From soaring diesel prices to Europe’s devastating summer heat waves, threats to energy security and the climate are intensifying. The introduction of U.S. permitting reform legislation on Sept. 30 brought a rare opportunity to address both. Leaders of the Senate’s two main energy and environment committees reached a bipartisan agreement on the most significant infrastructure overhaul in decades. The compromise is a major achievement, among the most important policy measures in decades to advance clean energy, meet rising energy needs, and rein in soaring energy prices. Rejecting it purely because it may ease construction of fossil fuel projects, as many in the environmental movement are advocating, would be an error.
Energy policy requires balancing the often-competing needs of security, affordability, and sustainability. Today, achieving each of these ambitions depends on the United States’ ability to build. The reality is that while the bill may lead to some additional fossil fuel projects and related emissions in the United States, those will be offset by lower production elsewhere and outweighed by longer-term gains from the expansion of clean energy. And in that sense, the bill is very likely to be a net positive for the environment.
From soaring diesel prices to Europe’s devastating summer heat waves, threats to energy security and the climate are intensifying. The introduction of U.S. permitting reform legislation on Sept. 30 brought a rare opportunity to address both. Leaders of the Senate’s two main energy and environment committees reached a bipartisan agreement on the most significant infrastructure overhaul in decades. The compromise is a major achievement, among the most important policy measures in decades to advance clean energy, meet rising energy needs, and rein in soaring energy prices. Rejecting it purely because it may ease construction of fossil fuel projects, as many in the environmental movement are advocating, would be an error.
Energy policy requires balancing the often-competing needs of security, affordability, and sustainability. Today, achieving each of these ambitions depends on the United States’ ability to build. The reality is that while the bill may lead to some additional fossil fuel projects and related emissions in the United States, those will be offset by lower production elsewhere and outweighed by longer-term gains from the expansion of clean energy. And in that sense, the bill is very likely to be a net positive for the environment.
But its benefits go way beyond that. Electricity demand is accelerating after nearly two decades of little growth, straining an aging grid. Renewables and batteries are often among the cheapest and fastest options for meeting that demand, but lengthy approvals and inadequate transmission impede deployment. Researchers from Princeton University estimated when the Inflation Reduction Act was passed in 2022 that more than 80 percent of the law’s projected 2030 emissions reductions could be lost if transmission remained at its rate of expanding only 1 percent annually—a rate that has actually been slowing since then.
Infrastructure constraints also strain today’s U.S. energy system, which remains roughly 80 percent supplied by fossil fuels. Disruptions in the Middle East and Russia have hit a refining system with little spare capacity outside China, causing diesel prices to spike, yet the United States has lost roughly 800,000 barrels a day of refining capacity since early 2020. Limited gas pipeline capacity contributes to high winter energy costs in New York and New England.
And this year’s oil shock underscores that in a global oil market, the most durable protection against disruptions abroad is to reduce oil use, such as by electrifying more vehicles. Yet that requires new electricity infrastructure. Energy security and climate progress both demand that the United States build more, faster.
The Senate compromise would make it easier to build energy infrastructure across the board. It would shorten the window for legal challenges, tighten environmental review deadlines, and strengthen federal authority to approve interstate transmission lines. It would also limit administrations’ ability to revoke permits, giving investors confidence that projects, whether pipelines or offshore wind, can survive changes in political control. Large data centers would also cover the additional costs of serving them while paying their share of the existing transmission system. Modeling from the Center for Climate and Energy Solutions shows that the reforms would reduce power sector costs and emissions while lowering household electricity bills.
Unfortunately, many environmental groups oppose the deal because it weakens tools used to block fossil fuel infrastructure. Challenges made under laws such as the National Environmental Policy Act and Clean Water Act have delayed pipelines, overturned approvals, and made projects economically unviable. Some opponents argue that curtailing those tools would undermine climate action.
Concerns about expanding the production of more polluting fuels are valid. Yet history shows the limits of trying to reduce fossil fuel use by restricting supply. In a global market, blocking production in one place encourages production elsewhere so long as underlying demand remains. To the extent that production is curtailed, supply restrictions raise prices—which could curb consumption, but governments facing angry consumers rarely tolerate shortages and high prices.
Indeed, few efforts have been more effective to block oil and gas supplies than U.S. President Donald Trump’s attack on Iran, which led to the closure of the Strait of Hormuz and, at the closure’s peak, disrupted roughly 15 percent of global oil supply. The shock spurred electric vehicle sales, but governments responded above all by subsidizing prices, releasing strategic stocks, and scrambling for alternative supplies. The economic and political costs of shortages were too high to tolerate.
By contrast, when the COVID-19 pandemic crushed demand, global oil supply plunged by nearly 12 million barrels a day in May 2020 alone. A pandemic is no climate strategy. But the collapse demonstrates how falling demand forces production down, not the other way around. Climate policy must achieve that by making alternatives affordable and practical, alongside stronger emissions and efficiency standards.
Making clean alternatives more available requires electric vehicles, nuclear power, renewables, battery storage, and transmission. Yet the same legal strategies used to derail pipelines have also obstructed clean energy projects. Permitting reform helps build the infrastructure that allows fossil fuel demand to fall, especially when paired with strong climate policy.
Affordability and reliability problems also underpin public support for climate action. From European capitals to Albany, governments have been easing climate laws in response to voter angst about energy prices. After Russia triggered an energy crisis in Europe, European governments accelerated some renewable deployment, but they also committed hundreds of billions of euros to subsidize high fossil fuel prices and build new gas import terminals to cushion the blow. Maintaining reliable supplies during a multidecade transition through investments in the resilience of the oil and gas system protects consumers and helps sustain support for climate policies.
As for oil and gas projects, this year’s crisis underscores the benefits of the United States’ emergence as the world’s largest producer. Global markets still determine prices at the pump, but greater domestic production, along with reduced oil use per unit of economic output, have made the economy more resilient.
Economists at the Dallas Federal Reserve estimate that a disruption comparable to this year’s would have reduced U.S. real GDP growth by 5.6 percentage points in 1980 versus 0.3 percentage points today. Even if the United States accelerates its much-needed transition to clean energy, investment in the energy system on which it still depends remains necessary and strengthens the country both economically and geopolitically.
Finally, landmark environmental laws were designed to assess and address projects’ effects on communities, water quality, wildlife, and other environmental resources, not as a blanket veto on fossil fuel development. That these laws have been repurposed to that end, creating obstacles that now also imperil clean energy, is a reason to reform them, not preserve the status quo.
This compromise deserves scrutiny and improvement where necessary; undoubtedly, when a bill more than 400 pages is finally released, careful parsing of the language may find drafting errors or unintended consequences. But rejecting it solely because it may also benefit oil and gas projects would sacrifice a historic opportunity to advance Washington’s security, affordability, and clean energy goals simultaneously. Paired with strong climate policy, permitting reform is necessary to rapidly bring the United States’ use of fossil fuels and greenhouse gas emissions down.