Manchin’s Permitting Side Deal Highlights The Energy Transition’s Central Conundrum

John Holdren, a Research Professor at Harvard University’s Kennedy School, told the Wall Street Journal in a recent story that “It is very hard to build infrastructure of any kind in the United States. There are genuine tensions between the desire of one set of people to build stuff and the desire of the public to have a voice.” Mr. Holdren also served as Director of the White House Office of Science and Technology Policy for President Barack Obama, where he would have witnessed the clash of these tensions first-hand.

In those two sentences, Holdren perfectly captures the central conundrum of the ongoing energy transition that is a major aspirational goal mainly of western governments: To meet the aggressive targets for this transition, these governments are going to be constantly faced with the choice of conceding to the desires of the environmentalist left, or permitting often-dirty businesses of mining, drilling and installation of critical infrastructure to proceed at an increasingly-rapid pace.

It is indeed true that it has become increasingly difficult to build anything big in the U.S., and that is mainly because anything big is inevitably going to result in impacts to air, water, land, viewsheds and migratory, threatened or endangered species. This is as true of any big renewable energy project as it is of any fossil fuel or mining project, for the simple fact that renewable energy – along with its fellow rent-seeking electric vehicles industry – is made possible by ready supplies of an array of critical energy minerals.

The acquisition of those minerals is by necessity accomplished mainly by hard rock mining, often the dreaded strip mining, which can and often does leave enormous scars across large swaths of land. The mining operations also involve the use of massive amounts of fossil fuel energy, which powers the mining equipment and creates a significant carbon footprint.

As I’ve chronicled at length over the last 18 months, the growth of renewables and EVs will also require a massive expansion in hard rock mining for minerals like lithium, cobalt, antimony, tungsten, copper, silver, aluminum and others. This is real; it is a thing, and it cannot be avoided.

Here is where the side deal reportedly struck by Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi to secure West Virginia Sen. Joe Manchin’s vote in favor of the recently-passed Inflation Reduction Act comes in. That side deal involves moving a still-unpublished bill that would involve measures to speed up the permitting of energy-related projects in the United States. Manchin’s requirement is that any provisions contained in the bill must be applicable to all forms of energy, not just to wind, solar and EVs, which have become the designated favored industries of the Democratic party.

The unavoidable conundrum in any such effort is this: The major hold-ups in obtaining permits for energy projects in America pretty much all relate to various forms of environmental protections. They relate to major federal statutes like the National Energy Policy Act, the Clean Water and Safe Drinking Water Acts, the Clean Air Act and the Endangered Species Act, to name a few.

Thus, the central feature in any bill designed to speed up federal permitting for energy projects will come down to a proposition to lessen environmental protections in order to…save the environment? Is that really something that Schumer, Pelosi and the rest of the Democratic Party’s Senate and House caucuses are prepared to do?

I recently wrote about a great example of this conundrum, that of a proposed lithium mine whose federal license to proceed has been withheld for years over a plan to protect 10 acres of buckwheat under the provisions of the Endangered Species Act. On the one side you have the mining company that wants to tap a massive new resource of one of the most critical minerals required by renewable energy and EVs; on the other side you have environmentalist organizations that provide big amounts of dollars to fund political campaigns mainly of Democratic candidates. If you don’t think one factor impacts the other, you don’t really understand how the U.S. political system works.

The grand irony here is that many of the environmentalist groups that work to oppose the mining permits on the one hand also claim on the other hand to be fervently in favor of the energy transition taking place. The existence of this conundrum related to the energy transition explains why Sen. Manchin was not allowed to include his favored permitting language in the Inflation Reduction Act itself. Schumer and Pelosi knew they would not likely be able to hold their caucuses together to get the larger bill passed with that language in it.

That, of course, means that Sen. Manchin will have to gain the support of a large number of Republicans in both the house and senate to get his stand-alone permitting bill passed. Whether he can do that or not remains to be seen.

Do we lessen environmental protections to save the environment? Whether they like it or not, it’s a conundrum all governments pushing this transition will ultimately have to resolve.