What the Debt Ceiling Fallout Means for Energy Reform

the debt ceiling fallout and energy reform
shale magazine, joe biden.kevin mccarthy, national debt

Congress recently passed the agreement reached by President Biden and House Speaker Kevin McCarthy to increase the national debt ceiling. Of course, this increase in the debt ceiling allows the US government to avoid a default on its debt. It also represents a crucial moment for energy reform. 

Within the debt ceiling agreement are some significant energy provisions. These provisions will majorly impact the energy sector over the next several years. As the world transitions to green energy, the energy permissions within the debt ceiling agreement will prove to be a linchpin for actionable change. The Debt Ceiling and the Threat of Federal Default 

As the threat of federal default loomed over the past several months, House Republicans and the White House finally came to an agreement to raise the debt ceiling. Now that Congress passed this agreement, it will increase the maximum amount the federal government could borrow for the next two years in order to cover national expenses. 

In January of 2023, the United States government hit the debt ceiling, causing some anxiety in Washington. With little time to spare, the White House and House Republicans needed to move quickly to propose a solution. Significant repercussions would begin throughout the nation if an agreement could not be reached. The national Treasury could delay paying its debts. This default could result in a cut down on payments like Social Security veterans benefits, federal employees’ salaries, and more. With the prevailing threat of debt default growing, lawmakers felt the pressure to present a viable solution. 

In the last days of May and the first few days of June, House Speaker Kevin McCarthy and the White House agreed to raise the debt ceiling. Fortunately, this agreement could be a real solution to the debt issue—but only for the time being. In addition to increasing the borrowing limits for the United States government, the debt ceiling agreement includes actionable measures for the energy sector. 

How Raising the Debt Ceiling Could Aid Energy

The question remains: how does raising the debt ceiling affect the energy sector? A significant portion of the debt ceiling agreement includes energy-related provisions. This bipartisan agreement is a rare platform both sides want in some measure. Since Congress passed the deal, it could be a positive step forward for energy reform. 

The bill (now signed into law) outlines energy permissions, which shortens the time required to provide permits for innovative energy solutions. This significantly reduces the amount of time it takes to get new projects approved to move forward. That fact not only has the potential to ramp up clean energy research but could make the transition to green power achievable sooner than we think. 

Increasing the debt ceiling could allow energy innovators the freedom and funding to explore new technology, research, and renewable energy strategies. Though we still rely on fossil fuels for the majority of our energy production in the United States, reducing the approval process for new energy solutions could expedite the green transition. 

Energy Permitting Explained

The process to gain permission or approval to move forward with energy research is complex and lengthy. The multiple layers of government red tape currently in place hinder energy companies from rapid progress. New technologies for green energy require sufficient research, permission, and funding before they can move to mass production. 


Project designers must answer to multiple layers of government and go through several agencies before moving forward with their energy ambitions. 

The bipartisan agreement enacted in the debt ceiling agreement helps alleviate some of the restrictions on energy projects. However, this agreement was not without dispute or controversy. The main issue at hand is determining which projects should be included in the energy permitting provisions. Renewable energies, like solar and wind, crude oil, and other fossil fuels, were all contenders for the energy permitting conditions. 

Other Energy Benefits to Raising the Debt Ceiling 

As lawmakers move forward with raising the debt ceiling, the impact on the economy and the energy sector could be game-changing. In addition to advancing the clean energy movement, the passed debt ceiling increase comes with the following core benefits to the energy sector. 

Streamlining Energy Permitting Process

The passed agreement would impose a restricting timeline for government agencies to approve new energy projects. This time limit would significantly decrease the amount of time it takes for project managers to receive permission for their energy project. By enforcing a tighter deadline, project managers could move their energy motions forward in less time. This deal outlines a strict time limit of 2 years for agencies to approve new energy projects. 

This bill requires agencies to conduct their research within a tighter timeline. Not only would this move projects along, but it would also force agencies to have efficient communication and processes for approving energy permits. 

If projects are approved more timely, it would decrease the time it takes for the construction and infrastructure of new energy facilities, decreasing the waiting period before they reach operational status. 

This bill also outlines a green light for the Mountain Valley Pipeline in West Virginia and Virginia. Opening this natural gas pipeline could provide a much-needed boost for the economy and the energy sector. 

Investing In Clean Energy Innovation 

If energy projects are streamlined and the permission process is less involved, this could prompt more significant investment in clean energy research and innovation. A boon for green energy companies would result in new economic opportunities. With clean energy research investment comes new jobs, facilities, and opportunities for clean energy breakthroughs. 

As the world transitions to clean energy, investing in research, developing energy positions, and creating energy-efficient infrastructure is vital to our progress. 

Promoting Energy Efficiency 

An essential benefit of the energy permitting provision is promoting energy efficiency. Maximizing projects’ energy efficiency could cost developers less to operate and initialize their projects. In the long term, energy efficiency promotion could reduce the cost of energy and lessen the negative impact on the environment. 

The Debt Ceiling Fallout and Energy Reform

Although the debt ceiling increase is a significant leap forward for green energy, and energy permitting reform, we still have a long way to go. The current climate crisis and energy deficit still require much work, revision, and debate. 

The permitting reform does not include local or state governments. These are two areas where clean energy projects could be delayed or discontinued. Still, the progress that could be made from passing the debt increase would be a major step for the green energy movement. 

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As the energy news unfolds, Shale Magazine is your home for the inside scoop. Our team of researchers and reporters keep a finger on the pulse of the world of energy. We provide our readers with the insight and accurate information they need to make informed decisions in the energy sector. You can rely on us to keep you up to date with the latest happenings. 

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Author Tyler Reed
Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a high-profile civil engineering firm. He had a focus on energy development in federal, state, and local pursuits. He picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency. There, they service marketing agencies, PR firms, and enterprise accounts on a global scale. A sought-after television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.


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