An independent producer with a handful of wells has three questions about any federal permit: how long will it take, will it hold up, and will there be a pipeline to sell into? 

The Senate’s 417-page permitting bill, the Bipartisan American Affordability and Jobs Act (S. 5653), which answers all three, faces its first vote on the Senate floor Nov. 9. That first vote, a procedural step known as cloture, needs 60 votes to cut off debate so a filibuster can’t stall the bill indefinitely. The vote will be held under a different number, H.R. 2347, an unrelated House tax bill the Senate is using as a legislative vehicle, according to the Senate’s floor schedule. IPAA, the trade group for independent producers, says the bill gives Congress a chance to deliver “clear and enforceable timelines, greater levels of certainty, and fewer unnecessary delays.” 

Here’s what changes:

A clock on federal reviews. Federal law already says an environmental assessment should take no more than a year and a full environmental impact statement no more than two, but 61% of impact statements still run past two years, according to the National Petroleum Council. A project gets one review or the other, depending on how significant its environmental effects are likely to be. The bill keeps those deadlines and adds consequences for missing them. Once the review is done, agencies would have 90 to 120 days to make their permit decisions. If an agency misses its deadline, the producer can take the matter to court and ask a judge to order the agency to act within 60 days. If the agency is still late two months after the deadline, the official who runs it can’t travel more than 25 miles from their office in Washington on official business until the issue is resolved. (Sec. 1106)

No federal permit for a mostly private well. In North Dakota, federal minerals often come in small tracts scattered among state and private ones, so a single 1,280-acre drilling unit can include a sliver of federal oil. Today that sliver pulls the whole well into federal permitting. North Dakota’s top oil regulator at the time, Lynn Helms, told Congress in 2017 that operators often skip those units entirely rather than face the delays. The bill would end that. The well would still need a state drilling permit, and the operator would have to notify Interior when it applies and send a copy within five days. Royalties on the federal minerals wouldn’t change, and Interior would keep its authority to collect them. (Sec. 2211(a)) (Sec. 2211)

A 150-day lawsuit window. Today, groups that want to stop a project can sue over its federal environmental review for generally up to six years after it’s approved. The National Petroleum Council states that a case appealed to a circuit court takes an average of 4.2 years to resolve. The bill would give these groups 150 days to file, send the case straight to a federal appeals court. It also limits suits to people who raised their concern during the public comment period. If a judge finds a flaw, the permit goes back to the agency to be fixed within 180 days instead of being thrown out, and it stays in effect in the meantime. (Sec. 1110)

Permits that survive an election. Today, a permit approved under one administration can be pulled by the next. President Biden revoked the Keystone XL pipeline’s permit on his first day in office in 2021. The bill would let agencies take back an approved permit only for narrow reasons, such as fraud, breaking the permit’s terms or the law, a court order, or a new and urgent threat to life, property or national security. If the permit holder sues, the agency has to prove one of those reasons applies. If it can’t, the holder gets the permit back, plus its delay costs and 25% to 50% of what it has spent on the project. That’s the certainty producers asked for in last quarter’s Dallas Fed Energy Survey, where one wrote that “regulatory uncertainty poses a material risk to business investment.” (EID broke down that survey last month.) (Sec. 1401)

A faster path for the pipe. A state reviewing a water-quality certification could deny it only with clear and convincing evidence that no reasonable condition would fix the problem. For natural gas pipelines, the review would be capped at nine months and limited to direct discharges into the water. EID has documented what the Northeast’s blocked pipelines cost families during Winter Storm Fern and more recent fears driving the need for more infrastructure. (Sec. 1202)

Bottom Line

This bill would put deadlines, with teeth, on getting producers a yes or a no. Sen. Martin Heinrich (D – N.M.), one of the bill’s authors, said at the bill’s Sept. 30 rollout that the SunZia transmission line in his state took 17 years to permit and build, in a process that should have taken about five years to reach a yes or a no.