit, can we keep it?

This conundrum is reminiscent of the great Seinfeld bit at the rental car desk: “…you know how to take the reservation; you just don’t know how to hold the reservation. And that’s really the most important part of the reservation, the holding.”

The draft Senate permitting bill attempts to tackle this issue in a title appropriately called, “Permit Certainty.” A review of the draft language reveals that stating the goal is easier than making it a reality.

The bill would first prevent a federal agency from rescinding a previously granted permit except in rare circumstances, such as instances where the applicant committed fraud in obtaining the permit or if a court orders permit rescission. And agencies would have to provide permit holders notice of any such action. Fine.

The bill next lays out the “sense of Congress” that all permits and authorizations “should be treated fairly and efficiently.” In other words, regardless of whether one administration prefers renewables over fossil fuels, it shouldn’t be able to create different rules for different projects.

But how can Congress ensure that fair and efficient treatment beyond stating their sense that it should be so? To reach “fairness,” the bill creates a convoluted process to determine whether “disparate treatment” has occurred in the permitting of any one of a LONG list of covered actions (really every kind of energy project known to man). It also allows developers to go to court if they believe the government has unreasonably delayed or denied permit applications. Successful litigants would be entitled to payments from the government equivalent to not only the project delay but also the additional project costs incurred by the project sponsor.

The latter provisions are a tell – when legislators build in judicial remedies, they don’t have confidence that future executives will faithfully implement the “sense of Congress.” And that lack of confidence is further demonstrated because the bill takes pages to enumerate how a potential court challenge to a permit delay or denial should be adjudicated, including the burden of proof and evidence required to show a violation.

Fixing this convoluted process is possible, although legislating fairness is harder than you’d think. The disparate treatment calculation uses the baseline timelines for each type of project—for project types that are still nascent technologies, the timelines may be longer than for more established categories. The average calculations may not be meaningful in cases where there are very few total projects.

There’s no question – project developers should have confidence that they will be able to “hold” a permit, a la Seinfeld. Whether the draft legislation achieves that goal is open to debate. The already emerging split between renewable energy associations and some environmental NGOs concerning support for this aspect of the bill indicates that Congress likely has more work to do.

Fred Wagner is Principal Environmental Advisor at Jacobs and is a member of the Eno Board of Advisors.

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