Democrats dominated in the midterms largely on a kitchen-table message of affordability. Naturally, one of their first legislative acts will be to increase the cost of living in a crucial part of the economy: energy.
Congress has one shot — and one shot only, it seems — to enact comprehensive permitting reform in the lame-duck session starting next week. Party leaders in the Senate have already negotiated the deal. By paring back and streamlining federal reviews of energy and infrastructure projects, the Bipartisan American Affordability and Jobs Act — cliché name, but what else is new — would expand the supply of transmission lines, power stations, and pipelines. In due time, the effects would show up in electricity and gas bills, and potentially in fuel prices.
Hakeem Jeffries (D., N.Y.), the man certain to be the next speaker of the House, says not so fast. Politico reports that Jeffries thinks the permitting bill “falls short in several areas,” particularly by paring back review for environmental impact and historical preservation. He also demands that House Democrats have more input before passage. That would require time that Congress doesn’t have. If Jeffries can persuade his caucus to vote down permitting reform this winter, he likely sinks it for good.
Addressing the minority leader’s objections would also gut the bill’s substance. Though they might sound innocuous, environmental and historical reviews are often a death knell for projects, with the onerous process dragging on for years as costs and litigation pile up. Rationalizing the National Environmental Protection Act of 1970 (NEPA), which requires agencies to compile exhaustive reports for almost every permitting decision, is the heart of the legislation. Jeffries wants it out.
The country needs more electricity to accommodate new data centers, yes, but also to alleviate strain on the grid that existed long before the AI buildout. Before very recently, the United States had not meaningfully expanded its power generation since 2007 — halting decades of consistent progress. Utilities are now scrambling to catch up with demand.
If permitting requirements prevent the supply of energy from growing quickly enough, rates will stay high and, in fact, keep rising above inflation. Deep permitting reform is an urgent necessity. Yet Democrats risk turning their backs on affordability before they even get their majorities.