The federal permitting bill has been updated. What changed?

0:06Hi, greetings, hello everyone. This is Volts for November 11, 2026. The federal permitting bill has been updated. What changed? I'm your host, David Roberts. In Congress, the manager's amendment to a piece of legislation, an updated version released by sponsors in response to feedback, is usually a matter of housekeeping, small tweaks and corrected typos. But the just released manager's amendment to the federal permitting bill, which everyone in D.C. has been eagerly awaiting, is more than that. It is intended to answer objections that have piled up since September from environmental groups, tribes, utilities, and states.

0:59It was released on Saturday, a 494-page substitute that adds 13 new sections and changes 37 others. Protections for already permitted projects like offshore wind were boosted. Transmission lost a little and gained a little, data centers will pay even more to connect, and the bill's authors have tried their best to address the many worries about permit certainty. It arrives mere days after an election that went extremely well for Democrats, who will now dominate the next Congress. Many of them are weighing whether to take this deal or hold out for a better one next year. Daniel Palkin of Arnold Ventures walked me through the original bill in October in an extremely long podcast that proved to be weirdly popular.

1:56So I've brought him back today to talk through this manager's amendment. What has changed? And given the election, what are its current chances of passing? Let's get into it. All right. With no further ado, Daniel Palkin, welcome back to Volts. Thank you for coming. Thank you for having me back. This is a lot more. There was a lot. Now there's a lot more. Maybe let's start for people maybe who have not been tracking this as closely as the small band of obsessives on social media. Maybe just catch us up with a two minute backgrounder on what the permitting bill is and where we are in the congressional process.

2:45Yeah.

2:46Daniel Palken: So for listeners who want the two minute version of the two and a half hour episode we did last time, this is the original version was a 417 page bill. They added about 77 pages to bring it to 494 pages. It was negotiated in the Senate by Senators Lee and Capito on the Republican side and White House and Heinrich on the Democratic side. It makes reforms to a number of procedural laws and various procedural aspects of some substantive laws. And there I'm talking about both laws like NEPA and the National Historic Preservation Act, as well as the Clean Water Act and the ESA. And then it also has targeted reforms within the Federal Power Act that will make a big difference for building up grid infrastructure, as well as reforms to geothermal, permit certainty, hydropower, and new nuclear provisions have been added as well.

3:34Daniel Palken: Where we stand right now is there's a procedural vote the day we're recording. So assuming the vote goes forward, we should note to listeners that we're recording at 2 p.m. on Monday, November 9th. I'm in Atlantic time. I'm in Puerto Rico, so 1 p.m. Eastern time. And we're expecting a vote at 530. So we should know a lot more soon. And this is a cloture vote, which is just a vote in the Senate to move forward with debating, right? That's correct. What does it mean? what are we going to learn from the cloture vote? What do we want to happen in the cloture? What do Dems want to happen in the cloture vote?

4:07Daniel Palken: Well, Dems are not fully unified on this, so your mileage may vary depending on the Democrat you ask. And I think we're going to learn a lot about what they want when they cast their votes, but often not always. Members will choose to view their procedural vote to advance past debate as kind of a stand-in for the substantive vote they plan to take. So I think with most members, they're going to be taking this vote as a vote on the substitute bill that came out with all the amendments as they would vote up or down on it. Of course, members will have the right to change their answer when it comes time to take subsequent votes to actually go towards final passage.

4:39Daniel Palken: We're likely looking at at least four votes spread out over the next week or week and a half on this. So this is not the only vote, but it is. What happens if it fails, though? What happens if you can't get 60 votes for cloture? If this fails, this is probably the end of the road for permitting reform. If it can't make a showing that it can move past the Senate, which is the chamber in which it was drafted. I don't think there will be too much to be had in the House. I could be wrong on that. You never know. There's always must-pass vehicles. Things can get amended and changed. But the most likely outcome, if it can't clear the Senate today, is failure for the product, in my assessment.

5:12Got it. So we are having a vote today, which will be a done deal by the time this pod is released, that if it fails, the whole process is probably dead. And if it succeeds, it will probably be a pretty fair indicator that there's a lot of substantive support for this and it has a decent chance of passage.

5:34Daniel Palken: Is that fair? At least a decent chance. The House of Representatives will have to have its say. And there's a lot of scenarios that are all too easy to imagine where the Senate passes this and it dies in the House. I wouldn't express strong confidence in either direction if it passes the Senate. Right. If it passes, that just gives it a chance, not necessarily guarantee anything. Exactly. I'm just curious briefly on political economy, kind of a two-part question. One is we talked kind of early in the process last time, pretty quickly after the bill had come out. Obviously, we've had a couple of months since then to see how debate has shaped up.

6:13So I'm curious what your thoughts are on how the debate has played out so far. Like, were you surprised in either direction? Were you surprised by any particular person or faction's stance on this? And then part two, how has that political calculus changed post-election? Do you think we are in a better or worse place for passage post-election?

6:41Daniel Palken: Yeah. So to take the first part, the different groups, as you mentioned, have come out for and against the bill. Like a lot of the energy industry, whether we're talking fossil, renewable, and nuclear, as well as the transmission developers, have come out and said, we like the reforms in this bill. This makes it easier for us to build. The trade groups are pretty united. Yes, that's kind of one of the kind of anchor group of supporters. Another really big group of supporters that's been really influential in this is labor. So labor has come out staunchly for the bill. The building trades have all come out for it.

7:15Daniel Palken: Very interestingly, IBEW, the electrical workers, came out for it. They don't always do that because sometimes utility opposition, they work closely with their utility partners, leads them not to. Yeah, right. Various other groups, LIUNA, UA was one of the first groups to come out of the United Association of Journeymen of Apprentices for Plumbing and Pipe Fitting. A lot of big labor groups that Democrats listen, the Teamsters, interestingly, have come out and said, this is helpful for us. That's an important signal to Democrats who just won an election focused on affordability in the economy and the cost of living that some of those same workers who had drifted away from them in previous elections have said, this is a really important priority post-election.

7:56Daniel Palken: However, there are other groups that definitely have taken a different position. I would say the two main camps of opposition that we've seen is, one, there are a lot of tribes and tribal organizations that have raised serious objections to the National Historic Preservation Act provisions in the bill, which I'm sure we'll talk about later. And two is that a number of environmental groups, especially to the initial version of the draft of the legislation, came out and said, we have serious concerns with this. And the concerns tended to focus on a few different areas. The ones that got by far the most attention, and I also suspect we'll spend some time on this, were concerns around the permit certainty provisions and specifically whether there might be unintended consequences to the way that some of the language was written.

8:43Daniel Palken: That was something we discussed some of in the previous episode. But in the weeks after we recorded a lot more smart lawyers kind of war gamed out hypotheticals of various degrees of likelihood or unlikelihood. And in the aggregate, there was a feeling John Podesta came out at the time and said, you know, I have concerns about these provisions. So that was another nexus of opposition. That is something that has somewhat shifted, although not in any perfectly definitive way since the introduction of the managers. What we've seen since the managers came out is Evergreen Action, which is the group that kind of came out of Jay Inslee's campaign, has come out and endorsed the bill.

9:21Daniel Palken: So that's a big mark in the favorable column. But NRDC, on the other hand, came out and said, we still have concerns about this legislation. So it's the environmental world leans mostly opposed, but with some groups like Evergreen and Citizens Climate Lobby supporting. I might even question that. I mean, there are a few key groups that are very loud in opposition, but a lot of the other big groups have either been quiet or sort of neutral and occasional groups have come out for. There's a definite like hardcore of environmental opposition, but it seems to me like that community is quite split.

9:57Daniel Palken: It is quite split, right? We haven't seen or I haven't seen maybe some things coming out right before or as we're recording statements from some of the big groups like EDF and the Nature Conservancy, a number of others. And that silence is interesting. You haven't always seen on all previous permitting bills. Maybe that'll change for Democrats in Congress. And what's notable about even the groups that have come out opposed is all of them include or often start their statements with, there's a lot about this bill that we do like. And so it goes to show that within the environmental movement, there is kind of a split where some of the more traditional kind of air and water litigator type organizations have been the ones that are the most opposed.

10:38Daniel Palken: and some of the more kind of climate oriented emissions oriented. And of course, there's obviously a correlation between these things. The same fuels and products that put greenhouse gas emissions into our atmosphere are often the leading things for putting particulates and effluents into our air and water. So, you know, on the theory that when you're addressing climate emissions, you're also often helping a lot of aspects of local environmental quality. A lot of groups and a lot of individuals within groups have a more favorable posture. And so that's the division you see. Yeah, it's interesting.

11:09I was thinking the other day about a piece I wrote for Vox many years ago, probably 10 years ago, basically saying that the air and water conservation oriented environmentalists and the clean energy focused, climate focused environmentalists are going to come into increasing tension over coming years. And it's happened here and there, but it seems like this is sort of that fight flushed to the surface. This seems like that fight out in public now. I'm curious, before we get into the substance of what's changed, there is a large faction of people who say something along the lines of, there's good stuff in the bill.

11:55There's a lot of bad stuff we really don't like. We just won a huge election. Democrats are going to dominate Congress next Congress. Why not wait? Why not wait and get a better deal next Congress? I think that is a very common sentiment. What is your take on that question?

12:13Daniel Palken: Yeah, I think that some of the arguments for waiting, and we discussed some of this last time, but it's much more sharpened into focus in the wake of the election, which, as you noted, Democrats won in the landslide. The arguments for waiting, I think, often trace to a misunderstanding that Republicans are kind of eager to take any permitting deal. And if there's a renegotiation next Congress, the strongest versions of this, and you'll hear people say this with sincerity. And so I think they should be taken at their word that they believe this, but the argument should be addressed. that like Republicans would do a transmission only version of this bill or would do a version of this bill that kind of cuts out some of the remaining like major priorities that live in the NEPA or the Clean Water Act sections.

12:56Daniel Palken: And as somebody who has worked on permitting reform for the last several years, mostly from within Capitol Hill, I just cannot stress that like both sides have been willing to walk away from deals that don't meet their criteria, especially when they are out of power. And Republicans in particular, the Manchin-Schumer bill that was voted upon in NDAA in 2022 largely walked away from that. There were like seven yes votes and like 40 nay votes. It was put to a vote. Like, we don't have to wonder. The Fiscal Responsibility Act, where there were some very minor changes to NEPA, but there was a big discussion of do we go big on judicial review in exchange for something like the Big Wires Act or a big transmission provision?

13:35Daniel Palken: Republicans said no. And Democrats also said no. There wasn't a willingness to go there, even in exchange for reforms that Republicans were very interested in. at the time. When it came to EPRA, the Republican House looked at that bill and said, Spell out EPRA. The Energy Permitting Reform Act from Senators Manchin and Barrasso in 2024, that was another one where it probably had a path through the Senate, but Republicans in the House simply said, we're not doing this, we're not including this in an end-of-year bill. And those were all in divided governments. It's not a theoretical whether Republicans are interested in doing a transmission-only bill or a bill with transmission and actually a lot of other reforms, but that aren't the ones that they've worked hard to negotiate and balance in this package.

14:18Daniel Palken: There just isn't a strong environment to do that. Yeah, if I could just sharpen that slightly, I mean, just for context, you can't do permitting reform through reconciliation. You got to go through regular order. So unless you're going killed the filibuster, which, you know, it's a whole separate question. I very much doubt they're going to do it right now for this. So you need 60 votes in the Senate, basically. And even assuming you get a transmission only bill that gets 56 Democrats and independents united on it, which I keep telling people is not a sure thing at all. Like, we just elected a bunch of moderates and blue dogs.

15:06Yeah.

15:06Daniel Palken: John Fetterman and Mary Peltola are not where Jeff Merkley and Ed Markey are. Like, the caucus is diverse. Yeah. Yeah. Like, they don't necessarily want a clean-only bill. They like oil and gas and want these concessions to oil and gas. So even in the sort of fantastical scenario where you get 56 Democrats and independents on the same page on this, then you need four Republican senators who will vote for a transmission-only bill to grant the new Democratic Congress a giant historic victory. Who are those four Republicans? I keep asking people over and over and over again, who are those Republicans that are going to vote for a transmission-only bill and give Democrats a big win in their new Congress?

15:54Who are them?

15:55Daniel Palken: And no one has an answer. There's actually a fifth, right? Because there's Donald Trump. Like, even if you could pass a bill through the Senate, Donald Trump has no interest in signing that, and his administration and White House have said transparently to people, we have no interest in signing that or anything close to that. You know, even if you abolish the filibuster, it would be an entirely symbolic exercise for the next two years because there's still a Republican president in office. So you're only talking about 2029 and beyond if you're having this conversation about can Democrats do it alone?

16:24You get 2029. So you get more Democratic senators. Everything goes well. You get more Democratic senators. You get a filibuster proof majority. You get a dim trifecta. You get a dim president. Well, if you have that, then you can do whatever you want, including improving whatever you passed this year. Right. Like, yes, you could just take anything you don't like about this bill and revise it. You can do whatever you want if you've got 60 votes. But like in the meantime, why not get started building out?

16:53Daniel Palken: Yeah, that's absolutely right. And like the other thing to flag is if Democrats really, even in 2029, had a trifecta and went the abolish the filibuster route and passed like a transmission only bill or a bill that had only the things that were kind of core to the left wing of the party. Even that would have a serious downside risk, which is that we've seen that every single one of the most recent administrations has entered office with a governing trifecta, right? Obama did. He had a filibuster-proof majority for a minute. Trump one did and passed the Tax Cuts and Jobs Act. Biden did and used it to pass the IRA.

17:26Daniel Palken: And Trump, too, did and used it to pass the one big, beautiful bill. It would require a big break in the pattern to not expect that the next Republican president would come in, or maybe even the one after that, with a trifecta, At which point, anything that Democrats did through purely partisan legislation that was only the things they liked and none of the things Republicans liked, you could expect to get reversed. And that is especially important with permitting reform legislation, the entire point of which is creating certainty for industry actors to have longtime horizons in which they can see a stable business environment in which to put money into projects and move them forward.

18:00Daniel Palken: And even the mere threat of that, right, even if you had a crystal ball and knew that in the future there wouldn't be a Republican trifecta that would reel things back, you couldn't convince anybody that your crystal ball was actually functional. And businesses who have to line up money to build projects under the new permitting regime would say, wait, isn't this permitting regime about to change the second now that the filibuster is gone? A bare majority, a bare trifecta of Republicans would come in and undo it. So I really think it's a mirage to imagine that any permitting reform can be passed without true bipartisan consensus.

18:32Daniel Palken: And this bill, for my money, having worked on this for years, is the furthest we've gotten the most significant product that's been put out and has the most significant buy-in from the conservative and moderate and from the liberal and moderate wings of both parties, respectively. Like Sheldon Whitehouse and Martin Heinrich have serious climate and environmental credibility with many of their peers for good reason. I mean, they've worked on these issues for a long time and people know where they come from. The final thing I would just add on this point and then we can get on with it is just that climate people don't necessarily like to hear this, but like the public likes the all of the above stuff.

19:08I don't like it, but they do. The idea that Democrats are forestalling or blocking out oil and gas and just elevating their forms of energy, the public doesn't like that. It does not poll well to do that. Like there's plenty of ways you can make progress under the banner of all the above that I think is going to have the effect of elevating clean in the future. And that's fine. And I'm all for it. But just like public opinion matters here. And it should not be assumed that the public is down with a clean only bill. Like the main thing Democrats opponents are going to be doing for the next two years, the next six years, maybe is trying to brand them as like you elected a bunch of radical Dems.

19:53Now they're going to go crazy and do woolly headed stuff.

19:56Daniel Palken: Yeah, let me sharpen that point because that's extremely important. Like Dems just won the biggest election victory that any party has won in three decades. Right. And they want it primarily on affordability. And this is fundamentally a bill about affordability. When you are making a bill that addresses supply side constraints, like when you go to Econ 101, price is determined by supply and demand. Freeing up supply, and this is true whether you're talking about fossil, renewable, nuclear, you know, midstream, is something that helps bring down prices because it allows more supply to keep pace with demand.

20:28Daniel Palken: It also has a bunch of benefits that extend beyond mere prices to employment and economic growth and other aspects of the economy that voters really care about. The modeling on this bill, even the optimistic modeling from rhodium and types like that, they show this like bringing down energy costs by like three, four percent in coming decades. That's going to be relative. That's going to be a counterfactual relative to what it otherwise would have been. Like, I worry whether even if this is passed. Whether we really have the power or the tools or the will to do the kind of things that would really be required to bring down energy costs enough that it would be visible to ordinary voters.

21:12Daniel Palken: And I'm not sure this would do it. I think no one bill should be viewed as a panacea, right? You look at the Biden industrial policy agenda. He had some major initiatives, the IRA, the IIJA, the CHIPS Act, that all were stalled up over permitting specifically. So it's not just what are the effects of this bill, but Democrats should all update their priors in the wake of the election that we were just talking about, that the next president is more likely to be a Democrat and they're more likely to be a governing trifecta. The last Democrat who had a governing trifecta had three major laws, all of which were stymied over this.

21:43Daniel Palken: So it's not just the effect of this law directly in a vacuum. It's what other policies it enables to go forward smoothly and effectively. Yes, this is crucial. This is what I keep telling people. This is not the climate bill. This just lays the groundwork for a climate bill. This just makes it so that whatever you pass for your climate bill works. Like nothing's going to work to build out clean energy if you don't solve this problem. But like, this isn't it. Yeah. And this bill, I think, happens to be good for climate. One can choose semantically whether they want to view it. My friend Noah Kaufman has a lot of thoughts on this and our friend Jane Flagle as well.

22:21Daniel Palken: It's kind of philosophical discussion of is this a climate bill or is it merely a bill that's good for climate? But the compounding effects of, you know, enabling a more robust agenda across domains and having success. The other thing to say about the rhodium modeling and the C2ES modeling and the others that's out there is they're in all in very key respects conservative. A lot of those modeling studies only look at some of the provisions of the bill, right? Because there's so many and they're so hard to model. So they kind of pick off the one that gets talked about the most. They'll do like the transmission and they'll kind of hand wave and say that arguably, you know, maybe we're also modeling the NEPA here too, because we've turned some dials on a NEMS run that like, you know, makes it look like you build more things.

23:03Daniel Palken: And so maybe that's also NEPA. But like you're not capturing nearly the full effects of all the provisions of the bill when you do that. You're certainly not capturing tail end positive effects. So we talked last time about how geothermal in this country is kind of either going to be a massive difference maker or a nothing. There's not really a scenario where, you know, it doesn't really matter if we get five gigawatts or zero gigawatts, you know, by 2050 out of geothermal. What matters is whether it becomes a resource on the scale of solar, wind, gas, these other big performers in the economy.

23:33Daniel Palken: And we've seen with previous permitting bills. We've seen with EPACTO5, which had this kind of legendary categorical exclusion for exploratory drilling for oil and gas that's copied here in this bill, finally for geothermal, that small things that make a difference in the kind of exponential development of a technology can have big effects down the road. So none of that is captured in the modeling. And some of the data center price effects are not captured as well. There was a grid strategy study that found that the so-called and pricing provision in the bill alone that we discussed last time would save ratepayers$35 billion by just charging data centers more and giving it directly to them.

24:08Daniel Palken: And that hits people's wallets immediately. You don't need to wait for new infrastructure. Even just trying to model that provision alone involves a whole stack of assumptions about how big the AI bubble is going to get, whether it's going to pop, you know, how many data centers, whether data centers are going to continue to be concentrated or whether They're going to get more distributed on and on. And that's just one part of the bill. Any part of the bill you're trying to model, you've got assumptions upon assumptions. I think the honest approach on predicting the effect is just massive, massive uncertainty bars everywhere you look.

24:48But at a certain level, you just have to have faith. Like we have to uncork, unburden, unleash clean energy. Will it win if it's unleashed? We don't totally know. But as I keep coming back to, there's no victory on climate change that does not involve a massive rapid buildout of clean energy. If that's not part of your plan, you don't have a plan. Okay. I didn't want to get too mired down in the political economy before we talk about what's in this bill, what's changed in the manager's amendment. So let's go through it quickly. We were not going to do a whole another two and a half hours on this thing, but just the big changes.

25:29Let's start with some of the bigger changes, some of the sections that got the most substantive changes. Let's start with everybody's favorite, transmission, citing, and cost allocation in transmission. It seems like there were some good news here and the utilities won a couple battles here. It's sort of a mixed bag here. Tell us about transmission changes.

25:50Daniel Palken: Yeah, I genuinely think the transmission got much better. I think they did so in a way that was very intelligent and that balanced some real concerns that the utilities had that did need to be addressed for actual technical reasons. I think there's like sometimes a lazy thinking that happens where people say, well, if the utilities are for it, I'm against it. And like, you know, you need utilities to run the system. You know, sometimes utilities are against it for parochial reasons, and it's actually good policy. And sometimes utilities are against it because they've spotted a legitimate issue that would freeze up a lot of investment in building.

26:24Daniel Palken: And the issues that they fixed for the utilities in this section are actually ones that I think were legitimate and deserved fixing. The main one there is there's this provision in Section 2106 called the Consolidated Planning Process, which required in the previous version of the bill, all the different regions of the country, including the regions that don't have these organized wholesale markets called RTOs, to embark on like a 20-year forward planning process that integrates... Combined transmission and generation planning. Yeah, transmission and interconnection, essentially, and to offer what amounts to fixed-price transmission and interconnection services.

27:02Daniel Palken: And that makes a lot of sense in the RTOs. It came from the SPP region. There are administrative reasons that are almost impossible to unwind without totally re-regulating the way that the non-RTO regions work, why that policy would not work in like the Southeast or the West. In the Southeast and the West, you need to know where you are delivering energy to in order to be quoted a price on transmission service. And so having anything that looks like fixed price transmission service would require rolling those regions up into something that looks and is regulated a lot like an RTO. And while there are many people who might say, well, I don't see the issue with that.

27:41Daniel Palken: That was not the bargain that was intended or struck. Like that would be a cataclysmic seismic change that was not the bargain that was struck in this bill. And it also wasn't what the language actually said to do. So what likely would have happened would have been frozen investment and confusion and litigation in those regions that would have actually slowed down and not sped up a lot of investments and credit to the utilities. I think they brought forward those points. They argued them well. And the negotiators listened to them and said, look, this actually does improve the bill to make that fix.

28:09Daniel Palken: So it was kind of a win-win where you made the utilities a lot happier than they previously were. And you took something out of the bill that was going to be disruptive while preserving it for the RTOs. And they are now supporting the bill, like utilities, basically, like to me, that's one of kind of huge, the dogs that didn't bark here, like utility opposition to me was low key. I thought one of the biggest threats to this thing. And it kind of seems like partially because I think they've been weakened by recent events. It shifts in public opinion, but like they got a couple of concessions and now they're on board to a very strong transmission provision.

28:48Daniel Palken: And let's not also forget that some of their calculus here owes to other provisions of the bill as well, right? They have a lot of projects, especially the ones in like the West that are the projects sitting on Doug Burgum's desk or the projects out in the Atlantic that are frozen. If you're a utility and you have a multi hundred million to multi billion dollar project sitting in your desk, you'll think about the transmission later. That project needs to get unstuck. And so a lot of, you know, I think people are narrativizing utility support or opposition around just their calculation in this one title.

29:18Daniel Palken: Utilities have won a NEPA reform for a long time. They certainly want the certainty fixes and things that would give timelines to their projects to actually move forward. And we'll talk more about certainty later. But let's go through a few other changes in the transmission title that are favorable and important. One is that they have made the backstop authority a lot more elegant and flexible. And what I mean by that is they have added provisions that allow for partial cost allocation. So you might have a line that has some obviously monetizable benefits where you can get somebody to sign up and say, I'll pay you money on either side of the line to essentially arbitrage power across geographies.

29:55Daniel Palken: But then there are benefits like Blackstar capability that like no counterparty is going to pay you directly for in the same way. And so this bill for the first time provides language that says you can allow for can allow for partial cost allocations where you allocate the hard to monetize parts that are real benefits that you can still show. And then you can take on voluntary offtakers for the other. And that takes a lot of pressure off customers who would otherwise have to buy things or have their utilities signed up for things involuntarily. So that's a big plus. Another one is they allow you, and this one's really important, to avail yourself, if you're a developer or a utility, of the cost allocation tariff filing provision in that section without having received the federal permit.

30:36Daniel Palken: So if you meet all the same criteria of improving reliability and being just in reasonable rates and benefiting and protecting consumers, you can kind of click the button and say, I want the same cost allocation treatment. And that's really important because it provides a balanced incentive where developers don't have to like game out how their line is going to be funded and paid for based on what siting pathway it ends up availing itself of. So that makes the backstop a lot more fluid and workable. They also took out a prohibition on using the backstop on state land, which could matter a lot for like there are a lot of state rights of way for like existing roads.

31:10Daniel Palken: And if you have that prohibition, you're kind of forcing the backstop to be only used on private landowners. And so this is a kind of win win where the backstop becomes as flexible as the Natural Gas Act authority. Right. So federal eminent domain now extends to state-owned land. And that's already true under the Natural Gas Act. Like, this was a fix that I think makes a lot of sense from a private landowner perspective and from just a looking out for Americans and also making this authority serve its intended purpose and work well. Some of the other changes that have made Republicans happy, I think some of those have made both parties happy.

31:44Daniel Palken: A lot of those have made transmission advocates very happy. there was a provision that was genuinely really offensive to a lot of state regulators that was taken out. It was a provision that allowed for simultaneous processing of a backstop sighting application. And I think the initial reaction of a lot of people was to mourn that as, you know, that's a big loss. They can't kind of submit simultaneously. I think there were multiple reasons they took that out. One is it's almost impossible to imagine a developer kind of starting off on an antagonistic footing with a state that hasn't yet taken an antagonistic posture to them just to save a year.

32:19Daniel Palken: Two is actually a technical reason. There's another provision in Baja that allows the state to submit its record into the FERC docket at any time during the first year that it's processing the bill. And FERC then has to consider it under the Administrative Procedure Act. And so the state would have every incentive to simply submit that at day 364 and jam the feds enforce an inadequate decision or force a violation of their own statutory deadline and defeat the purpose of the backstop provision. So in my view, taking the simultaneous processing out has given a lot of assurance to like regulators, state regulators, you know, Commissioner Christie of former Commissioner Christie has been vocal in complaining about that provision without, I think, compromising the integrity.

33:00His point was basically like the state process is rendered pointless if you can just go straight to the feds simultaneously. So now you You have to go to the state permitting process for a year before you apply for this federal backstop.

33:14Daniel Palken: Yeah. And I think that's also fine. Like the states, the vast majority of the time get to yes on transmission lines that are beneficial for their ratepayers. It is a bit of a myth that states like are just out to block these things. The record is clear that they do a good job. And in the rare cases where they don't, having a backstop is really important and makes a lot of sense. and also changes the incentives, I think, for utilities as much as for states who often kind of play the fundamental blocking role when planning is being negotiated. And then there's this provision where FERC has oversight.

33:45In the original bill, FERC has given oversight of local utility transmission, which was a big deal in and of itself. But now that's been somewhat extended and now covers not just new transmission projects, but replacement projects, too. What's the significance of that?

34:02Daniel Palken: Yeah, they've made sure to kind of dot their I's and cross their T's on making sure this is looking at different flavors of local builds. So some projects are not modifications or new builds, but they're just wrecking and rebuilding. They're replacing one for one. And if you think about it, that is kind of a suspect category that is maybe most likely to be a form of wasteful spending because you're taking something 100 years old and saying nothing new is needed. So FERC has oversight over that too. So FERC has jurisdiction over RTO governance. What does that mean? You sent me some exclamation points next to that.

34:34What's the significance of that?

34:36Daniel Palken: This is maybe the most significant addition to the transmission section. And it was something that Democrats and Republicans in a unified way were interested in. A lot of the governors, especially the Democratic governors in the PJM region, those 13 states on the Atlantic coast, have had huge problems. You know, everybody has issues with PJM and everybody's issues are slightly different. But a lot of the issues trace to the way that PJM is governed. It has a Byzantine labyrinth. Actually, it's probably unfair to ancient Byzantium. It's much worse in PJM. It has a very challenging labyrinth of committees that have different stakeholder groups that have different weights that vote on things.

35:14Daniel Palken: And utilities will actually show up multiple times in those groups. So they comprise one of the groups in their entirety, the transmission owners, but they're also big in the generators group. And so oftentimes things are ground to a halt through the committees. And then the board in PJM has its own problems. There's a lot of criticisms of how the board is composed. There's kind of some well-intended things that say they're not supposed to have interests in the grid of the region, but they've ended up hiring a lot of people who have limited expertise historically in electricity in general. And so having the FERC be able to step in and say, be the decision maker and make a hard call and say, hey, you need to structure some aspects of this differently is something that everybody wants.

35:55Daniel Palken: But the current kind of process of too many cooks prevents from happening. And so that was a huge priority change for states like Pennsylvania and Maryland and Delaware that have been looking for a number of fixes to just how PJM is run. Okay. So that's the transmission. Those are the big pieces, I think, on transmission and planning and utility competition. Summarizing, I think transmission was already the strongest part from the point of view of Democrats, clean energy people. Incredibly strong and impactful transmission section is now, if anything, slightly stronger. Fair? Yeah, I think even more than slightly.

36:38Daniel Palken: There were real improvements. They did it in a way that really earned the support of folks on both sides, which I think was just very deft of the negotiators in that section. Yes. And I'll just say again, at risk of, at this point, belaboring, whatever climate policy you pass, your carbon tax, your tax incentives, whatever it is you favor, you cannot spread clean energy on a mass scale without more transmission, the ability to build transmission. And that is what this frees up. Okay. The second, as you say, probably the biggest target of bill opponents and the biggest worry among environmental groups, particularly lawyers, were the permit certainty sections, 1401, 1402, 1403 in the original bill.

37:32Just to sort of recap, this was originally, I think, Democrats were motivated to write these parts because what they're trying to do is prevent Trump or a future Trump from doing what Trump is doing, which is just preciously intervening in these processes and blocking clean energy and boosting oil and gas. This is sort of, you know, capricious intervention in the permitting process. They're trying to prevent that. But there were a lot of worries that the way it was written was somewhat sloppy and there's a lot of possible unintended consequences. People, I think the main worry is just that the way some of the provisions were written, you risked locking in.

38:17This was the big worry, right? We're going to lock in a bunch of bad Trump decisions and they are going to become the baseline against which future decisions are measured. and then you're sort of like not only not preventing Trump from doing stuff, but consecrating the stuff Trump does as the baseline. So 1401, what's changed?

38:38Daniel Palken: Yeah, 1401 has really changed a lot. It's one of the most changed sections in the entire bill. And honestly, I would say really scaled it back. Like it no longer has the level of ambition it has had before. It still serves a purpose. And I'll talk about what that is. And it's an important purpose. But in addressing, I think, head on a lot of the kind of concerns, which took the form of hypotheticals of like, you know, could you imagine a industry organization kind of filing this sort of lawsuit and forcing courts hands to give it damages? Or could you imagine a federal government acting in bad faith and colluding with industry actors in order to get them payouts under the provision?

39:16Daniel Palken: Or could you imagine that, you know, bad faith granting of permits not being revocable under certain circumstances? And also one other, just to toss this on your list before you move on, is just, you know, at the end of all legal roads lies the Supreme Court. And these days you have to think about, like, what would an explicitly ideological reactionary Supreme Court do with this language, right? I mean, you kind of have to these days up armor your legal language against malicious misuse, maybe more so than you used to. Yeah. And I mean, I actually think the concern was more with kind of district courts.

39:56Daniel Palken: Like the Supreme Court is definitely not ideologically aligned with the Democratic Party and proponents of the clean energy provisions of this bill most of the time. But they actually have adopted a lot of doctrines that would get in the way of expansive interpretations. They like to say, you know, Congress doesn't hide elephants in molehills and things like that. And some of the... Well, they say that when it serves their ideological aims, suddenly those things go out the window, you know, when they need to. Fair enough, fair enough. But I think that especially the lot of judicial concerns I heard were around, like, could you, like, get a really crazy ruling in, like, the West District of Texas or some, you know, district court that you could venue shop to?

40:33Daniel Palken: In any case, the fixes in this section, right, there's a few global fixes that kind of address like how the whole section applies. And then there's a lot of targeted fixes that address specific problems that people brought up. And so the three global fixes, one is that the section only now applies for the most part to projects that have secured all, it uses the word all, federal authorizations or permits for construction or operation. It's worth noting that most projects, even ones far under construction, don't literally have all their permits. The Bureau of Safety and Environmental Enforcement might have to authorize or not object to a pile driving plan or something as you're kind of in the later stages of big multi-year projects.

41:15Daniel Palken: And so as a threshold matter, for this provision to apply, you would kind of need a court to make the ruling that all actually means some or most, which is obviously not what all means. So there is an argument that like, you know, you might just not be able to show that this provision applies except to projects that really do have all or something that's functionally indistinguishable from all of their federal permissions. The second two of a kind with one another, and I think it's very important that the bill says this in two separate ways, because if it said it once, it would be easier for a court to kind of ignore it.

41:48Daniel Palken: One is that it says that there's a new exception for when the federal government may revoke or rescind or alter all those other verbs, a federal permit. And that is when they're doing so pursuant to any applicable law or regulation. Well, most actions the government takes, it will, first of all, claim or pursuant to any applicable law or regulation. But this also addresses the concern that if you have a new Clean Air Act rule or a new OSHA rule or a new tariff or something and something has to change, as long as that Clean Air Act rule was lawful and you're acting pursuant to it, which is a broad phrasing, then you are within your rights.

42:28Daniel Palken: You are not going to be stopped by this section. And in addition, there's a savings clause that says nothing limits or modifies any other authority under the law, which is another way of saying the same thing. This was all about the lock-in, right? This is all about the lock-in, worries about lock-in, the idea that Trump gives a bunch of dirty permits away and then you change law or regulations subsequently, but you can't go back and do anything about those. But this just says if you are implementing an applicable law, you can intervene in those. And the plain language of that says it very cleanly.

43:07Daniel Palken: I think there are some people who have said, well, like a court might just choose to ignore that. And there's always a risk, I suppose, that a court chooses to ignore something. But one, they'd have to ignore it twice because it also shows up in different guise in the savings clause. And two, and this is the last category, is there's a lot of targeted fixes that address specific problems that people raised with the section. So to tick through some of those, one is they added the word similar to the types of approvals or orders. So you couldn't have exotic things that nobody thinks about as permits, like a FERC, you know, tariff being complied with.

43:41Daniel Palken: That wouldn't be eligible under this section if there was ever any risk that it would have. Two is they changed words like amend or alter to say materially amend or materially alter. So even if you cleared the other bars, you know, routine or small changes required under existing law would not be in scope. Three is they changed full capacity. This was, I think, a legitimately problematic phrase. They said permits to operate at full capacity. Well, many projects are not permitted to operate at full capacity. A peaker plant might be permitted to operate 5 % of the year. And so they changed that to normal capacity.

44:14Daniel Palken: So, you know, whatever it was kind of permitted at, in a sense. That definitely takes away the concern that you were expanding, you know, existing permits or something like that. it broadens the ability of the agencies to respond to courts. They made some changes around, they had this kind of passive voice, like for an exception, if an agency is required to take action by a court. Well, a court almost never requires an agency to take a specific action. It says, we're remanding this, go come back with kind of the right answer. And so now it says, takes action, such action in response to a court, which gives a broader scope for what agencies can do when responding to courts.

44:48Daniel Palken: They added human health in the environment to the list of immediate and urgent harms that can be grounds for exception to the provision. They limited the venue shopping by letting the appellate court provision, venue provisions, and other sections of the bill govern in this section. They removed the clear and convincing evidence standard that agencies had the burden of proving their case to before a court. And most importantly, they added a bad faith requirement, which is a notoriously hard standard to me because you have to show something about what's in the kind of head and heart of the actors in order to be able to access the payouts.

45:25Daniel Palken: They said you have to reach final judgment. The case has to reach final judgment, which can include a settlement or consent decree, but it has to be approved by the court and the judge has to deem that it's fair and reasonable and consistent with the public interest. And they also made a lot of similar changes to 1402, which was the disparate treatment section. So they made it much harder for companies to get their hands on these payments from government if there was any bad acting. Yeah, the payments were just to clarify, these were if the government blocks my permit and I think it is treating the category that I'm building differently than other categories of permits disparate, I can sue.

46:04And if I win, I can get a payout tantamount to the total cost of constructing the thing, which a lot of people worried about. They just thought, you know, lawyers are going to descend on this. They're going to sue every time any permit is blocked. They're going to get a bunch of big payouts, et cetera, et cetera. So there's a bunch of guards put guardrails put in so that those lawsuits become extremely difficult to win. And you have to prove that the government blocked them in bad faith.

46:34Daniel Palken: Extremely difficult to win. And even if you win them, yeah, to then get the payouts because the judge has to deem it in the public interest. And there's a really interesting thing here, right? Like a lot of people have spent a lot of time kind of wargaming out the downside interpretations of all of these potential provisions. One thing that is very interesting is that the way this is worded, it actually could prevent the sorts of payouts that Trump has been making to like Total Energies and other companies who are getting these buyouts not to move forward with certain projects. It says no payout shall be issued under clause one or from any other source to resolve any dispute related to a federal authorization or permit.

47:14Daniel Palken: That is not cabined to the projects that are just covered within the section. That is any other project that's related to a federal authorization or permit. And so it makes it a lot harder. Now, there's a savings clause that kind of conflicts with that. It's maybe a bit of a jump ball as to whether it would actually work. But even the deterrent effect is real. Because if like Total Energies, for example, can see that this might be overturned by a future administration, the incentive to take the money, so to speak, goes dramatically down in the current environments. They made some changes that have real upside.

47:48Daniel Palken: They sanded a lot of the edges off the section. I want to be clear that like all those fixes I was describing, most of them were attacking things that were real concerns, but each of them had a very low probability of manifesting. Like just because somebody raised a concern about a potential legal interpretation does not mean that like the way the bill was written, most lawyers were under the impression. I'm not a lawyer, but I certainly believe that most of the concerns that were raised, not all of them, but were very low probability. And then there were a few concerns that kind of traversed into the low to moderate probability, like we really need to fix this.

48:21Daniel Palken: And in my view, they did fix a lot of, they did fix all of those, often with the belt and suspenders approach. So what does the section still do? One of my questions is, have they almost, in some sense, neutered this with this exception, any applicable law? You can't intervene and block a permit unless you are implementing some applicable law. Well, like Trump was always citing some law or other when he was intervening. You know what I mean? Like none of these interventions were just, I don't like it. They always had some law that they could cite. So doesn't this, that exception just kind of like open the door right back open to what Trump was doing?

49:04Daniel Palken: It's a very astute observation, but I actually think the answer is not quite. Like, this is the role I think there's two things that I think this section still really does that are vitally important. Three, actually. One is the one I already mentioned, which is it actually potentially outlaws things like the total energies case that kind of have been able to happen under the status quo, which is a big deal. And these were Trump paying off basically like giving leases back to. Giving leases back and also in the bargain, getting them to commit to instead of spending the money on renewable energy, go off and do some drilling somewhere or something.

49:36Yes, several such cases.

49:38Daniel Palken: The other two things, this is the one you allude to of like, what is it doing if there's any other law exception is so broad? Well, it's clearly not in a plain reading of the language blocking like a lawfully promulgated Clean Air Act regulation from having the intended regulatory effect on permits. What it is doing, though, is if an administration can always claim that there's a law they're acting under. But if a judge finds that they're not, which is often the case with things Trump has done, like judges have referred to his actions as pretextual, it does provide a backstop for truly egregious actions to say, OK, we're tossing that out.

50:15Daniel Palken: There's a new right of action for people to bring suit against it. And in truly egregious cases where there's obvious bad faith and, you know, the judge doesn't detect any sign of collusion or anything like that, there is a financial remedy that can be paid to these people to make them whole for the damages they've suffered over time. So it serves a much narrower purpose. There's a much higher bar to reach it. But it does one other thing. I said it did three things. The third one is that there's a specific carve out for essentially the five offshore wind projects that Trump has been attacking.

50:42Daniel Palken: There's a provision that says that they, if Trump wants to try to meddle with their permits again, he has to first get permission from a court before anything he does has any effect on them. So it's essentially a restraining order in colloquial terms, which, you know, that was the one big thing that Senators Whitehouse and Heinrich said at the press conference was unresolved when they first put out the bill. They landed it, I think, in a very good place for the certainty of permits and the ability of projects that are under construction to move forward for those five. Oh, and one other thing we should mention, a lot of people were worried about this idea of the previous five years of permits forming a baseline against which disparate treatment was supposed to be measured.

51:27The idea was if three of those five years consist of Trump, you know, vigorously blocking clean energy permits and permitting oil and gas permits, that's going to create a baseline that then ties subsequent administrations. I think that worry was a little bit overblown, but it's worth saying that that baseline period has been extended from five to 10 years.

51:51Daniel Palken: Yeah. So now it's two and a half administrations long, and that will, under all recent history, make sure there's some administrations of both stripes in there. And now we're traversing into 1402. We'll be a lot quicker on 1402 because a lot of the changes mirror 1401. They make some of the same fixes with full to normal capacity. They critically add the bad faith standard. They critically add the requirement that the judge find public interest and fairness in actually doling out any payments that come from this. And they make a number of other targeted fixes. They make sure that the government can present its evidence in a more level playing field way against a developer that is alleging disparate treatment.

52:31Daniel Palken: And so similar to 1401, and I think candidly, like I would say it was about 80-20, where the vast majority of concerns, both by severity and by volume, were actually coming in at 1401, not 1402. But there were some concerns that were coming in certainly at 1402. I also think that this section is in many ways weakened. It's less likely to be used. I don't think it was terribly likely to be used at baseline because of challenges we discussed in the last episode. But I certainly think that a lot of the worries that people had about it are out the window. But we should also discuss the last certainty section, which is 1403.

53:05Daniel Palken: And this one is fully intact. They didn't change this one at all. And that's important because I think this is, in many ways, the kind of, it came with no financial penalties. This section is just about deadlines. And it pairs with sections 1106 and 1109 in the NEPA sections, which combine to create a binding set of deadlines and application completeness protocols throughout the process. So what 1109 does in the NEPA section is it says that any application basically has to hear back within like 60 days from the federal government if it's complete. And if not, there's to be something that goes into the record and writing that says, you know, what's missing.

53:41Daniel Palken: And so it gives developers a clear route to make sure that the clock starts. And then 1106 sets a bunch of deadlines. And some of them are the same as the ones that were originally acted in the FRA, but now without loopholes. And there's deadlines for when you have to start the environmental analysis. how long you have to complete it, how long you have to make final agency decisions after it. And crucially, if the department is missing deadlines by more than two months on a project, there's a provision in there that says the secretary of interior, the head of the department, secretary of energy, interior, whoever it is, can't travel more than 25 miles for work from their duty station.

54:21Daniel Palken: So this one kind of without any major risk of corruption or big unintended consequences, like really makes life kind of personally restricted and miserable for the highest level officials within the administration. If there's not a predictable process where agencies get to yes or no on projects. And if you ask a lot of the solar and wind folks, that was always the certainty provision that they were like, yeah, it's the boring deadlines that are the ones we care about. Because a lot of what this administration and past administrations have done is just sit on permits forever of the projects they don't like and never get an answer back.

54:54Daniel Palken: And part of the bargain of this bill is we're not going to do that as a country anymore. You have to get an answer. So they're forcing mechanisms. So just to sum this part up, in your judgment, you think we've come out in a place that is good on providing some certainty for permits of all kinds, that they're going to get a hearing, that they're going to get expeditious action, that they can't be blocked for capricious reasons, et cetera, and you think the main fears and objections on these sections have been adequately addressed? I think that, you know, you can always come up with scenarios that have tiny percent likelihoods, but it's not like all laws under the status quo have been interpreted benevolently and that there's no risk.

55:40Daniel Palken: I think for sure the positive thing to say about the changes to certainty, there's two positive things and one negative thing to say. The two positive things to say are that all the major concerns, I think, have been meaningfully addressed, whether they've been completely beaten down to absolute zero percent or they're just much, much lower than however high people thought and opinions really differed earlier is people will continue to talk about in the coming days and weeks. The second positive thing to say is that it's preserved a lot of the essential core and actually made some enhancements like for those five offshore wind projects.

56:10Daniel Palken: And that essential core is especially the deadlines and enforcement mechanisms and rights of action around those. Those really matter for energy developers. They were hoping and those did indeed stay intact. The negative thing to say is for folks who did like some of those stronger provisions and had a lower rating of the risks associated with malinterpretations of some of them, they are now meaningfully weaker other than the deadlines and the enforcements around them. The provisions around revoke and repeal and amendment of permits and the provisions around disparate treatment are now harder to access and have higher bars than before.

56:44Daniel Palken: A lot of people will view that as a plus. Some people will view that as a minus. Some people will view it as a mixed bad. Okay, we need to move on. We're behind schedule as usual. Let's talk about, I think, one of the most significant areas of dispute was about the National Historic Preservation Act and tribes, tribal land, tribal prerogatives, etc. etc. And I think And although they did not always get all the press, I think tribes are one of the kind of the key groups behind the scenes here whose disposition towards this is a big deal in the DEM coalition. So talk a little bit about what changes have been made to that section.

57:23Daniel Palken: Yeah, maybe just a tiny bit of table setting first, because this is like the section that we mainly it was covered in like the Peter Jackson, you know, director's cut of our former episode. But yeah, I should say we had a section about this in the original. pod, I cut it in a vain attempt to restrain the length of that pod. And then for my efforts, got yelled at roundly by like a million different people for ignoring this extremely important issue. So we're addressing it on the pod for the first time here. Yep. Section 106 of the NHPA, which is the section of that law that's at issue, is a section that requires consultation for federal undertakings, which is kind of any federal action in the real physical world that may have effect on historic properties.

58:07Daniel Palken: And historic properties are both ones that are like on the national register of historic properties, and then a much, much broader category of millions of buildings and structures and landscapes that are at least 50 years old is kind of where you get to presumed to be eligible. And so it's a law that serves a lot of legitimate purpose. There's a lot of people who have things that matter to them or are outright sacred to them that look to this law to make sure that the effects, both physical effects and then, you know, just having to look at something and having the kind of environment of it perturbed or changed, are considered and mitigated where possible around those objects.

58:42Daniel Palken: It matters especially to tribes, not only to tribes. There's a lot of preservationists who care about this law. The law requires kind of a four-part process where the federal government determines if you require review it. It looks at the so-called area of potential effects where you do that review. It looks if there's historic properties or eligible historic properties that might be affected. It then looks at the potential impacts and it looks at mitigation. So I guess kind of five parts. And it's a procedural law. This is the important thing to stress also. It's like NEPA. It requires no actual outcomes that are prescribed in the real world, but it makes government go through this process.

59:17Daniel Palken: So that's what we're talking about at a baseline. In the background, it's also important to say the Trump administration has proposed a pretty harsh rule to redo the 20-year-old regulations on this law. And that rule would basically greatly diminish the tribal and state and other stakeholder role in the process, basically turning them into - That's 1806, Trump's rule. To Section 106 of the NHPA. He's proposed a rulemaking through the ACHP, which is, it's the central agency that kind of administers the NHPA in the federal government. And that rule has been received very poorly by tribes. And then this bill came along, which actually was in many ways an improvement and a reversal of some of the things in that rule, but also in many ways had provisions that were in the first version of this bill, especially, but also to some degree in this new version, quite offensive, especially tribal stakeholders.

1:00:08Daniel Palken: And they really made their voices heard on this and said, hey, I'm not here to adjudicate what was the case or not. But they said we didn't feel appropriately involved in the process. And we wish you had taken more of our input on some of these changes that you're making in this law, even notwithstanding the fact that the status quo is kind of changing under our feet by virtue of Trump regulations. Yeah. I mean, one of the fights here is, are you judging what's in this bill against that 106 rule, against Trump's terrible rule, or are you judging it against the pre-Trump rule status quo? Yes. Right?

1:00:45So I think the sort of perspective for tribes is, sure, this is better than 106, But we want to go to the pre-106 status quo. And this is worse than that, I think, is one of the arguments.

1:00:56Daniel Palken: And this is where your point from earlier about the Supreme Court kind of comes into play. One of the Supreme Court's major decisions, the Loper-Breit decision, which struck down Chevron deference, basically says that it's much harder to put in place or put back in place once they've gone away expansive interpretations of small bits of ambiguous legislative text. And so Section 106 of the NHPA is a two-sentence section that basically says you have to consult, you have to look at effects on historic properties and maybe mitigate them. And what would happen if Trump succeeds in issuing his new regs, which he almost certainly will in whole or at least in large part, is that a future Democratic administration, even if they wanted to put the old ones back in place, might very well get struck down by courts under the new doctrines around not having elephants in molehills.

1:01:46Daniel Palken: and other similar things. The baseline reality, I would argue, but that argument has not won the day, right? The tribes have heard that argument, they've considered it, and they've said, we'll take our chances in court. We, you know, really feel like this is a two-front attack between this rule and this bill, not something where this bill is mitigatory to the rule. And I think one has to respect that perspective. And so what the changes to the legislation did was they struck some hard compromises between where the Republicans were who didn't want to back off most of the provisions of the section, but were open to some of the tribal arguments and were Democrats where a lot of Democrats, other than the certainty provisions, wanted to see the most changes here.

1:02:26Daniel Palken: They did not go as far as a lot of the tribal groups wanted, but they went far enough to elicit some meaningful positive acknowledgement and ultimately got a few but meaningful kind of endorsements and statements out of important tribal individuals and a tribe and a coalition of tribes. So let's talk about what they did and kind of how the politics shook out. One of the biggest things they changed was they took out this provision that if a tribe was missing its deadlines consistently on complying with the National Historic Preservation Act, the federal government was allowed to take over its roles and responsibilities.

1:03:01Daniel Palken: And they took that takeover rollout entirely. Tribes viewed that as probably public enemy number one in the bill. It was really, they viewed an affront to sovereignty to have the threat of federal official taking over their job. The other thing it did that was maybe the most important along with that to tribes is it had a bunch of language that said the federal government may consult with tribes on various aspects of identifying the area and identifying the effects. And that was also very offensive to tribes who said, you know, hell with May, you must consult with us. The purpose of the National Historic Preservation Act is you have to.

1:03:37Daniel Palken: It also says that in Section 101. And so they removed that language and they actually added express language. The secretary can't consult on behalf of tribes, has to consult with tribes. There were a lot of improvements to the process of consultation. There were other things. There was a workweek provision that kind of mirrors stuff in the NEPA where it says that if you're missing deadlines, you have to spend at least 50 % of your workweek. That provision was unconstitutional. The federal government can't tell a non-federal worker how they're going to spend their work week. And it was offensive in addition.

1:04:08Daniel Palken: So that was taken out. There was a provision around comments that were provided and what types of comments would or wouldn't give you standing to sue down the road. And the word unique was in there, which was in a version of the Speed Act in the House, but is not in the NEPA section of this bill, but it showed up in the NHPA section. And, you know, what is a unique comment if two people happen to submit the same comment because they have the same concern. Have they canceled each other out was the concern. And frankly, I shared that concern. I think that's a poor drafting issue. They removed the word unique and just, you know, put in a prohibition on form letters instead, which I think is an acceptable compromise there.

1:04:41Daniel Palken: They also put a number of privacy protections on these grants that they give to tribes. The bill makes available to tribes to digitize resources. They exempt it from FOIA, for example, so people can't just say, I want to create a bunch of, you know, inconvenience for you and get this stuff as a matter of public record. So there were a number of things that the tribes asked for. That was the good from tribes perspective. The bad from tribes perspective is that the ultimate ask of tribes was we want you to remove. There were a lot of tribes that said, you know, unless this section is out and there were a lot of tribal groups, there's a group called the 106 Strong Coalition that said, we want you to remove the whole title.

1:05:17Daniel Palken: And short of removing the whole title, we're opposing this bill. The negotiators, for probably obvious reasons, were not able to go there. And so, you know, when I talked to Democratic staffers and Republican staffers on Capitol Hill, they are still hearing a lot of similar opposition from tribes. There's usually an acknowledgement that the bill has moved in a positive direction. The Colt Coalition, which is a big coalition that represents 50 % of Native Americans in the country within the tribes and its membership, and 95 % of tribal landmass came out and said some balanced things. They said, we really appreciate the positive changes.

1:05:51Daniel Palken: They also said there's still room for improvement, but other groups have been more negative. They stopped short of endorsing. But I think if we can narrow down on, I think what's the real bone at issue here is a lot of these improvements improve the consultation process, bring tribes more into consultation, guarantee their consultation, etc. But ultimately, the only remedy is to send the review back and have them do it again while construction continues. Same as with NEPA. You can't find that they didn't do the review right and thus stop construction while they do the review right. And that was the teeth of this section.

1:06:36This is the power that tribes have is if you don't do your NHPA review correctly, you have to stop construction while you do it correctly. The change where they don't have to stop construction, they can't vacate, they don't have to stop construction. All they have to do is go back and do the review again. That remains in the bill. And that is, I think, the main thing tribes object to. Is that fair?

1:06:57Daniel Palken: That is absolutely fair. I think like a step short of the kind of groups that are in the strike the whole section provision or the groups that are in the like at strike that provision section. Like that was viewed as kind of the, you know, a reform that the Republicans very much prioritized. And it wasn't on the table from the Republican side and the White House's side for striking. And that was the reality of a bipartisan negotiation. The thing to say about this is I think that provision matters a lot less in the NHPA than it matters in a NEPA context. And I think people, Republicans and Democrats, have a false intuition because that is kind of the master governing provision that calibrates our expectations on how consequential the NEPA changes will or won't be.

1:07:37Daniel Palken: And because NHPA is, by analogy, the other procedural law, people assume that it's of the same importance. The reason I think it isn't, there's maybe some empirical evidence that it isn't, which is that NEPA and NHPA, major federal action and undertaking are a similar scope of government activities. They mean almost the same thing. And yet, under NEPA, there's the same number of government actions, there's 10 times the amount of litigation, roughly speaking, annually. NHPA is typically not adjudicated by litigation. It doesn't have the same dynamic. And I think in part, the litigation, even in a no vacature world, especially for NHPA, still has bearing on how government and industry actors will respond.

1:08:21Daniel Palken: It's one thing if you're an industry actor and you are sued by a nonprofit whose name no one recognizes that might be just a few lawyers. That's a legal problem for you. If you were sued under NHPA by a tribe, you look like, whether or not you have been or not, a very bad, you know, greedy capitalist who is trampling on the sovereign rights of people who attach real value to the land. And so I think there are human incentives that no changes to a law are going to address that make litigation under the NHPA, including the potential remedy. like if you have to go back and remand something, if you're the agency, if it's remanded to you, you have to then put in a bunch of work and come back with a product that actually goes through the process correctly.

1:09:06If you refuse to do that, then you're in serious territory.

1:09:10Daniel Palken: Then there are consequences. The government can hold you as the agency in contempt. They can impose fines. There's all sorts of things that a court can do if an agency is truly just defying a court order. If on the other hand, they do comply at that point, then they have created a whole administrative record that might end up showing violations of other procedural or substantive laws. They might end up having violated FLIPMA or other Native American relevant statutes like the Native American Graves Act or various treaty requirements. And so there are still remedies that will have a lot of teeth, both kind of hard and soft aspects that will matter in the real world.

1:09:45Daniel Palken: The kind of 10 to 1 nature of NEPA to NHPA litigation, I think should tell us at baseline that the NHPA mostly has its effects on the world, both positive and negative effects, through channels that are not mediated by litigation to the same degree, is at least my view. So it's more like the reputational threat of litigation is doing a lot of the work here. Candidly, yes. And disproportionately when it comes from a tribe, because for good reason, people take it seriously when tribes have an issue with the project near land that they attach meaning to. There was some meaningful movement in the direction of tribes, not adequate to what they wanted, because what they wanted is vacature and they didn't get vacature.

1:10:26So we can move on. What's your sort of summary of the political economy here? Do you think tribes are going to be a substantial blocker here? Or do you think this is enough that they're going to be neutral or supportive? Hey there, everybody. Don't worry, I'm not going to tell you about a new mattress or push a credit card on you. This isn't an ad. There are no ads on Volts. It is supported entirely by listeners like you. If you'll indulge me for a second, I'd like to ask for your support. I started Volts because we're all surrounded by depressing news about climate change and misinformation about clean energy.

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1:12:05Daniel Palken: Do you think this is enough that they're going to be neutral or supportive? I think the situation has meaningfully improved for Democrats that wanted to see improvement. You have the days in the lead up to this being released and after. You saw endorsements of the bill from the Crow Tribe, from the National Tribal Energy Association. Very interestingly, Sharice Davids, who is the only Native American member of the House Democrats, came out and said we should move on this bill. On the other hand, there's still a lot of opposition. It's still going to be a very hard vote. I think this is the section of the bill that is going to give Democrats in the Senate more pause than any other.

1:12:40Daniel Palken: And I don't want to dismiss it all. I have some substantive reasons that I've articulated that I think that the changes are landing in as good a spot as they could have landed. I also don't want to take away that people have a range of feelings, positive and negative, about this section, and people are going to weigh those differently. And that's fair. Okay. I think the big ones, there's a lot of small ones. Let's talk briefly about data centers. So in the original bill, they have this, what you call and pricing, which means you have to pay for the power you need and you have to pay for upgrades in the grid required to provide that power to you.

1:13:22One of the weirder attacks on the bill I've seen is that it's good for data centers, but this is like, to me, in the original permitting bill, some of the strongest, not anti-data center, but like forcing them to pay that you're ever going to get. It's just as strong as any state policy. And it would be a federal baseline. Like To me, it's just bizarre to take data centers as your reason to oppose this bill. This bill is quite strong policy on data centers. So that was already in the bill. And now maybe you can clear this up for me because it's slightly confused. Congress has declared it national policy that data centers pay the full cost of the grid service and infrastructure they need.

1:14:08The bill already had that in it. So like, what further purpose is served by pounding the table and declaring it national policy? I mean, of course, it's going to be national policy if you pass a national bill. So like, what's going on there? What's going on with data center?

1:14:24Daniel Palken: The two main provisions that affect data center paying are the and pricing one you mentioned that we talked about last time, estimated to bring in$55 billion total from data centers over just the next 10 years,$35 billion additional from what would have happened under the status quo, real money, direct wealth transfer from data centers to residential and other rate payers. You know, you can say anti-data center. It's an anti-data center provision. The second one is the one you mentioned that was previously called the rate payer protection floor. Now it's called something similar. And it basically says that you have to do the same thing, making sure you're paying for all of the kind of but for costs you cause on the generation side of the grid as well.

1:15:04Daniel Palken: The reason that is interesting is that the numbers there are potentially even bigger. The same grid strategy study that found the$35 billion additional found that if that goes into effect in all 50 states, it will result in about$136 billion of additional wealth transfer from data centers to residential ratepayers. They also did a number of surgical changes in that provision. There could have been some real issues with the way it was written initially. Like they had language that like if you do a true but for test, right, you can have a data center that really marginally contributes to the need for some transmission line, but happens to put it over the threshold of its benefit cost test.

1:15:41Daniel Palken: And so it is one of many but for causes for that line. And then maybe that billion dollar line would have to be paid for all by one data center. You know, I'm all for overcharging data centers. That's how our insane interconnection rules work today. I mean, it is insane. Not for big, like, interregional transmission upgrades. Like, yes, for some pretty big lines that connect you to the grid, but not for things of, like, regionally and interregionally planned scale. So this was actually even worse and even harsher than anything that exists under current law. And they made that in line with the way they had intended it, which was that we're talking about upgrades that you are reasonably causing on the grid that are kind of the network upgrades that are caused by your ad hoc addition to the grid, not like regionally planned transmission lines that are meant to benefit the entire system and ratepayers broadly.

1:16:28Daniel Palken: So I think the section works meaningfully better now than it was. There was a lot of technical feedback from folks. It is still a very strong provision that is quite strong in making sure that data centers are paying their way. There's one other data center provision that we never discussed last time. It's pretty much unaffected in the bill. Maybe we discussed it briefly. It's a reporting requirement from data centers that they have to give the EIA information about their power use, which was something that the EIA previously tried to require for crypto and lost a court case on something of a technicality.

1:17:01Daniel Palken: And they haven't been able to have that data from data centers, from crypto, from others in that space. And so one thing this bill will do is give federal and state policymakers and just the general public much better baseline knowledge of like what is actually going on with respect to how much power data centers are using that's a question we should be able to answer but don't have an authoritative government answer to and that's not like a protection in and of itself but it is something that will be very useful in assessing what to do about data centers going forward also ferk has to act in 90 days rather than 270 on data centers.

1:17:43I don't know how significant that will be. And the 20 megawatt threshold is gone. It was 20 megawatt data centers and above that were covered. Now it's all data centers that are covered. What about the worry, and we discussed this briefly last time, we'll just touch on it one more time, which the worry that once again, And in this bill, you've even, if anything, sort of tightened the amount that data centers are going to have to pay to connect to the grid. On one hand, that's great. Like they're going to cough up a ton of money that's going to go to reducing residential rates, some affordability play, et cetera.

1:18:19But does it not also create somewhat of a disincentive to hook up to the grid? does it not create somewhat of an incentive to build your own behind-the-meter gas instead of connecting to the grid and taking on all these penalties?

1:18:34Daniel Palken: On the margins, yes, it does. The mitigating factor, which I think is very mitigating indeed, is that data centers much prefer to connect to the grid, like more than the amounts of money you could impose, even the very large dollar numbers you're imposing here. Their main concerns are speed to power and social license. And they would much prefer not to be their own utilities. It is really hard and really expensive, right? As expensive as it's going to be to pay, you know, a hundred plus billion dollars, you know, as an industry, it is more expensive for every data center to be an island unto itself and to provide the backup generators for the backup generators for the backup generators if their projects fail on site and to have unique exposure to whatever one fuel source they're using.

1:19:18Daniel Palken: A lot of them would prefer to have a clean energy in their mix as well, although we've seen that it hasn't proven overriding for them. So there's a thousand reasons, some quite strong, just not being your own utility being the biggest, that they would prefer to have electricity provisioned to them as every industry in humanity, you know, since the electric age to this point mostly has. And the calculus that the authors of the bill are making is that having data centers pay their fair share is an appropriate bargain and not on the level of financial incentive that would be material going to scare them to go off grid, it is more going to have the effect of making sure that the ones that do get built, you know, which is largely something that is unaffected by this bill, will be more likely to be able to go on grid in the first place because of the transmission provisions building out the grid.

1:20:05Well, of course, if you're building more transmission, you're going to free up more grid and enable more of them. Before we move on from data center, I just kind of want to pound the table a little bit on this. Like, whatever your thoughts about the other part of the bill, it is bizarre to characterize this bill as some sort of giveaway to data centers. This is the strongest, tightest sort of anti-data center legislation that I've seen, including from any state. Like it's going to make it a federal baseline that data centers have to pay for all their own power and whatever transmission costs they are causing by coming online and whatever generation costs they are causing by coming online.

1:20:48It is going to be, as you say, a huge wealth transfer from the hyperscalers to residential rate payers. This is, to me, one of the strongest bits of the bill. If you're trying to ride this anti-data center wave, this disciplines data centers strongly and is also one of the strongest, I think, affordability pieces because you're transferring, as you say, this is going to go to reducing residential bills. So just like if you're an anti data center person, you should love this bill.

1:21:23Daniel Palken: Yes, like 100 percent. Right. You know, to put that 136 billion in that 35 billion dollar number in context, right, that's like a meaningful share. Like the renewable energy provisions of the IRA when they were originally passed scored at like three or four or 500 billion or something like we're talking about a provision that is a meaningful fraction of the entire IRA's worth of originally estimated spending in wealth transfer from data centers to other ratepayers. I do agree. I think it comes from people who oppose the bill and say, you know, what's unpopular, data centers are unpopular. I think many of the critiques of this bill, I want to be clear, are made in good faith.

1:22:00Daniel Palken: I'm not a person. I don't like to allege bad faith. But I think some of the data center critiques, maybe they come from people who are really misreading it or not reading it or hearing from people who are just saying things. But I think some of it is coming from a place of just, we're going to take the most unpopular kid in town, the data center, and allege that this bill, which actually has a bunch of provisions that are meant to constrain data centers and make them pay their fair share, is somehow a Trojan horse for said data centers. And that is not the case. Yeah, that line of attack really irritates me.

1:22:28It seems pretty dishonest. Okay, moving on. There's some other little things on, I mean, A lot of the environmental objections were about the provisions on NEPA and the Clean Water Act and the Endangered Species Act. And I think it's just worth saying that there were not major revisions to those pieces of the bill, but there were some small ones that are significant if you want to go and touch on a couple of them.

1:22:56Daniel Palken: Yeah, let's tick through them, ESA, Clean Water Act, and then NEPA in short succession. So in the ESA, they made a few changes. They changed a may to a shall, basically saying that the Secretary has to terminate states that aren't meeting their qualifications for the program that allows states to take the role of Section 7 consultations. They amended the Pittman-Robertson Wildlife Restoration Act. Can we pause on that? I just want to spell that one out. So part of what people didn't like about the original bill is that it allows states to run the endangered species consultation rather than the feds.

1:23:31And the worry, of course, is that there are lots of states that don't give a damn about endangered species and could not be trusted to run good faith consultation processes. And so this strengthens a little bit the Fed's ability or willingness to step in if a state is doing an inadequate job on that.

1:23:54Daniel Palken: Is that fair? Yeah, it forces their hand if the program is not up to snuff. If it's not meeting standards, the secretary has to terminate that state. You know, I have always said to that objection that this is like you could have states that, you know, don't want to protect species. Look no further than, do you feel differently about Doug Bergen Department of Interior? Do You feel that they have taken an approach to species that is materially different. I actually think it's actually upside for Democrats in blue states to be able to say in years where there is an adverse secretary, at least blue states, if they can prove that they're compliant with the program, which they'd have every incentive to be, California can run its own ESA process.

1:24:30Daniel Palken: That's maybe the major change in ESA. There's another one in the title that makes it easier to get dollars out the door for wildlife, state wildlife action plans, which I think will matter somewhat. It comes from a bill from Representative Moskowitz and Donald's, a bipartisan bill in the House. Moving on to Clean Water Act. The Clean Water Act, I do think it's fair to say, my personal view is that some of the bigger trade-offs in this bill are in this section. I, to be clear, think that those trade-offs are worth it, even just on the narrow dimensions of water quality because of how much water quality is affected and commingled with other environmental concerns that this bill addresses across its numerous titles, but it does create new higher standards for when states can impose conditions on projects.

1:25:15Daniel Palken: Those are generally preserved with one change, which I think is important. It removes language that says the Section 401 conditions that states can impose on a certification for an action under the Clean Water Act had to be consistent with the requirements of the federal license or permit. There was a legal argument that was made by Eric Biber, I think that's how pronounce his last name, from UC Berkeley, that said that that provision could be a real poison pill because if a court interpreted it broadly, which he acknowledged was not the most likely outcome necessarily, but the court could say that that would ban consideration, that would ban imposition of any requirements from a state that are more stringent than basically the baseline federal requirements.

1:25:57Daniel Palken: So they struck that provision entirely to remove any chance of that misinterpretation because I don't think that was the intent of the Democratic or even Republican drafters. They codified Nationwide Permit 27 in the new version of the bill, which is around aquatic habitat restoration. So they're giving force of law to saying that that has to be something that government provides a general purpose permit to and makes it easier for entities to do aquatic habitat restoration and enhancement activities. And they have another change, which is also important, that makes it more clear that states have the right to deny a legitimately incomplete application.

1:26:34Daniel Palken: There was some question around that the way the language was previously written. A lot of the groups that have focused attention on the Clean Water Act provisions from a negative perspective will still say that there are provisions in there they don't like, and that's fair. And we can discuss those as much as little as people want, but I suggest maybe we go on to NEPA. Yeah, let's go on to NEPA. Okay. So on the NEPA section, the thing I'll say here is that the changes it made, there aren't too many big changes. They removed federally funded broadband from NEPA. Like you look at challenges that the Biden administration had outside of the energy space, but in getting the infrastructure law implemented, and there were challenges around that.

1:27:10Daniel Palken: And so that's advantageous for future administrations that want to do meaningful infrastructure work to get people broadband. It requires deep sea mining to undergo NEPA. So this was an objection raised by Oceana and others because there was an exception from extraterritorial activities in the previous bill. And that conflicted with the law that governs deep seabed mining. And so they clarified that here, more than clarified. They said, there is an exception for deep sea mining when it comes to extraterritorial activities. You still have to do NEPA for that, even in non-U.S. controlled waters and international waters.

1:27:46Daniel Palken: And then they brought DOT, Department of Transportation, block grants back into the fold. These are big grants that are given out every five-year highway bills as federal actions under NEPA. Those are the changes. What you will still hear, you know, like with the Clean Water Act, some groups have said NEPA is a really big issue for me. It's a big enough issue that I oppose the bill despite things that I'll acknowledge are good in other sections. My personal view is I agree with those arguments much less than I agree with them on something like some of the Clean Water Act changes. And I think one can get at this with like a basic kind of 40 ,000 foot level sanity check.

1:28:24Daniel Palken: NEPA as a federal law is a very interesting federal law because it applies differentially or non-uniformly in different parts of the country. Like not only is it the case that some large infrastructure projects and actions undergo no NEPA at all because they don't require a federal authorization or federal money, but it's also the case that you have a bunch of state laws, state NEPAs that were passed in the early to mid 70s around the exact same time as NEPA itself. In other words, they've been in effect for 50 years. Rather than making gross comparisons of like Texas v. California or states that are different in their culture, their politics, their political leadership, their other environmental laws, their labor laws, their economies.

1:29:05Daniel Palken: You can compare states that are kind of near each other, that have similar politics, that have otherwise similar laws, and that some have these state NEPAs and some don't. And these state NEPAs, it's worth saying, are just as big and powerful as the federal NEPA. Many of them are more powerful. They often apply to any action by the counties or the localities within the states, which would be the same as if NEPA were juiced to apply to all state-level actions. It would be a far stronger law. That's what these state NEPAs do. For example, if I were to ask you, which of Washington or Oregon do you think has much better or worse environmental quality or participatory democracy than the other one, what would you say?

1:29:46Well, Washington, of course, out of loyalty.

1:29:49Daniel Palken: If you were a NEPA apologist, you would be correct on that. Like Washington is the one that has a state NEPA. But my hypothesis is that you could live an entire lifetime in Washington and Oregon and not detect real differences, you know, signal from the noise on kind of aggregate features of the environment, water quality, air quality, species, let alone kind of the participatory democracy around projects. Similarly, you can compare Massachusetts and Connecticut, which have strong state NEPAs, to Vermont, New Hampshire, and Maine, which don't. It's telling to me, you know, you can compare California, which does, to Colorado, which doesn't, Minnesota, which does, to Wisconsin, which doesn't.

1:30:26Daniel Palken: I think most normal people who have lived their lives in those states or combinations of those states wouldn't be able to tell you which ones are doing much better environmentally by any sense any normal person could detect. And that to me is the smoking gun that NEPA is not often serving the purposes that it is mythologized to serve. If we can't after 50 years detect any discernible difference in the environmental quality between a control case that has no NEPA at all and test case that has had a stronger law than NEPA in place for 50 years, I view that as kind of an interesting indicator. And meanwhile, Oregon has built twice as much solar and wind as Washington over the same period.

1:31:07Interesting. Okay, so your point is just NEPAs are not, in reality, in our experience, in our state experience, playing the environmental protection role that people are sort of building it up to play.

1:31:26Daniel Palken: Yeah, I'm not saying it does nothing, right? I think there are definitely targeted cases where people can say we secured this mitigation as a result of the NEPA process and wouldn't have otherwise. But I think it's telling that the gross, large scale qualities of the environment are indetectable or likely indetectable. That's my hypothesis to people who have spent a lot of time in kind of comparison case states. Meanwhile, the effects of NEPA on project development are much less ambiguous. We discussed last time how federal lands make up 21 % of the lower 48 and yet 3 % of wind and solar on federal lands, despite the resource being really strong, especially for solar, where the federal lands are.

1:32:05Daniel Palken: And we discussed how when developers are polled of, have you ever avoided federal land because of the NEPA process? It's like 82 % yes, 18 % no. What's the hardest permitting process, federal, later state or local, 68 % federal, you know, 32 % the other two combined. There's just patterns you observe in the real world where NEPA has a real downside for large landmass, i.e. renewable transmission, energy development. The evidence is, I think, much more clear that it is having a deleterious effect there than that it is having a real material positive effect in the aggregate when it comes to benefits, is all I'm saying.

1:32:41Okay. Well, we're probably not going to settle the global argument over NEPA here, but that's an interesting perspective.

1:32:46Daniel Palken: So then a couple other bits and bobs, distributed energy, a couple of changes. I don't know if there's anything you want to mention or call out. They put a five megawatt cap in place to restrict any malinterpretation that provision might have applied to like 100 megawatt or gigawatt scale gas turbine at a data center. So yet another anti-data center provision, if you will. A couple of nuclear things? Yeah. Some new nuclear bills that they brought over from both the House and the Senate. They took the Efficient Nuclear Licensing Hearings Act from Kim Schreier and Mark Vesey and Morgan Griffith in the House, which basically says that for certain permits where nobody's contesting them in licenses, the NRC doesn't need to hold full hearings and can use adjudicatory measures instead.

1:33:31Daniel Palken: They have one that allows construction to begin on certain projects but still maintains the right of the NRC once it reaches a licensing decision, because licensing takes a long time to deny the license. they have one. There's a little bit of a state capacity Easter egg, one of these themes of our previous episode where the NRC, the Nuclear Regulatory Commission, can raise the pay of certain senior executive service employees, the kind of most important career employees who run departments within the agency by 10 % at their discretion. You know, nuclear is an area where there's been a lot of bipartisan legislating, and so there wasn't a ton sitting on the shelf.

1:34:07Daniel Palken: But they did pick up those a few other nuclear provisions, which the nuclear industry has been very supportive of. And we've seen endorsements come out from nuclear folks in recent days from the Nuclear Innovation Alliance. The Nuclear Energy Institute had already endorsed the bill. It's definitely picked up some more nuclear interest and nuclear support in the new nuclear title. Okay. Other, et cetera. Collective bargaining was restored for the employees of federal power, marketing administration, gas pipeline penalties get de novo review in court. What the heck does that mean? No. So I think the provision you're referring to is one that shows up in the transmission title.

1:34:49Daniel Palken: And it's a fix to this issue that FERC has had ever since the Supreme Court ruling called JARCASY that basically determined that certain actions that administrative of law judges were taking were unconstitutional. They couldn't decide these certain types of penalties under law without a court doing it because it traces back to English common law and like the current Supreme Court's view of when agencies are and aren't able on their own to impose penalties. And this basically says that under the Natural Gas Act, market manipulation problems can have penalties imposed on them and they just have to go through a court process after the FERC kind of makes its findings.

1:35:28Daniel Palken: And so it's fixing a problem where FERC wasn't able to enforce findings of wrongdoing under the Natural Gas Act as existed. So that will hold bad industry actors to better account, essentially. That's a good consumer protection provision. Any other bits and bobs? Prescribed burns. There's an interesting bill in here that I think is really smart that makes it so that prescribed fire emissions don't count towards air quality standards and violations. And that's important because like as much nuisance as a prescribed burn to thin out a forest and prevent a bigger fire causes, the nuisance of a large fire that burns down the whole forest and many of the surrounding towns is much worse.

1:36:05Daniel Palken: So a very good climate and forest adaptation policy made it in here. There's a Brownfields revitalization policy that came out of a bipartisan vote in the House ENC committee. There's just a number of things kind of speckled throughout the bill. But I think we've at this point hit on pretty much all the big ones. They expanded the geothermal cadets slightly. There's a lot of small bits and bobs. Okay. Let's wrap up then with a few procedural and political economy considerations. One thing I wanted to ask you is, you and Arnold Ventures are backers of this bill. You're in favor of the bill. But as you've noted, there are some bitter pills in here.

1:36:43I'm curious what your least favorite is. What objections do people have that you think have the most substantive merit? What bothers you in here?

1:36:53Daniel Palken: Yeah. I mean, it's a 490-page bill. I will be the first to say there are provisions in this bill that I would not have written if it were me. And I think if you had them in isolation, I would be recommending that people vote against. But when balanced as part of a big deal, I think are totally fair things to trade in a package this comprehensive. So one that comes to mind, like, you know, you asked what is the one that you like least? I would say the changes to Section 401 of the Clean Water Act, they basically say that states need to show their work on all of the conditions that they impose on projects.

1:37:26Daniel Palken: They need to show that by clear and convincing evidence that the conditions they're imposing are the least burdensome in order to attain the water quality standards. And I think that to be clear, that provision has a real use case. Sometimes states do impose conditions that are too burdensome or they're too unrelated to water quality well outside as well as within the energy space. A lot of the time, those states are imposing fairly routine conditions, unlike if a certain endangered species of turtle comes within 50 feet of your dredging operation in the Mississippi River, you have to stop construction until it goes somewhere else.

1:38:00Daniel Palken: Okay, fair enough. Can a state justify that as the least burdensome condition? I think generally, yes, because there's an applicable law that they're going to have to comply with. And like a court isn't going to second guess them on should it have been 50 feet or 43 feet or something. But it's going to kind of have the perverse effect of creating more, not less paperwork in a permitting bill that is otherwise designed to do more. And it's going to on the margins tax state capacity and probably result in a deterrence, you know, on the margins again to imposing certain conditions that we would all agree should be imposed and make sense.

1:38:34Daniel Palken: If it were me, I really don't like the way that provision is written. I would have done it differently. On the other hand, what I will say is that once an agency does that once, once it does the turtle provision and condition the first time and justifies it, and if it ever gets legally tested once it passes, they will be able to copy and paste the text into different applications that look similar enough, I think. So it's not like you're creating tons and tons of work that doesn't get easier over time, but it is a negative provision. I think it may have on the margins some bad effects on water quality, and it will certainly have some bad effects on state state capacity.

1:39:10Daniel Palken: And so that's one I would take out if it were up to me. What's your number two? Let's see. I think with the ESA provision, there's a thing that says that the developer can opt not to go the state route if they want to, even when a state has demonstrated that it has the qualifications to take over. Now, I think once a state is habituated to that, as with the simultaneous processing and the FERC backstop, I think that most developers will choose to go with the state and not kind of spurn them and get on their bad side. But I would say that if you're going to do it, you know, and the state has proven that it's doing it, just go with the state and don't have a bifurcated system where occasionally the federal government is traversing into a single state.

1:39:50Daniel Palken: You know, again, in the scheme of this much larger bill that has a lot of positives, that's a negative that I'm very willing to live with. But there are a number like those that I view as downsides in a vacuum. Okay. One question here is, and I guess this is another two-parter, which I sort of meant to get at earlier at the beginning, but talking now, I'm sort of curious whether the landscape of support and opposition played out roughly like you thought it would, or whether anything has surprised you, like the intensity of some of the green opposition surprising you. And then the second part of that question is, do you think this manager's amendment, these changes that we've been discussing, are going to materially change the position of any particular faction?

1:40:38Like, do you think this will do the work of scaring out more votes?

1:40:43Daniel Palken: Yeah. I mean, I think we've already seen the manager's shift positions. You know, I mentioned Evergreen earlier, which had put out a directionally nice statement, but had stopped short of endorsing the bill. The second they analyzed the managers and felt comfortable with it, they came out and said, we support it. That was a big enviro group. Jennifer Granholm today, Josh Siegel reported, has an op-ed in support of the bill that she came out with citing improvements to the managers. So some big figures have come out, many more in addition, including some of those tribal voices that are the kind of minority in that community that are nevertheless in the support of camp.

1:41:16Daniel Palken: I think that was in large part because they were seeing the movement and the negotiations towards fixes there. So a lot of the stakeholder politics has gotten more favorable, especially for Democrats, but also for Republicans, because as we talked about earlier, the deft way they did some of those transmission reforms bought in the utilities. They made that fix for collective bargaining, you mentioned, and local prevailing wage rates for the power marketing administrations that got IBEW there. Trump, don't forget Trump. Don't forget Trump. Yeah. I mean, you know, that's a big X factor, right? He came out and endorsed it, which you got to wonder, like, what did that mean?

1:41:51I can't imagine that he cares or is following the details particularly closely. So, like, just reading the tea leaves, like, what does it mean that he came out at this moment to endorse it? It almost seems a little rat fucky to me. Maybe I'm just too paranoid about Trump at this point. But, like, what does it mean that he came out at this moment to support it?

1:42:13Daniel Palken: I think that one thing, and you can see this by just reading his truth, like by what text takes up the most space in his brain is often the text that takes up the most space in the social media post. The rate payer protection clause, right? Trump almost never talks about energy compared to certain other topics. And when he does, it's rate payer protection. We're going to make him pay their fair share. He has this pledge. Credit for that. Yeah. Let the guy have credit. If that's the price of passing this, you know, the ratepayer, he did put forward an ambitious ratepayer protection pledge, but it didn't have an implementation.

1:42:45Daniel Palken: And this bill is in many ways making sure that data centers are paying their fair share. And like, if that's the thing that Trump wants to hang his hat on, I am very happy about that because I agree with him on the importance of those provisions. And I think the way he understands the bill is that is, and it is one of the most important provisions in it. It is also very important. You need this bill to be signed under Trump. You know, previously, the White House is like an entity had taken a position that we support it, but Trump had made no pronouncements. And we have seen in the past the White House take a position and Trump come out and say, what are you talking about?

1:43:16Daniel Palken: I disagree. You know, change of position. Also, just because Trump's supported doesn't mean he can't change his mind tomorrow. Like, that's a real risk. Yes, I know. Let's just put on record here that him saying he supports it is worth a fart in the wind. Like, who knows? But this is a good thing for the chance of passage. You have to have the president support a bill in order to sign it into law unless you have a veto-proof majority, which we're not going to have on this one. What do you think about the crude heuristic that a lot of Greens are applying to this, which is just saying, look, if Trump supports this and oil and gas companies support this and big mean hyperscalers support this, they're not dumb.

1:43:52They must know something. They must know that it's good for them. Why should we support something that they support?

1:43:56Daniel Palken: With the caveat that I don't think any hyperscalers have come out in support for the kind of reasons we've discussed around it. I think the politics of counter indicators are, first of all, a two edged sword, right? The same groups that say that were all too happy to side with, you know, Kevin McCarthy and the Republicans when they were, you know, in union opposing the Manchin-Schumer permitting bill in 2022. and I didn't hear the complaints of, oh, you know, I'm on Kevin McCarthy or Mitch McConnell's side. I must be wrong. You know, let me flip to whatever it is they're not doing. People do apply this heuristic somewhat selectively.

1:44:31Let's just say.

1:44:32Daniel Palken: And people on both sides do this, right? I'm sure I have been guilty of this. Why not say intersectionality requires us to stand by our union brothers and sisters? Why shouldn't we support what unions support? Exactly. And like we live in a country of 300 million people. There's two policy positions, three, you know, support, oppose or neutral to take on a bill. There are going to be people who you don't like, who have your aggregate position on the proposal for reasons that are not your own. Maybe sometimes you agree with them on things like ratepayer protection, but maybe sometimes you disagree.

1:45:04Daniel Palken: And as we talked about previously, the core thesis of this bill is a bet. It is the Democrats believe that renewable energy will win on a level open playing field, and the Republicans believe that fossil energy will win. And as disconcerting as that bet may be to some people, it is better than any conceivable alternative that we could imagine for our politicians, given that they disagree so fundamentally on energy in the first place. We want them truly believing in their technology and saying, I want the country to prosper with my technologies. But if it can't prosper with my technologies, I'm not going to flip the whole board over and stop all of your technologies.

1:45:37Daniel Palken: It come what may in terms of political retribution of the voters and high prices, et cetera, et cetera. Okay, so there's going to be a cloture vote today. So if that fails, this whole thing will be dead in the water and this whole podcast will be pointless. And I apologize to everyone who listened to all two hours of it. If it gets through cloture today, then there will be a series probably of other votes. but do you think what's the house going to do? I'm wondering whether the substantive changes are done and we're just about voting now or is there a chance that if it like goes over to the house there's going to be another round of substantive changes?

1:46:21We don't have a lot of time here in the lame duck to mess around. So like what's the process from here forward?

1:46:28Daniel Palken: They're voting to advance. This sounds like something like Treebeard would say, you know, and it's like we're just done saying good morning that if it passes, then there's kind of three pathways in the House. There's the House could pass it by a rule. Jeffries has said that he's not just going to rubber stamp what he gets from the Senate. What does that mean? How seriously should we take that? We should absolutely take what the incoming, you know, presumptive speaker, current minority leader says seriously. When he said that quote, you know, it got reported as Jeffries opposes. And if you look at the underlying statement, it wasn't nearly that in my reading that maybe he meant to oppose.

1:47:01Daniel Palken: But going on his words, he was taking issue with the current bill and saying that he needed to see improvements, and it was before the managers. And I think undoubtedly, you know, so many of those bills we were talking about that were added de novo to this were bills that were straight out of the House that were bipartisan, or some of them were actually Democrat only, his members supported. And in addition, you saw these meaningful movements on the two biggest areas of concern that his members had raised, Democratic stakeholders had raised, of certainty and tribes. The question is, will it be enough for Jeffries?

1:47:33Daniel Palken: He doesn't get to control what comes to the floor necessarily. So if there's enough other members, you have members all across the Democratic caucus. Remember Mike Johnson? Yeah. He's still there, I think. Yeah. Like I said, Sharice Davids, Native American of Kansas, you know, Democrat has expressed support for moving forward on permitting. You have Nikki Budzinski, who's the incoming chair of the New Dems, who has been very enthusiastic about the bill. She's very strong ties with labor. You have Scott Peters, who's been a longtime champion, Mark Vesey from Texas. A lot of these frontliners who live in the districts where they are really in a knife fight for their seats every two years around bread and butter issues of affordability are saying, this is really important.

1:48:11Daniel Palken: We want to move this. And so even without Jeffries, there's always an actual chance that you have a big enough faction of Democrats. But barring either of those, then you would have to do what's called a rule in the House where Democrats, even if they support a bill as a general rule, do not vote for Republicans' rules. There have been a few exceptions to this where like Jared Golden and Marie Gluce and Camp Perez have voted for Republican rules. But as like a matter of House practice, one side doesn't generally vote for the other's rules. And what that means is you would have to really limit Republican defections in order to move this.

1:48:45Daniel Palken: And the likely source of defections is both you could have people oppose it because they don't like it, or you could have people not show up because like a hundred Republican members just lost their seats and might be mad at the president for like how the election went. And might not want to show up just to pass a Democratic bill that's basically going to redound to Democrats' benefit. Right. I want to say this bill, I think, redounds to the country's benefit. I think there's a lot of reasons for Republicans to like this bill that are good, legitimate reasons that this is a positive sum game, not a zero sum contest.

1:49:15Daniel Palken: But there's a lot of challenges to the Republican only pathway or near Republican only, but it's not impossible. And then there's the third possibility of could you just attach it to something bigger? The two big things are the NDAA or more likely the spending bill, which is due up to government funding is set to expire on December 11th. And so there's always the chance you could attach it to a continuing resolution or some funding vehicle and move it that way. And so there's a lot of different options in the House. No one of them looks like overwhelmingly like, yes, that one, let's do it. It's going to work.

1:49:46Daniel Palken: A lot depends on, you know, first of all, the threshold question of does it pass the Senate? There's not really a ballgame if it doesn't. But then the question of like, how strong is the showing in the Senate? And there is a question of like, will the bill take on further amendments? I am pretty skeptical that given how much movement there was from Republicans, I think they really did calibrate to we just lost this election. Let's make some of these big changes that we're hearing from Democrats, knowing that they're going to be a higher bar to clear there. What we've been hearing from the Republicans is we're not making substantive moves anymore.

1:50:17Daniel Palken: You know, Democrats can pressure test that at their own risk. But I think there is a real risk that if you try to go further, the rug will just be pulled. And given how little legislative time there is, and how many committee chairs and everything turn over in the next Congress, you know, my view is that Congress should evaluate this bill as it stands in the new manager's amendment. And people should vote up or down based on how they see the negatives. And, you know, my view is the positives do outweigh the negatives. And we should be honest that it's a big bill. It's complicated. There are some negatives to balance against the positives.

1:50:48So if it does die, and I really think like if there's one thing I've learned following politics for 25 years now in the U.S., it is that things die. That is the default outcome. It is very, very difficult to shepherd something all the way through passage. Learned that again and again. If it does die, do you think, like, does it just evaporate in a puff of smoke and the next Congress is starting from ground zero? Do you think there's a framework here that will survive? Do you think there are pieces that will survive? Or, you know, if you start again, are you just starting from scratch?

1:51:35Daniel Palken: So I think you're starting from scratch in the sense that the political environment is shattered. And then going into the next Congress, you have new chairs and ranking members of one or the other or both on almost all of the relevant committees of jurisdiction, like Senator Whitehouse and Senator Lee and an interesting twist of fate will be joining each other likely on the Judiciary Committee. So, you know, maybe they've become good friends, maybe not. I don't know. But like they won't be rid of each other. You'll have Dave McCormick probably and you'll have Jeff Merkley or Ed Markey possibly on the EPW committee in McCormick, sorry, on the ENR committee.

1:52:09Daniel Palken: And then in the House, you'll have Jared Huffman taking over as chair, Frank Pallone taking over as chair. Westerman is termed out and he's been a big rallier and champion on the Republican side that has marshaled a lot of the support. The politics is gone. And frankly, I just think that the Venn diagrams don't overlap. White House and Heinrich are people who, like me, I think, believe that clean energy standing on its own two feet will fight and that the moral arc of the universe will bend to them, you know, in the short, medium and long run. They're in the camp of let's take this bet of permitting reform.

1:52:43Daniel Palken: Some of the new folks that are coming in, I think it's safe to say they might not say this during the debate around should we postpone and let us renegotiate. I am sure they mean in good faith to try to negotiate. But I think the gap between them and where Donald Trump is and where the Republican senators are is too large. As you say, the default expectation of people is that any given issue will not pass in any given Congress. And so like, even if we knew nothing about all the negotiators and nothing about the politics and nothing about the substance of the bill, your prior should be 10 to one higher than any given topic, including permitting reform, especially kind of starting from a totally new entry point to negotiations, will not be able to pass in any given two years.

1:53:25Daniel Palken: And so that would be sad to me because I think that this bill, we have always on our shows together, masochistic listeners will know, talked very exclusively about mostly the clean energy and kind of puts and takes on the environment, which as is appropriate for this show. This bill also has so many other important things it is doing for the nation's economy, for affordability, for national security, for our geopolitical footing, for reliability and security. You know, part of the reason we at Arnold Ventures want to see it pass is because we care about all of those things in tandem. Yeah. And I'll just reiterate, too, because one take on this from some of the green folks confused me, which is that they point out, as we talked about, there's a lot of different modeling, a lot of different assumptions.

1:54:10Very difficult to predict how this is going to point out. But, you know, they point at like rhodium. They're like, oh, it's like drops emissions by four percent. That's lame. That's horrible. That's inadequate as a climate bill. Yeah.

1:54:24Daniel Palken: Far from just climate rate, any other infrastructure, physical world thing that future Democratic administrations, and again, you know, the party that this will most benefit is probably the one that gets seated in 2029. And all of our priors should be updated that that is more likely than not at this point to be a Democrat and more likely than before to have a governing majority. Suppose a Democratic administration wants to do a lot of innovative things around multimodal transportation infrastructure and not just fund highway expansions. What was it, the National Transit Association or whatever?

1:54:54I forget the exact name, but they just came out and endorsed it.

1:54:58Daniel Palken: Yeah, a number of the transportation groups have come out. Stephanie Pollack, who was a big Biden official, wrote a really good op-ed. We'll link that in the show notes. Previous Volt's guest, Stephanie Pollack. Yep. Stephanie's amazing. She wrote a good piece on how the reforms are actually going to probably asymmetrically advantage the types of projects that are less familiar to DOT and their NEPA process, which tend to be the ones around things like bike lanes and public transportation projects and things that high speed rail has been a disgrace in this country. It's not that the technology doesn't work.

1:55:30Daniel Palken: You can look at it in Japan or Europe or China. The trains move, but they don't get built. The rail doesn't get built in the U.S. That is not just a federal permitting problem. It is also states. People will often say, well, why are we doing federal permitting? You know, when there are also state and local problems. Go talk to state and local policymakers. The first thing you'll hear is, well, why would we fix our problems when the federal government makes it so hard to permit? You know, one nice effect of this bill is I think it will take away the excuse from state and locals that like, well, we shouldn't do anything because the feds.

1:56:01Daniel Palken: If you are a democratic administration, that whether it's broadband or housing or transportation or energy or anything has an agenda that relates to the physical world and the prices people pay for things, then you should care about setting up an environment where government can function intelligently. and there are still good checks on government against doing things that are adverse or unintended. And what I like about the manager's amendment to this bill is it corrects a lot of the hypotheticals and legitimate worry cases that people had about the original draft while keeping it off and strengthening the things in the original draft that people like me weren't our fans of.

1:56:39Yeah. And I'll just say as a final political note, maybe this is implicit and everything, but just to draw it out, is like there's a lot of just free-floating anger and discontent in the world, online, among voters, and there's a lot of just sort of flailing back and forth, punishing incumbents over and over again. The only hope of forestalling that effect of actually getting some approval of DIMMs in office once they take power is things happening, visibly happening. Things getting passed, things getting built, prices coming down, only visible things happening have any chance of saving Dems bacon with their new power that they're getting.

1:57:26And this bill clears the way physically, as you say, in the physical world, for things to start happening, for things to start getting built visibly. So I just think

1:57:38Daniel Palken: Politically, that's got to be top of mind. That's front and center. Absolutely. All right. We did it again. This is fascinating. You know, I guess we'll know in how long is the lame duck? We're talking weeks now, right? It goes to the end of the year, right? I mean, like they try to go out a session for Christmas and that's usually the motivator. You never know if they're going to be there until like December 30th. That happens a lot of years, especially for NDAA. So we'll know in the next couple of months what the fate of this is. But thanks for coming on and walking us through some very complex and subtle changes in this bill.

1:58:12And let's keep our fingers crossed.

1:58:14Daniel Palken: Thanks for having me. I know our friends and loved ones are wondering what's become of us at this point. We should probably go announce that we're still alive and safe. But it's been a pleasure being locked in this room with you, Dave. All right. Thanks, Daniel. Bye. Thanks, everybody. you've been listening to Volts founded and hosted by me David Roberts produced by Nate Peavy and supported entirely through the generosity of listeners like you if you have 10 seconds to spare please leave a rating or review on your favorite podcast app it really helps other people find the show see you next time