Joe Biden is signaling he would make it difficult for developers to obtain federal permits to build fossil fuel infrastructure such as pipelines and liquefied natural gas export facilities, delivering on a key priority of environmental groups.
“There is virtually unfettered discretion there, so long as procedural safeguards are observed,” said Glenn Schwartz, director of policy at Rapidan Energy Group, a consultancy firm.
As his chief tool to curb pipelines and LNG export terminals, Biden could require thorough and lengthy reviews to determine whether a project’s economic value is outweighed by its contribution to climate change.
Biden’s official plan to address climate change commits “that every federal infrastructure investment should reduce climate pollution” and requires “any federal permitting decision to consider the effects of greenhouse gas emissions and climate change.”
“Biden’s assessment and protocols he will put around potential fossil projects is absolutely spot on,” said Jane Kleeb, chairwoman of the Nebraska Democratic Party and a leading grassroots organizer against pipelines. “We can’t keep developing fossil fuel projects and also think we are solving climate change. Those can’t be on parallel tracks.”
The threats are scaring the fossil fuel industry and its allies, who have already complained of lengthier development processes due to opposition from environmental groups. Activists have had success stymying projects in the courts, leading to complaints from industry that, despite a significant build-out of pipelines this past decade to serve the shale boom, there remain shortages in parts of the country such as the Northeast. Interstate natural gas pipeline developers have proposed $30 billion in new investment through 2025, according to the Rocky Mountain Institute, a sustainability nonprofit organization.
The latest legal threat to the industry could be addressed this week by the Supreme Court, which is weighing whether to grant or deny review of an appeals court’s decision blocking developers of the PennEast pipeline from condemning state-owned land. Industry officials and analysts say that decision could give states effective veto power over natural gas pipeline projects.
“It’s pretty clear for those states that are just trying to block pipelines, this gives them one more potential tool to try and sink them,” said Tony Clark, a senior adviser at the law firm Wilkinson Barker Knauer who represents energy companies.
Biden has already committed to one of the most high-profile demands from activists, pledging to rescind a permit granted by President Trump allowing the Keystone XL oil pipeline to cross the border from Canada into the United States.
Keystone XL, which is still caught up in court, has been stalled for more than a decade and was rejected by President Barack Obama.
But Biden had previously balked at signing a “No KXL” pledge proffered by environmental activists, who are now interpreting his opposition to the project as a sign he’d favor applying strict scrutiny more broadly to other fossil fuel projects.
“We don’t need any new fossil infrastructure,” Kleeb said. “Our country has enough currently to meet our needs. The next phase of energy development and construction projects must be focused on clean energy for the next 100 years.”
Activists like Kleeb argue pipelines and LNG export terminals lock in a dependence on fossil fuels, due to their long lifespan. They say the fossil fuel industry overstates the need for pipelines. A report last year by the Rocky Mountain Institute found it’s cheaper to build new solar and wind now rather than gas plants and the pipelines that support them.
Keystone XL is unique in that it required a presidential permit for crossing countries, giving the executive branch direct authority over it. Interstate natural gas pipelines and LNG terminals, by contrast, have to be reviewed by the Federal Energy Regulatory Commission, an independent body whose members are appointed by the president and subject to Senate confirmation.
“Any new FERC won’t be able to slam the brakes on projects willy-nilly,” said Clark, who was formerly a Republican commissioner on the FERC.
Analysts say a Biden White House could influence the FERC’s decision-making process by issuing guidance requiring agencies to account for greenhouse gas emissions when completing environmental reviews for infrastructure projects under the National Environmental Policy Act.
The Trump White House, by contrast, recently finalized an update of regulations governing NEPA that seeks to speed and narrow environmental reviews by, in part, not requiring agencies to consider the effect of a project on climate change.
A Biden administration can’t “across-the-board dictate that the federal government cannot approve any project with climate implications,” a former government official who worked in the Trump administration told the Washington Examiner.
But the Biden White House could issue guidance “directing the government to make every effort to reduce climate impacts and to account for greenhouse gases as fulsomely as possible,” the official said.
Jon Wellinghoff, a former Democratic chairman of the FERC, said the agency would make decisions independently, regardless of a president’s priorities. But he said guidance from the White House requiring rigorous climate reviews could make it more likely that the commission’s rejection of a project on that basis be held up in court.
“That can bolster whatever FERC decision makes and help support them in the courts,” Wellinghoff said.
The current Republican-majority FERC has taken an approach preferred by the Trump White House, aggressively approving pipelines and LNG terminals while doing limited climate reviews.
Republican chairman Neil Chatterjee has argued federal law does not allow the FERC to deny projects based on the effect of greenhouse gas emissions released by the natural gas transported through pipelines and during the production process. Instead, the commission’s current approach is to examine the environmental effects of the construction and operation of the pipeline itself. Democrats say the law allows for more expansive reviews.
Wellinghoff said the law is ambiguous, leaving it up to the courts to decide who’s right absent new federal legislation.
“There’s been a long-standing debate as to whether or not the authority provided by Congress to FERC extends to looking at downstream greenhouse emissions,” Wellinghoff said. “You can argue it either way legally, and it will be up to the courts.”
Still, analysts say a Biden administration could make the process so burdensome and expensive for pipeline developers that they give up before trying.
“If you don’t have a permit in hand when the Trump administration leaves office, it may be very hard to get one, either by saying no, by saying yes, requiring expensive, onerous litigation to get a permit, or saying no outright,” said Christi Tezak, managing director of research firm ClearView Energy, LLC.
