Welcome back to 535. Very excited to kick off, let's say, this new season, fall season of 535 with Senator Alan Armstrong. You made your way to the House side. That is very impressive [laughter] first and foremost. So, congrats. You've only been in session, well, not in session, but you've only been in office for just a couple of months. And you come in as a former CEO, oil and gas, and your main focus is permitting reform. I mean, we were just discussing this is an issue that has been debated both Republican and Democrats. When we ask them what do they want to tackle in the new Congress, they say permitting reform, yet there hasn't been much action. Um, tell us what you are thinking about, how you're informing your colleagues about how to approach this issue realistically and quickly.
Yeah. Well, I've been, you know, now here since the I think March 22nd or something like that. So, um, and I came in with a very clear focus on permitting reform. In fact, when Governor Stitt asked me if I would do this, before I answered that, I called around and asked some people on both sides of the aisle that I knew, hey, do you really think it's possible that we could get something done on permitting reform? Because if not, I'm probably not the right person for the job. And the answer was, well, there's, you know, better than 10% chance anyway. So I always like a good problem and a good challenge and so this has been a great opportunity to go after that. But I think the, you know, the thing that a lot of people miss is the connection between permitting reform, which is not a very popular topic. You know, like when I get notes from my sisters about things, it's all like, well, what about daylight saving time?
And so, it's not these big, heavy, difficult issues that most of the public really is fairly blind to. They and they certainly don't appreciate what it means to them in terms of affordability of energy at their homes and the prosperity of our country. But I will say on both sides of the aisle, people have seen how long it takes to get a critical mine built, how long it takes to get a transmission line built in areas where we have excess renewable power like New Mexico solar and transmission lines into the markets to the west of them. So people are finally starting to realize on both sides of the aisle like we have got to make it easier to get things built here in our country and we can't have years and years and years of litigation because when we do it's not actually, you know, a lot of people think, well, duh, you were a pipeline executive and so you want to come talk about permitting reform. Actually, the incumbent big companies like the company that I was the CEO for, this has been a bounty to make it difficult to build when you already own a lot of the critical infrastructure. It just makes your infrastructure more and more valuable. But I think those of us in the industry and myself, you know, I started as an engineer and started off in the business of constructing projects and I've certainly realized that long-term our country is not going to be the great country that we've all enjoyed because of the building that went on in the generation prior to us and all the infrastructure they built. We have another round of big infrastructure that needs to be built here to support things like AI and modern manufacturing. And if we can't get it built here, we will fall behind. We, you know, I think it's...
Can I jump in and ask you about that though? Um, because obviously you bring this very unique perspective as a CEO of an oil and gas company and when you came here, I'm curious how you explain the severity or the big or smallness of this issue to senators. So I think when you're right, people, you say permitting reform and people are like, what does that mean? Like how big of a problem is the permitting process in the big picture of American energy production?
It is, you know, and it's not just, it's not one form of energy. It's everything. It's renewables not being able to get connected into markets that need that power. It's pipelines not being able to displace fuel oil and coal which is so much more expensive and so much more emissions. There are mines that we desperately need here in the US to be able to continue to not have to import it from sources that, you know, are not so friendly to us. So there are so many instances and to answer your question the good news is both sides of the aisle have seen it.
Yeah. And if you think about the pendulum that swung on the prior administration, and I actually was on the infrastructure council for President Biden's infrastructure council. Um, but if you think about how the pendulum has swung between we're going to stop everything fossil fuel to now we're going to stop anything offshore wind and wind and solar. We can't continue to really be a great country if the pendulum constantly swings as to and trying to pick which energy source we're going to use. The focus of permitting reform should not be to try to select what energy source we're going to be. It should make it simpler and with great confidence in being able to get a permit if you go through the process today. If you think about a small company today or even an upstart company trying to bring new infrastructure on or new innovation on and they go to their lenders and say, well, we have this, you know, permit we have to get. We may or may not get it after we spend $200 or $300 million. We may or may not get the permit. That is a no-go. And so that is really what drives prices up is that we're destroying competition for building large scale infrastructure in our country because we're leaving it to the very few that can afford to do it. So, it's ironic to me that the NGOs that stand in the way of permitting reform actually are condemning a lot of their own opportunities to expand renewable power here in the US because we can't build the critical transmission infrastructure.
So, what exactly does your bill do? How does it fix the problem?
Yeah. So it is, first of all we came in and we said listen, let's work to get the industry, all industries to speak with one voice about this and so we went out and interviewed the transmission, the renewables, we went out and interviewed people about what is it you really need, what do you want. And so the bill takes on things like judicial reform because one of the primary things that people can't afford is to get caught up in a work. A lot of times, even after a permit's been issued, a certificate will be pulled after a pipeline or a transmission line is up and running. There's actually many cases where you thought you were done. I personally sat in a situation where we had a billion dollar pipeline that we had spent four and a half years getting to the permit, getting the permit done. Team did a fantastic job on it. Got the permit. It was up and running for 9 months and a court came in and vacated a FERC certificate. So nothing the company had done wrong. The company went through all the processes, everything that was required of them to get that and it spent a billion dollars and a court came back and vacated a certificate. So you think about how many companies can't afford to have that circumstance and the risk of that. People like, I remember going back to my boardroom and we had another project we were approving. Are you serious? Like why in the world would we approve a project again after certificates pulled and thank goodness we were able to win that case? Because we had done all the right things and things were on our side. But importantly it was up and running and at a 90% load factor and had they actually shut that project down there would have been a lot of people in the northeast that would have been without heat and power that winter. So, thank goodness, you know, the critical nature of that came through. But these are not, nobody is asking for, hey, let's lower the environmental protections. That is not what any of these bills are about. They're simply about bringing certainty and a set of standards that says, okay, for instance, the Clean Water Act, the 301, the 302, the 303, which are standards that are federal standards for the impact that you can have on water quality for a project. Today, a state is not bound by those. A state can come up with whatever rules they want to on the fly. And so, and if you have a pipeline that's going through multiple states, and a state says, well, what am I getting out of this? And it becomes popular to stop it because the NGOs come in and want to have something to fight about. And so, they make it a politically popular issue to stop. And so there's no standards then by which that project to be judged. So, it's completely arbitrary as to whether a state's going to issue you the 401 certificate. So there's obviously a number of layers under permitting reform and obviously a number of things that you want to address in this piece of legislation.
You're only here for a couple more weeks. I mean, you're frankly, we were sworn in. Exactly. That's the thing. It could be a powerful lame duck. I think Senate Majority Leader John Thune was asked what could potentially be done and he said permitting reform which frankly, honestly, I will say surprised some of us reporters because we know there's a number of things that could move but that wasn't necessarily something front of mind on the docket. There's some Democrats who've also said they're getting very close, I think, in this bipartisan group. The bipartisan conversations have been going on, they think that they just have a couple more things to figure out. Is your piece of legislation also part of this potentially bipartisan package that may soon emerge?
Yeah, we put our bill together after taking all this input from industry and we went to industry and said don't point fingers at politics and Congress not being able to get on the same page if you as an industry can't get on the same page. You are going to be much more powerful if you're speaking with one voice on these issues. And I think we've accomplished that. Our bill certainly is crafted in that spirit of trying to take into all industry consideration on the matter. And so I think that's very powerful and I think we've helped do that. My hope, I would love to see a bill come out of EPW this week that is strong and addresses a lot of these critical issues. And it's going to have to make it back through the House. It's going to have to make it through the White House and to get the White House support. And so I think everybody's kind of sitting on the edge of their chair right now. I am not in any way, shape or form. We put our bill out showing the CR trying to pull together all of the critical issues and importantly taking into consideration all the great work that had already been done in the House. And so that's, we had an op-ed we put out here a week or so ago with myself and Scott Peters put out saying listen, these are two guys that come at the world from very different angles but we both agree that we have got to address permitting reform and we have to address it in very clear and certain ways. So if it comes out as very fuzzed up language that doesn't address things like judicial reform for NEPA and Clean Water Act, it's going to be met with some pretty big resistance.
Are you aware of what those final points of tension, crossing the t's, dotting the i's, what that looks like? What do Democrats and Republicans still have to figure out on this front?
Well, I think, you know, all along transmission has been and exactly how you deal with federal authority over transmission. So if you think about it today, transmission siting gets done on a state-by-state basis for the most part and there were some requirements that the ISOs work together to talk about interconnection, but it hasn't been very effective. And so the transmission piece is difficult because a lot of the states would say and the big utilities would say, hey, we don't need any help from the feds. We got this and we certainly don't need the feds telling us what rates our customers are subject to. So that issue of being able to site transmission infrastructure on the one hand, but on the other hand, not giving the feds a lot of authority over the states on state utility rate making. That's a point of conflict that's going to require some very fine noodling. And I say that because I think you could get there in the Senate frankly, but it's going to have to make it back through the House and I think it would be met with some really big resistance if you tried to go too far with federal authority over rate making on transmission. So that's one item. The second item I think is a lot of the NGOs have pushed back really hard on judicial reform for things like the Clean Water Act.
