Government regulation may not be main reason for power plant delays
Contrary to current wisdom in the nation's capital, environmental laws and regulations are not the major cause of energy project delays, at least in the West.
This is the conclusion of a recent study conducted by the Western Governor's Policy Office (WESTPO), the regional research and policy arm of the governors of 12 Rocky Mountain and high plains states.
Since the mid-1960s, the planning lead times for energy projects have nearly doubled. It now takes more than six years to construct a coal-fired power plant and more than a decade to complete a nuclear power plant. Many industry spokesmen have blamed government regulation, in general, and environmental laws, in particular, as the primary reason for these lengthening lead times. In fact, some 60 percent of the criticisms received by Vice-President George Bush's Task Force on Regulatory Relief focused on environmental rules.
This is one of industry's main contentions in the imminent congressional fight over renewal of the Clean Air Act. The American Petroleum Institute, for instance, has charged that "the Clean Air Act is only one of a whole constellation of laws that are currently impeding the development of energy sources."
Still, "studies, all of which are based on reviews of project experience, have consistently pointed to factors other than government law and regulation as being of equal, if not primary, blame in the delay of energy projects," the WESTPO report maintains.
One of the analyses cited in the WESTPO report was done by the Environmental Policy Institute. The analysis summarizes the reasons for power plant delays between 1967 and 1976. Both vendor and labor-related problems were mentioned almost three times more frequently than regulatory difficulties, the Petroleum Institute found. Regulatory delays were cited only 12 percent of the time.
Regulatory problems that do occur fall into two categories: changes in regulations and delays in obtaining necessary permits. As much as half of the permit delays may be at the state level, the study acknowledges. However, Western states have tried a number of ways to streamline this process which can get extremely complicated:
* Colorado and Alaska have set up formal methods for expediting review of energy projects. Colorado's highly touted but locally controversial Joint Review Process has been used on four projects and was established by administrative initiative. Alaska's master application process, established by the legislature, has been used by eight or nine projects, at least partially.
* Since the inception of the "energy crisis" in 1973, a number of states have begun requiring utilities and other energy project developers to publish and periodically update their plans for the next 10 years.
* Several states have published "permit directories" that list all the state regulatory requirements for energy projects. They are advantageous to companies from other parts of the country. In addition, Alaska has an "escort service" -- information centers where would-be devel opers can get help filling out and submitting applications.