The Schumer Permitting Exception for Semiconductors

Computer chips get a NEPA reprieve, but the rest of the economy needs one too

WSJ editorial. 

"Wonder of wonders, miracle of miracles. Democrats in Congress have finally conceded that the U.S. economy needs permitting reform—at least if you make computer chips. Herewith a tale of political favoritism and industrial policy.

The House on Monday passed the Building Chips in America Act, which is a cleanup job for the 2022 Chips and Science Act. While the previous law doled out $39 billion to build semiconductors, the new bill will help projects shorten the path to approval under the National Environmental Policy Act (NEPA). The bill passed the Senate in December and President Biden is eager to sign it.

Chip makers will get several ways to skip environmental reviews. They can earn an exemption by starting construction before the end of this year, which several have already done. NEPA rules will also be waived for companies that receive loans rather than grants through the Chips Act, or use federal grants for less than 10% of their total project cost.

More House Republicans than Democrats voted for the bill, and the GOP support is easier to explain. Most Republicans have sought for years to streamline permitting across all industries. Even Republicans against chip subsidies would prefer projects to move quickly once the funds are appropriated.

But Democrats are breaking their usual NEPA habit. Senate Majority Leader Chuck Schumer has blocked multiple attempts at permitting reform, including a House proposal in May to speed up energy production and transmission. The green lobby sues and sues some more under NEPA to slow projects for years. The average wait is 4½ years, according to a 2020 review by the White House Council on Environmental Quality.

Without the exemptions, chip makers would likely face similar delays. A large fabrication plant can consume as much water each day as 300,000 people, and only 15% to 20% of it is recyclable, according to a study by the research firm Interface. That’s catnip for endless bureaucratic review and lawsuits. The climate lobby opposed the Building Chips act, and 112 Democrats voted no in the House.

So why did the chip exception pass? Local and election politics. Democrats have made manufacturing a main theme of this year’s campaigns and want to promote more projects before Election Day. Mr. Schumer is also crucial to this NEPA override. The new bill will likely speed construction for Micron Technology’s plant near Syracuse, N.Y., which was set to break ground this year but has been tied up by the environmental review process. It’s good to be the Majority Leader.

The chip exception shows how much NEPA permitting reform is needed for the entire economy. Companies shouldn’t need a Majority Leader in their pocket to get permission to build the plants and products that drive American prosperity."