Deal or No Deal?

This is the second in a series of posts on permitting reform.  The first post is here.

Given the provisions of the Energy Permitting Reform Act (EPRA), should Congress enact it as it stands now?  Answering that question is tricky, in part because it depends both on uncertain political and administrative action, as well as uncertain forecasts about economic and climate impacts of the development that EPRA might, or might not, advance.  As an overview to these questions, I recommend this article in Heatmap (a great resource for climate news, by the way).

The bill overall can be understood as a deal – on the hand (for Republicans), provisions that constrain the ability of a President who wishes to reduce fossil fuel production from doing so, in return for, on the other hand (for Democrats), permit streamlining for clean energy projects on federal lands and federalizing important electricity transmission lines, both of which should greatly advance clean energy and thus reduce carbon emissions.  From a climate perspective, the question is whether this tradeoff is worth it.

That is where the election of a second Trump Administration is meaningful.  Many of the constraints on reducing fossil fuel projects in EPRA are much less relevant in a second Trump Administration.  There’s really no need for a minimum number of lease sales or acreage limits for lease sales – anything industry wants, this Administration will give it.  So the marginal effect of EPRA in terms of increasing climate emissions has probably gone down a lot since the election.

On the other hand, facilitation of clean energy probably is only more important.  A second Trump Administration may not like clean energy, so streamlining clean energy projects on federal lands may not move the needle as much, but the mandatory lease sale provisions (for instance) might move the needle some.  And the electricity transmission provisions are still super important, especially since they are managed the Federal Energy Regulatory Commission (FERC), which has at least some insulation from Presidential control.  The marginal effect of EPRA in terms of reducing emissions thus may have gone down some during the election, but probably not as much.

You can see this dynamic some in the negotiations since the election, where Republicans, perhaps less satisfied with the EPRA deal, have begun adding in additional requests, such as more substantial changes to NEPA.

That being said, are the increases in GHG emissions in EPRA more than outweighed by the reductions?  Most of the debate here has been around the provisions related to LNG terminals.  Advocates who are critical (see this letter from environmental groups, this letter from academics) have relied on this analysis which claims that the LNG terminals will produce more emissions than comparable coal plants, and that this will swamp the emissions reduction gains from EPRA.  Other studies argue that the increases in emissions from LNG terminals are much lower – in particular, lower emissions might result because not all the LNG terminals that are built may get permitted.  Much of the dispute also revolves around how much methane is leaked from production and distribution (unburned natural gas is a potent greenhouse gas), with varying estimates leading to varying outcomes.

What I have not seen disputed is the massive reductions in emissions that would likely occur from a more accelerated build out of electricity transmission lines – because that would facilitate much greater clean energy development in the US.  So the question is whether that outweighs the harms from the LNG expansion.

If you take the worst case estimates from the study relied on by critics, and combine that with the best case analyses of emissions reductions from electricity transmission, they mostly cancel out, with some emissions reductions remaining.  (You can find an upper end of 11.5 gigatons of GHG emissions from LNG terminals in this study, and combine that with the upper end of emissions reductions from transmission lines in this study, where the emission reductions range from 6.5 gigatons to 14.3 gigatons.) The provisions that encourage fossil fuel production on federal lands have a relatively small negative impact.  I have not seen any estimates of the emissions reduction from the provisions that encourage clean energy development, though those would have at least some beneficial impact.  Putting those all together, it seems that with the worst case for LNG emissions, EPRA has marginal emissions impacts, but if that worse case is not realized, it has a large potential upside.  Plus, there are reasons to believe that EPRA might prevent worse outcomes in the Trump Administration (such as the mandatory clean energy leasing provisions).

Finally, the provisions relating to onshore and offshore oil and gas leasing may allow development activity that will produce some harm to a range of natural and cultural resources, though the overall impacts may not be too substantial.  (For instance, most oil and gas leases are never developed on the ground.)

There’s a lot of uncertainty here, which is one reason advocates have been split.  But all told, this is probably a deal worth taking.  A better deal isn’t going to be on the table in the Trump Administration, and delaying until 2028 means more emissions accumulate anyway, without building out our clean energy infrastructure.

Next post I’ll talk about changes that could be made, perhaps realistically, to make the deal better.