Biden climate law will stumble without permitting reform, industry warns

[March 07, 2023]  HOUSTON - The Biden administration's climate law, which provides hundreds of billions of dollars in clean energy incentives to fight global warming, won't be fully effective without permitting reform, executives told the CERAWeek energy conference on Monday.

U.S. President Joe Biden last year approved the Inflation Reduction Act (IRA), which extends tax credits to wind, solar and other clean energy projects, but a parallel effort to speed up environmental permitting - which can take years to complete - has stalled in Congress.

"If the permitting reform doesn't happen, the IRA may not get its full use and benefit," Bold Baatar, who runs the copper business at mining giant Rio Tinto Plc, told the Houston conference.

Copper demand is expected to soar on the back of the clean energy transition because it is vital to electrification, but the United States has few existing mines and one of Rio's proposed copper mines in Arizona faces strong opposition.

Renewable energy companies and utilities have also long complained about the time it takes to secure permits for power generation projects and transmission lines required to move the power to markets.

Sanjiv Lamba, the CEO of industrial gas firm Linde Plc, said he supported the IRA because it provided incentives to find climate change solutions. But "managing the micro-level permitting issues are equally important," he added.

White House Energy Adviser John Podesta told the conference permitting reform was high on the administration's agenda. Biden officials are using all available tools to accelerate permitting and are also supportive of legislative efforts to streamline regulation, he said.

Joe Biden walks past solar panels while touring the Plymouth Area Renewable Energy Initiative in Plymouth, New Hampshire, U.S., June 4, 2019. REUTERS/Brian Snyder

"The permitting process for clean energy infrastructure, including transmission, is plagued by delays and bottlenecks," Podesta said. "To be sure, plenty of delays happen at the state local level and those need to be addressed. But there's plenty that we can do and must do federally."

U.S. Senator Dan Sullivan, a Republican from Alaska, said he was pleased with the administration's comments about permitting reform, but hoped it would extend to fossil fuel projects and not just renewable energy.

The Biden administration is expected to announce a decision within days about ConocoPhillips' Willow oil and gas drilling proposal in Alaska's North Slope, a project the state's government is hoping can help the state reverse declining oil production and revenues.

"I was a little bit nervous, because when John Podesta kept talking about permitting reform, he only talked about renewables," Sullivan told the conference. "Well, we need permanent reform for everything: to build a bridge, to build a road, to build a mine, to build an oil rig, to build renewables."

(Reporting by Richard Valdmanis; editing by Ernest Scheyder and Lincoln Feast.)

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