Building Infrastructure In Real Time: Avoiding Regulatory Paralysis

While the $1 trillion infrastructure funding in the bipartisan bill is critical and long overdue, even with final passage, the U.S. will still be faced with the hard reality that regulatory paralysis has made it increasingly difficult and time-consuming to get permits for major infrastructure construction projects. Consequently, infrastructure projects have ended up costing the taxpayers more and, ultimately, delivering less value for each dollar spent.

We cannot afford that either in terms of time or money. Electric power is generated in inefficient and environmentally harmful plants, interrupted by equipment failures and vulnerable to cyberattack. Water is wasted in failing, aged pipes, and millions of Americans lack safe water, including through exposure to lead. Bridges are unsafe, and inadequate and crumbling highways cause delays and damage. Millions of Americans lack adequate internet access. Air transport is delayed by inefficient airports and air traffic control. Rail and inland waterway weaknesses constrain travel and commerce.

Added cost due to delays will only compound our deficit and debt problems. Today the deficit has grown to $3 trillion, and our debt will soon be larger than the US economy.

Together, all of these factors inhibit economic growth, while competitor nations have worn away our nation’s competitive advantage.  

Since 2010, the time needed to hurdle regulatory, approval and permitting times have increased roughly 25 percent. Delay increases cost, congestion, pollution and needless economic inefficiencies. An important reason arises from the National Environmental Policy Act, or NEPA. Today, the average environmental review takes four and a half years; the average review length exceeds 600 pages, two to three times longer than the early regulations to implement the NEPA contemplated. Some reviews have taken more than a decade, with documents of thousands of pages.

The only resolutions of the standards have been in the legal process, which can delay projects to the point of termination because of cost inflation. And some of the most notorious recent delays have been for projects that ultimately were constructed—at higher cost. One estimate concludes that a six-year delay in the permitting process, including both added costs and postponed benefits of the projects, costs the nation $3.7 trillion.

Congress has attempted to improve the permitting process, but success has been limited. The current bipartisan bill, which is primarily focused on funding, does have limited provisions related to the permitting process, but a number of the provisions are optional and not mandatory. Much more far-reaching improvements are needed to tackle the scale of the problem.

No major infrastructure project will ever receive universal approval; compromise is necessary to make timely progress. The nation could achieve this end with several targeted reforms:

The current permitting process lacks a final decider. A three-member expert panel, possibly in the Judiciary, with Senate-confirmed representatives of each party appointed by the congressional leaderships and one member appointed by the president, would yield faster, balanced decisions. Members could continue across presidential administrations. Decisions would be by majority, not unanimity, to avoid stalemate.

A “One Federal Decision” process—using a single document—should be mandatory for permit applications with significant environmental consequences. A single chief permitting officer should be appointed for each project.

With a three-member panel airing all points of view, it would be reasonable to restrict the scope of legal challenges, which could be restricted to failure to consider or disclose material impacts of the project or its practical alternatives, or violation of substantive law.

Any party should be required to participate materially in the public review and public comment process to have standing to sue. The time to sue should be limited to two years or less, and adjudication should consider the project’s benefits as well as its costs.

All parties to the permitting process, including federal agencies and state and local governments, should be required to provide their documentation within a fixed time consistent with the final permitting decisions within two years (longer only for issues of public safety). The panel should be free to proceed as of that submission deadline (i.e., failure to file documentation denotes support).

And finally, the law should limit reviews to 150 pages (300 pages for the most complex projects), as was anticipated at the dawn of the process.

The bipartisan infrastructure bill before Congress is an historic investment in the nation’s infrastructure. But equally important are improvements in the permitting process. Without these regulatory improvements, the US will only waste critical resources and time to address the many challenges before us and cede this historic opportunity to compete globally to unnecessary red tape and consequent paralysis.