Tisha’s Insights

Running the Permitting Gantlet

January 31, 2024 Adán Rubio & Tisha Schuller
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In a world that needs more energy than ever before, every type of energy company faces the same challenge: getting projects permitted and built in an increasingly contentious community and stakeholder engagement climate.

The weird thing: Oil and gas companies—not startups, not clean tech—may be best suited to running this gantlet. In this Nuts & Bolts edition of Both True, I explore the nuts and bolts of leveraging your company’s resources and knowledge—and thus leveraging your head start on the inexperienced.

Both of these things are true:

  • Many stakeholders are skeptical about the role oil and gas should play in getting the many needed energy projects off the ground.
  • It is oil and gas companies that are best positioned, resourced, and experienced to engage stakeholders and regulatory agencies and run the permitting gantlet.

The situation:

Three key developments are shaping a rapidly evolving and increasingly difficult stakeholder engagement environment for energy projects:

  1. Community veto power. Project developers can no longer rely on just state regulators’ stamp of approval; community buy-in is also essential. Local opposition can delay or completely sidetrack any project, whether traditional or novel energies. Throughout the Midwest, an unconventional coalition of stakeholders has mounted a determined and effective campaign to derail the development of carbon dioxide pipelines in the region (a topic we covered in Takeaways from CO2 Pipeline Battles: Engagement as a Path to Regulatory Certainty). State regulators have denied permits, projects have been delayed, and proponents are cancelling their efforts. This development would have once been considered to reflect an outsized degree of community influence, but it’s now the norm. For example, when state regulators in Illinois denied the Wolf Carbon Solutions’ CO2 pipeline permit, they particularly weighed the “overwhelmingly negative public sentiment”.
  2. Environmental justice (EJ) influence. The massive investment the federal government has made in addressing EJ interests and communities has changed the community engagement landscape forever. For example, every funding opportunity announcement from the Department of Energy now requires a community benefits plan in which the applicant assesses the benefits and impacts of the project on disadvantaged communities, among other stakeholders. At the state level, New Jersey and Colorado, for example, both use EJ-related considerations to inform various decisions pertaining to citing, permitting, and resource allocation. Layering on these state-level expectations and requirements around EJ communities means that projects need to assume first that all communities are EJ communities and build in the time and resources to supercharge research, listening, and collaboration.
  3. Unconventional opposition. Across the country, novel coalitions are coming together to oppose energy projects. In the Midwest, farmers, environmentalists, Republicans, and Democrats have banded together to prevent the approval of CO2 pipelines that have been proposed by Wolf Carbon Solutions, Summit Carbon Solutions, and Navigator CO2 Ventures. For example, the Coalition to Stop CO2 Pipelines is a large group comprising landowners from rural communities, farmers, and environmental activists in Illinois. Traditional anti-energy alliances are shifting—signaling that your stakeholder engagement strategy needs to shift, too.

The good news: The harder the permitting gantlet gets, the better positioned oil and gas companies are to succeed. A startup has absolutely no idea how to go into a skeptical community and build rapport, to engage a regulator in crafting a feasible strategy, to invest in the community projects that will have enduring impact. You do.

Seize the day:

The energy future belongs in no small part to those who can get projects permitted and built. Oil and gas companies are well resourced to do so, starting with building partnerships in order to co-create energy projects alongside communities. Leverage your experience by following these four steps:

  • Do your homework. Before going into any project, conduct an assessment to identify historically disadvantaged communities in the area using the several federal and state-level EJ screening tools provided to the public. Do the research required to understand the stressors those communities have endured. These stepswill provide you with valuable insights into these communities’ histories and what is important to them today.
  • Don’t skimp on environmental justice. EJ stakeholders are your stakeholders—and therefore getting over the permitting finish line in many cases will hinge on meaningful engagement with them. Use the information you learned in your research to thoughtfully engage and ask questions to understand what partnership and co-creation look like to the many subgroups that make up a community.
  • Map your partners (even if they look like opponents!). Unconventional coalitions among traditionally opposed groups have effectively challenged energy projects. On the flip side, unconventional alliances between your company and nontraditional partners might be the ticket to getting your project across the finish line. Engage in an exercise of mapping your potential partners in a community, especially if they aren’t the partners you’ve engaged with in the past.
  • Plan to succeed. A robust engagement strategy is nothing without proper support. We’ve seen even the best-intentioned stakeholder and community engagement leads flounder by being stretched too thin and inadequately resourced. Devote the resources, time, and staffing to sustain meaningful and consistent engagement with stakeholders.

The stakeholder engagement landscape is contentious and messy, and it’s easy to get your strategy wrong without the proper planning, resources, and understanding of the communities. That’s why so many inexperienced companies have failed and will fail. But your company has a head start and knows that a well-resourced and well-executed stakeholder engagement strategy can streamline permitting efforts, setting up your project for success.

Thanks to Kelsey Grant for her help in writing this edition.

Adamantine can help you devise an authentic stakeholder engagement strategy. Reach out for a consultation. If you like what you’re reading, please share this edition with three of your colleagues.

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Both of These Things Are True

By Tisha Schuller