Good evening and welcome to our first 535 live event. I'm Susan Davis, formerly of NPR, and tonight we're talking about permitting reform and the road ahead. We're going to be talking to some of the key players in this debate, and we're going to start with Oklahoma Senator Alan Armstrong. Welcome. Welcome and thank you for being our first guest in this.
Yeah, glad to be here. Thank you.
I think you know you've joined the Senate just a couple of months ago, so you're new to the legislative process, but you are not new to this industry. And so I think it would be interesting to start by explaining sort of what the conversation is like about permitting reform inside the boardroom. And we should note before you came to the Senate, you were the CEO of a gas company.
Yeah, sure. Well, you know, first of all, I've now been here for now six months, so it seems like a long time. But it's been a really remarkable journey. Great staff that's been very focused on permitting reform. And so it's really been, you know, a great time to have an opportunity to contribute on this front. What this sounds like in a boardroom today is take Williams' journey on this. Williams just had the now third project in the Northeast have a certificate vacated by a court that was issued by a federal agency that had the juris—or a state agency that had the jurisdiction to issue it. Now what does that mean? That's a lot of like jargon. It means you spent a lot of money and you don't have the right to operate your facility any longer because your certificate that gave you the right to permit that, to construct it, has been vacated. So you tell me when you bring up the next project if you're the CEO to a board and you say, 'I got a great idea. Let's go build another one of those billion-dollar projects that we might have the certificate vacated on.'
And what's the timeline like on that? What do you—when you say that this is being vacated, is this months, years?
Yeah. So I mean this is spending, you know, like in the case of NEXUS, which is the latest project that Williams just had the certificate vacated on it. That project has been on the books for six years now, I think, and went through the EIS process, got stopped by Governor Cuomo once. Trump administration came in and said, 'Man, why in the world are you guys not building gas pipelines under these markets that desperately need gas and what can we do to help?' So they helped. New governor, Governor Hochul, Governor Hochul investigated, realized that what they were doing instead of a pipeline was trucking compressed natural gas or LNG. 250 trucks, 250 large semis loaded with LNG around the town to be able to keep gas supplies on. So we're not going to build a pipeline, we're just going to fake it that we don't really burn the gas and we're going to distribute it with trucks. And so she witnessed that. The local utility, National Grid, did a good job of demonstrating what was really going on, and then she got supportive of getting that pipeline built. And so but that was, you know, five years in the making to get to that point.
Everything goes ahead. FERC authorizes the permit. New York gives their 401 certificate. New Jersey gives their Clean Water Act 401 certificate. Construction starts. Construction's well into, you know, spending hundreds and hundreds of millions of dollars, probably close to a billion dollars, and the new—and the Third Circuit appeals court comes out and says, 'Never mind, that certificate that was issued to you by the state is no longer valid.'
Yeah. So, if you think about what that does to it—now I'm not asking for your sympathy for a big, you know, multi-billion-dollar company. I'm not begging for your sympathy for that corporation. But if you think that that's where the pain stops, you're dead wrong. The pain of that actually goes directly to the consumer.
Because it just means constrained supplies. And it means if you ever do get infrastructure built, don't think that all the other companies don't look at that and go, 'We're not going to go build infrastructure for a return that we used to think when it was a low-risk infrastructure. We're going to demand risk like an oil and gas company that's drilling risky wells would think about it because you don't know whether or not you're actually going to be able to put it in service or not.' So everybody wants to applaud that, yay, we stopped the big bad pipeline. And what they've really done is raise their utility bills once again by doing that.
So let's fast forward a couple months. You come to Washington. You give your inaugural speech in the Senate on permitting reform. And you could argue that right now seems like as good a time as there has ever been to get this issue done. There was even a little bit of news this week. It seems like this was the topic of conversation in the Senate lunch this week. What can you tell us about the state of play of those conversations with your colleagues?
Yeah. Well, you know, and certainly want to protect confidence here a bit, but I can give you a general understanding of it. Key is that people have begun to connect their higher utility bills with permitting reform. They are starting to understand that if you can't build a transmission line and connect renewable power into a market that needs it or you can't build a pipeline into a market, the less infrastructure you can build, the more constrained the supply are and the higher the price. People are finally getting that. People like myself have never been in the business of trying to communicate with the public about, well, permitting reform really means your utility bills go lower. I mean, it definitely—we should have named it something a lot better than permitting reform because that sounds really boring to people. But people are finally making that connection. Susan Collins this week came out and she's in a very tough and tight race and said that this is one of the most important things to her constituents is permitting reform. I ran up and gave her a big hug and told her she was my new favorite senator. Because it is that recognition that that is important for this to make it to the front on a leadership front. But I think that—that so that's really big progress. And it's putting it with a balance of a lot of other high priority items.
You know, to me, it is remarkable to me that college sports is a much more important issue to people than permitting reform. But it just says how it just has not been a popular issue. And so but those are the kind of balance that, you know, that's out there right now. The good news is that Leader Thune is hearing it loud and clear from a lot of the candidates that are in tight races that permitting reform is important. So that's key. The other thing though that I really want to applaud the broad sector of industry—I know Jason Grumet is here who's been a great ally on this—is that the cross sector of industry all the way from renewables to a gas pipeline and everything in between have been speaking with one voice about the importance of getting permitting reform done. That is the most important thing that has happened to permitting reform in my mind in many, many years. And so that's I think that's a difference-maker for us.
It seems like there has been a fair amount of bipartisan goodwill in the Senate on this one. What has the relationship been like with Congress and the White House on this? I know that the president has been critical certainly of wind projects. It's no secret there. How willing of a partner are they to say, 'Let's get this done before—maybe not before the election, but before the end of this conference?'
Yeah. I mean, I'm going to be careful about how I comment on this because, you know, there's a lot of work left to be done on this. But folks like Secretary Wright, Secretary Bergum, they understand how important it is that we get permitting reform done and done right. They are not going to go march into the Oval Office and argue for getting permitting done if people like myself can't say that this is really meaningful permitting reform and this really will change the game for all infrastructure. They're not looking forward to doing that. But I think they're, you know, they understand how important it is that we have durable long-term permitting reform done. And I think they're definitely up to the task if we can deliver a really meaningful bill.
What's your level of confidence? And I don't necessarily want you to speak for Democrats, but you certainly had conversations with them. And that one of the pressure points in this debate is that traditionally there has been more interest among Democrats for environmental protections. And that's one of the big issues here is that the environmental review process leads to these incredibly lengthy delays. Is there a way to get people on board who also strongly believe in protecting these environmental situations?
Great. Great question. There is nothing in any of the permitting reform bills that actually does anything to reduce environmental protection. So people have that perspective. That's not the case. Now, what it may do is it may take the tool away to have flagrant lawsuits against projects that drag them out for four, five years in lawsuit and eventually kill them because they're lawsuits that don't make any sense. So if by environmental protection you mean giving somebody the tool to be able to stop a project that they don't like for political reasons, then yes, I'm hoping that that's exactly what this bill does. But it in no way, shape, or form reduces the standards of environmental protections. Nobody's thinking that. Nobody's asking for that.
What about how much of the other pressure point here is federal versus state? Because my understanding is that somewhat of what this bill would do would streamline the process for projects that might have to run through multi-state jurisdictions. Pipelines are a great example of that.
Yes. And we kind of talked about this earlier this week when we chatted that that's maybe one of the trickier points that not a lot of states necessarily want to give up some of their own protections to the federal government. And I could see potentially governors in both parties trying to say, whoa, whoa, what are we trying to do here?
Yeah. No, I think—well first of all the National Governors Association, first led by Governor Stitt and he just stepped down from it, and now Wes Moore is the new president. Both of them have been very strong in their support. I've had a conversation with Governor Moore here as recently as a couple of weeks ago, offering to do anything that he and the governors' association can do to support this because they understand that if you're putting critical infrastructure at risk on a constant basis that you're adding to the utility bills. They understand that. They might politically take some other positions from time to time, but in general, they completely understand that if we can't have confidence in getting permits and being able to execute on those permits, that that is not a good thing for our states or for our country. So, but it is an issue. To be clear, what we are trying to do is require the states to comply with the broader process that everybody else complies with. And so if you think about an environmental impact statement, that process requires everybody to come together and say what is the best route that we can take here that'll do the least environmental damage with all the other concerns that exist—the landowners, the local community, the people protecting species, people protecting forest—all of those concerns. You know, everybody thinks their issue is the most important. And the process of the EIS is to actually come together and have folks like FERC oversee that process to say, okay, we'll referee this and we'll figure out the best route.
Today the states are not required to operate under that, and so they wait until that entire process is done and then they say, oh, you know what, for this particular reason we think you should move it over here. And if you agree to move it over there, you're back to the original EIS process all over again, which took four and a half years. And then you're trying to argue that even though you decided this was the best route overall, that the state—if you decide to take the state to court, the judge has to find today under judicial standards they have to find that it's arbitrary and capricious. In other words, that the state by requiring that route change was acting in an arbitrary and capricious manner. But they're only looking at it under the issue that the state was looking at it. They're not looking at these 40 other factors that were considered when you looked at the broad route. So, of course, if you have a general counsel of your DEQ that can't provide something that would say this wasn't arbitrary and capricious, you need a new general counsel. So that's just way too low of a standard that exists there underneath judicial review. So what we are trying to accomplish is requiring the states to play ball within that broader EIS process and not having that operate in its own universe. And it always causes a do-over, and by the time you get done you're like, okay, fine, we give—we didn't really—and a lot of times the customer that was relying on that to be an energy source, they can't sit around and wait forever either. So the contracts cancel and the project goes away.
What do you see as the most at stake here if this effort fails in terms of if you're trying to persuade someone to vote for it? How do you describe the stakes? And I think it could be anything from even the cost of your electric bill to questions of sort of national security and the tech race with China.
It certainly is. You know, I tell people all the time, I have three grandkids and that keeps my compass really clear on issues like this—that the things that we enjoy today, my generation has enjoyed, have been because we've been a nation of builders. We have gone out and we've built the best infrastructure in the world—was the best infrastructure in the world—and we are living off of that every day. The sweat and the hard work and the risk that the builders had in the 50s and the 70s that gave us what we have today. We no longer—if we decide we're not going to be a nation of builders, it's going to take a while for us to get choked out. But we will absolutely get choked out of being a world power if we continue that. But in the immediate term, I mean, this should be so simple to people. People ought to be wanting every bit of transmission line to get built that could possibly get built and every pipeline that could get built because what that means is more competition for transporting that product, which means lower prices to the consumer. So it's strange to me that that's hard for people to understand—that if you constrict the transportation, that the price of transportation goes through the roof and you end up with a scarce commodity in the demand areas. And so that's, you know, to me—but both it certainly in the long term is a huge national security issue, not just around AI but just in general, that we will have higher-cost energy and we won't be able to attract manufacturing here. I mean today, do you know that we do not produce in the US anymore? We do not produce any of the aluminum—military-grade aluminum here in the US anymore. We have to import that from other—now that's not a super complex material. But because our permitting processes are so difficult, we now have it produced somewhere else and we import it. That's just, you know, that's the tip of the iceberg, but it's exactly what happens if it becomes so difficult to build infrastructure here.
How much economic impact do you think is being constrained by not doing something like this? It seems—
There's a lot. They are—the number is—I—there are a lot of big estimates out there. They're so big I don't even like to use them because they just sound kind of gaudy, like trillion.
I mean they are well into the trillions. And but I'm not really surprised because I think about where the industry was when I started in the industry 40 years ago to where it is today. We don't even like—if somebody said, 'Hey, go build that pipeline.' You know, the actual—the Williams brothers built pipelines all the way from Houston all the way into New York, New Jersey during World War II. That entire length, which is now Texas Eastern Gas Pipeline. They built that pipeline in less than a year. Today, you can't even—can you imagine if you said, 'Hey, we're going to go build a pipeline'? People would first of all—people like, well, who's going to finance that? Because it's never going to get done because it's, you know, you can build a million feet of pipeline if you don't have the last foot, but the pipeline's worthless. And so I just think that, you know, we've been builders. We've shown that we can do it. But today, our ability to—like I don't—I'm not even sure if you told your engineering construction team today, 'Hey, go,' they would say like, 'Huh, we couldn't do that. There's no way we—' But technically, it's easy. It's not that today's equipment and construction techniques—it's actually not that hard to do that. It's just that people are so used to being twisted and contorted in a hundred different ways when you start a project that nobody can even fathom being cut loose to actually go build something.
I'm going to ask you a political question, although I know you're going to say, 'I'm not a politician.' And you're not because you're not even running in November. You have the joy of the freedom from running for re-election. So maybe I can bring some candor, but it's hard to separate an argument for legislation that would make it easier to build energy infrastructure in the country right now and separate that from the very real debate happening in communities across the country where people are saying, 'I don't want that built in my backyard.' Speaking specifically to AI data centers, I know it's more complicated than that. But you can also see a world where a politician might say, 'Senator Armstrong, I agree with you. You're right. This is good policy. I cannot vote for this right now because I don't want to go home and say so-and-so made it easier to build a data center in your backyard.' So I wonder how much of the political pressure you feel on this issue in this precise moment.
Yeah. Okay. Well, two positions to that and I can speak very freely to this. First of all, to the people that would say, 'Oh my god, AI is going to take over and kill us all,' I would say if you really believe that then you better not be standing in the way of the US being able to develop it and control it themselves because if you believe it's going to be that powerful and you think it's good for another nation to have that in their hands is absolutely—I mean that has got to be the scariest thing in the world. So my point is you can't be scared of that and say I'm just going to stick my head in the sand and say we shouldn't do anything. So I think that's a really a crazy approach if that's the issue. If the issue is, well, my utility bill is going to go higher—
—and they're going to consume all the water in the area, I would say that those are easy things to address. And I will get political on you now. The House passed a bill that would have protected ratepayers this week and I think it was 47 to three or something like that as a vote. I mean think about that in the House right now passed, went to the Senate, and the Dems—John Husted from Ohio tried to—you see that today on the Senate floor and the Democrats blocked that today. But this is exactly what we need to do. It's like it's not that we shouldn't be building this stuff. It's that it ought to come with the obligation that the data centers pay for their own power improvements and their own infrastructure. And for the most part, they are—the big hyperscalers, they know that already. They're not trying to—I mean, there are some third-party developers that are still trying to do that, but the big guys that, you know, know that their reputation is important, they're way past that. They know that they're going to pay for and not put any burden on the local ratepayers. So that's a political issue, but it's not a practical issue. That is an easy thing to solve. The water issue, you know, more and more technology is just closed-loop circulation. So fairly easy to absolve that issue. And if it is, hey, well, I don't want it, you know, in my backyard. My argument to people on that is okay. Okay. Well, especially in rural Oklahoma, have you looked around what we have left for industry here? We have antique shops and pot shops. That's kind of what you'd see when you drive through a rural town. I hate to be, you know, derogatory towards my own state, but—
I thought you were going to say hate to be derogatory towards pot, which would—
No, I don't have any problem being derogatory towards that. But that's what you see when you go, you know, through these old—and so the industries that used to be there, those towns desperately need ad valorem tax to support their school systems. And I think the data centers will get smarter about going and showing what they have to offer to multiple locations and saying, hey, if you want the jobs and you want the ad valorem tax, we're here for you, you've got to approve this and invite us in. We're not going to impose ourselves on you, but we do have a lot to offer. And I think that's a much smarter approach to getting the infrastructure. But to their defense, they have not been in the business of siting infrastructure, so they haven't appreciated that. The pipeline industry has gotten a lot better at understanding how to do that.
Yeah. I believe Senate Majority Leader John Thune said he's going to have a sense in the next couple of days whether something might be able to come together in the Senate. You are one of the senators that if this is going to pass, you need to be a yes. So, if they pull you into the room and say, 'Okay, what absolutely has to be in here?' Or the opposite, if we take this out, what loses your vote? What do you think, aside from the big pillars of the bills, is there anything in particular for you that you're like, 'This has to be in this legislation.'
Well, one, I want to make sure we honor the fact that we started this process saying this is going to be good for all energy sources. And so I don't want to see things carved out in a way that doesn't support an energy-neutral approach to this. So I think it's really important. I've asked people to stick together on that and so, you know, we need to honor that energy-source-neutral approach. Two, we need to make sure that we have clear standards around things like the Clean Water Act so that states don't just have an arbitrary process and are able to throw a monkey wrench in the process at the end of it. Third is judicial reform. We've got to make sure—I mean judicial reform is probably from my perspective one of the most important things to be dealt with because when you can after the fact pull a certificate from somebody after they followed all the laws, went through all the processes that were required of them, did everything they were supposed to do, and then a court tells an agency that they didn't do their job, but the person that's going to suffer is the corporation. That's got to get fixed. So because taking that risk out is really critical. And so, you know, I'd say that's some of the really key issues that have to be dealt with in there. And so that's, you know, Clean Water Act, judicial reform, and NEPA are really some of the more critical issues to be dealt with.
Just the brass-tacks question too. Let's say—let's be optimists. Let's say there's a framework for an agreement in the Senate next week. Obviously, this isn't going to happen before the election. The House is gone. It seems realistic that the lame duck is when anything could come together. Is that your understanding? And how much pressure do you think this Republican-controlled Congress feels to get this done on their watch?
Yeah, you know, I can't speak for the House leader and where they are. I will tell you that I think the House Democrats—there's a lot of moderate House Democrats that really want to see this get done. You know, Congressman Peters and myself put out an op-ed here a few weeks ago that spoke to the importance of getting this done. Folks like Josh Gottheimer, very interested. There's a lot of moderate Dems that really want to see this get done. And I think it's going to be upon me a little bit to make sure their voice is heard within the Senate that they're willing—that they are over there to support this. And so I think that's going to be, you know, one of the critical things is to make sure that the House Dems are speaking—that there's enough of them that want to see this done as well.
Senator, you've been very generous with your time, but I'd like to close sort of asking you about your experience here in Washington. You were sworn in in March, I believe, right? You will leave in January. You knew that coming in the door that this was a temporary assignment. I'm curious if you could just reflect a bit about what it's like to be a senator in those circumstances. And as someone who came from a lifetime of work in the business world, what about the business of Washington either surprised you or didn't surprise you?
Boy, that is such a long, long list.
I do keep a list—a hard list in handwriting on my credenza that, you know, I keep shut most of the time about the things—the most positive things and the most negative.
Well, I try to keep it balanced. You know, I would say—I always say that I am amazed at how many hardworking, dedicated, well-intended people operate within the Senate, particularly within the staff, within the support for the Senate. I mean, there's so much talent there. Like, if you took that talent and you said, 'Hey, you can take this talent, go run a company, you could go do anything you wanted to.' I mean, this is an amazing body of talent. What amazes me about that is how little gets done with all that talent.
Now, I know that's by design on the one hand, and that's the argument you always hear. But when some of the things that we're doing—like, you know, people will say, well, it's designed to make it hard to make laws. Well, it might be, but it shouldn't be that hard to improve on the law that exists. And so, you know, a lot of—so that's one of the things that has really struck me. You know, the staff I've gotten to work with has been amazing. They're dedicated. They're excited about what they're doing and have been terrific support. You know, I would say also though, one of the things that's been very disappointing to me is how far down on the list of priorities when people are debating this, how far down on the list it is that we actually get to what's best for the American people long term. And I think—I mean that's—people tell me all the time, well, duh, because you don't have to run for an election. It's easy to have that point of view. And I said, 'Yeah, I get that, but I don't understand what's so—if you're going to take the position of being a senator for six years, it's not like it's a great paying job or something. So I don't understand why people wouldn't say the most important thing I can do while I'm here is to make the country better than when I got here. And let that be their guiding light, not whether or not they're going to get reelected or not.' It just feels very selfish to me that people think that their argument is, well, I won't get reelected. Well, okay. Well, there's other people, you know, that it's not that important that you're that person. What's important is that we have people that put the country first. And so that's, you know, something I really—and don't get me wrong, there's some great people out there. The Oklahoma delegation getting to work with James Lankford is, you know, fantastic. So there's some great people out there doing, you know, doing the work that they feel like they're called to do, but it's surprising to me how many times it becomes about the immediate issue instead of what's great for our country long term. And you would think the Senate would be the place—
—that the focus would be on the long term.
Well, there used to be this piece of sort of conventional wisdom you would always hear that they would tell lawmakers if you cared about an issue, it would take 10 years to move the ball on it. So, if you can do it in 10 months, they might have to rename the role. Senator Armstrong, thank you so much for doing this. It was a pleasure to talk to you.
Yeah, thank you very much.
Welcome back to our 535 live event on the permitting reform debate underway right now in Washington. I'm joined by a very distinguished panel of guests who are experts on this very issue. Starting at my left, this is Jason Gay. He's the chief executive officer of the American—
Clean Power Association. Amy Andrezac is the president and CEO of the Interstate Natural Gas Association of America, and Todd Snitler is the president and CEO of the Electric Power Supply Association. Welcome to all three of you.
I always like to say first and foremost, this is a conversation. So I might direct a question at one of you, but if you want to jump in or have a point you'd like to make, please feel free. And I want to start with something that the senator had alluded to, in which he said that the message from Congress to industry was, if you want to get something done on this issue, you all need to get on the same page. So how big of an effort, or what was it like to get wind, gas, solar, electric all on the same page here?
I don't want to not take credit for our incredible achievements, but actually, extremely easy, right? I don't know whose reputation I'm undermining, but we're all kind of friends. And we have shared interests and shared trauma, right? We're all trying to build multi-billion dollar projects. Almost none of them can be built within a single political cycle. And we have all suffered the tragedy of having incredible amounts of investment basically wasted when the politics change and an ideological president decides that, you know, he is going to change the direction of American energy policy. And so I think the fact that none of us feel like we can make confident investments in this country is something that really brings us all together.
And Susan, I'll just add, you know, even though I obviously represent natural gas pipelines, when I talk about permitting reform, I often talk about it as permitting reform for all linear infrastructure, because as Jason said, you know, his term, shared trauma. We all have stories of the difficulties of building, and we are all building, for the most part, interstate projects where there's multiple levels of permitting that need to be addressed.
I think it's interesting in part because I think sometimes outside the Beltway, people would think that the gas industry might not like the renewables industry. And it's interesting that you're saying like this is not the case at all. Actually, you're much more all on the same page than people might think you are.
Well, I mean, from our perspective, the way the energy system is right now, renewables need natural gas for reliable backup. So we, you know, are hand in hand in many of these efforts to build out more energy infrastructure.
And I think as you look at the electrons that get added to the system, consumers are agnostic about where they come from.
And state policies matter and state decisions about resource mixes matter, but you have to be able to build whatever that infrastructure is. And then you actually have to be able to deliver the power from where it's being generated to where consumers need it. And that's transmission lines to move electrons long distances. That's gas pipelines to fuel natural gas-fired power facilities in order to make sure that you can generate the electrons that are needed. And so as we look at it, you have an awful lot in common. Every organization has a different perspective and priority. Ours is clearly the electricity side of things, but at the end of the day, you can't make a 40-year investment, as Jason noted, on a two or four-year election cycle. And so being able to look out long enough to spend those billions of dollars, as Senator Armstrong noted, is crucially important.
How big of a coalition effort has this been? When did it start? How long have you been working on this? Like, is this the culmination of years and years of effort, or is it really capitalizing on the past year or so in which I think permitting reform has kind of dominated the conversation?
