Shortly after the November elections, I interviewed Thomas Hochman from the Foundation for American Innovation — then policy manager, now Director of Infrastructure (congrats!) — about his wide-ranging work on permitting reform in the United States.
I’ve edited the transcript to make it easier to read and more clear written down. It’s not a verbatim record of our conversation — but that’s why there’s the video!
We covered:
The State Permitting Playbook, a guide covering 32 states and their environmental regulations, focusing on both state-specific and federally delegated laws.
An explanation of the function and impact of NEPA (National Environmental Policy Act) and state NEPAs on development.
The "Abundance Agenda" movement.
The Microsoft investment in Three Mile Island and nuclear power-purchasing agreements from AI-centered companies and the challenges of building nuclear in the United States.
State-level opportunities for permitting reform.
Syllabus:
Thomas Hochman’s own Green Tape Blog
Thomas has already expanded on many of the ideas in this interview since we spoke — highly recommend subscribing!
Transcript:
Aiden Buzzetti: Welcome to the Daring Greatly podcast. I'm Aiden Buzzetti, and today we're joined by FAI policy manager, Thomas Hochman, who will walk us through the plan to unleash American abundance. Thank you for joining me, Thomas. This is the first episode I'm recording, and I'll probably end up releasing it first. I'm really excited to talk about this topic.
You released a state permitting playbook yesterday?
Thomas Hochman: Yes.
Aiden Buzzetti: You've been working on it for a while now. We've talked about it on and off over the last couple of months. Walk me through the playbook. What's the goal behind it? Who are you really targeting?
Thomas Hochman: There are lots of people talking about permitting reform right now. It's become something of a sexy topic on the Hill. Over the last 50 years, we have all these environmental laws—typically passed in the late 1960s early 1970s—with good intentions, but some have really made it incredibly hard to build things, from major physical infrastructure like highways and roads to smaller things. If you're a small business owner with a small industrial facility, you're regulated under these environmental laws.
It's made it almost de facto illegal to build certain types of infrastructure projects in various parts of the country. There's a lot of energy from the center left now for the first time in a long time talking about this because they've realized these environmental laws make it hard for them to meet their climate goals by making it hard to build clean energy infrastructure. On the right of center, this has been a live issue for a long time. Since the early 2000s or even late 1990s, Richard Pombo, a Republican from California, organized this NEPA task force to look at how the National Environmental Policy Act was making it really hard to build things.
Most of the energy is focused at the federal level, partly because of how the center left has capitalized on this moment. But in reality, the vast majority of permitting and permitting reform opportunities are actually at the state level. 75% to 80% of federal permits are issued by the states. That's to say nothing of all the environmental laws passed at the state level, like state NEPAs and state endangered species acts. Yet there's been no attention given to the states.
Unlike in Congress where there are historically thin majorities and lots of gridlock, that's not a problem in a lot of states. There are lots of super majorities, particularly in red states which tend to be amenable to regulatory reform and cutting red tape. So not only is there opportunity in terms of policy fixes, but there's also opportunity in terms of getting wins on the board, actually getting it done in the next couple of years.
That's why I wrote this state permitting playbook. It looks at 32 states—every state with a red or purple legislature—and tracks four environmental laws. Two are state-originating laws: state NEPAs and state endangered species acts. Two are federal laws delegated to the states: the Clean Air Act and Clean Water Act. We mix recommendations for addition and subtraction. For subtraction, those would be state-specific laws like state NEPAs where the state can just cut the law entirely if they wanted to, and we tend to recommend pretty aggressive reforms.
For things like the Clean Air Act and Clean Water Act, those are federal laws. You can't just ignore them. It's about addition—designing new, flexible ways of meeting those standards that are better than the more procedural approach typically handed to states. We're really excited about this. All the folks at the state level who we've talked to so far have been looking for something like this, and I think it's a way to get wins on the board.
Aiden Buzzetti: You said that the states authorize or issue these permits even if they have a basis in federal legislation. I assume there's a fair amount of workarounds on the state level for implementing or not implementing certain federal policies. When we've talked about this before, it's primarily the flexible permits—or the PALs—that we'll get to, and the state NEPA. What is the problem with state NEPAs? I know on the federal level we may or may not see some changes, but why is a state NEPA so divisive or such a bad implementation?
Thomas Hochman: It's worth explaining how NEPA works first because state NEPAs are modeled off that law. NEPA is set off by any major federal action, which has come to mean any federal action.
If there's a project that happens on federal land, that's a federal action. If there's a project that requires a permit from a federal agency, that's a federal action. If you get money from the federal government, that's a federal action. NEPA is a procedural law. What it says is before a project can move forward, it has to complete some form of environmental review describing the environmental impacts. It doesn't say you can't have environmental impacts. It doesn't say you need to keep your pollution below this level or keep your land use impact below this level—it just says you need to describe what your impact will be.
But this description is incredibly onerous. Environmental impact statements, which is one level of NEPA review, take an average of four and a half years. The even larger problem is that NEPA allows for private right of action, citizen lawsuits. It's been used as a tool by obstructionists to block projects. The Sierra Club and the Center for Biological Diversity, if they don't like the impact a project will have, will just sue repeatedly until the project runs out of funds to move forward.
State NEPAs function in much the same way. The only difference, in principle at least, is that state NEPAs are kicked off by a major state action rather than a major federal action—if there's state land or state funds or the issuance of a state permit.
State to state it looks different. In a state like Montana or California or New York, it really does look very similar to federal NEPA. It's really expansive, kicked off by basically any state action, and it makes it incredibly hard to build everything from mines to roads to energy infrastructure.
Aiden Buzzetti: Are state NEPAs primarily focused in more blue states or states that have overwhelmingly democratic control in their legislature and executive offices?
Thomas Hochman: It skews slightly democratic, but it's not as even of a split or as clear of a split as you might expect. Montana has quite a restrictive state NEPA. Minnesota, which has a split legislature, has a really bad state NEPA. Wisconsin, North Carolina, Virginia have a NEPA equivalent. These are all states which are either purple or red. California, New York, and Maryland all have some equivalent as well, but you can't really tell a clear political story here.
Aiden Buzzetti: So it's not necessarily red versus blue. There is a broader ideological component at play here. Do these legislatures realize that these laws are negatively affecting development in their states?
Thomas Hochman: It varies state to state. There is more attention being paid to these laws than there has been in a long time. There are also unique state-level problems or barriers that make it hard to move on this. In some states, even in a deep red state, the environmental lobby might have more funds to throw around than any other interest group. In Montana, there's a line in the state constitution and a progressive Supreme Court at the state level which has made it incredibly hard to do anything on Montana state NEPA grounds. In fact, a number of the most aggressive efforts have failed in the Montana court. It varies, but there is growing awareness. You've seen some good reforms happen in red states. North Carolina did one in 2015. Georgia did one in 2016. But there needs to be a lot more.
Aiden Buzzetti: So the goal for the playbook is what—30-something states that you've outlined with specific actions on what they should and shouldn't be looking at, going down to the DEQ level, the Department of Environmental Quality?
How would you recommend a legislator who pulls up the report and is interested in the topic—whatever state you want to pick—what should they be doing next after looking at your guidelines?
Thomas Hochman: I like to think of this as a menu for state legislators. States and every legislator have their own priorities. If you're in one state, you might be particularly worried about energy production. Utah, for example, has this new Operation Gigawatt plan, which means they want to double their energy production in a relatively short amount of time. So when they think about permitting reform, they think about it in the context of energy production.
Other states might be thinking about how to court data centers, particularly amidst AI growth and AI-driven load growth. The permitting options they look at are more targeted at that industry. It varies from state to state. Most legislators seem to be thinking along the lines of energy, but there's also a lot more you can do to make it easier for small business owners and smaller facilities.
Aiden Buzzetti: What industries do these laws impact or even the lack of real guidance on permits?
Thomas Hochman: Effectively everything. The Clean Air Act impacts every single industrial facility in the United States. The Clean Water Act is similar, though it's more around construction and things like municipal sewer systems. State NEPAs affect things that have some nexus with the state government, state endangered species acts similar to state NEPA with that trigger. Pretty much anything in a state economy has that nexus.
Aiden Buzzetti: Anything important.
Thomas Hochman: Right, or even unimportant.
Aiden Buzzetti: You also wrote an article recently in The New Atlantis about the "abundance agenda." It seems like the focus on permitting is, or the newer focus, maybe a consequence of people talking about it post-COVID years. Break down for me what the abundance agenda is, how it ties into the work you're doing, and why it's even showing up in the first place.
Thomas Hochman: The easiest way to describe the abundance agenda is to describe what it's in response to. It largely emerged out of the COVID years where suddenly we realized here in the US: we're the most powerful country in the world, the richest country in the world, and yet there are these very real supply chain constraints which means we're failing at some pretty basic things.
More than a year after COVID shut down the economy, we couldn't get rapid COVID tests. Meanwhile, countries in Europe were selling them for a dollar a pop at corner stores or giving them away for free. We couldn't get access to semiconductor chips, and people were hoarding toilet paper. There were all these problems that we didn't really feel acutely until COVID.
The abundance agenda was really just a group of people asking: why is it that we don't have these things that we took for granted? Where are the choke points, where are the failure points that are making it so that we don't have those things?
Derek Thompson wrote this article in The Atlantic which really kicked off the idea of the Abundance Agenda—that's where he coined the term. In his view, at least at the outset, it was meant to take from a number of different ideological positions. It was meant to take from liberalism and conservatism and libertarianism. As I'm sure we'll get into here, I think that's not how it ended up, and I think that's why I see there being some real issues with what the Abundance agenda looks like today.
Aiden Buzzetti: What are the political realities behind this broad movement? The permitting focus now crosses ideological lines for a variety of different reasons. But what does it look like in practice? In your article, you mentioned that Democrats have more of a deregulatory favoritism, and the Republicans skew towards a monocausal view of scarcity. What does that actually mean?
Thomas Hochman: Painting with broad strokes here, the abundance agenda says there are two levers you need to pull for technological progress. One is cutting red tape, making it easier to build things. The other is some level of public investment, government investment. They look at things like nuclear, which not only suffers from a Nuclear Regulatory Commission that has taken an overly burdensome and procedural view of regulation, but also requires lots of government involvement.
The most successful case of nuclear scale-up we've seen in the world is in France. They pushed that nuclear reactor design through one nationalized electric utility—it was a centralized plan to build nuclear. Nuclear is incredibly expensive, and one way you clamp down on nuclear costs is by standardizing designs. That's hard to do without some level of coordination and centralization. It's also difficult because the upfront capital costs are so high. It may pay itself off over a long lifespan, but it's really hard to secure that funding through just a pure free market approach.
So you need both, but here's the problem with deregulatory favoritism: The left has started to get used to the idea of talking about permitting reform, but they say "permitting reform to realize the benefits of the Inflation Reduction Act," "permitting reform to build clean energy," "permitting reform for housing." It's permitting reform not on principle, but for specific things that the left has decided are parts of their agenda.
Not only is that not something Republicans should necessarily take seriously if Democrats aren't willing to come to the table for a more serious, more expansive permitting reform package, but it also just doesn't work. Every time you decide you're willing to do permitting reform for one more thing, you have to build up the coalition on the left that supports that. As we've seen, half of the left, if not more, at least in Congress, isn't on board with permitting reform even though that will largely help their clean energy goals.
On the right, there is this built-in view that there shouldn't be government involvement in anything, but especially things like the energy sector and technology more broadly. As we've seen in the case of nuclear and historically when we were bringing lots of major technological developments to the commercial stage in the U.S., you need government involvement in the early stage for a lot of industries.
When I put out the piece, you had Democrats saying, "We should specifically deregulate for things that are good." And then the right said, "If we just got rid of the Nuclear Regulatory Commission, we wouldn't have to use government spending for nuclear." This is exactly my point—these two positions exist, but they don't really reflect material reality.
Aiden Buzzetti: It seems like the general Democratic, or to take the partisan lines out, the more modern American liberal perspective has been "we're going to carve out the things we like and leave everything else we don't like to rot." I'm more concerned with making things easier across the board. But they have their pet issues and they're worried about things like the climate and clean energy, so they zero in on those with tunnel vision.
And then for the Republicans, we've seen this before in policy issues. They just say less government equals good all the time; more government is always bad. Even though some private projects choose not to take government funding because there's all these strings and requirements, or they don't want to invest in certain federal lands or federal projects because of that.
Thomas Hochman: To give you one example, a huge amount of solar potential is on federal land. Pretty much the entirety of solar energy infrastructure that has been built has not been on federal land. Federal land is a NEPA trigger. This is not random that this is happening.
Aiden Buzzetti: What is your take on the Three-Mile plant and Microsoft investing money into reopening this? Does that trigger anything? What is that whole story? Does it fall under what you're talking about here?
Thomas Hochman: It's a really interesting issue. It might not deal as directly with something like NEPA. There's this big question right now of whether the skyrocketing energy demand for data centers and AI will drive change. Training AI models requires an enormous amount of energy, and the hardware used to train AI in data centers requires an enormous amount of energy.
Big tech companies that want to train these frontier AI models are thinking about how to actually get that energy given that the US struggles to build energy infrastructure. People are asking if we're going to get a nuclear renaissance because these trillion-dollar companies are going to open their checkbook and build nuclear or reopen nuclear that has been closed down.
I would say it's still TBD. There's been a lot of celebration of certain deals, and I think those deals are promising. But it's really important to make the distinction between a power purchasing agreement—where a tech company says if you bring this nuclear reactor back online or build this nuclear reactor, we will pay you for that electricity—and a tech company actually taking on the construction risk for building a new nuclear reactor.
The Microsoft deal is important because it looks like they're actually willing to take on some of that construction risk, but all the other deals that have been announced with nuclear plants or nuclear companies so far have just been power purchasing agreements. It's a good thing—it spurs building new nuclear or bringing nuclear online—but it is fundamentally different than a tech company actually taking on the risk.
Aiden Buzzetti: It seems like it jumps the gun a little bit because we still have this choke point. What was the last time a new nuclear design or proposal was approved by the Commission?
Thomas Hochman: I don't know the last time that a new design was approved, but I know that the last two nuclear reactors that came online came online in the last five years. It took 16 years and 31 billion dollars and bankrupted Westinghouse, the builder, so we're still in relatively rough shape. But I think a huge piece of this is cost. I think it's promising, but there's a lot that remains to be seen.
Aiden Buzzetti: The argument for your playbook is we have all these federal rules with their own drawbacks, but the states can bring their own incentives to play here. How can a state legislator or a governor incentivize more investment and more facility construction inside their own states?
Thomas Hochman: It's the things that we've been talking about. For example, if you want to have a massive data center, the real bottleneck will be the energy inputs. How are you going to power that data center? Maybe it's onsite natural gas, maybe it's solar, maybe it's the grid. All of these have their own permitting choke points. If it's natural gas, a huge question is going to be the Clean Air Act. The Clean Air Act is a delegated law where states have a huge amount of flexibility in terms of how they comply. There are enormous opportunities here, and hopefully the playbook will be a good start.
Aiden Buzzetti: Why should an uninformed person care about permitting and why should they care about the philosophy or the agenda of abundance? What could it tangibly bring or completely change about the way that we're living now?
Thomas Hochman: Nothing is a panacea, but permitting reform is about as close to a skeleton key as you can get to so many issues that everybody cares about. Permitting reform is crucial if we care about national defense. There was recently a years-long environmental impact statement for artillery sites in Guam, and my understanding is that it reduced the number of sites they could build on the island. That's a huge deal. If you care about traffic, an environmental impact statement in Colorado to expand the highway by two lanes took 16 years. If you care about energy costs, how much you pay for your electricity depends in part on how expensive it is for companies to build energy infrastructure. Regulations touch everything that we do in our daily lives and the fundamental health of the country.
Aiden Buzzetti: My final question for you is: Where do you see this agenda going? You're doing a lot of work on the state level. Where do you see this going on the federal level in the next two to four years? Are more members of Congress realizing what's at stake? Is there a coalition building on the federal level to address these problems?
Thomas Hochman: At the time of recording, we're about a week out from the election. Everything has been shaken up. I'm personally very happy that we have a GOP trifecta. I think it means we could get some really phenomenal things done on regulatory reform.
The filibuster is a challenge, so if we want this comprehensive permitting reform package, we're going to need to either figure out how to do something clever through reconciliation or how to peel off seven Democratic Senators. There's certainly an enormous amount that can be done from the executive, and I'm sure great things will happen there.
Trump actually in his first term put out what I think was quite a solid executive order around NEPA, removing some of the more stringent requirements, but we're at a point where it's crucial that we get this done and the only way to really get this done is through an act of Congress. I'm more hopeful than I have been in a long time, but there's a lot of work left to be done and there will have to be some sort of grand bargain.
Aiden Buzzetti: As far as the environmental groups go, what's your read on their hold on Democratic politicians and activists? Do they continue to have a stranglehold on language over climate and permitting? Or has it been slackening over the last couple years as we deal with supply chain challenges and come to grips with our national security situation?
Thomas Hochman: I'm optimistic about the trajectory. At the same time, it's undeniable that the environmental left and environmental NGOs still exercise power over a significant percentage of the Democratic Party.
This would have been borne out in a pretty terrible way if Kamala won. Kamala came up in the 1990s California Democratic Party—this is the typification of this environmental NGO problem. Her chief climate advisor, Representative Jared Huffman, screams bloody murder every time the words permitting reform come across his desk. There is a significant percentage of the Democratic Party who finds the idea of even reforming NEPA, let alone anything more aggressive, to be anathema.
Aiden Buzzetti: Does the abundance agenda—taking from both sides of the coin—work? I'm using the term very broadly, and people have different takes and opinions on where this "abundance agenda" might go and what the goals are. But does it skew towards one political party over another? Is there still a broad ideological component at play that could create a cross-party coalition?
Thomas Hochman: The luminaries in the abundance agenda are Ezra Klein, Matt Yglesias, and Derek Thompson—all card-carrying Democrats. The vast majority of people who will show up to an abundance event are Democrats.
If you were to ask somebody what the top two policy goals of the abundance agenda are, it would be permitting reform for clean energy and more housing. Both of which, particularly the former but somewhat the latter as well, have something of a left-leaning skew. That's a problem.
If the abundance agenda wants to brand itself as a truly bipartisan movement coalition, it needs to be much more open to just saying out loud what I think a number of folks in that movement are thinking, which is, "Look, we should just reform NEPA because NEPA is a bad law." We should think about these other laws that are making it hard to build other sorts of energy infrastructure and infrastructure more broadly.
Aiden Buzzetti: In the case of Clean Air Act, Clean Water Act, it doesn't detract from the positive components, right? They both came into law under Nixon. The Clean Air Act substantially reduced pollution in the air in the US. So they objectively have had some good impacts. But now the question is what we can do to fix the current problems.
Thomas Hochman: I should draw a distinction here between a law like NEPA, which is a fundamentally procedural law that doesn't actually offer substantive environmental protections, and a law like the Clean Air Act, which absolutely does.
You can say pretty wholeheartedly that America's better off because we have the Clean Air Act. There are still real inefficiencies in the Clean Air Act, and I would like to fix those inefficiencies, but we certainly should not gut it.
America's not better off because NEPA exists. It is a tool for obstructionists to block projects from going forward. It's a tool for well-funded, often environmental interest groups to block projects. Even more ironically, it's often both fossil fuel infrastructure and clean energy infrastructure that get sued under NEPA.
The litigation rates are enormous—50% of pipelines get sued, two-thirds of solar projects get sued. With the electric grid, a third of the transmission projects that go through NEPA gets sued. It's bad for everything and good for nothing. The Clean Air and Clean Water Act are not this way—that's a key distinction.
Aiden Buzzetti: So with NEPA, it's the process that needs to be eliminated. With the Clean Air Act and Clean Water Act, it's more typical legislative coalition building, tweaking some things based on available support. But objectively we need to make it harder for bad faith activists to go after projects simply because they want to see no development whatsoever.
Thomas Hochman: That's right. The simple way of putting this is you want to go after laws where they put procedure over performance. Clean Air Act, in general, puts performance over procedure. The places where I have issues with the Clean Air Act is where that's flipped. NEPA is purely putting procedure over performance. The Endangered Species Act largely puts procedure over performance, so it's more of a mix. That's the easy way of thinking about it.
Aiden Buzzetti: I'm going to include the permitting playbook in the show notes when we get this uploaded. If you're a legislator and you want to do some real, life-changing work for the country, your constituents, and hopefully industry—if you live in an area where there's interest in expanding these industries—email Thomas. Get in touch with Thomas.
I'm really excited for what you're working on. Maybe in a couple months we'll have you back on to talk about any wins. Thank you so much for coming on and talking about this with me.
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