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A guide to the year’s biggest environmental fight — and some of the most important changes that could result.
Pending catastrophe, the most important environmental policy debate in Washington this year will be about a set of questions that have come to be known as “permitting reform.”
Essentially, the government is poised to change the laws and procedures that govern how it approves new infrastructure, from highways to subways, wind farms to oil pipelines. The outcome of the debate will alter how America fights climate change and builds clean energy — and whether it further embraces fossil fuels.
Some of the oldest ideas in American environmental law are up for grabs. For the first time in decades, both parties want something to change about the country’s permitting process: Republicans want to loosen federal environmental reviews; while Democrats want to simplify and speed up how new electricity transmission is built, which would inherently boost renewables. That should make a deal possible — and indeed, lawmakers have entertained striking a bargain in a deal to raise the debt ceiling.
Yet permitting reform is unusually hard to follow. As of May 2023, at least six different bills are floating around Congress: House Democrats, Senate Democrats, House Republicans, and Senate Republicans have each proposed a bill (or two), as has Senator Joe Manchin of West Virginia, a key moderate who leads the Senate’s energy committee. Each of these bills consists of dozens of unique policies and proposals, and their goals range from hastening the end of oil to rejuvenating fossil fuels.
Below we’ve compiled a cheat sheet on some of the biggest questions in the 2023 permitting-reform debate without getting into the weeds of each separate bill. We’ll update it as the process continues.
Heatmap Illustration/Getty Images
It’s really hard to build new power lines in the United States — especially the kind of long-distance, high-voltage power lines that can move electricity across the country.
Because a shortage of power lines is holding back America’s renewables revolution. With a bigger, more interconnected grid, you can link the country’s windiest, sunniest areas to its power-hungry cities and suburbs, and balance out electricity demand across regions.
If America doesn’t double its rate of power-line construction, then 80% of the carbon benefits from Biden’s climate law will be lost, according to an analysis from Jesse Jenkins, a Princeton engineering professor.
Building a new transmission line requires getting approval from dozens of organizations along a proposed route, including every city, county, and state government. (Building a pipeline is much easier.) And utilities along the route have to agree about how to divide up its costs.
They want to give the Federal Energy Regulatory Commission, a bipartisan panel usually called FERC, the authority to decide where new interstate power lines should go and who should pay for them. (FERC already has that power over natural-gas pipelines.)
Democrats also want FERC to require each region to have a baseline amount of transmission with its neighbors, and to open an office that will manage and coordinate new transmission projects.
They haven’t proposed much, although the Senate GOP’s bill would prevent a president from blocking a cross-border pipeline or transmission line — a not-so-veiled attempt to help fossil fuels and avert another Keystone XL debacle.
His proposal would let FERC approve a new power line — but only if a state government has already blocked it for a year or more. He also wants FERC to set rules about who pays for a transmission project.
Heatmap Illustration/Getty Images
Every new power plant or renewable project has to enter the “interconnection queue” — effectively, a waiting list to get plugged into America’s jammed and overloaded power grid.
Because it keeps the grid from decarbonizing. The longer that new clean-energy projects have to wait in line, the longer that existing, dirty energy sources provide most of our electricity.
It now takes about four years for new projects to clear the interconnection queue, and more than 75% of renewable projects get canceled before they get to the front of the line.
At root, it’s because America doesn’t have enough power lines. But it’s also because in some places where the grid is clogged, utilities will force a wind or solar developer to pay not only for their own grid hookup, but also for crucial upgrades across the power grid — even those hundreds of miles from a project. That’s partially because the interconnect rules were written for companies building big coal and nuclear plants, not smaller renewable farms.
They want FERC to issue some ground rules about who can pay for grid upgrades, so that utilities can’t force renewable developers to foot the entire bill for them.
They haven’t proposed anything.
He hasn’t proposed anything.
Heatmap Illustration/Getty Images
Before a federal agency can build, approve, or change almost anything — whether it’s authorizing a space port or banning cars from a road in a city park — it must study how that action will impact the environment. It also must seek public comment and publish alternatives to its plan.
These studies, which are required by the National Environmental Policy Act (NEPA), can run thousands of pages long and take years to finish.
It’s not … depending on who you talk to. NEPA doesn’t require that the government actually change anything because of its study; only that it publishes it and seeks public comment. While environmentalists can’t use NEPA to block a polluting project, they can sue the government to get it to add information to an environmental-impact report, which can sometimes delay a project long enough for it to get canceled.
Some environmentalists say that NEPA is an important tool to waylay fossil-fuel development. (It’s how activists delayed the Dakota Access Pipeline for a year or so.) But others say that NEPA is now mostly slowing down the green transition, and that it has given “corporate interests and rich NIMBYs” a veto over rapid climate action.
It takes 4.5 years on average to finish an environmental-impact statement, the most stringent kind of NEPA review — but that’s an average. The NEPA review of renovations to Washington, D.C.’s main public-transit hub has taken eight years and counting.
When NEPA was first passed in 1969, supporters believed that it would give Americans an expansive new right to a healthy environment. Liberal lawyers hoped that NEPA might reorient all of federal policy in a greener direction, like the Civil Rights Act did for race and gender discrimination a few years earlier.
That didn’t happen. By the mid-1970s, the court system had hemmed in NEPA, turning it into a paperwork mandate, not a substantive right. That means NEPA lawsuits — of which there are more than 100 every year — feature a lot of bickering over procedural details.
Senate Democrats would impose a one-year deadline for light NEPA reviews and a two-year deadline for the most stringent reviews — but those deadlines would only apply to projects that fight or adapt to climate change, and there would be no penalty for missing them. The House bill asks the White House to write new rules for NEPA studies.
The GOP would require one- and two-year deadlines for NEPA studies, but for all types of projects, not just those related to climate change. If an agency missed those deadlines, then under the Senate GOP bill, the project being studied would immediately and irrevocably get approved. (The House GOP, meanwhile, would charge the offending agency a fine.)
Republicans would also impose a 300-page limit on NEPA studies for complex projects and a 150-page limit on most projects. Today, the average NEPA study is more than 500 pages long.
He’s proposed the same page limits and deadlines as Republicans, but with weaker penalties and no automatic approval.
Heatmap Illustration/Getty Images
Technically, NEPA doesn’t require that agencies look into whether a proposed federal project would worsen climate change. The Biden administration has required agencies to take it into account, but that could be reversed by a future administration.
It’s a little silly that the government would write a 500-page report about a project’s environmental impact — but not say anything about its carbon emissions.
Because every administration — and every agency — implements NEPA in a different way. The courts also set some ground rules about what a NEPA study must include, but the extremely conservative Supreme Court is unlikely to require NEPA studies to include climate effects anytime soon.
They want to require agencies to consider a project’s impact on the climate, including whether not doing the project would raise emissions.
House Republicans want to block agencies from considering climate change — or any negative environmental impacts more than 10 years in the future — when preparing a NEPA study.
Senate Republicans would also forbid FERC from considering whether any project would raise or lower emissions.
He hasn’t proposed anything.
Heatmap Illustration/Getty Images
NEPA fights never end. Americans generally have up to six years to sue the government over a NEPA study, and the ensuing court battles can take years to resolve.
Depends on who you ask. The lack of a deadline can create an aura of uncertainty around public projects: Years after a federal agency approves an infrastructure project (including a clean-energy project), that project can still be challenged and blocked in court — even if construction on it has already started.
For some progressives, that doesn’t seem so bad, because it lets environmental lawyers drag fossil-fuel companies into lengthy NEPA lawsuits over proposed pipelines or refineries. But other progressives argue that most new energy projects will be zero carbon anyway, so NEPA fights allow conservatives and NIMBYs to veto clean energy.
Because Congress didn’t envision the modern permitting process when it first passed NEPA, and the law doesn’t contain a statute of limitations.
Senate Democrats want to impose a three-year limit on bringing a NEPA lawsuit, and they’d immediately elevate a NEPA suit to the local federal appeals court. House Democrats haven’t proposed anything.
Republicans in both chambers want to add a three- or four-month statute of limitations to NEPA. Senate Republicans would go further and require the courts to rule on any NEPA case within six months. These litigation deadlines could sharply limit environmentalists’ ability to fight fossil-fuel infrastructure.
His bill would add a five-month statute of limitations to NEPA.
Heatmap Illustration/Getty Images
The federal offices that handle most of the NEPA-related paperwork don’t have enough employees and suffer high staff turnover, which slows down their ability to quickly finish the easiest studies.
According to some progressives, a lack of funding for the agencies that implement NEPA is the biggest driver of permitting-related slowdowns. They argue that the most common kind of NEPA studies are completed in a year or so, and that only the most stringent NEPA studies regularly drag on. (Plenty of federal actions, such as building a new train station or transmission line, require a stringent NEPA study.)
When legal scholars at the University of Utah looked at 41,000 NEPA decisions of all kinds made by the U.S. Forest Service, they found that most delays were caused by agency understaffing, turnover, or delays in getting information from applicants. They also blamed unstable budgets, inadequate technology, and conflicting guidance from other laws, such as those governing historical preservation.
A decade of federal cost-cutting, among other reasons. The Department of the Interior lost 6% of its staff during the Trump administration and has only gained 2% since. FERC has also struggled to hire qualified workers.
Senate Democrats would make every agency identify its NEPA workforce needs annually and then give it the power to hire accordingly. House Democrats would let FERC pay people more than normal federal law allows.
House Republicans would require the National Park Service, the Bureau of Land Management, and the U.S. Forest Service to prepare an outreach plan for hiring new permitting employees.
He’s proposed allowing FERC to exceed the federal payscale, too.
Heatmap Illustration/Getty Images
New geothermal plants could generate a huge amount of zero-carbon electricity. Yet securing a permit to install a geothermal plant on federal lands — where the richest geothermal resources exist — can take years.
Because it’s comparatively easy to drill for oil and natural gas on federal land: Oil and gas drilling is categorically exempt from parts of NEPA, and a special office in the Bureau of Land Management handles fossil-fuel permits. So even though geothermal firms use the same equipment as oil and gas companies — but don’t create the same carbon emissions — it is much harder to drill for geothermal energy, and therefore much more expensive.
About 90% of “viable geothermal resources” — places where it makes sense to drill for Earth’s heat — are located on federal lands in the West. This isn’t parkland, to be clear, but government-owned land now used for ranching, hunting, mining, or recreation.
Because geothermal is a new industry. Until recent improvements in drilling, geothermal only made sense in a few parts of the country. Now it could be used more widely.
Senate Democrats want the Interior Department to make sure geothermal drilling permits are handled in the same way that oil-and-gas drilling permits are.
House Republicans would exempt some geothermal projects from having to get permits at all. And Senate Republicans would tell the Interior Department to defer to state law when granting new geothermal permits.
While supportive of geothermal power, he hasn’t proposed anything on this issue.
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The department creates a seemingly impossible new permitting criteria for renewable energy.
The Interior Department released a new secretarial order Friday saying it may no longer issue any permits to a solar or wind project on federal lands unless the agency believes it will generate as much energy per acre as a coal, gas, or nuclear power plant.
Hypothetically, this could kill off any solar or wind project going through permitting that is sited on federal lands, because these facilities would technically be less energy dense than coal, gas, and nuclear plants. This is irrespective of the potential benefits solar and wind may have for the environment or reducing carbon emissions – none of which are mentioned in the order.
“Gargantuan, unreliable, intermittent energy projects hold America back from achieving U.S. Energy Dominance while weighing heavily on the American taxpayer and environment,” Interior Secretary Doug Burgum said in a statement included in a press release announcing the move. “By considering energy generation optimization, the Department will be able to better manage our federal lands, minimize environmental impact, and maximize energy development to further President Donald Trump’s energy goals.”
Here’s how this new regime, which I and many in the energy sector are now suddenly trying to wrap their heads around, is apparently going to work: solar and wind facilities will now be evaluated based on their “capacity density,” which is calculated based on the ratio of acres used for a project compared to its power generation capacity. If a project has a lower “capacity density” than what the department considers to be a “reasonable alternative,” then it may no longer be able to get a permit.
“On a technology-neutral basis,” the order states, “wind and solar projects use disproportionate Federal lands relative to their energy generation when compared to other energy sources, like nuclear, gas, and coal.” The document going on to give an example, claiming that data from the U.S. Energy Information Administration shows an advanced nuclear plant uses less federal acreage than an offshore wind farm and “thus, when there are reasonable alternatives that can generate the same amount of or more energy on far less Federal land, wind and solar projects may unnecessarily and unduly degrade Federal lands.” The order also includes a chart comparing the capacity density of wind and solar facilities to conventional nuclear, gas, and coal, as well as geothermal, and claims that these sources are superior as well. The document does not reference hydropower.
There’s also a whole host of other implications in this order. Crucially, does the Interior expect that by choking off the flow of permits, cities and companies will just pony up to build what the Trump administration considers “reasonable alternatives” instead? Is the federal government going to tell communities in Nevada, for example, that they must suddenly build gas plants in the desert instead of solar farms to meet their increasing energy needs?
In any case, much more is coming, as this order simply built off of a separate secretarial order earlier this week commanding staff to prepare a litany of recommendations on ending alleged “preferential treatment” for solar and wind facilities. In other words hold my beer – and hold onto yours, too.
That’s okay for clean energy firms, terrible for manufacturers, and a big risk for everyone.
Over the past few months, you could put together three different — and somewhat conflicting — pictures of the American economy.
For companies exposed to the AI boom, business has been good — excellent, even. The surge in ongoing capital investment into data centers and electricity has been larger than other recent booms, such as the telecom buildout. Electricity demand is soaring, especially in Texas and the Mid-Atlantic. Technology companies have signed power offtake deals with nuclear and hydroelectricity companies. If anything, companies exposed to artificial intelligence are more afflicted by congested supply chains and shortages than by slack demand — see the yearslong waiting lists to get a new transformer or natural gas turbine.
Outside of the AI economy, though, the economy has been a fair bit colder. You might even say it’s been frozen by indecision. When you talk to business leaders, they confess confusion about where things are heading. President Trump’s constantly changing tariffs — and his administration’s mercurial policy shifts — have made it difficult for non-AI-exposed businesses to plan long-term capital investment.
You could hear this view from clean energy manufacturing and traditional fossil firms alike. When I talked to John Henry Harris, the CEO of the medium-duty truck maker Harbinger Motors, for an episode of Heatmap’s Shift Key podcast in June, he told me that his company was just about to shift a production process to Mexico when a last-minute Trump change made it cheaper to keep it in China. Meanwhile, an oil and gas executive recently told the Dallas Federal Reserve: “The Liberation Day chaos and tariff antics have harmed the domestic energy industry. Drill, baby, drill will not happen with this level of volatility.”
But the data contradicted that tepid view. This was the third picture that we were getting of the economy. Through the summer, federal surveys showed an economy that was performing okay. In May, according to the Bureau of Labor Statistics, the U.S. economy added 139,000 jobs; it gained another 147,000 jobs, apparently, in June. The AI boom was clearly contributing to those robust reports. But how could an economy that business leaders otherwise described as difficult be going so well?
Now we can finally square these disparate pictures.
On Friday, the federal government released its newest tranche of job numbers. The headline number was mediocre — the U.S. added a mere 73,000 jobs in July — but the guts of the report were worse. The government revised down its estimate of the May and June reports by a total of 258,000 jobs. With these new numbers in hand, it’s clear that the labor market has essentially stalled out since Liberation Day in April.
The unemployment rate slightly rose to 4.2%, which was in line with what economists predicted.
These new reports clarify that the broader American economy wasn’t actually thriving. Its summer strength was a mirage the whole time. Outside of AI, things are downright frigid. And as President Trump continues to shuffle tariffs and increase trade uncertainty, we can expect conditions to worsen. Trump seems hellbent even on clouding our ability to understand the underlying economy: on Friday afternoon, he fired the Bureau of Labor Statistics commissioner, a career civil servant.
If you squint, you can see a hazy “AI sector” versus “non-AI sector” distinction in the data, even among the energy and decarbonization companies we cover at Heatmap. But it’s not obvious. Contrary to what you might expect when power demand is surging, utility employment was basically flat last month. Heavy and civil engineering construction jobs were up by 6,000, and “nonresidential specialty trade contractors” — a category that can include electricians — gained nearly 2,000 jobs.
But manufacturing lost 11,000 jobs last month, with the motor vehicles industry driving 2,600 of those losses. Mining, quarrying, and oil and gas jobs were down. The Institute of Supply Management report, a private survey of U.S. manufacturing activity, showed the sector shrank in July for the fifth month in a row.
And even though the Department of Government Efficiency’s deferred buyout program for more than 150,000 people has yet to hit, the federal government bled 12,000 jobs.
In a way, the clean energy industry — or at least solar, battery, nuclear, and geothermal developers — might consider themselves lucky. Despite the best efforts of Trump’s officials, and despite the chaos of President Trump’s policies, they have been able to eke through the past few months because of the AI boom. Nearly 70% of all new power-generating capacity added to the U.S. grid in the first quarter of this year came from solar panels, and the government has thrown its weight behind next-generation nuclear and geothermal technologies. A tepid jobs report might even bring some interest rate relief from the Federal Reserve.
But if that AI boom slows down, we should all watch out below.
A conversation with Heather O’Neill of Advanced Energy United.
This week’s conversation is with Heather O’Neill, CEO of renewables advocacy group Advanced Energy United. I wanted to chat with O’Neill in light of the recent effective repeal of the Inflation Reduction Act’s clean electricity tax credits and the action at the Interior Department clamping down on development. I’m quite glad she was game to talk hot topics, including the future of wind energy and whether we’ll see blue states step into the vacuum left by the federal government.
The following conversation has been lightly edited for clarity.
During Trump 1.0 we saw blue states really step into the climate role in light of the federal government. Do you see anything similar taking place now?
I think this moment we’re in – it is a different moment.
How are we handling load growth? How are we making sure consumers are not paying for expensive stranded assets? Thinking about energy affordability? All of those challenges absolutely present a different moment and will result in a different response from state leaders.
But that’s where some of the changes our industry has gone through mean we’re able to meet that moment and provide solutions to those challenges. I think we need aggressive action from state leaders and I think we’ll see that from them, because of the challenges in front of them.
What does that look like?
Every state is different. Take Virginia for example. Five years after we passed the Virginia Clean Economy Act – a big, bold promise of action – we’re not on track. So what are the things we need to do to keep the foot on the accelerator there? This last legislative session we passed the virtual power plant legislation that’ll help tremendously in terms of grid flexibility. We made a big push around siting and permitting reform, and we didn’t quite get it over the finish line but that’s the kind of thing where we made a good foundation.
Or Texas. There’s so much advanced energy powering Texas right now. You had catastrophic grid failure in Hurricane Uri and look at what they’ve been able to build out in response to that: wind, solar, and in the last few years, battery storage, and they just passed the energy waste reduction [bill].
We need to build things and make it easier to build – siting and permitting reform – but it’s also states depending on their environment looking at and engaging with their regional transmission organization.
You saw that last week, a robust set of governors across the PJM region called on them to improve their interconnection queue. It’s about pushing and finding reforms at the market level, to get these assets online and get on the grid deployed.
I think the point about forward momentum, I definitely see what you’re saying there about the need for action. Do you see state primacy laws or pre-emption laws? Like what Michigan, New York, and California have done…
I’m not a siting expert, but the reform packages that work the best include engagement from communities in meaningful ways. But they also make sure you’re not having a vocal minority drowning out the benefits and dragging out the process forever. There are timelines and certainty attached to it while still having meaningful local engagement.
Our industry absolutely has to continue to lean into more local engagement and community engagement around the benefits of a project and what they can deliver for a community. I also think there’s a fair amount of making sure the state is creating that pathway, providing that certainty, so we can actually move forward to build out these projects.
From the federal government’s perspective, they’re cracking down on wind and solar projects while changing the tax credits. Do you see states presenting their own incentives for renewables in lieu of federal incentives? I’ve wondered if that’ll happen given inflation and affordability concerns.
No, I think we have to be really creative as an industry, and state leaders have to be creative too. If I’m a governor, affordability concerns were already front and center for me, and now given what just happened, they’re grappling with incredibly tight state budgets that are about to get tighter, including health care. They’re going to see state budgets hit really hard. And there’s energy impacts – we’re cutting off supply, so we’re going to see prices go up.
This is where governors and state leaders can act but I think in this context of tight state budgets I don’t think we can expect to see states replacing incentive packages.
It’ll be: how do we take advantage of all the flexible tools that we have to help shape and reduce demand in meaningful ways that’ll save consumers money, as well as push on building out projects and getting existing juice out of the transmission system we have today.
Is there a future for wind in the United States?
It is an incredibly challenging environment – no question – for all of our technologies, wind included. I don’t want to sugar-coat that at all.
But I look at the whole picture, and I include wind in this: the technologies have improved dramatically in the past couple of decades and the costs have come down. When you look around at what resources are around to deploy, it’s advanced energy. We’re seeing it continue to grow. There’ll be headwinds, and it’ll be more expensive for all of us. But I look at what our industry and our technologies are able to offer and deliver, and I am confident we’ll continue to see growth.