This week the House of Representatives will vote on H.R. 1, the “Lower Energy Costs Act.” The comprehensive bill includes several pieces of legislation that aim to reduce energy costs and modernize permitting regulations to get more projects deployed faster. By designating this bill as H.R. 1, Republicans in the House of Representatives are signaling that this is their foundational piece of legislation for this Congress.
While the package is lengthy, here are a few of the key provisions of the Lower Energy Costs Act.
Permitting reform is a central tenet of H.R. 1. The United States’ permitting process has become inefficient and antiquated, which has slowed down the development and deployment of energy and infrastructure projects. H.R. 1 addresses this issue with the Building U.S. Infrastructure through Limited Delays and Efficient Reviews (BUILDER) Act. The BUILDER Act, which was introduced by Rep. Garret Graves (R-LA), modernizes the permitting and approval process under the National Environmental Policy Act (NEPA).
Before any project that receives federal funding can begin construction, it must first undergo a NEPA review. Smaller projects that a federal agency determines to have no significant effect on the environment receive a Categorical Exclusion which allows the project to begin. For all other projects, which is the vast majority, developers must complete an Environmental Assessment (EA) or a more cumbersome Environmental Impact Statement (EIS). Over the years, Environmental Assessments and Environmental Impact Statements have become longer and more expensive to complete. A NEPA review takes an average of 4.5 years to complete with an average cost of $4.2 million. This delays completion times and inflates project costs, hurting America’s energy production and aging infrastructure.
The BUILDER Act addresses these issues by limiting the page length of an EIS to 150 pages and giving the respective federal agency two years to complete the review. An EA meanwhile is limited to a page length of 75 pages and must be completed within one year. The BUILDER Act also designates one federal agency as the lead agency to conduct a NEPA review for each project and reduces the statute of limitations on lawsuits to 120 days. Currently, the statute of limitations is six years.
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Included in H.R. 1’s NEPA provisions is Rep. David Valadao (R-CA)’s Determination of NEPA Streamlining Act which directs the Secretary of a lead agency to use previously conducted EAs and EISs for projects that are “substantially the same.” Meanwhile, Rep. Pete Stauber’s Permitting for Mining Needs Act streamlines the approval of actions such as feasibility studies, mine waste reclamation, and modernization of mining processing facilities.
Importantly, these reforms would benefit every energy source, not just fossil fuels. In fact, 42 percent of Department of Energy Act projects under NEPA review in 2022 were related to clean energy, transmission and conservation compared to only 15 percent for fossil fuel projects. Critically, H.R.1 designates actions such as transmission line upgrades and drilling geothermal wells as “non-major federal actions” which don’t require EAs or EISs in order to be completed.
Modernizing these regulations will improve permitting efficiency, not create lax environmental standards. It will also give regulatory certainty to the private sector, leading to greater investment to increase energy supplies, create jobs, and drive clean energy projects forward.
H.R. 1 takes an “all of the above” energy strategy to boost the production of every power source. Included in the energy security provisions of the package is Rep. Buddy Carter (R-GA)’s bill which streamlines environmental reviews for critical mineral processing and refining. A similar provision would codify the Environmental Protection Agency’s flexible air permitting rule which would give energy facilities the flexibility to plan for anticipated operational changes, such as increased market demand for products or dramatic shifts in the supply of minerals like lithium, cobalt, as well as processed components including semiconductors.
The package also strengthens the domestic production of traditional energy sources. Several individual bills would restrict the President from shutting down pending or previously approved energy facilities (such as pipelines, like Keystone XL, or generating stations) that cross international borders without congressional approval. Another piece of legislation would prevent the President from issuing a moratorium on hydraulic fracturing and give states primacy on regulating energy extraction on state and private lands.
Also included in the Lower Energy Costs Act is Rep. Bruce Westerman (R-AR)’s Transparency, Accountability, Permitting, and Production of American Resources Act, or TAPP Act. TAPP will direct the Department of Interior to conduct quarterly lease sales of oil and gas on federal lands and annual lease sales for the development of clean geothermal energy. In addition, H.R. 1 will repeal restrictions on liquified natural gas (LNG) exports and imports and allow the U.S. to sell LNG to countries with which it does not have a free trade agreement, which will be crucial to deploying clean American energy abroad.
With global energy demand expected to increase by 50% through 2050, America’s global leadership in energy will be critical to supplying affordable power and enhancing energy security. Importantly, U.S. energy will play a key role in reducing worldwide emissions by displacing dirtier fuel sources like Chinese coal or Russian natural gas.
The Lower Energy Costs Act takes several steps to reduce regulatory barriers that hinder energy and infrastructure progress. Additionally it paves the way to unleash American energy production, which is crucial to providing affordable and reliable power to consumers while reaching key environmental objectives.