Before Congress leaves Washington for August recess, lawmakers must confront one unfinished issue with bipartisan support: energy permitting reform.
Negotiators have spent years trying to cut red tape that makes it difficult and expensive to build new power in America. The biggest obstacle is whether presidential administrations should use permitting to favor projects they like and block those they do not. Congress has to step in and resolve the permitting reform gridlock permanently to provide certainty for all private sector energy projects.
Businesses, not governments, risk their capital to explore for new resources, develop energy infrastructure, expand production, and transport affordable, reliable energy to consumers. Creating a stable, predictable investment climate allows companies to make the long-term commitments necessary to meet America’s growing energy needs while strengthening economic and national security.
Unfortunately, federal policies that shift with each new administration creates an uncertain climate for energy investment. The Biden Administration foolishly targeted fossil fuels by canceling pipelines, closing off drilling, imposing new taxes and regulations on oil and gas, and implementing a de-facto ban on natural gas exports. These directives, along with others, clouded the certainty companies need to operate, making energy more expensive over the long-term.
President Trump reversed this war on fossil fuels, but he needs to improve his approach to renewables, particularly wind energy. He’s pulled permits from approved projects with no clear rationale, issued stop work orders, and paused future offshore wind lease sales.
Wind energy has its shortcomings, but calling for the offshore wind industry to be immediately paused is Washington-speak for “shut it down.” Like most other energy projects, delays can be a death knell for wind energy projects.
It’s no surprise, then, that Blue States are suing the administration to get these projects built. Last Friday19 State Attorneys General sued the federal government, saying the offshore wind freeze is illegal and hurts their ability to keep electricity affordable.These lawsuits are ratcheting the pressure on Congress to take action.
No one wins from tit-for-tat energy policy. Projects of this scale are capital-intensive, requiring billions of dollars in upfront costs and often take years—or even decades—to recover. When policymakers signal that a particular energy source will face new restrictions, permitting obstacles, or outright bans depending on which party controls Washington, investors become understandably hesitant.
This creates stranded capital where infrastructure or assets can no longer earn an adequate return because of political decisions rather than market forces. It raises financing costs, leading businesses to delay or cancel investments altogether. Companies made those investments based on the assumption that once they satisfy the law, obtain permits, and survive years of environmental review, they will eventually be allowed to build.
Earlier this year, the Trump Administration pressured a private company to wind down a project off the coast of New York. The company paid the federal government nearly $800 million for the leasing rights and invested hundreds of millions more in infrastructure to build the project. As CEO Patrick Pouyanné bluntly explained, “It’s our money. We gave it in 2022.” Rather than allowing that capital to remain trapped in a politically untenable project, the settlement permits it to be redirected into investments capable of producing actual energy.
Weeks later, Bluepoint Wind, a proposed multi-gigawatt project in the New York Bight, reached a nearly identical settlement with the federal government, agreeing to relinquish its $765 million lease in exchange for redirecting its investment capital into other domestic energy infrastructure.
This phenomenon is hardly unique to renewable energy. The Atlantic Coast Pipeline collapsed after years of litigation, regulatory delays, and ballooning costs. The Mountain Valley Pipeline endured nearly a decade of permit reversals and court challenges before finally entering service after billions in additional costs. Even the Dakota Access pipeline only recently got its final approval after more than a decade of litigation.
A recent study found that nearly one-third of utility-scale solar projects and roughly half of wind projects completing full environmental review later faced lawsuits challenging permits already granted by federal agencies. The National Petroleum Council similarly found that oil and gas infrastructure projects routinely experience multi-year permitting delays that significantly increase project costs.
Congress must act expeditiously. It’s fair to demand fairness across the energy sector, whether it’s a renewable or a fossil fuel project. The sooner Congress addresses this problem, the sooner we can build more projects and lower consumers’ energy bills.
To be clear, if a project is not economically viable and would need massive government subsidies to stay afloat, then it should be cancelled. If a project goes through all the hurdles of a rigorous review and is approved, it should be built.
America needs more electrons on the grid, not more barriers to investment. Yet, our regulatory and political system too often freezes private capital when it is needed most. Congress should enact durable, technology-neutral reforms that provide businesses with the certainty to invest while protecting ratepayers over the long term.