Another Significant House Bill on Energy Permitting Reform Passes but Looks Doomed in Senate for Now

On March 30, the U.S. House of Representatives voted 225-204 to pass HR 1, the Lower Energy Costs Act. While Democrats in the Senate have indicated they will reject the legislation in its current form, we still consider this a positive step forward for oil and gas (and solar and wind) permitting reform in the United States.

We expect the act would be especially helpful for large pipeline projects, particularly at Kinder Morgan KMI, Williams WMB, Enbridge ENB, TC Energy TRP, and Equitrans ETRN, to obtain additional clarity and certainty on potential and in-progress projects. Broadly, the fact that permitting reform remains top of mind in Congress keeps our confidence level reasonably high that some type of reform will eventually pass, likely as a compromise portion of a must-pass bill.

The latest legislation has similarities to and differences from prior proposals. There are time limits placed on the National Environmental Policy Act for environmental reviews, and deadlines for filing legal challenges against projects, similar to earlier legislation introduced by West Virginia Democratic Sen. Joe Manchin. Some differences include limiting states’ ability to strip water quality permits from projects (a real boon for Equitrans, given its recent struggles here), limiting the consideration of climate in NEPA reviews, and boosting U.S. liquefied natural gas exports by asking the Federal Energy Regulatory Commission to find exports consistent with the public interest. It would eliminate the U.S. Department of Energy’s role in approving LNG export terminals.