Permitting reform is dead in the 118th Congress.
It died earlier this week, although you could be forgiven for missing it. On Tuesday, bipartisan talks among lawmakers fell apart over a bid to rewrite parts of the National Environmental Policy Act. The changes — pushed for by Representative Bruce Westerman, chairman of the House Natural Resources Committee — would have made it harder for outside groups to sue to block energy projects under NEPA, a 1970 law that governs the country’s process for environmental decisionmaking.
When those talks died, they also killed a separate deal over permitting struck earlier this year between Senator Joe Manchin of West Virginia and Senator John Barrasso of Wyoming. That deal, as I detailed last week, would have loosened some federal rules around oil and gas drilling in exchange for a new, quasi-mandatory scheme to build huge amounts of long-distance transmission.
Rest in peace, I suppose. Even if lawmakers could not agree on NEPA changes, I think Republicans made a mistake by not moving forward with the Manchin-Barrasso deal. (I still believe that the standalone deal could have passed the Senate and the House if put to a vote.) At this point, I do not think we will see another shot at bipartisan permitting reform until at least late 2026, when the federal highway law will need fresh funding.
But it is difficult to get too upset about this failure because larger mistakes have since compounded the initial one. On Wednesday, Republican Speaker Mike Johnson’s bipartisan deal to fund the government — which is, after all, a much more fundamental task of governance than rewriting some federal permitting laws — fell apart, seemingly because Donald Trump and Elon Musk decided they didn’t like it. If I can indulge in the subjunctive for a moment: That breakdown might have likely killed any potential permitting deal, too. So even in a world where lawmakers somehow did strike a deal earlier this week, it might already be dead. (As I write this, the House GOP has reportedly reached a new deal to fund the government through March, which has weakened or removed provisions governing pharmacy benefit managers and limiting American investments in China.)
The facile reading of this situation is that Republicans now hold the advantage. The Trump administration will soon be able to implement some of the fossil fuel provisions in the Manchin-Barrasso deal through the administrative state. Trump will likely expand onshore and offshore drilling, will lease the government’s best acreage to oil and gas companies, and will approve as many liquified natural gas export terminals as possible. His administration will do so, however, without the enhanced legal protection that the deal would have provided — and while those protections are not a must-have, especially with a friendly Supreme Court, their absence will still allow environmental groups to try to run down the clock on some of Trump’s more ambitious initiatives.
Republicans believe that they will be able to get parts of permitting reform done in a partisan reconciliation bill next year. These efforts seem quite likely to run aground, at least as long as something like the current rules governing reconciliation bills hold. I have heard some crazy proposals on this topic — what if skipping a permitting fight somehow became a revenue-raiser for the federal government? — but even they do not touch the deep structure of NEPA in the way a bipartisan compromise could. As Westerman told Politico’s Josh Siegel: “We need 60 votes in the Senate to get real permitting reform … People are just going to have to come to an agreement on what permitting reform is.” In any case, Manchin and the Democrats already tried to reform the permitting system via a partisan reconciliation bill and found it essentially impossible.
Even if reconciliation fails, Republicans say, they will still be in a better negotiating position next year than this year because the party will control a few more Senate votes. But will they? The GOP will just have come off a difficult fight over tax reform. Twelve or 24 months from now, demands on the country’s electricity grid are likely to be higher than they are today, and the risk of blackouts will be higher than before. The lack of a robust transmission network will hinder the ability to build a massive new AI infrastructure, as some of Trump’s tech industry backers hope. But 12 or 24 months from now, too, Democrats — furious at Trump — are not going to be in a dealmaking mood, and Republicans have relatively few ways to bring them to the table.
In any case, savvy Republicans should have realized that it is important to get supply-side economic reforms done as early in a president’s four-year term as possible. Such changes take time to filter through the system and turn into real projects and real economic activity; passing the law as early as possible means that the president’s party can enjoy them and campaign on them.
All of it starts to seem more and more familiar. When Manchin and Barrasso unveiled their compromise earlier this year, Democrats didn’t act quickly on it. They felt confident that the window for a deal wouldn’t close — and they looked forward to a potential trifecta, when they would be able to get even more done (and reject some of Manchin’s fossil fuel-friendly compromises).
Democrats, I think, wound up regretting the cavalier attitude that they brought to permitting reform before Trump’s win. But now the GOP is acting the same way: It is rejecting compromises, believing that it will be able to strike a better deal on permitting issues during its forthcoming trifecta. That was a mistake when Democrats did it. I think it will be a mistake for Republicans, too.
