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theodore M I R A L D I mpa ... editor, publisher, writer
Sunday, December 11, 2016
The National Infrastructure DILEMMA
It may fail spectacularly if environmental regulations aren’t reformed first Illustration on government regulatory obstacles to infrastructure construction by Linas Garsys John Sitilides
President-elect Donald Trump has proposed as one of his legislative priorities a $1 trillion national infrastructure program (“Trump’s infrastructure program,” Nov. 28). His goal of upgrading and modernizing America’s highways, airports, harbors, inland waterways, railways, electric transmission lines and water pipes and treatment plants — creating two million jobs in the process — is receiving broad bipartisan support. But it may fail as spectacularly as President Obama’s 2009 economic stimulus if the incoming Trump administration and congressional leaders don’t first reform federal environmental regulations.
Much of the infrastructure debate focuses on how to pay for the projects. Mr. Trump’s economic advisers Wilbur Ross and Peter Navarro propose to privately finance most of the projects using debt financing, tax credits and future usage fees, such as road tolls. Trump critics consider the debt-financed private investment plan a betrayal of the public interest, forcing regressive user fees on poorer Americans and bypassing pressing needs if they are less profitable to private companies.
Mr. Trump may well achieve a legislative balance that addresses both financing and impact issues. But current federal environmental regulations render nearly impossible the ability to even break ground on any new project, perhaps not until after the end of Mr. Trump’s term.
The White House Council on Environmental Quality was established under the federal National Environmental Policy Act (NEPA) to oversee the interagency process for assessing the environmental effects of proposed actions, and achieving a balance between public needs and resource use, prior to making decisions. NEPA requires an environmental impact statement before any major road, tunnel, bridge or another project can proceed. The Government Accountability Office stated in 2014 that the average time to complete an environmental impact statement is more than four years. Federal Highway Administration data from 2013 show that the median time to complete a highway project statement was more than seven years.
Raising the Bayonne Bridge roadway, a project with virtually no environmental impact, required a 10,000-page environmental assessment and another 10,000 pages of permitting and regulatory materials. The dredging project at the Port of Savannah, Georgia stalled for almost 30 years, with an environmental review that consumed 14 years. A San Diego desalination plant required 12 years to battle back 14 legal challenges before delivering a drop of fresh water to residents.
Adding to the regulatory burden, President Obama in 2014 released draft guidance that all federal departments and agencies consider the effects of greenhouse gas emissions and “climate change” in their reviews, further extending the time required to complete the requisite statements.
In the infrastructure investment sector, the U.S. lags behind Singapore, Qatar, United Arab Emirates, Canada, Malaysia, Norway and Sweden. Much of the problem lies with the endlessly redundant federal environmental regulations imposed on almost every infrastructure project. Even the liberal Progressive Policy Institute stated in May that “an accumulation of laws and regulations” largely designed to protect the environment is thwarting an array of necessary transportation projects — and resulting in environment harm.
The non-partisan institute Common Good issued a 2015 report noting that “a six-year delay in starting construction on public projects costs the nation over $3.7 trillion, including the costs of prolonged inefficiencies and unnecessary pollution,” more than double the cost of the actual projects. Many projects require as many as 10 years of environmental review just to be approved, let alone begun and completed.
Even countries such as Germany and Canada, with far more statist regulatory policies, complete infrastructure projects more rapidly, with approval processes that ensure new infrastructure permits can be issued in less than two years, even while fully achieving stringent environmental conservation objectives. “They have clear lines of authority, with consolidated decision-making on both environmental review and permitting. Lawsuits must be brought and resolved quickly, with jurisdiction limited to legal violations, not policy decisions,” per the 2015 report. Australia is now following that lead.
As Mr. Obama learned about “shovel-ready projects,” only $30 billion of the $800 billion package was spent on transportation infrastructure precisely because of the multi-agency approval requirements. His own National Economic Council conceded in 2014 that the permit approval process takes anywhere from five to 10 years.
Congress can act immediately to reform the process. Under a bipartisan effort led by Sen. Rob Portman, Ohio Republican and Sen. Claire McCaskill, Missouri Democrat, the Federal Permitting Improvement Act would lower the statute of limitations from six years to 150 days for all major projects across all sectors. The bill, supported by President Obama, environmental organizations and business groups, offers a peek into new regulatory possibilities in the next session of Congress, in conjunction with President-elect Trump’s stated priorities.
Here’s the bottom line: Even if President Trump successfully persuades Congress to immediately pass a $1 trillion infrastructure bill, he will be frustrated by the reality that the first project wouldn’t begin, and the first job wouldn’t be created, until 2021. The real first step to a national infrastructure and job-creation solution is requiring all environmental impact statements be completed in a 12-month “one-stop” permitting process. Only then will the Trump infrastructure plan have a chance to succeed in making America great again.