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How Congress should reform infrastructure permitting

Late last month the Senate Committee on Environment and Public Works held a hearing on the federal environmental review and permitting process for such infrastructure projects as pipelines, powerplants, fossil energy extraction, mining, refinery equipment, ad infinitum. 

So broken is the process that — believe it or not — there was bipartisan agreement that reform is necessary. So broken is the process that a recent McKinsey study found that about $1.5 trillion in proposed projects are stalled in years-long permitting delays, imposing annual economic losses of $100 billion to $150 billion. And the McKinsey estimate is biased downward, because the permitting delays hinder investment in the underlying productive activities that would utilize the infrastructure projects delayed or not built.

So broken is the process that significant environmental damage is one obvious result, as older infrastructure not technologically up to date, physically deteriorating, and inefficient is left in place because the endless permitting delays create a large bias in favor of the status quo. 

Fortunately, the National Petroleum Council has published a detailed report discussing the central steps needed to reform the process.

Their first recommendation: “Amend [the National Environmental Policy Act] to clarify its procedural nature and focus the scope of environmental review.”

This reform is crucial because under a 1965 ruling from the Court of Appeals for the Second Circuit, that a project may be approved only if “the record on which it bases its determination is complete.” This means that any potential adverse environmental effect — regardless of how small or speculative or indirect or distant in time — can justify litigation and rejection of a project.

Clarification of the law would mean that courts may not vacate or enjoin agency actions; only a remand to a lower court for further review would be the remedy available. The House recently passed the SPEED Act, which would enact many of these reforms in law, with bipartisan support. 

The council’s second recommendation is to “enact judicial reforms to streamline environmental permitting litigation.” Such streamlining would prevent courts from rejecting an agency action unless they find that the agency abused its discretion in such a way as to change its finding. It also would prevent courts from substituting their own judgments on environmental effects in place of those considered by the agency.

Moreover, strict time limits for the filing of lawsuits must be part of a litigation reform. The time limits would apply to court resolution of such lawsuits and any appeals. Also, in order to establish standing to sue, plaintiffs should have to demonstrate that they would be harmed directly by an agency decision.

Another recommendation is to “direct agencies to identify and eliminate duplicative permitting process requirements and promote greater consistency across federal, state, and local jurisdictions.” Not In My Backyard state environmental reviews duplicating federal reviews are a classic tactic to nullify federal project approvals.

Because aggregate infrastructure investment over the long-term has crucial implications for national wealth, environmental protection, international trade, and many other central parameters, it is federal review that is appropriate and that is shaped by political pressures reflecting national-level tradeoffs. States and localities have concerns that are far more parochial, with few incentives to consider national imperatives. 

The National Petroleum Council also recommends amending the Clean Water Act “to limit the scope of state review to direct water quality impacts.” The Trump administration is proposing a rule to “update and clarify several substantive and procedural requirements” for state reviews of water quality requirements that might be affected by any discharge into the waters of the U.S.

Because of ambiguity in the current regulatory structure implementing the Clean Water Act’s Section 401, it is a source of lengthy delay and obstructionism of energy projects already licensed federally. But a mere change in the regulatory rules will be challenged in the courts, and can (and will) be undone by a future administration. That is why the House of Representatives is currently considering the PERMIT Act. 

There are still more steps we can take beyond these. For example, U.S. Army Corps of Engineers permits must currently be be renewed every five years; an increase to ten years would provide greater certainty and investment efficiency. The Federal Energy Regulatory Commission often fails to adhere to its own 90-day deadline for issuance of permits; an executive order directing it to do so can be reversed easily, but congressional action requiring automatic approval after the 90-day period would solve this problem. 

For many decades, aggregate infrastructure investment has been subjected to obstructionism driven by imperatives that are ideological, narrow-minded, and perverse in terms of actual environmental protection. The result has been deeply destructive economically. A serious reform is needed; Congress must act.

Benjamin Zycher is a senior fellow at the American Enterprise Institute.

Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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