Inside the energy fight dividing Congress as funding deadline looms

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Washington — As Friday’s government funding deadline approaches, Congress is splitting over an overhaul of the nation’s energy permitting process demanded by Sen. Joe Manchin.

Senate leaders and President Joe Biden say they stand by an agreement to attach the West Virginia Democrat’s proposal — which would accelerate both fossil fuel and clean energy projects — to a stop-gap government funding measure that must be passed by the end of the month to prevent a government shutdown.

But the deal is drawing opposition on all sides: Democrats in both chambers are lining up to stop it, concerned it will threaten the environment and public health. Republicans, who have pushed for changes to federal permitting for years, are concerned it doesn’t go far enough and are loath to support Manchin after he enabled passage of the Inflation Reduction Act with solely Democratic votes.

How the drama unfolds may determine whether the government remains open in October — and add fuel to a conversation about how the country can meet demands for a growing electric vehicle sector, from battery mineral sources to an expanded grid for charging.

Electric vehicle challenges

The U.S. auto industry is rapidly transitioning to electric vehicles, pushed by changing regulatory environments worldwide, federal incentives and the increasing pressure of climate change. BloombergNEF estimated last week that more than half of all passenger cars in the U.S. will be electrified by 2030.

Streamlining permitting for energy projects has long been on the wish list for mining companies, which argue there is a long and convoluted permitting process that makes it difficult for miners to invest in extracting the critical minerals needed to fuel an electric vehicle boom. 

It takes an estimated seven to 10 years to permit a mine in the United States. And “even once you get your permit, you often get hit with lawsuits,” said Abigail Wulf, director of critical minerals strategy at Securing America’s Future Energy, which supports Manchin’s proposal.

Forecasters estimate both the world and the United States will fail to meet demand for EV battery minerals such as lithium, cobalt, nickel and graphite by steep margins in the coming decade. The mineral supply chains that do exist for EV batteries globally are largely controlled by China, the country’s chief economic rival.

A pile of nickel and copper concentrate is stored at the Humboldt Mill site near Eagle Mine in Marquette County.

Experts also say that utilities will have to expand battery storage and transmission lines to accommodate an increase in electric vehicle sales.

“There is a very legitimate need to increase (mining) capacity significantly and to control more of it because of obvious reasons around geopolitics,” said Mike Ramsey, a transportation and mobility analyst for Gartner Inc. “However, mining can be a rather destructive process … and now (companies) are looking at much more energy and environmentally intensive methods to try to get” minerals like lithium out of the ground at scale.

Political hardball

Over the next five days, Congress will attempt to fulfill a deal brokered at the end of July.

In exchange for Manchin’s support for the clean energy, tax and health care bill that became the Inflation Reduction Act, Senate Majority Leader Chuck Schumer of New York agreed to attach Manchin’s permitting reform legislation to a continuing resolution this fall. Congress has a powerful incentive to pass the resolution by Sept. 30: It extends the current budget past the end of the fiscal year, keeping the government open.

Manchin argues the legislation will increase U.S. energy independence, decrease energy prices and increase the net use of clean energy sources.

His bill would require the White House to designate energy projects of “strategic national importance” and prioritize permitting for those projects, which must include critical mineral and energy transmission projects as well as carbon capture and hydrogen. However, at least some of those chosen would also have to be fossil fuel projects.

It would also set a two-year limit for project reviews under the National Environmental Policy Act, set a 150-day statute of limitations for lawsuits challenging projects, and expedite approval of the Mountain Valley Pipeline, a natural gas line running from West Virginia to Virginia.

That’s drawn the fury of environmental groups, which have dubbed the bill “the Dirty Deal” and protested it on Capitol Hill.

U.S. Rep. Rashida Tlaib

Rep. Rashida Tlaib, D-Detroit, was one of more than 70 Democrats to send a letter to House leadership urging them to keep Manchin’s bill out of the stop-gap funding legislation. She said her district has the only petroleum refinery in the state and is subject to hundreds of air permits.

“So gutting and so-called ‘streamlining’ NEPA and the Clean Water Act in environmental reviews is very, very harmful to front-line communities that are already seeing the detriment of the current system,” she told The Detroit News. It’s “what my residents call ‘permission to pollute.'”

Reps. Andy Levin, D-Bloomfield Township, and Debbie Dingell, D-Ann Arbor, also signed the House letter. Several Senate Democrats sent their own letter last week opposing the legislation.

Sen. Debbie Stabenow, D-Lansing, also said she has “deep concerns” about the bill because it does not prevent oil and natural gas from being shipped to China or require that projects use union workers and American-made equipment: “For a bill that is supposed to spur American energy and lower costs, it still needs a lot of work,” she said.

Many Republicans, too, say they’re closed off to the bill and are instead throwing their weight behind an opposing permitting reform proposal authored by Sen. Shelley Moore Capito, R-West Virginia, even as Capito has since said she’d support Manchin’s bill.

Manchin’s proposal has a long way to go to secure 60 needed votes to pass it through the Senate, but it isn’t yet considered dead. Some Democrats are finding things to support in the measure. And as of now, Schumer remains committed to holding up his end of the bargain and putting it to a vote, despite the stakes.

“I’m not shutting the government down, I’m voting for it,” Manchin told reporters last week. “Whoever votes against it is shutting the government down.”

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