Congress should act quickly on energy permitting reform

As America continues to innovate and create, energy demands will continue to increase. The U.S. Energy Information Administration forecasts electricity consumption to increase by 1% in 2026 and 3% in 2027, marking the strongest four-year period of electricity demand growth since 2000. Unfortunately, the permitting process for building new energy infrastructure is complex, tiresome, and incredibly expensive for investors.

Depending on the situation, approval for a new site can be heavily regulated by the local, state, and federal government. Given this bottleneck, how will the U.S. keep up with growing energy demands?

The Bipartisan American Affordability and Jobs Acts (BAAJA) was introduced in the U.S. Senate in late September to address and provide solutions to this question. This legislation is sponsored by Shelley Moore Capito (R-WV), Mike Like (R-UT), Sheldon Whitehouse (D-RI), and Martin Heinrich (D-NV). It would reform the National Environmental Policy Act ( NEPA), Clean Water Act, and the Endangered Species Act ( ESA).

Given the bipartisan support for this important permitting reform, Congress should quickly take it up in its post-election session. The good news is that the Senate just advanced the proposal in a 73-25 procedural vote. Now comes the amendment process.  

NEPA was signed into law by President Nixon in 1970, and since then it has expanded its scope and involvement in the federal government’s permitting review process. It was initially intended to apply only to major federal action, but that definition has become increasingly vague, resulting in NEPA overreaching and meddling with permits it should've never been involved with. This delays important infrastructure projects like energy plants and disincentives businesses investment in energy projects due to a large potential loss of capital as the project stalls.

The proposed revisions of the Clean Water Act and the ESA aim to limit the number of reviews and approvals needed at the state and federal level while also establishing a tighter deadline for litigation possibilities. These proposed changes don’t mean that the U.S. won’t have any environmental reviews or consideration for environmental impact; it just takes away the unnecessary steps that can hold up projects for years.

This federal reform is massively needed, but there is also a state responsibility for energy permitting to meet this new demand. On the state level, Montana and Washington’s environmental review processes were actually modeled after NEPA and enacted in 1971. The same issue of overreach could creep in for both states. Montana, however, has been wise with its power, while Washington’s policy even extends to local governmental decisions.

Idaho and Wyoming don’t have a state-level NEPA-type policy, but state permit applications run through the proper agency to deliver decisive and fast approvals. Idaho, Montana, and Wyoming have also all agreed to participate in FAST-41 , which is intended to promote collaboration between the federal and state government to ultimately quicken the process for crucial energy infrastructure.

Washington, however, is an obvious outlier in its lagging permit approval timeline. A 2026 Sightline Institute study found that Washington’s Energy Facility Site Evaluation (EFSE) averaged 26.9 months from application submission to gubernatorial approval, with a median of 24.4 months. Some of the projects even took up to 56.2 months.

On the supplier side, the risk an investor currently must take in committing to a new energy project should also be considered. A survey by the National Association of Manufacturers and the Foundation for American Innovation found that nearly two-thirds of respondents would likely increase U.S. investment if permitting were faster and more predictable. Policymakers should be finding ways to incentivize energy production and development at the state and federal level.

America needs companies to step up and deliver power infrastructure to the grid, but it can be incredibly frustrating for business owners because of the tedious and lengthy process. Each level of government has accountability for its own statutes. Federally, if BAAJA passes, it would be a big step in the right direction.

Idaho, Montana, and Wyoming already have solid permitting review processes in place that will complement the proposed federal reform. This will increase confidence for stakeholders that energy needs can be met in those states if Congress takes the needed step to act.