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Wednesday, August 30, 2017

Executive Order 13807: Permitting Process

What the Executive Order Says

Executive Order (EO) 13807 is entitled "Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects".  It was issued on August 15th, 2017 and has 7 sections.  It deals with streamlining the permitting process for the anticipated infrastructure spending that was a campaign promise last year.

Section 1

This section defines the aspirations of this EO which is to streamline Federal Government decision making so that decisions can be made quicker so as to expedite starting up construction activities.

Section 2

This section defines the policy.  Essentially this can be summarized as wanting to conduct environmental reviews through the various Federal agencies in a coordinated and efficient manner.

Section 3

This section contains definitions for "Authorization", "CAP Goals", "Federal Permitting Improvement Steering Council", "Infrastructure Project", "Major Infrastructure Project" and "Permitting timetable".

Section 4

This section defines that the Federal Government will start creating agency and personnel performance goals to reduce the time to conduct environmental reviews to 2 years.  Further, information on whether these goals are being met will be published.  The Office of Management and Budget is responsible for the collection and publishing of the performance data.

Section 5

This section is about "process enhancements."  This includes the mechanism of establishing a "champion" for each infrastructure project which is winding its way through the review process and having that "champion" be responsible for shepherding the decision to a conclusion as quickly as possible.  Essentially, it is customer service.

Section 6

This section revokes EO 13690 entitled "Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input" which had been issued by the previous President in 2015.  It also modifies some of the process defined in EO 13766 entitled "Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects".

Section 7

This section contains the legal fine print to assure the constitutionality of the EO.

My Commentary

With respect to section 6, the roll back of the Federal Flood standards, it is ironic due to the intervening events with Hurricane Harvey and the damage due to flooding along the Texas coastline and elsewhere.  Clearly, this EO has not yet had any impact, but in the long run, this will result in more homes and businesses being built in flood hazard areas.  Further, as always with the current President, he is obsessed with trying to undo the actions that had been taken by the previous administration.
On that, it is always much easier to tear down than to build, just ask anyone who has done even a small home renovation project.  In the past 7 months since the inauguration, a fair amount has been undone, especially in the Justice department, but little has been achieved.  Even those things which looked like easy wins have turned out badly.  And even this revocation is actually flawed since EO 13690 is actually a modification to a previous EO.  And therefore, it does not actually eliminate Flood Risk Management, but reverts it back to older processes as defined in EO 11988 which had been issued under President Carter.
It needs to be noted that in section 2(b), previous administrations would have emphasized that decisions on environmental impacts need to be made based on information gathered in a scientific way.  Here, the decisions need only be "informed" although it does not state what information should be considered.  I have to admit there are some worthwhile goals expressed in the policy section.  To the extent that Federal agencies are jointly responsible for conducting environmental impact reviews, there should be obtainable efficiencies by reducing duplication and ensuring co-ordination across the various agencies, but this being an EO, it cannot actually change the Rules (i.e. the Code of Federal Regulations).  This is good since the last parts of Section 5 do seem to direct agencies such as the FPISC and CEQ to be responsible to push through environmental reviews with people who are political appointments making decisions.
In reading this, one thing I had been suspicious about is whether this streamlined permitting process could be used for private enterprise to build a manufacturing plant.  It does not seem likely.  However, nuclear power plants (despite how unlikely it is that someone would want to try to build a new one) fall into what can be considered by this EO.
This is in some ways a well thought out comprehensive document that seems to have been written by some knowledgeable policy wonks and ends up being relatively unpartisan in comparison to a lot of the EO's that have been issued by the current administration.  It should be noted that this EO is essentially version 2 of EO 13766 which actually details out some of how things can be made faster and better, but also it is based on a previous model "Synchronizing Environmental Reviews for Transportation and Other Infrastructure Projects" dating from 2015 (See Section 5(b)(iv)(A)).
It is not easy to judge just what are the long-run implications of this EO.  Faster decisions by governments on environmental approvals would be welcome, provided these approvals (or rejections) are fact-based and scientifically sound.  But the Federal government is only one piece, as is mentioned within the EO, state, local and tribal governments get involved as well.

Sunday, August 27, 2017

Executive Order 13806: Manufacturing base

What the Executive Order Says

Executive Order 13806 is entitled "Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States".  It has 3 sections.

Section 1

This section defines policy.  It posits that the manufacturing capacity and defense industrial base has been weakened by the loss of factories and jobs.  This has consequences for national security.  Therefore policies should be crafted to enhance manufacturing capacity and the defense industrial base.

Section 2

This section mandates that a report is created.  It does have a number of subsections which define the aspects of the report.  These include identification of stuff that is essential to national security, what domestic manufacturing capability exists, what internal and external shocks might precipitate a crisis and what we should do to prevent that.  This report is due in 270 days.

Section 3

This section contains the necessary legal fine print to assure that the Executive order is constitutional.

My Commentary

This is tricky.  There is a real national security weakness when the USA relies on weapons manufactured outside of the country.  Further, it is true that some weapons which are assembled in the USA rely on components and raw materials that come from outside the country.  Any of these components or raw materials could be made into point of leverage, be it batteries, memory chips or high strength magnets.  All of these three mentioned parts rely on metals which are often rare and not necessarily found in the USA.  Batteries require lithium.  Chips are made with gallium and arsenide.  Magnets are made with neodymium.  What are the options to obtain these minerals when faces with some kind of external shock.
The problem is that these Executive Orders have been, under this President, often tools of simple political posturing, full of sound and fury signifying nothing.  Also, anyone that knows anything about this topic knows that there are no simple solutions.  Partly this is because the pace of industrial innovation and technological development is such that in order to aim to catch up with someone, you end up trying to come up with the next round of evolution (or revolution) in a technology before them.  If you just try to match where they currently are, by the time you get there, you are behind again.
The last point I want to make is that short of the government procuring goods and services from private industry, there are few if any direct tools to create manufacturing jobs or build factories.  As such, the probability is that the suggestions will amount to re-invigorating the military-industrial complex of the 1970's and 1980's.  The government has much more power to influence conditions that are conducive to job growth and expansion of the manufacturing base.  These would include: low interest rates, low tax rates, less regulation, the availability of highly skilled workers who will work at low rates of pay. All of these disadvantage or harm workers.  Fundamentally, manufacturing is not coming back and we will have to deal with the national security implications of that.

Saturday, August 26, 2017

Executive Order 13805: Infrastructure Council

It's been some time since I have posted here.  I've been busy at work and also trying to enjoy the summer.  Much craziness seems to be on-going, but still need to catch up on some of the Executive orders that have been issued even though they have been overtaken by events.  Long-term, we shall see if this blog continues or maybe I will change focus again to something else.  But, now to continue with Executive Orders...

What the Executive Order Says

Executive Order (EO) 13805 is entitled "Establishing a Presidential Advisor Council on Infrastructure" and was originally signed on 7/19/17.  It has 8 sections.

Section 1

This section defines policy on infrastructure projects.

Section 2

This section simply establishes the council.

Section 3

This section defines the membership of the council to be 15 and that there are 2 co-chairs.  The members are solely appointed by the President at his discretion.

Section 4

This section defines the mission of the council.  Basically it is to come up with a list of things to be done and then make recommendations on how to get things done faster and using less public money.

Section 5

This section indicates that the council is to be run and supported by the Department of Commerce and the Secretary of Commerce.  The Secretary will set the course via determining the questions that the council should investigate for the report that they will submit.

Section 6

This section states that the council will create a report and submit it to the President.

Section 7

This section defines when the council is terminated.  This is December 31, 2018 at the latest, but could be sooner depending on when the report is submitted.

Section 8

This section contains the usual general provisions to assure that the Executive Order is legal.

My commentary

So this Executive Order has been affected by subsequent events in Charlottesville.  After the statements made by the President  which appear to endorse racist views, potential participants on the Council have backed off and now it has been basically cancelled.  However, there is some interesting bits of cognitive dissonance in section 1.  Even though the policy intends to "create high-quality jobs", the council is asked to find ways to cut costs in projects which would reduce both the number of jobs created in the US as well as the number of high-quality costs.  The policy states that there is a desire to "improve quality of life" and to "protect the environment", but yet the council is asked to find ways to expedite the approval process so that answering these questions is a rubber stamp rather than a true determination.
The membership is so vague that the council can be packed with partisans or through nepotism so clearly it is a political instrument.  This infers that the value of the output is likely going to be pretty small and therefore it is not a big loss that it has ended before it began in the first place.