Clean energy projects have tremendous potential to create jobs and grow the economy and help the nation meet its energy needs in a more sustainable way, but regulatory and legal barriers to energy projects have substantially reduced job creation and economic growth while impeding efforts to bring new energy generation facilities on line, according to a recent economic study commissioned by the US Chamber of Commerce as part of its Project No Project. The report, entitled, “Progress Denied: A Study on the Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects,” (PDF) found that legal challenges, threats of legal challenge, and regulatory hurdles caused the delay or cancellation of 333 energy projects which, if constructed and operated for twenty years, would have potential economic and employment benefits of a projected $3.4 trillion. These estimated benefits would include $1.4 trillion in employment earnings and one million or more jobs per year.
The study estimated economic benefits for hundreds of proposed projects, including 89 wind, 10 solar, 29 biofuel/biomass, 21 transmission line, 22 nuclear, 28 gas and platform, and 111 coal projects. Energy projects normally involve myriad regulatory approvals, and the complexity increases when federal land is involved, as is often the case with solar, wind, and transmission line projects. Navigating the regulatory approvals process may force project developers to deal with the National Environmental Policy Act (and state equivalents, such as the California Environmental Quality Act), the Endangered Species Act, the Clean Water Act, the Clean Air Act, the National Historic Preservation Act, the National Wilderness Preservation Act, or the Federal Land Policy and Management Act, or their state equivalents, among other laws. The approvals process requires interaction not only with the many different federal, state, and local agencies which have jurisdiction to enforce these laws, but also with a variety of public and private interest groups. Even after regulators issue approvals, legal challenges can delay or doom clean energy projects. The realistic specter of delays and legal uncertainties can discourage private investment in such projects or cause funders to withdraw from projects.
The study highlights the regulatory and legal hurdles which must be overcome by clean energy projects at the same time as California discusses adopting a 33% by 2020 Renewables Portfolio Standard, President Obama calls for 80% of energy to be generated from clean sources by 2035, and a multitude of other standards (and incentives) exist to promote the development of clean energy. Without new sources of generation, the various renewables standards will not be met. In addition to new sources of generation, the study points out that new transmission line projects are needed to connect renewable energy projects to the grid. Prime locations for solar power generation, wind turbines, or wave facilities are often found at great distances from the urban centers where the bulk of energy is used. Not only are these remote projects being opposed and delayed, but the transmission line projects necessary to convey the energy to populated area are also subject to attack and delay.
The U.S. Chamber of Commerce study is the latest effort to draw attention to significant economic effects of delayed or denied permitting of clean energy projects.