Protect Local, Not Special, Interests

In recent years, technological advances and resource development have yielded new opportunities to increase energy production here at home. In fact, earlier this year the US exported more energy than it imported for the first time since 1949. Unfortunately, much of the progress that’s been made has been met with vocal cynicism, not only from concerned local citizens, but often from activist groups with their own agendas.

Two recent examples illustrate these challenges. This year President Obama delayed the approval process for the Keystone XL pipeline because of local concerns in Nebraska about the project’s impact on a major aquifer. That project had been winding its way through the regulatory process for more than three years. Cape Wind, the offshore wind-farm project that is poised to be the country’s first, has been slogging through the permitting process and beating back local opposition from powerful politicians like the late Sen. Edward Kennedy (D-MA) for more than a decade.

All federal regulations should be reviewed periodically to determine if they are effectively serving their purpose and when possible, to revamp and streamline them. That happens too infrequently as does the effort to make them as clear and understandable as possible in the first place. Unnecessary complexity ensures that review processes for new opportunities will be slow and that law firms will get rich.

The Keystone pipeline fiasco and the slow permitting of fossil energy projects make clear that politics often trumps the rule making process. If three years of review was not sufficient to approve the Keystone Pipeline – a claim the Administration makes to rebut criticism its decision was a political one – then it’s obvious that the system is broken. It also is clear in the case of Keystone that Nebraska officials were not sufficiently involved early on. Opposition from one of the President’s major constituencies and the Administration’s own hostility towards the oil industry may have been larger obstacles that the rules themselves. That was also true of the Cape Wind Farm.

Having said that, it would be dangerous to pass a law that could further erode state and local rights. The process of claiming federal preemption on energy projects should not be easy. It should be used as a last resort and limited to situations that involve national issues rather than strictly local matters. How to do that without trampling states’ rights and property rights is a tough task.

Canada recently installed a new review process that is “one project, one review.” This takes the duplication out of national and provincial government reviews. According to the Canadian government: “The plan for Responsible Resource Development has four main pillars: more predictable and timely reviews; less duplication in reviewing projects; strong environmental protection, and enhanced consultations with Aboriginal peoples”. The new Canadian system sets specific timelines for hearings and review. It also consolidates the number of organizations responsible for review.

When considering our own regulatory review, policymakers should consider using the Canadian system as benchmark of measuring and improving our process. Given technological improvements, it ought to be possible to achieve much greater collaboration between the federal governments and states. There should also be incentives based on the performance record of the company requesting the permit. Companies that meet a predetermined standard of excellence should not have to jump through the same hoops as companies that have a poor operating and environmental records.

With any project, local concerns must be answered and we have to ensure there are proper precautions in place to protect residents’ and communities’ wellbeing. But by the same measure, policymakers need to ensure that the regulatory review process is effective enough that it can’t be hijacked by special interest groups to stifle important development that we need to continue moving the country forward.

Originally published by the National Journal at http://energy.nationaljournal.com/2012/10/energy-project-permitting-the.php#2248125

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