There has been much discussion lately regarding the new Administration's efforts to review and possibly "roll-back" several environmental and energy-related regulations issued by the Environmental Protection Agency (EPA), the Department of Interior (DOI), and other federal agencies, as well as to reverse key decisions made during President Obama's tenure. Because many of these policy changes may directly or indirectly impact your businesses, we wanted to keep our clients abreast of which of the major environmental and energy policies are in and which are out. We plan to update this blog, if and when, this landscape shifts.
So far, the new Administration's moves fall into three categories: (1) overturning regulations using the Congressional Review Act; (2) reversing key decisions by Executive Order (EO); and (3) reviewing, revising, and potentially rescinding regulations through the federal rulemaking process. As discussed in more detail below, some policy changes will take immediate effect, while others will take considerable time to be fully implemented. Supporters of the Administration's efforts view these recent moves as removing regulatory hurdles for businesses that will strengthen the Nation's economy and boost job creation. Opponents view them as hurting the U.S.'s ability to address the impacts of climate change and protect human health and the environment. Each category of Administration action is discussed below.
Congressional Review Act
The Congressional Review Act (CRA), passed in 1996, created a period of 60 legislative days (days in which Congress is in session) during which Congress could use an expedited procedure to overturn a regulation of the previous administration. This removal procedure is not subject to the procedural requirements in the Senate that make a filibuster possible, but the action can still be vetoed by the President. The CRA has been used successfully only once since 2001, yet the current Congress has successfully used it several times already. The following regulations have been revoked by Congress or are under consideration for revocation by one chamber. A rule's revocation is immediate upon the President's signature.
- Stream Protection
Rule: The DOI, Office of Surface Mining, published the
Stream Protection Rule in December 2016. The rule updated a number
of regulations impacting the coal industry, particularly by
protecting streams and waterways in the vicinity of coal mining
operations from being polluted by operational waste. On February
16, Congress revoked the rule and the bill was signed by President
Trump on the same day.
- Methane and Waste Prevention
Rule: The DOI, Bureau of Land Management, issued new
regulations in November 2016 to reduce waste of natural gas from
venting, flaring, and leaks from oil and gas production activities
occupying leased Federal and Indian lands. Using the CRA, the House
voted to repeal the regulations and a similar bill is under
consideration in the Senate.
- SEC Disclosure Rule: In June 2016, the Securities and Exchange Commission issued new regulations requiring oil, gas, and mining companies to disclose payments to foreign governments in an effort to increase transparency. On February 14, Congress passed and President Trump signed the bill canceling this disclosure requirement.
Executive Orders and Directives
President Trump has also issued several EOs and directives to reverse key decisions made by former President Obama or by federal agencies during his tenure. The reversals with immediate effect include:
- Methane Regulation of
Existing Oil and Gas Production: In June 2016, EPA issued
an information collection request seeking a broad range of
information from the oil and gas industry. This request accompanied
EPA's final rule limiting emissions of methane and other
ozone-causing volatile organic compounds from new, reconstructed,
and modified oil and gas infrastructure. This information request
was viewed as a precursor to EPA's evaluation of potential
regulatory requirements for methane emissions from existing oil and
gas sources. On March 2, at the White House's request, EPA
Administrator Scott Pruitt withdrew this information request,
signaling that new regulations are not on the horizon.
- Keystone Pipeline:
Following the President's EO in January, the State Department
announced on March 24 that the Undersecretary for Political
Affairs, Mr. Tom Shannon, issued the required cross-border permit
needed to revive the controversial Keystone XL pipeline. Secretary
of State Rex Tillerson recused himself from the decision-making
process due to his former position as Chief Executive Officer of
Exxon Mobil, Corp. The permit had been rejected by the Obama
Administration; however, the pipeline, which will run from Alberta,
Canada to Steele City, Nebraska, will now move forward.
- Dakota Access Pipeline: After President Trump signed a directive aimed at pushing the 1,172 mile pipeline project forward, the U.S. Army Corps of Engineers terminated its preparation of an environmental impact statement and issued the easement needed to cross federal lands along Lake Oahe in North Dakota. The easement and the construction of the pipeline had been halted by an earlier decision by the Corps to conduct an extensive environmental review before issuing the easement and by federal lawsuits brought by tribes alleging that the Corps violated the National Environmental Policy Act (NEPA) and tribal treaties. It has been reported that the pipeline will be operational in a few weeks.
A significant EO was issued on March 28, called the
"Presidential Executive Order on Promoting Energy Independence
and Economic Growth." According to the EO, the order was
issued "to promote clean and safe development of our
Nation's vast energy resources, while at the same time avoiding
regulatory burdens that unnecessarily encumber energy
production." Like the EOs before it, some of its directives
may take effect immediately, while others will take some time to be
implemented. Those taking effect immediately include:
- Review of Agency
Actions: The EO directs the heads of all agencies to
"review all existing regulations, orders guidance documents,
policies, and any other similar agency actions (collectively,
agency actions) that potentially burden the development or use of
domestically produced energy resources, with particular attention
to oil, natural gas, coal, and nuclear energy resources" and
to develop a report identifying such agency actions. Potentially,
these actions could be suspended, revised, or rescinded. EPA
Administrator Pruitt formally began the agency review
process.
- Presidential
Actions: The EO revokes several energy and climate-related
Presidential EOs, memorandums, and directives, including former
President Obama's Climate Action Plan.
- Coal Leasing on Federal
Lands: The EO compels DOI Secretary Ryan Zinke to lift the
moratorium on the issuance of new coal leases on federal lands,
which had been in place since early 2016. Secretary Zinke formally
lifted the ban on March 29.
- Consideration of Climate
Change in Decisions: The EO rescinds an August 2016 White
House, Council of Environmental Quality directive and final
guidance that required federal agencies to consider climate change
impacts when those agencies conducted reviews under the National
Environmental Policy Act (NEPA).
- "Cost of Carbon" Considerations: The EO directs a review of the estimate of the "social cost of carbon," which is used to calculate the economic costs and impacts of climate change when conducting analysis and developing regulations. The EO also "disbanded" the Interagency Working Group on Social Cost of Greenhouse Gases (IWG) and withdraws several of its working documents.
Administrative Rulemaking Process
Many of the EOs simply direct EPA and other federal agencies to review environmental and energy-related regulations and ensure that regulations align with the new Administration's priorities and current law. Suspension, revisions, or revocation of these regulations will take considerable time, possibly several years, because proposed changes must go through the lengthy federal rulemaking process, as directed by the Administrative Procedure Act. The rulemaking process is comprehensive and entails, among other requirements: proposing a rule that is supported by extensive science and legal arguments; issuing proposed rules; opening the proposed rule to notice and public comment; considering and responding to comments; and eventually surviving judicial review. The regulations that EPA Administrator Pruitt has been directed to review include:
- Clean Power Plan (Existing
Stationary Sources): EPA's final rule, Existing
Sources, Carbon Pollution Emission Guidelines for Existing
Stationary Sources: Electric Utility Generating Units (80 Fed. Reg.
64661), was published in October 2015 and was challenged the same
day by several states, state agencies, and industry. State of
West Virginia v. EPA (Consolidated Case No. 15-1363). More
commonly known as the Clean Power Plan (the CPP), the CPP sets
emissions rates goals and mass equivalents for each state. The
March 28 EO directs EPA Administrator Pruitt to review the CPP to
ensure it aligns with the Administration's priorities. Oral
arguments were heard by an en banc panel of the U.S. Court
of Appeals for the District of Columbia Circuit on September 27.
The court has not yet ruled, but may do so any day now. On March
29, EPA asked the court to suspend this suit as the agency works to
revise or replace the final rule.
- Carbon Pollution Standards
for New, Modified, and Reconstructed Power Plants:
EPA's final rule, Standards of Performance for Greenhouse Gases
from New, Modified, and Reconstructed Stationary Sources: Electric
Utility Generating Units (80 Fed. Reg. 64509), was also published
in October 2015. This rule has not received the same level of
attention as the existing stationary source rule because very few
new coal plants are in the construction pipeline due to the
availability of affordable natural gas and reluctance in the
investor community to finance new coal projects. This rule has been
challenged in the U.S. Court of Appeals for the District of
Columbia Circuit. State of North Dakota v. EPA
(Consolidated Case No. 15-1381). It has moved more slowly than the
CPP litigation, but oral arguments are set for April 17. The March
28 EO also directs EPA Administrator Pruitt to review this
regulation and possibly suspend, revise, or rescind the rule. The
Department of Justice most likely will file a motion to suspend
this suit as EPA works to revise or replace.
- Methane Regulation at New Oil
and Gas Production Facilities: In June 2016, EPA published
its final rule, Oil and Natural Gas Sector: Emission Standards for
New, Reconstructed, and Modified Sources (81 Fed. Reg. 35824),
limiting emissions of methane and other ozone-causing volatile
organic compounds from new, reconstructed, and modified oil and gas
infrastructure. The rule updated the New Source Performance
Standards (NSPS) associated with methane and other VOCs and
requires oil and gas companies to prevent leaks, capture methane
from hydraulic fractured wells, and limit emissions from various
types of oil and gas extraction and transmission equipment,
including pumps, compressors, and pneumatic controllers. The March
28 EO directs EPA Administrator Pruitt to review this regulation
and possibly suspend, revise, or rescind.
- Hydraulics Fracturing on
Federal Lands: The March 28 EO directs DOI Secretary Ryan
Zinke to review several final rules governing hydraulic fracturing,
or fracking, for oil and natural gas on federal lands and possibly
suspend, revise, or rescind the rules.
- Clean Water Rule or Waters of
the United States Rule (WOTUS): This June 2015 rule
clarified which streams, wetlands, and other waters fall under the
federal clean water regulations – a point of confusion since
the U.S. Supreme Court's 2006 split decision in U.S. v.
Rapanos. President Trump signed an EO on February 28
requesting that EPA Administrator Pruitt review the rule and begin
the lengthy process to possibly suspend, revise, or rescind.
- Vehicle Fuel Economy
Standards: The model year 2022-2025 greenhouse gas
emissions standards for light-duty vehicles were established in
2012. Last year, EPA conducted a midterm review to determine
whether the automotive manufacturing industry could meet the
stricter standards, which would have vehicles getting more than 50
mpg on average across the fleet by 2025. The agency completed its
review ahead of schedule and approved the standards in January
2017. President Trump has now directed EPA Administrator Pruitt to
reconsider the agency's recent decision and approval.
- California Vehicle Fuel Economy Standards: President Trump and EPA Administrator Pruitt left in place a waiver that allows California and other states to enforce stricter emissions standards within their borders, thus delaying a standoff with the state. On March 24, California's Air Resources Board voted to push ahead with stricter emissions standards for cars and light trucks. It is unknown at this point if the White House will take any action restricting this waiver.
Although the new Administration has made several moves to cut back regulations and decisions issued during former President Obama's term, it has not addressed two substantial issues. First, whether President Trump will direct EPA Administrator Pruitt to address and possibly reverse the agency's December 2009 "endangerment finding" for emissions of six greenhouse gases. The finding provides EPA the statutory authority to regulate these emissions and was the result of an April 2007 Supreme Court decision in Massachusetts v. EPA, which required EPA to determine if greenhouse gas emissions threaten human health and welfare and if so, to regulate them. Addressing this issue will be difficult considering it has already survived judicial scrutiny and is supported by scientific data. Second, President Trump hasn't addressed whether the U.S. will exit the 2015 Paris Climate Agreement. This issue is not as straightforward for the new Administration as many in President Trump's inner circle are divided regarding whether the U.S. should move away from its commitments. This division has kept the issue's resolution in limbo as the new Administration addresses the U.S.'s role in the international agreement.
There are many moving parts to the new Administration's change in direction on environmental and energy policy. The above is not an exhaustive list of policy changes, so please check back to this blog for updates. In the meantime, please contact any of the attorneys on this post if you have any questions.
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