How to Create Permit Certainty?

What might be a good path forward for the FREEDOM Act?

This is the third post in a series looking at the most recent proposed legislation for permit certainty, the FREEDOM Act.  Part one, discussing why Congress is considering permit certainty and its importance, is here.  Part two, analyzing the strengths and weaknesses of the bill, is here.

The good parts of the bill – making judicial review speedier, setting timeframes for permit decisions that are enforceable by courts – are a step forward.  The permit revocation provisions require more definition and precision – we may wish to identify more specifically which conditions (or which provisions of which laws) can trigger revocation action.  I am a little skeptical of the provisions limiting judicial review of permit approvals by third parties.

The insurance provision could be fixed by making payment of a premium a mandatory requirement for all applicants (at least those for large projects), and perhaps some minimal screening requirement to ensure only plausible projects pay in. This would reduce the moral hazard problem, and if run correctly, could provide an important policy benefit.  One problem with the ping-pong governance of the past two decades is that it reduces the stability of law, and thus incentives to invest and innovate.  Insurance coverage for permit delays or revocation would offset the impacts of instability to some extent, which may encourage private investment and innovation.

The final problem is deterring the government from “improperly” delaying or revoking permits, whatever that might mean.  Here, the real flaw in the legislation is that it tries to provide incentives for agencies to avoid delaying or revoking permits.  But the problems of the past several years are not being driven by the agencies – the problems are being driven by political direction from the White House.  Thus, incentives directed only at agencies will likely have little impact on a determined President who wants to accomplish policy goals, even if it means paying some tens of millions of dollars to unhappy permit applicants.  And as noted above, for some Presidents, punishing agencies for permit delays and revocations might be seen as a good outcome on top of the delays and revocations.

That means if Congress is serious about permit revocation, it needs to either reduce political control over permitting, or create sharp incentives for Presidents to avoid permit delays and revocations.  That’s a much more difficult task.  Reducing political control over permitting directly is much harder to do now that the Supreme Court has decided to essentially eliminate independent agencies and increase Presidential removal powers in the Executive Branch.  Congress could more clearly specify the terms for approving or rejecting permits – making permits more “by right” rather than discretionary.  But major projects will often have lots of complex moving parts; they may be situated in a wide range of economic, ecological, and social circumstances; they may have uncertain or novel impacts.  All of those mean that – unlike building infill housing – it may be quite difficult to ex ante specify the conditions in which projects should be approved or rejected.  Finally, increasing the incentives for Presidents to comply with the law is difficult – unless Congress wants to tie White House funding to permit approvals or revocations, the only other leverage Congress might have is to tie funding for the pet political projects of a White House to permitting, but that will vary from President to President.

There’s more work, and probably more creative thinking, that could be applied here.  This bill is a starting point for permit certainty.  I’m not sure, however, that creating permit certainty legislation is as straightforward as advocates might think, and it may not be possible to provide it on the timeframe required, if the goal is to facilitate permitting reform in this Congress.

NEPA, oil and gas development, oil and gas leasing, permit certainty, permitting reform, public lands, renewable energy