New Source Review Permitting Improvement Act

HR161, the New Source Review Permitting Improvement Act, was introduced in the House on January 3, 2025, and was reported out of committee on January 21, 2026, awaiting floor action. This bill modifies the Clean Air Act to clarify when changes to a stationary source constitute a 'modification' for purposes of the New Source Review (NSR) permitting program. Specifically, it states that a change is only a modification if the maximum hourly emission rate achievable after the change is higher than the maximum hourly rate during any hour in the preceding 10-year period. Crucially, changes designed to reduce air pollutants or improve reliability/safety are explicitly excluded from being considered a modification, unless they cause an adverse effect on human health or the environment and increase the maximum achievable hourly emission rate. This bill does not involve direct funding or appropriations. Instead, its mechanism is regulatory relief, which translates into cost savings and accelerated project timelines for affected industries. By narrowing the definition of what constitutes a 'modification,' the bill reduces the instances where existing industrial facilities must undergo the lengthy and costly NSR permitting process for upgrades, maintenance, and efficiency improvements. This directly lowers compliance costs and removes a significant barrier to capital expenditure projects aimed at modernizing facilities. Structural winners include companies in heavy industry with significant existing infrastructure, particularly in petroleum refining, chemicals, and power generation. These companies frequently undertake projects to improve efficiency, reduce emissions, or enhance safety, which under current regulations might trigger NSR. The bill's passage would make these projects less burdensome. The recent Presidential Memorandum on Domestic Petroleum Production, Refining, and Logistics Capacity, issued on April 20, 2026, amplifies the impact of HR161 by signaling strong executive branch support for investment and development in domestic petroleum infrastructure. This memorandum encourages the very activities that HR161 seeks to deregulate, creating a synergistic effect for the energy sector. Market data for energy companies like Exxon Mobil ($XOM), Chevron ($CVX), Marathon Petroleum ($MPC), and Phillips 66 ($PSX) shows mixed performance over the last 30 days, with declines ranging from -10.94% to -12.22%. However, over the past 7 days, these tickers have shown positive movement, with $XOM up +0.66%, $CVX up +0.92%, $MPC up +4.2%, and $PSX up +2.88%. Chemical companies like DuPont ($DD), LyondellBasell ($LYB), Dow Inc. ($DOW), and Celanese ($CE) have also seen declines over 30 days but mixed 7-day performance. The recent positive 7-day trend in energy stocks could be influenced by the Presidential Memorandum, which was issued on April 20, 2026. The legislative path for HR161 involves floor action in the House, followed by potential consideration in the Senate and presidential assent. Given its 'Reported out of committee' status and the recent supportive executive action, the bill has clear momentum. The bill's impact is significant for companies that operate large industrial facilities. The legislative action history shows consistent progress, with the bill being referred to committee, undergoing subcommittee and full committee mark-ups, and being ordered to be reported within a year of introduction. This indicates active engagement and a clear path forward. The alignment with the Presidential Memorandum further strengthens the case for a positive impact on the affected sectors.