A deal on fast-track permits for energy projects is emerging as a key potential component in any deal to avert a US default, say lawmakers and officials familiar with talks over the debt ceiling standoff.
Aides working behind the scenes to identify potential areas of compromise have already focused on changes to permitting rules that would accelerate fossil fuel production, a priority for Republicans and some Democrats, and clean energy, a progressive priority.
President Joe Biden and House Speaker Kevin McCarthy plan to meet again with other congressional leaders on Friday, with the threat of a default as soon as June 1.
Republican Rep. Garret Graves, a key adviser to McCarthy in the negotiations, said the chances are “better than 50/50” that a deal will include some agreement on an enabling energy overhaul.
Staff talks also focus on recovering unspent Covid-19 funds and limiting spending in the next federal fiscal year that begins Oct. 1, the Louisiana lawmaker said. The White House wants a short-term cap deal, while Republicans want to limit discretionary spending for 10 years, he added.
Meanwhile, the White House has so far signaled it is unwilling to consider repealing clean energy subsidies and tax hikes from last year’s Inflation Reduction Act.
Republicans and Democrats have presented competing proposals to change the permitting rules, but there is overlap between them and a strong push from business lobbyists, led by the US Chamber of Commerce.
Graves, one of the architects of the House debt ceiling bill, said a Republican plan on energy permits was included in the bill in hopes that it would be a catalyst to forge a compromise. He cited comments that Biden’s climate envoy, John Kerry, made last year about the need to accelerate clean energy projects.
“I think allowing reform is more likely than a number of things that Joe Biden will have to accept,” said South Dakota Republican Dusty Johnson, another architect of the bill.
The White House is also sending signals that it wants to make a deal. On Wednesday, John Podesta, Biden’s senior clean energy adviser, said the authorization process has been “plagued by delays and bottlenecks.”
“We have to fix this problem now,” Podesta added, noting that the White House supports a proposal with West Virginia Democrat Joe Manchin “with additional reforms.” He also cited areas of commonality with the GOP proposals.
Still, Podesta warned that the administration was opposed to tying the debt ceiling to allow for reform, and with Republicans and Democrats so far apart, a deal could remain difficult. The White House has said all budget talks should technically be “separate” from the debt ceiling.
Last year, Manchin tried to attach a version of enabling reform to a mandatory spending bill, only to face opposition from some progressives and Republicans who wanted to do more.
A person familiar with the debt talks said Republicans have a list of objections to Manchin’s proposal. They include the lack of clear timelines for issuing permits, the lack of litigation criteria and the fact that the streamlined process for just 25 projects along with Equitrans Midstream Corp.’s Mountain Valley pipeline. it does not extend more widely.
While the Republican permitting proposals focus on speeding up oil, gas, coal and other fossil fuel projects, the Democratic plans seek to speed up approvals for clean energy projects and the construction of high-voltage transmission lines needed to transport the energy they produce. There is agreement between the two sides on the need to reduce the overall time it takes for projects to clear environmental reviews and other bureaucratic hurdles. In addition, the White House proposal aims to speed up some mining projects by reforming a 150-year-old mining law.
Among the hardest pills for Democrats to swallow would be a weakening of the National Environmental Policy Act, a decades-old environmental law considered sacrosanct by environmentalists.
Many Republicans, meanwhile, have expressed reservations about the power transmission line reforms, which they said would give too much power to the independent Federal Energy Regulatory Commission. That includes changes to how the agency allocates the costs of multibillion-dollar power lines.
