By Roland Murphy for Arizona Builder’s Exchange
About the only thing that hasn’t been covered in the tumult following President Trump’s Tuesday press conference, where he announced a new executive order to simplify the infrastructure project permitting process, has been the actual details of the order, itself.
Calling the permitting process, “Badly broken,” Trump noted it took 11 months in 1930-1931 to build the Empire State Building, but said, in today’s regulatory climate, projects can take decades or more to obtain all the necessary permits and approvals to construct even “a fairly routine highway.”
He said, “Highway builders must get up to 16 different approvals involving nine different federal agencies governed by 29 different statutes. One agency alone can stall a project for many, many years, and even decades. Not only does this cost our economy billions of dollars, but it also denies our citizens the safe and modern infrastructure they deserve. This overregulated permitting process is a massive self-inflicted wound on our country.”
Following this statement, he unfurled a flowchart between six and seven feet in length to illustrate the current permitting and approval process. He then showed a revised flowchart of around two feet long that will reflect the process after the order takes effect. The goal is to cut the permitting and approvals timeline at the federal level down to an average of two years.
Over the course of 11 pages, the order addresses the broad terms, conditions and goals for projects involving transportation, ports, water resources and energy production.
To achieve the goals of expediting and streamlining reviews and approvals, the order mandates the Office of Management and Budget, in cooperation with a Federal Permitting Improvement Steering Council, to establish a (Cross Agency Priority) Goal on Infrastructure Permitting Modernization.
The stated language of the CAP Goal reads:
The time for the Federal Government’s processing of environmental reviews and authorization decisions for new major infrastructure projects should be reduced to not more than an average of approximately 2 years, measured from the date of the publication of a notice of intent to prepare an environmental impact statement or other benchmark deemed appropriate by the Director of OMB.
Once the CAP Goal is created, federal agencies will incorporate it into their personnel and performance policies.
Major infrastructure projects will be tracked by OMB, which will implement a scoring mechanism to determine compliance. If agencies fail to meet permitting timetable benchmarks, they will be required to submit estimates of the delays’ costs to considered projects and may suffer budget penalties.
One Federal Decision
The order’s core component is the institution of a “One Federal Decision” policy that assigns accountability for major projects.
“Each major infrastructure project shall have a lead Federal agency, which shall be responsible for navigating the project through the Federal environmental review and authorization process, including the identification of a primary Federal point of contact at each Federal agency,” the order reads. “All Federal cooperating and participating agencies shall identify points of contact for each project, cooperate with the lead Federal agency point of contact, and respond to all reasonable requests for information from the lead Federal agency in a timely manner.”
In most major projects where the National Environmental Policy Act applies, the agencies involved will record their individual decisions in a single Record of Decision coordinated by the lead agency.
The implementation framework for One Federal Decision will be developed by the Council on Environmental Quality and OMB in consultation with the FPISC. It will include guidance and input from lead federal agencies as well as cooperating and participating agencies.
Once established and implemented, “Permitting timetables shall identify estimated intermediate and final completion dates for all environmental reviews and authorizations that are reasonably anticipated as being needed for a project, including the process for granting extensions of any established dates.”
Estimates will not have to be provided until project designs are far enough along to be able to provide enough detail for a thorough assessment.
Business groups have largely expressed support for this portion of the plan. In a statement Tuesday, American Petroleum Institute President and CEO Jack Gerard called the proposal, “An important step in speeding up projects, creating jobs, and improving government efficiencies in delivering energy Americans demand.”
On Wednesday, Associated Builders and Contractors also expressed its support. “President Trump’s executive order can go a long way towards eliminating unnecessary delays that cause budget overruns,” said ABC President and CEO Michael Bellaman. “The principles of creating a coordinated, predictable and transparent process to streamline permitting will enable the industry to plan and execute even the most complex projects while safeguarding our communities, maintaining a healthy environment and being good stewards of public funds. The ‘lead agency’ concept is masterful—a sort of permitting concierge that will shepherd a project through the complex process—and should go a long way towards achieving these goals.”
Democrats and environmental groups have expressed disapproval for the measure, in large part because it rolls back Obama-era policies. An article by Reuters said, “The Trump administration has issued dozens of rules and orders to reverse Obama-era regulations addressing climate change and its consequences such as rising sea levels and more severe storms.” It added, “The Obama-era standard required that builders factor in scientific projections for increased flooding and ensure projects can withstand rising sea levels and stronger downpours.
“It required all federal agencies apply the standard to public infrastructure projects from housing to highways.”
The View from the Ground
The ultimate impact of the new executive order will be difficult to measure, as the administration and Congress have yet to start serious work on developing a program around Trump’s campaign promise of directing $1T in infrastructure spending over that next 10 years.
The major hurdle, aside from differing legislative priorities and scheduling, stems from opposition to and uncertainty about the President’s general goal of using $200B in initial federal spending to spur $800B in private investment for infrastructure projects.
How that private investment would be generated and, more importantly, how it would make a return on investment have never been clearly defined. Until it is, “Major infrastructure projects,” may linger in limbo without progressing far enough into the planning stages for the review mechanism to really matter.
The full text of the order is available here.