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Endless delays and burdensome regulations are inhibiting the United States’ ability to outcompete China—and to change that, we need permitting reform, the NAM said on a recent podcast.

What’s going on: NAM Vice President of Domestic Policy Chris Phalen joined “Right of Way,” a permitting and energy policy podcast presented by the Institute for Progress and the Foundation for American Innovation, to discuss delays caused by a number of key permitting laws, including the National Environmental Policy Act.

• While noting that NEPA is manufacturers’ top concern, Phalen emphasized that the Clean Water Act and the Endangered Species Act are also “really, really critical.”
• “It’ll depend on if you’re a mining company, a semiconductor firm or a steel or aluminum company, but it runs the gamut,” he added.

Unattainable: Phalen also highlighted permitting challenges posed by the Clean Air Act. Many areas of his home state of Arizona are naturally in nonattainment with smog rules, Phalen said, and “that’s impacting the manufacturing sector pretty significantly.”

• “I describe it as ‘no way out,’” he said. “Maricopa County [for example] is in a nonattainment situation. A lot of that is for ozone, and a lot of that is driven by out-of-state emissions—from China, from Mexico or wildfires and forest fires.
• The Clean Air Act’s permitting system “is not designed to allow for the construction of large-scale manufacturing in such a situation,” he went on. “So the semiconductor fabs out there, the data centers—all of those are being significantly impacted.”
• Arizona Chamber of Commerce & Industry President and CEO Danny Seiden testified before the House Energy and Commerce Committee on this issue earlier this year. Catch up on his testimony here.

Unnecessary delays: It’s no secret that the U.S. electrical grid is overburdened and new power sources are needed—but that hasn’t gotten projects online any faster, partly because of endless litigation allowed under statute and partly because of byzantine, burdensome permitting, Phalen told podcast hosts Thomas Hochman and Pavan Venkatakrishnan.

• “I dealt with this in Sen. [Kyrsten] Sinema’s office: There was a giant transmission line bringing five gigawatts of [electricity] into central Arizona and California,” he said. “You’d think it’s a no-brainer. No. It took 15 years. … [and] at the very end, folks tried again to block that project. And it’s a 100% clean energy project into Arizona and California. You’d think that would only happen to a pipeline, right? But no—NEPA, [National Historic Preservation Act], all of these really need a commonsense update.”

How to outcompete China: According to the NAM’s Manufacturers’ Outlook Survey, some 80% of respondents cited length and complexity of the federal permitting process as being harmful to their ability to increase investment, Phalen went on. That means the U.S. is less competitive against Beijing.

• “I liken it to tying one hand behind our back and trying to compete with China,” he said. “They are setting up just massive, massive infrastructure buildout and energy buildout and manufacturing buildout. We can compete with that, but we cannot [do it with] one hand behind our back in all of these different situations.”