🏗️ Permitting ourselves to build: A Quick Q&A with … energy policy expert James Coleman

'We had an incredible infrastructure boom in the postwar years, along with an economic boom, and we've been spending down that infrastructure inheritance ever since.'

Feb 04, 2025

My fellow pro-growth Up Wingers,

There are pro-growth/progress/abundance advocates across the political spectrum — all united by the recognition that it takes too much and too much time to build physical infrastructure in this country. That, especially in the energy sector. Much of this problem is the regulatory legacy of a massive push in the 1970s to protect US landscapes, biodiversity, and neighborhoods from reckless, unchecked development. But regulatory policies like the National Environmental Policy Act, while enacted with good intentions, haven’t come without costs: namely, near-insurmountable challenges to the infrastructure improvements that 21st century America needs.

I recently did an American Enterprise Institute podcast with James Coleman, one of the country’s top experts on energy regulation, on America’s regulatory barrier to progress. He’s just outstanding. In addition to being an AEI nonresident senior fellow. Coleman is also a scholar of energy law at the University of Minnesota, where he specializes in North American energy infrastructure, transport, and trade.

To listen to my entire conversation with Coleman, click here. This is an edited version of our chat, about half as long as the podcast. Great stuff, I think.

. . . more than half of the oil pipelines we use today were built before NEPA, and so they're more than 50 years old now.

1/ People in Silicon Valley say, “It's time to build,” suggesting that it's already hard to build. On social media, this notion that you cannot build things in America is very prevalent, and they say there are federal regulations that make it hard. What regulations are they talking about?

The primary one they're probably talking about is the National Environmental Policy Act, which is our environmental review law in the US, and it says you have to do an environmental review before you have federal approval for infrastructure or before you have funding that makes infrastructure possible, and those reviews can take a long time. Over time they've taken more and more time. NEPA, was passed in 1970, and we've seen a huge slowdown in infrastructure construction since that time. So if you take oil pipelines, for instance, more than half of the oil pipelines we use today were built before NEPA, and so they're more than 50 years old now.

Of course, we built things, we built natural gas pipelines, we built some power lines, but if we want to continue economic growth and allow more energy for things like electrification of cars, for things like AI and increased data centers, we are going to need to have a lot more energy sources. We can't just keep using all of this infrastructure from the 1960s.

Folks have started to realize that a lot of the things that we have that might preserve or help the environment . . . are being held back by this thing that was supposed to protect the environment.

2/ NEPA does get mentioned a lot — it's not the only one that gets mentioned. What problem was it supposed to be solving?

The incredible infrastructure boom that happened in those postwar years has done us a lot of good. It was, in some ways, an amazing time for the United States — but it did come with environmental consequences. Most cities in the US had highways that were built right through the middle of them through urban neighborhoods. My grandmother grew up in a majority-African American neighborhood in St. Paul, the Rondo neighborhood, that was just destroyed by I-94 when it came through in Minnesota, and that was a huge problem. Congress reacted to that problem by saying, “Okay, for all the benefits of these infrastructure, we really need to at least think about the environmental consequences before we build that.” And that idea, that basic idea of the National Environmental Policy Act, is sensible.

The challenge is that the courts have taken that basic idea, which is, “Look before you leap. Consider the environmental consequences,” and expanded it to require more and more reviews, so now it takes, on average, over four years to do that environmental review. Then when you add lawsuits and litigation on top of it, can take more than a decade to get a project built. This pendulum has swung too far to the other side. Folks have started to realize that a lot of the things that we have that might preserve or help the environment — nuclear power, high speed rail, power lines for solar and wind power, liquefied natural gas exports — all of these things are being held back by this thing that was supposed to protect the environment.

. . . that spectrum from dirty to clean [energy] is also the same as the spectrum from easy to transport and store to difficult to transport and store.

3/ The current system seems set up more for fossil fuels than these newer, renewable technologies, which may be bringing some of these issues to the forefront.

If we think about our energy sources and we put them on a continuum from dirty to clean, you take things like the dirtiest — coal and then oil — these built the modern world because that spectrum from dirty to clean is also the same as the spectrum from easy to transport and store to difficult to transport and store. Cleaner sources like natural gas, electricity from geothermal, nuclear, and renewable sources are extremely expensive to transport and store. You need very expensive infrastructure. One reason that you’ve started to see bipartisan focus on permission for these projects’ permitting approval is because Democrats have started to realize, “Wait a second, if we make it hard to build infrastructure, they can still get oil out of the ground, and if you can get oil out of the ground, you can find some way to get it to market.” But if you can't build a power line, you'll never have solar farms or wind farms, and the same thing is true of most of those cleaner (i.e. lower carbon) technologies. Those are all dependent on either pipelines or power lines to bring them to the markets that need it, and so permitting reform has a disproportionate impact benefiting those lower-carbon and lower-air emissions sources of technology.

4/ When we talk about reform based on federal level, are we just talking about NEPA or are we talking about other significant rules originally passed with an environmental impact which are still really relevant and make it difficult to build today?

No, we should be talking about not just the National Environmental Policy Act, but the Endangered Species Act, which was that issue in that [famous] snail darter Tellico Dam case, TVA v. Hill. We should be talking about the Clean Water Act, which often gives states a veto over even federally approved infrastructure. When we look at projects that we've really wanted to get built, like the [1970s] Trans-Alaska pipeline, the border wall, like the Mountain Valley Pipeline — typically if Congress really wants something to be built, it's going to exempt it from all those statutes. It's going to provide an exemption from the Endangered Species Act, from the National Environmental Policy Act, et cetera. So when we're looking at reform, is this a reform that's actually going to allow stuff to get built? I think we're probably going to want something that provides some way of speeding up the process or stopping court injunctions or somehow putting a cap on how long an Endangered Species Act or National Environmental Policy Act or Clean Water Act review can stop a project.

It may be appropriate to have the courts have some period of time, maybe a year or two . . . but the idea that they can hold them up for 10 or 20 years just creates too large of a burden for the private companies . . . facing the possibility that it will never be built . . .

5/ The real veto gate is when the courts get involved. I wonder if you could just take another minute and say why that judicial review aspect is so important to address?

There can be a sort of naive way that business folks think about environmental reviews, which they say, “Hey, if I have a business, and it's taking too long to consider some issue, and I say, ‘Just make a decision,’ I can just tell them, ‘Just don't consider that issue. It's too far afield. It's not worth considering. Decision.’”

Don't consider environmental justice, or don't consider climate change, or whatever. Just skip it and move forward.

And that would work because you're in charge and you can fire anybody that doesn't follow your rules. Well, the president can't fire the federal courts, and so the president doesn't have the same kind of authority because there is another veto gate, which is that the president can ask the agencies, “Don't consider this issue,” but if the courts say, “Oh, no, no, we want you to consider it,” and that may be a judge that was appointed by President Obama or President Biden, then they are going to be able to hold up that project potentially indefinitely. That's those judicial injunctions.

I think the key thing that you should be looking for with reforms: Is there something that limits those injunctions?

It may be appropriate to have the courts have some period of time, maybe a year or two, where they could hold up the project and ask for more review, but the idea that they can hold them up for 10 or 20 years just creates too large of a burden for the private companies that are talking about sinking billions of dollars into these new energy investments, and they are facing the possibility that it will never be built because there's a disagreement between the government and some judge in some courtroom in the US.

6/ What is the Council on Environmental Quality? There's a recent court case involving it. It also was mentioned in one of the opening day Trump executive orders.

That is the agency that's responsible, under NEPA, for basically setting guidelines for how to do these reviews. But what the court said in this Marin County DC Circuit Decision [at the end of 2024] was that the CEQ doesn’t have the authority to issue binding regulations. it can issue guidance and say, “Hey, this is how we think you should do these reviews,” but, ultimately, its statements do not have the binding authority of a regulation. Now, that was a controversial decision. There was some speculation that maybe it would be overturned — doesn't look like that's going to happen. But also, it's now been underlined by the new administration, which has said, “Yes, we are revoking the executive order under which CEQ issued those regulations.” They’re revoking this 1977 executive order that allowed these 1978 regulations. It appears that the Trump administration is doubling down on that DC Circuit decision and saying those previous regulations are not valid, and instead, we're going to just issue guidance for how these reviews should be done.

[An update on the CEQ litigation here.]

7/ Now this is the part of the conversation the lobbyists going to want to focus on: What does that mean going forward?

If it's guidance, that means that the other agencies don't necessarily have to follow it in every case, although they are likely to. They tend to follow the guidance from other agencies. Also, it means that it's not binding on the courts, and so the courts have an opportunity to reconsider their NEPA jurisprudence, which is what has made NEPA take so long. Most judges are unlikely to take that opportunity to really change their laws because hey, they've been applying these laws for decades. But for those quarter of the judiciary that's appointed by President Trump, they might say, “Wait a second, those previous decisions of the courts that made NEPA such a problem, we don't have to follow those because those were adopted under regulations that are now no longer binding. We have an opportunity to reconsider these things.”

8/ Is reform possible? Do we need a machete to cut through that thicket of regulation?

Maybe we need a lawnmower. I think the challenge is there needs to be some light at the end of the tunnel for people who are looking to make investment in new infrastructure in the United States. The idea that there has to be environmental consideration of the impacts of your product: fine. The idea that we want to protect endangered species: fine. But the idea that a project can be held up indefinitely in the courts is a challenge. And so the proposal that I've made, we have a legislative text for, is that the power to issue judicial injunctions ends three or four years after the review starts. You first have this proposed project, and then after that, review starts. Now if you think that's too much time, that really projects need to begin construction even faster, hey, make it two or three years . . .

At some point, judicial injunctions need to stop. So as long as the government remains supportive of it, as long as it's done in a couple of years of consideration of these things, at that point, the project should be able to go ahead. By the way, that doesn't mean the courts can't still order the government to consider a new issue that it hasn't, or otherwise, it's just that, in the meantime, the project gets to go ahead and begin construction because there has to be some end to that. That regulatory thicket has to be passable for all these new energy projects that we're hoping to see in the future.

One thing that we've seen is because of the challenge of building big infrastructure projects, we've seen a lot of focus on smaller projects.

9/ Can you imagine a world where we have dozens and dozens more nuclear reactors sending power around America, or coast-to-coast high-speed rail if the current regulatory regime is pretty much unchanged?

No, it won't happen. Keep in mind, I think the two specific things you mentioned are some of the more challenging ones. One thing that we've seen is because of the challenge of building big infrastructure projects, we've seen a lot of focus on smaller projects.

Think about transport: We don't have the same kind of linear transport, whether it's high-speed rail, subway systems, metro systems, that you see in many other places in the world. So where have we had innovation? Well, we've had a ton of innovation on things like ride apps: your Ubers and your Lyfts of the world. It's sort of these distributed innovations. I think we will see more innovation in autonomous vehicles, et cetera.

Same thing is true with respect to long-distance travel. We don't have high-speed rail like other countries, but we have a very extensive airport system, and that's the kind of innovation that we've seen. Now we see drones, maybe, for deliveries. My friend Eli Dorado, he loves the idea of blimps, he wants blimps traveling around the US, but that's that kind of network, that's a permissionless innovation or maybe just ignoring the requirements.

10/ The president has talked about building, I think he calls them “Freedom Cities” on federal lands. Is that possible without significant reform?

No, and why would you want to build on federal land? If you look at where is innovation happening in the United States, so much of it is happening in infrastructure in Texas. Texas is amazing. It's installed as much solar power in one month last year as all other states combined. It has three times as much wind power as any state, three times as much solar power that it's installing. It's truly amazing. Why does that happen? Because there's no federal land, it's easy, and so it's easy approvals. Why would you develop on federal land with all these permitting requirements when you could just go to Texas and not worry about federal land?

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