US renewables industry joins Big Oil to fight delays to project permits

America’s renewables industry has formed an unlikely alliance with Big Oil as they lobby Congress to overhaul a permitting process they say scuppers new energy development.

The campaign has intensified in recent weeks with oil and clean energy lobbyists hoping negotiations between Republicans and Democrats over the debt ceiling offer an opportunity to cut a deal on permitting reform.

“In the last several months all the key associations looked across the table and realised we were arguing for the same thing,” said Jason Grumet, head of the American Clean Power Association, the leading renewables industry group, who led a delegation of 200 members to Congress this week to call for reform.

“This is Big Wind and Big Solar coming to the table and saying we want to get things done.”

The co-ordinated push from unlikely bedfellows underlines widespread frustration across the energy industry at repeated failures to streamline the permitting system, in particular the lengthy review process and avenues for litigation offered by the 1970 National Environmental Policy Act.

Representatives of the oil and gas, renewables and utilities industries said they were holding daily discussions on their approach to permitting reform and that joint delegations to Capitol Hill were likely in the near future.

They are hoping reforms could be ushered through as part of a debt ceiling deal — though people involved in the talks said any such compromise remained distant.

Several separate pieces of legislation have been put forward by progressive Democratic lawmakers as well as conservative Republicans and Joe Manchin, the centrist Democrat whose efforts to pass a permitting bill in the wake of the Inflation Reduction Act failed.

Raúl García, vice-president of policy and legislation at Earthjustice, said the question was where the political middle-ground lay. “The differences are stark,” he said.

“We want to make sure when the time comes for a deal, we are united in our goals,” said Mike Somers, head of the American Petroleum Institute, Big Oil’s most powerful Washington lobby group. “We believe that the debt limit deal could be a vehicle for permitting reform. But the clock is ticking.”

Eric Grey, vice-president of government relations at the Edison Electric Institute, which represents big utilities, said a “coalition” had been formed between different parts of the energy industry. “We are all rowing in the same direction on the need for efficiency gains.”

Gregory Wetstone, chief executive of the American Council on Renewable Energy, a Washington-based trade group, said the organisation “sometimes” spoke to fossil fuel groups on permitting, but cautioned that the industries were not always aligned.

“I think there could be a middle ground, but there is a fundamental driver for this larger effort — it’s about climate change,” said Wetstone. “And so that’s going to mean that there are some elements that are going to be more complicated than others.”

The lengthy permitting process has long been a bone of contention for the oil and gas industry. But with the passage of the IRA, which injects $369bn into clean energy in the form of tax credits and subsidies, renewables developers say their development plans are hitting a wall.

In particular, developers say it is far too difficult to build the thousands of miles of high voltage transmission lines needed to carry electricity from renewable sources to urban areas.

Academics at Princeton University say that unless the rate of transmission expansion is doubled from the current levels, the IRA could be as much as 80 per cent less effective in cutting emissions.

“Now that we have the IRA, the uncertainty on access to capital and policy regarding tax credits is gone. And the pacing item really is transmission,” said Mark Goodwin, chief executive of Apex Clean Energy, a large wind and solar developer.

Oil and gas executives, meanwhile, say it has become almost impossible to build big pipelines in some parts of the country as campaigners successfully make use of the legal system to block new projects. Gas producers in particular say the onerous permitting process will hinder development of some of the world’s most prolific deposits, which would support more exports to Europe and other countries.

“It’s not set up to be fast, it’s not set up to allow this infrastructure to get built quickly,” said Ryan Lance, chief executive of ConocoPhillips.

A previous reform attempt last year led by Manchin, the Democratic senator from West Virginia, fell apart after widespread pushback, both from the progressive wing of his party — which called it a “giveaway” to the fossil fuel industry — and Republicans, smarting from Manchin’s support of the IRA.

The Republican-led House of Representatives has now produced its own legislation and executives are optimistic that a compromise can be reached.

Still, any deal faces opposition from hardliners in both parties. And many environmentalists vehemently oppose any legislation that would weaken Nepa regulations and make it easier to build fossil fuel infrastructure, regardless of the benefits to renewables.

“You can create clean energy without rolling back these protections,” said García. “Giving even an inch to the fossil fuel industry is a mistake. It goes against all the lofty rhetoric we’ve heard from the Biden administration.”

Renewables developers say such a stance would hinder the rollout of clean technology that is needed to cut emissions.

“It will not be possible to achieve anything close to a climate solution with the current system in place,” said Grumet at the ACP. “Whether coalitions are driven by inspiration or necessity is a philosophical question — I think this is a bit of both.”