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Infrastructure Review and Permitting: Is Change in the Wind?

Monday, May 7, 2018
Serena Choi

Serena Choi

Research and Publications Intern

On February 12, 2018, following President Donald Trump’s announcement to rebuild the nation’s “crumbling” infrastructure in his first State of Union address, the White House submitted to Congress the Legislative Outline for Rebuilding Infrastructure in America, a legislative roadmap on the Administration’s ambitious $1.5 trillion infrastructure plan. The plan asks Congress to authorize $200 billion in federal spending over 10 years to spur $1.5 trillion investments from local and state governments and the private sector in major infrastructure projects. The plan contains a significant section devoted to “Infrastructure Permitting Improvement,” proposing to streamline, consolidate, expedite, and, in some cases, eliminate the statutory environmental review and permitting requirements for future infrastructure projects. While it is highly unlikely for the proposal to pass and be implemented in 2018, as the president himself admitted, both environmental law practitioners and industries in many sectors want to follow its developments closely.

The upcoming conference “Infrastructure Review and Permitting: Is Change in the Wind,” co-hosted by Arnold & Porter and the Environmental Law Institute, will examine the infrastructure plan’s developments in a constructive, practical, and forward-looking context, featuring a variety of perspectives from panelists across all sectors. Expert panelists will include federal and state policymakers, as well as leaders from private industry and the nonprofit sector.

The panelists will discuss the promises and perils of review and permitting reform, present case studies on existing infrastructure projects to determine success and failure in obtaining approvals, and speculate on the plan’s stipulated impacts on transportation and energy industry, including prospects of renewables, as well as on cooperative federalism. The full agenda, with speakers, is available here.

Changing the Environmental Law Framework

Devil’s Elbow Bridge in Waynesville, MO (Photo: Chuck Coker)

If adopted by Congress, “the plan would significantly alter the environmental law framework” for infrastructure projects. The plan directs the Council on Environmental Quality (CEQ) to rewrite its regulations and guidance on the National Environmental Policy Act (NEPA) for the first time since 1978. It would also impose a strict deadline of 21 months to complete NEPA environmental reviews and three months to make permit decisions. (Currently, NEPA permitting takes between three to five years on average, but it can take up to 25 years.)

The plan would also expedite the permitting process through the One Federal Decision framework. As contemplated in Executive Order No. 13807, this policy would designate a single leading agency to carry out NEPA environmental reviews, issue permitting decisions, and coordinate and set time frames among agencies. The proposal would also create a Performance-Based Pilot program that would allow up to 10 future infrastructure projects to bypass compliance with NEPA and other environmental statutory requirements, replacing them with performance standards and permitting parameters established by a leading agency. Additionally, a Negotiated Mitigation Pilot program would enable agencies to “establish an alternative decisionmaking process in lieu of NEPA, based on negotiated mitigation agreements and supporting mitigation markets that address anticipated project impacts for a specific set of projects.”

Going significantly beyond Executive Order No. 13807, the implementation plan seeks statutory changes beyond just NEPA, including the Clean Air Act (CAA), Clean Water Act (CWA), and the Comprehensive Environmental Response, Compensation, and Liability Act, among others. The plan proposes to eliminate a provision under the CAA that allows EPA to provide comments on other agencies’ draft and final environmental impact statements. It would also limit states’ ability to deny an interstate gas pipeline under CWA §401 in case the project does not comply with the state’s water laws. While the plan touts its ability to reduce “inefficiencies” in review and permitting procedures for infrastructure projects, some say the plan undercuts, rather than reforms, one of the nation’s bedrock environmental laws. According to Raul Garcia, Senior Legislative Counsel at Earthjustice, the plan would “gut health and environmental safeguards that protect communities from dangerous, ill-conceived and poorly constructed projects.”

The Math for the Infrastructure Plan

The plan’s advocates calculate that $200 billion in federal funding over 10 years would spur state and local governments, combined with the private sector to invest $1.5 trillion in infrastructure spending. Half of the federal funds ($100 billion) would be used to directly incentivize state and local infrastructure projects through a grant competition. Of the remaining half, $50 billion would be allocated as grants to governors to choose rural infrastructure projects; $20 billion would expand federal lending programs and private-activity bonds in order to attract private investment; another $20 billion would promote innovative, transformational projects; and $10 billion would seed a capital financing fund for federal infrastructure. While the plan may attract a huge amount of additional funding sources outside the federal government, it also “recasts the federal government as a minority stakeholder in the nation’s new infrastructure projects.” This pivot would shift the emphasis away from public needs and priorities toward the profitability of private investors. 

In addition to the private sector, the infrastructure plan would rely heavily on investment by states and cities. The federal funding of $20 billion per year would be stretched thin throughout the country, providing scant support to state and local governments that are already fiscally constrained. While many of them do have needs and demands for infrastructure projects (e.g., the repair of old roads, bridges, and more), state and local governments lack money for new projects, with nearly half of the states facing budget a deficit in 2018. Increasing state and local taxes to fund new projects may not be feasible or sufficient.