America’s share of global manufacturing output has fallen from 25% in 1997 to 15% today. Absent intervention, it could reach 11% by 2030.
Those numbers get thrown around a lot. What is said less is what they mean for Americans: The United States is losing its ability to produce the things it needs to defend itself, to power its economy and to care for its people. This failure is not because we lack talent, capital or technology. It is because we have made it nearly impossible to build anything here.
This inability to build harms every American industry and every American job. Whether it is semiconductor fabricators, munitions or battery factories, rare earth production facilities, natural gas pipelines, oil refineries or medical manufacturing centers, all hit the same regulatory barrier: federal permitting law.
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Among the various federal permitting barriers, the National Environmental Policy Act (NEPA) stands as the most egregious. Unlike substantive environmental protections found in statutes like the Clean Water Act and the Clean Air Act, NEPA’s central function is procedural, requiring analysis and disclosure of environmental impacts before major federal actions.
Over time, regulatory layering and aggressive legal interpretation transformed this reasonable “look before you leap” statute into a roadblock for projects with any sort of federal connection.
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This regulatory accretion has turned NEPA into a tool to stop nearly any meaningful project — across every state and political spectrum. It is not every day renewable energy advocates and oil and gas executives work together to reform a statute. Yet these and many other strange bedfellows have come together this year to fix a profoundly broken statute and allow America to build again.
The numbers explain why. The median NEPA review in 2024 ran 26 months. The statute’s more demanding environmental impact statements averaged 3.8 years. Environmental assessments, the so-called fast track, routinely average a year or more. None of those timelines are legally required. They are what happens when bureaucratic caution and unlimited litigation combine in the absence of any countervailing pressure.
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And then there is the cost. DOE data showed mean environmental assessment preparation costs were over $300,000 while environmental impact statement costs averaged $6.6 million. Those figures exclude legal fees, staff time and the cost of litigation. These millions add to the bottom line of every potential domestic manufacturing project.
For a major company, these delays and costs are annoying. For a small business seeking to open a factory or a startup raising its first manufacturing round, they are often a company-ending event.
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These are the types of businesses America most needs right now–the 50-person drone manufacturer, the battery startup and the defense tech company that won a Pentagon contract and needs to be in production before its runway expires are exactly the companies the current NEPA regime destroys. These are also the jobs Americans need.
This regulatory Sisyphean task doesn’t improve outcomes, it materially delays or even kills meritorious projects. Investors cannot deploy capital if regulatory uncertainty clouds a project.
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While the Supreme Court’s “Seven County” decision and recent executive actions have helped, only Congress can enact durable statutory reforms needed to restore NEPA to its intended procedural role. Here are some basic fixes.
Enforce the deadlines and limit endless litigation
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Agencies need to enforce permitting deadlines. Aspirational goals do not motivate federal bureaucrats, but neither does the prospect of getting dragged into court. Both extremes perpetuate analysis paralysis. Get the permits done and when they’re complete, there should be finality, providing certainty for manufacturers, the capital backing them and the federal agency granting the permit. Revocations should be permitted only when there is an imminent, irreparable and specifically documented harm.
Cut the red tape for companies which can least afford it
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Agencies which finance or permit manufacturing already have categorical exclusions, pre-cleared categories of routine actions normally not requiring a full Environmental Assessment or Environmental Impact Statement. Most have never shared those categories with each other, despite a 2023 law explicitly allowing them to do so. Congress should require agencies that finance or permit manufacturing to adopt a curated list of relevant categorical exclusions from other agencies. This one reform alone would dramatically increase regulatory speed and certainty.
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None of this dismantles environmental protection. Clean air, clean water and endangered species protections all remain fully intact. What these reforms remove is the accumulated procedural weight which has nothing to do with those protections and everything to do with a system no one has been accountable for fixing.
The opportunity to build in America is now. Nobody left, right or center wants this to be an era of managed decline. We want growth, security and innovation. That is why political polar opposites are making great strides to reach a deal, like Chairmen Shelley Moore Capito, R-W.V., Environment and Public Works, and Mike Lee, R-Ut., Energy and Natural Resources, and Ranking Members Sheldon Whitehouse, D-R.I., Environment and Public Works, and Martin Heinrich, D-N.M., Energy and Natural Resources . The American people will benefit from the good jobs and the supply security these reforms create. It’s time to meet the moment and get America building again.
Katherine Boyle is a general partner at Andreessen Horowitz and co-lead of its American Dynamism practice.
