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Released November 22, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--There was broad agreement on the need to fix broken federal permitting and state siting processes for energy assets at last week's "Energy and the Economy" conference held in Dallas, Texas, and jointly sponsored by the Dallas and Kansas City Federal Reserve Banks.
Speakers representing oil and gas producers, electricity companies, financial firms and energy researchers agreed that the energy assets needed to meet future demand for electricity and oil and gas will not get built in a timely manner unless changes are made to the way project permits are issued by the federal government and energy project siting decisions are made by state and local governments.
In President-elect President Donald Trump, energy interests have an ally on permitting reform, at least at the federal level. During his first term, Trump streamlined the permitting process under the National Environmental Policy Act (NEPA), a bedrock federal environmental law that has been little changed since it was enacted in 1970. But earlier this year, President Joe Biden scrapped those changes and added new steps to protect the environment, likely lengthening the federal; permit-approval process. For more on that, see May 3, 2024, article - Biden Administration Finalizes Changes to Environmental Review Law.
As a candidate and president-elect, Trump has signaled his interest in cutting regulation and expanding energy production with this moniker: "drill, baby, drill."
"It's 'hang onto your hat' time in Washington, D.C. right now," Rick Muncrief, president and chief executive at Devon Energy (NYSE:DVN) (Oklahoma City), told conference attendees November 13. "Reducing oil and gas regulation, taxes, IRA tax credits and permitting reforms for pipes, wires and other energy infrastructure are needed."
This was the ninth joint conference on energy and the economy sponsored by the two federal reserve banks. About 250 people attended the Dallas event in person, and more than 1,000 people participated remotely via webcast.
The need to find ways to shorten the federal permitting process and make more certain state and local siting decisions was echoed by several other speakers.
"For renewable energy, the Four Horsemen of the Apocalypse are Permitting, Permitting, Permitting and Permitting," Geoffrey Hebertson, lead renewables analyst at Rystad Energy (Oslo, Norway), told conference attendees.
Another speaker, Chris Birdsall, director of economics and energy for Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas), said, "We have an abundance of oil, natural gas, renewables and nuclear energy in the U.S., but we are not optimizing the potential of those assets. Infrastructure constraints in the Northeast limit our ability to meet future energy demand."
A third conference speaker, Erik Haug, vice president for energy marketing at Apex Clean Energy (Charlottesville, Virginia), agreed that federal permitting delays were a problem, but he said state and local permitting delays, long grid interconnection queues and local opposition were more significant problems for clean energy.
He said there was about 100 gigawatts (GW) of clean energy projects in the U.S., representing at least $100 billion of value, that "are at risk for significant permitting delay."
In the U.S., Haug continued, approximately 33% of wind and solar siting applications submitted in the past five years have been canceled. About 50% experienced delays of six months or more.
He cited a report from the Brookings Institution (Washington, D.C.), a center-left think tank, that the leading causes for the cancellation of solar and wind projects in the U.S. over the 2016-2023 period were local ordinances or zoning, followed by grid interconnection delays and community opposition.
Click on the image at right for a graph showing the leading reasons for cancellation of solar and wind projects in the U.S. over the 2016-2023 period.
Haug shared his company's unhappy experience trying to build a windfarm in Vermillion County, Indiana, where two years of pre-project stakeholder outreach ultimately was negated when local opposition caused a county commission to adopt a restrictive setback provision, torpedoing the project.
This could have been avoided if Indiana had adopted a policy framework for siting of wind or solar generation, he continued. "Lack of state policy backstop allowed local opposition to block development through restrictive ordinances. Also, financial benefits and community input have limited effectiveness when faced with values-based opposition."
He said that Illinois and Michigan in 2023 passed legislation providing state-level support for renewable energy development, giving county and local agencies a framework within which they could consider permitting and siting clean energy projects. "With stronger assurances on paths to permitting, Apex can be more confident investing in projects located in both states," Haug added.
Several speakers also criticized yearslong interconnection queues at regional grid managers. One speaker, Kristina Lund, president of Pattern Energy Group L.P. (San Francisco, California), said her company has spent 16 years over four U.S. presidencies trying to secure permits for the 3,500-megawatt SunZia wind and transmission project in New Mexico. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more by viewing the related project reports. For additional information, see April 19, 2024, article - SunZia Transmission Line Gets Green Light from Judge.
"That's not going to get us to where we want to go," she said. "We need to clean out the interconnection queues."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Speakers representing oil and gas producers, electricity companies, financial firms and energy researchers agreed that the energy assets needed to meet future demand for electricity and oil and gas will not get built in a timely manner unless changes are made to the way project permits are issued by the federal government and energy project siting decisions are made by state and local governments.
In President-elect President Donald Trump, energy interests have an ally on permitting reform, at least at the federal level. During his first term, Trump streamlined the permitting process under the National Environmental Policy Act (NEPA), a bedrock federal environmental law that has been little changed since it was enacted in 1970. But earlier this year, President Joe Biden scrapped those changes and added new steps to protect the environment, likely lengthening the federal; permit-approval process. For more on that, see May 3, 2024, article - Biden Administration Finalizes Changes to Environmental Review Law.
As a candidate and president-elect, Trump has signaled his interest in cutting regulation and expanding energy production with this moniker: "drill, baby, drill."
"It's 'hang onto your hat' time in Washington, D.C. right now," Rick Muncrief, president and chief executive at Devon Energy (NYSE:DVN) (Oklahoma City), told conference attendees November 13. "Reducing oil and gas regulation, taxes, IRA tax credits and permitting reforms for pipes, wires and other energy infrastructure are needed."
This was the ninth joint conference on energy and the economy sponsored by the two federal reserve banks. About 250 people attended the Dallas event in person, and more than 1,000 people participated remotely via webcast.
The need to find ways to shorten the federal permitting process and make more certain state and local siting decisions was echoed by several other speakers.
"For renewable energy, the Four Horsemen of the Apocalypse are Permitting, Permitting, Permitting and Permitting," Geoffrey Hebertson, lead renewables analyst at Rystad Energy (Oslo, Norway), told conference attendees.
Another speaker, Chris Birdsall, director of economics and energy for Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas), said, "We have an abundance of oil, natural gas, renewables and nuclear energy in the U.S., but we are not optimizing the potential of those assets. Infrastructure constraints in the Northeast limit our ability to meet future energy demand."
A third conference speaker, Erik Haug, vice president for energy marketing at Apex Clean Energy (Charlottesville, Virginia), agreed that federal permitting delays were a problem, but he said state and local permitting delays, long grid interconnection queues and local opposition were more significant problems for clean energy.
He said there was about 100 gigawatts (GW) of clean energy projects in the U.S., representing at least $100 billion of value, that "are at risk for significant permitting delay."
In the U.S., Haug continued, approximately 33% of wind and solar siting applications submitted in the past five years have been canceled. About 50% experienced delays of six months or more.
He cited a report from the Brookings Institution (Washington, D.C.), a center-left think tank, that the leading causes for the cancellation of solar and wind projects in the U.S. over the 2016-2023 period were local ordinances or zoning, followed by grid interconnection delays and community opposition.
Haug shared his company's unhappy experience trying to build a windfarm in Vermillion County, Indiana, where two years of pre-project stakeholder outreach ultimately was negated when local opposition caused a county commission to adopt a restrictive setback provision, torpedoing the project.
This could have been avoided if Indiana had adopted a policy framework for siting of wind or solar generation, he continued. "Lack of state policy backstop allowed local opposition to block development through restrictive ordinances. Also, financial benefits and community input have limited effectiveness when faced with values-based opposition."
He said that Illinois and Michigan in 2023 passed legislation providing state-level support for renewable energy development, giving county and local agencies a framework within which they could consider permitting and siting clean energy projects. "With stronger assurances on paths to permitting, Apex can be more confident investing in projects located in both states," Haug added.
Several speakers also criticized yearslong interconnection queues at regional grid managers. One speaker, Kristina Lund, president of Pattern Energy Group L.P. (San Francisco, California), said her company has spent 16 years over four U.S. presidencies trying to secure permits for the 3,500-megawatt SunZia wind and transmission project in New Mexico. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more by viewing the related project reports. For additional information, see April 19, 2024, article - SunZia Transmission Line Gets Green Light from Judge.
"That's not going to get us to where we want to go," she said. "We need to clean out the interconnection queues."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
