What the Senate Permitting Bill Means for Midstream

Only a few years ago, natural gas pipeline projects were largely concentrated in Texas and Louisiana. These intrastate systems did not require federal review, making permitting relatively easier. Today, natural gas pipeline projects are underway in many regions of the U.S., from the Southwest to the Midwest to the Northeast.

An energy-friendly administration has arguably helped projects around the country advance with less permitting and regulatory friction. However, investors may now be wondering if this could change with the midterm election or the next presidential election. Notably, a new bipartisan Senate bill could provide a more enduring fix for federal permitting, with positive implications for midstream companies.

Key Takeaways

A bipartisan Senate bill would overhaul federal permitting after years of failed attempts at reform.
The bill would make it harder for states, courts, and federal agencies to block pipeline projects. This could ease the path for midstream companies building new pipelines.
Some risks would remain, and a key Senate vote is expected on November 9.

Senate Unveils Long-Awaited Permitting Seal

On September 30, a bipartisan group of senators introduced the Bipartisan American Affordability and Jobs Act (BAAJA), a long-awaited overhaul of the federal permitting system. Under current law, projects that need a federal permit, cross federal land, or receive federal funding must complete lengthy environmental reviews under the National Environmental Policy Act (NEPA) and other decades-old laws before moving forward. That includes interstate natural gas pipelines, which require approval from the Federal Energy Regulatory Commission under the Natural Gas Act. Environmental reviews can take years, and approved projects can still face lawsuits for up to six years afterward. BAAJA follows more than a year of negotiations among Senate committee leaders from both parties and the White House.

Permitting reform has been on the agenda for decades, but the current push dates to 2022, when former Senator Joe Manchin twice failed to attach reform provisions to must-pass legislation. Two years later, Manchin teamed up with Republican Senator John Barrasso on the Energy Permitting Reform Act of 2024, which cleared the Senate Energy and Natural Resources Committee but was left out of a year-end funding bill. Momentum returned in December 2025, when the House passed the SPEED Act and the PERMIT Act, which target NEPA reviews and state Clean Water Act certifications, respectively. Senate talks then stalled until the release of BAAJA.

BAAJA builds on these earlier efforts, carrying over the 2024 bill’s 150-day statute of limitations for legal challenges, along with provisions from both House bills. BAAJA goes further than its predecessors. At 417 pages, it is more than twice as long as the 2024 bill and rewrites many core elements of NEPA, the Clean Water Act, the National Historic Preservation Act, and the Endangered Species Act.

BAAJA Would Reduce Risk for New Pipeline Projects

For midstream companies, BAAJA’s most significant provisions address the risk of projects being blocked by state reviews or stopped after approval, a potential concern for interstate natural gas pipelines.

In perhaps the clearest example, New York denied Clean Water Act certifications for Williams’ (WMB) Constitution pipeline in 2016 and its Northeast Supply Enhancement (NESE) project in 2020, constraining the Northeast’s access to Appalachian natural gas during peak demand. New York approved NESE last year and WMB broke ground in April, but a federal appeals court vacated New Jersey’s certification for the project in September. (WMB is working with state officials and did not expect the decision to adversely impact construction or the anticipated 4Q27 start-up.)

BAAJA could make both types of hold-ups harder. States would need clear and convincing evidence to deny certification, and their reviews of interstate gas pipelines would be limited to direct discharges into waters. The table below summarizes the reforms most relevant to midstream.

Shorter Challenge Windows and Stronger Permit Protections

BAAJA’s litigation reforms could be just as significant. Under current law, opponents of a project have up to six years to challenge a federal approval, and courts can void permits over flaws in an environmental review.

In 2020, three years after Energy Transfer’s (ET) Dakota Access Pipeline began operating, a federal court vacated a key easement on those grounds and ordered the 570,000 barrel per day crude pipeline shut down and emptied. An appeals court ultimately allowed it to keep running, but the ruling showed how litigation can threaten operating assets.

BAAJA would shorten the six-year window to challenge an approval to 150 days and limit lawsuits to parties that raised concerns during public comment. Courts would also have to send flawed reviews back to agencies to fix while projects continue construction or operations.

Finally, BAAJA would protect approved projects from shifting political priorities. Federal agencies could revoke permits only in narrow cases, such as fraud or an urgent safety threat, and developers could seek damages if an administration targets an entire category of projects. These provisions respond to actions by administrations of both parties, including the 2021 revocation of TC Energy’s (TRP CN) Keystone XL permit, the 2024 pause on liquefied natural gas (LNG) export approvals, and recent federal actions against offshore wind projects.

Bottom Line

By lowering the risk of delays and permit reversals, BAAJA could ease the path for additional interstate pipeline opportunities as LNG exports and power generation drive natural gas demand higher. More predictable permitting could also help companies turn growing project backlogs into cash flow with less risk of cost overruns due to permitting issues.

The bill would not eliminate permitting risk, however. It lacks an LNG-specific approval deadline, courts could still halt projects over Endangered Species Act and certain Clean Water Act claims, and it does not address state and local opposition, such as New Mexico’s repeated rejections of an ET pipeline serving a large Oracle (ORCL) data center.

The next date to watch is November 9, when a Senate cloture vote is expected. BAAJA will need 60 votes, and the House has yet to introduce its own version. Bipartisan backing makes the bill less exposed to the midterm results, but the 2024 bill stalled in a similar lame-duck window.

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