Lame-duck Congress might actually do something: speed up energy projects

A massive permitting bill that could help energy projects come online much quicker and potentially lower utility bills for Americans is advancing with bipartisan support. And while it could be a catalyst for lots of clean energy, it could also speed up polluting projects and limit oversight of new data centers.

With data centers demanding more electricity for AI, environmental advocates fear that developers could take advantage of the reforms to evade public scrutiny and rely more heavily on fossil fuels. The bill sacrifices caution for speed, limiting environmental reviews and preventing communities from stopping a project from moving forward by taking it to court.

“Whether it is permits to bulldoze wetlands, the fast-tracking of gas pipelines or general environmental review, with this legislation, data centers would not need to answer to the concerns of local communities,” Christy Goldfuss, executive director of the nonprofit Natural Resources Defense Council (NRDC), says in an email to The Verge. “People would be shocked to realize their representatives are rushing such a consequential decision.”

The bill sacrifices caution for speed

The sea change in Congress following the midterm elections could put the bill in an even more precarious position, giving Democrats a better shot at pushing for their priorities in the bill and potentially triggering a fight with President Donald Trump. Should it come up for a vote during the current lame-duck session or get kicked to next year, the bill will test whether Democrats and Republicans can actually get something done to address some of the biggest issues voters carried with them to the polls: rising energy costs and data centers encroaching on their communities.

“They swung big with this bill. It’s a really good bipartisan compromise,” Xan Fishman, executive vice president of the Energy Program at the Bipartisan Policy Center, tells The Verge.

Four senators calling themselves the “four corners” — Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), Mike Lee (R-UT), and Martin Heinrich (D-NM) — introduced the Bipartisan American Affordability and Jobs Act (BAAJA) on September 30th. “If we can pass this bill, we will flood the grid with clean, affordable energy and make data centers start paying their fair share,” Whitehouse, a climate hawk, said in the press release.

The announcement simultaneously garnered support from climate and renewable energy groups, as well as fossil fuel interests. “Pass the frickin’ bill so we can start building things again,” the US Oil & Gas Association said in a statement.

The Senate could vote to move the bill forward as early as next week, teeing it up for potential passage before the end of the year, according to the Bipartisan Policy Center. Fishman expects President Trump will want to sign the bill if the current Republican-controlled Congress acts, adding in an email that the White House has been “very involved” in negotiations. Newly empowered Democrats, however, could decide to drag out debate on the bill until next year in order to make fewer concessions to Republicans.

“Sometimes, bureaucratic processes that are created with good intentions kind of spiral out of control.”

If it becomes law, the bill would limit the reach of bedrock laws (stemming back to the 1970s environmental movement) that protect water resources and endangered species and give the public an opportunity to weigh in on large projects that might impact public health. Over the years, however, reviews that once took months at most might take several years or even decades, according to the Bipartisan Policy Center. Fishman attributes the delays largely to lengthy legal battles. Now, agencies have to spend more time preparing for lawsuits as they consider permitting applications, Fishman says. That holds up development on all kinds of infrastructure projects, including cleaner energy alternatives to fossil fuels.

Fishman expects BAAJA to be very effective in amending outdated permitting rules that have become burdensome to projects across the board, even those that might ultimately have a net positive impact on the environment. “Sometimes, bureaucratic processes that are created with good intentions kind of spiral out of control,” he says. “You want to protect the environment, you want to protect people, but you want to get to a yes or no [on a permit application] in a reasonable amount of time and you don’t want to have this endless litigation cycle.”

The bill would set a 45-day deadline for a lead agency to issue a decision on a project after completing an environmental review under the National Environmental Policy Act (NEPA). In many cases, NEPA review is the only opportunity for nearby residents to weigh in on large projects that involve the federal government. And it’s been a key tool for opponents to high-profile projects including the Dakota Access and Keystone XL pipelines. BAAJA narrows the scope of projects subject to NEPA, creating exclusions for transmission upgrades and certain pipeline expansions, to name a couple. Many projects receiving federal loans or grants or that have already been through a similar state environmental assessment would no longer trigger NEPA review.

The bill also sets a strict new 150-day limit for anyone to challenge a project in court over alleged violations of NEPA, the Clean Water Act, Endangered Species Act, or National Historic Preservation Act. And BAAJA strips away a court’s ability to halt a project altogether even if it finds that a federal agency violated NEPA; it would simply force the agency to correct any issues.

The Clean Water Act allows the Army Corps of Engineers to issue general permits to projects that discharge dredged material into US waters as long as they’re deemed as having “minimal adverse environmental effects.” BAAJA could make it easier for large projects including data centers to qualify for those permits.

Some environmental groups are concerned that those general permits would take away public participation requirements for individual projects, especially when it comes to data centers that use a lot of water. The proposals in BAAJA amount to “rubber-stamping permits under the Clean Water Act” and “blocking interference from States and Tribes,” according to the environmental organization Earthjustice Action.

“It will enable fast delivery of gas to fuel the data center build-out.”

They’re also concerned that BAAJA aligns with the Trump administration’s push to deregulate industry and weaken environmental protections in order to swiftly build out more data centers and fossil fuel infrastructure to power them. Data center energy demand has led to a surge of new gas projects in the US, and the bipartisan bill could help streamline reviews for new pipelines delivering fuel for data centers.

“One very big reason why passing BAAJA is such a high priority for the gas industry is it will enable fast delivery of gas to fuel the data center build-out,” Earthjustice Action President Abigail Dillen said in a Thursday blog. “BAAJA delivers a precision strike for developers of dirty data centers.”

Long pipeline delays slow data center development, according to energy research firm Wood Mackenzie. Permitting reform could benefit data center developers building out their own gas generation rather than relying solely on the grid, so-called “behind-the-meter” projects, by ending regulatory delays when it comes to connecting pipelines. Reforms would also speed grid-connected gas generation, Wood Mackenzie says in a recent news release.

“I don’t think we’re seeing it as this bill helping one type of technology over the other. I think it clears the way for all technologies to get onto the grid a little quicker,” Siddhant Warrier, research analyst for North American Power for Wood Mackenzie, tells The Verge.

Notably, the bill is supposed to protect bipartisan interests by preventing any single administration from attacking a particular project type — such as the Biden administration attempting to phase down oil and gas in the power sector or the Trump administration issuing stop work orders to wind farms. BAAJA aims to provide “project certainty” by barring federal agencies from canceling or suspending permits they’ve already approved in most cases. It even allows developers to take agencies to court for “disparate treatment” to sue for damages incurred from project delays.

“This part of the legislation could also lead to a slew of industry lawsuits that result in taxpayers paying billions of dollars to private industry,” the NRDC warns in its analysis of the bill. It could also prevent communities from challenging projects, including data centers, that wind up having unforeseen consequences for the environment and public health.

Despite those concerns, the NRDC and other advocacy groups are optimistic about the bill boosting renewable energy and enabling power grid upgrades needed to meet rising demand while keeping costs down.

BAAJA could shorten the time needed to build a new transmission line nearly in half — from 10 years or more to around five or six years, the NRDC estimates. Transmission lines that carry electricity across long distances — key to getting electrons to urban centers from far-flung solar and wind farms — are particularly tricky to build because of the patchwork of permitting processes they’re subject to across different jurisdictions.

Two separate reports project that the permitting bill would increase renewable energy capacity in the US and cut greenhouse gas emissions as a result. It also points to modest reductions in energy costs as a result of BAAJA passing compared to a baseline reflecting the status quo. The average annual cost of producing electricity would fall by as much as 7 percent by 2041, according to modeling by think tank Resources for the Future. Household electricity bills would lower by $50 to $78 per year by 2040, according to an analysis by research firm Rhodium Group. The White House put out its own analysis in October claiming that the average household could see their electricity bills fall by as much as $251 each year as a result of BAAJA.

One of the ways BAAJA aims to keep utility bills from rising is to force data center developers to pay more for transmission costs. Current law prevents utilities from charging them for costs stemming from both new builds and existing infrastructure, which inadvertently shifts costs to other customers to fill in the gap. The bipartisan bill mandates what’s called “and pricing” so that data centers and other large electricity customers would be on the hook to pay for both added and existing infrastructure.

The bill would also require utilities to disclose electricity sales to data centers. It would force large data center developers to make financial assurances to utilities before they break ground, as well as make them responsible for covering costs of new energy projects even if the data center shutters before the infrastructure is paid off.

Unfortunately, the bill may only solve part of the problem since utility rates reflect more than just transmission costs. Increasing electricity demand from the data center boom can still raise prices for fuel and gas turbines, for example. And the bill doesn’t address other issues that have sparked backlash against data centers, like noise and air pollution from generators on site.

Still, without permitting reform, gas and power prices would likely continue to climb as new energy projects keep hitting bottlenecks, according to Wood Mackenzie. Even environmental groups concerned about some of the provisions in BAAJA are holding out to see if Congress can amend the bill to strengthen environmental and consumer protections.

The bill has become a sort of Rorschach test for its backers, one expert speaking on background tells The Verge. They’re all optimistic that their energy source of choice, be it oil and gas or solar and wind, will ultimately come out on top — as long as it gets the green light to build.

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