Illustration: Aïda Amer/Axios
The mini-permitting deal in the debt ceiling bill could have outsized political consequences.
Why it matters: The changes to the National Environmental Policy Act are small compared to what Republicans had been asking for, but they're politically significant. And the proposal to approve the Mountain Valley Pipeline is already setting off a firestorm.
Looking beyond the tough votes Congress needs to take this week, we see at least three implications here:
1. Manchinomics: The deal effectively fulfills the promise the White House made to Joe Manchin to push for permitting changes and Mountain Valley when he voted for the Inflation Reduction Act last year.
- It's a huge boon for Manchin's potential reelection run next year, but notably, the West Virginian wasn't thanking President Biden this weekend.
- "I am pleased Speaker McCarthy and his leadership team see the tremendous value in completing the MVP," he said in a statement.
2. Losing progressives: Progressive Democrats and environmental groups are furious about MVP's inclusion in the deal. Whether it matters will largely be decided at the ballot box.
- Climate advocates now have enough evidence post-deal (and after the Willow oil project's approval) that Biden will support new oil and gas drilling.
- We’ll be watching to see if this knowledge translates into meaningful pressure on future permitting policy deals, or activist campaigns for climate voters to rally against Biden’s current approach.
- If a real backlash were to happen, it would ride on people thinking that approving a pipeline wasn’t a worthwhile trade for protecting the IRA and lifting the debt ceiling.
Other progressives might hold their fire, judging that the deal was a bitter pill to swallow but had to be done.
- Jael asked Rep. Ro Khanna last week if he thought there’d be any climate voter backlash if pro-fossil fuel language was attached to a debt deal.
- Khanna didn’t answer the question, instead pivoting to how Dems were “going to hold firm on the IRA.”
3. Legislative momentum: Senate committee leaders will likely want to continue talking about a bigger environmental permitting bill, but the debt deal could kill that effort by changing the bargaining chips.
- It includes 2-year NEPA shot clocks — a major ask for Republicans and the energy industry — but leaves out changes to the judicial review process sought by the GOP.
- Meanwhile, Democrats essentially got nothing to spur an electric transmission buildout.
- The deal would require only a study of interregional transfer capacity, and the results, including policy recommendations, would be finalized more than two years from now.
Our thought bubble: So there are things folks on both sides still want, but the range of policies on the table for a bigger deal has narrowed.
- Here's how ClearView Energy Partners put it in a note to clients yesterday: "We currently think the FRA mini-deal is more likely to undercut momentum for such efforts than to stoke it."
Catch up fast: Check out our coverage from the holiday weekend for more details on what made it in the bill.
