United States: Forecast For Energy And Environment Regulations

Beth A. Viola is a senior policy advisor, Virgilio "Lio" Barrera is a public affairs advisor and Isabel Lane is a legislative assistant in our Washington, D.C. office

HIGHLIGHTS:

  • The review and modification of energy regulations is expected to be a cornerstone of President-Elect Donald Trump's first 100 days in office.
  • The Trump Administration may utilize a variety of executive and legislative options to modify or eliminate the plethora of energy regulations that the Obama Administration is working to complete before leaving office.
  • Energy and environment regulations potentially targeted for repeal or reform include the Clean Power Plan (CPP), Waters of the United States (WOTUS) and the Renewable Fuels Standard (RFS), among others.

President-Elect Donald Trump has promised to bring back jobs in the coal industry and reduce regulations that could inhibit economic growth. His transition team has already begun arriving at federal agencies to review the plethora of regulations that the Obama Administration is trying complete before the sitting President leaves office. The review and modification of regulations across multiple agencies is expected to be a cornerstone of Trump's first 100 days in office.

Holland & Knight's Energy Team has developed the charts below to outline the executive and legislative options the Trump Administration and Republican Congress may utilize to modify or invalidate regulations:


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While the Trump Administration has been vague on which provisions it will prioritize for elimination or reform, Holland & Knight's Energy Team has compiled the below list of likely energy and environment regulation targets:

Clean Power Plan Regulations

President-Elect Trump has long stated his intention to eliminate the Clean Power Plan, finalized in August 2015. The rule has a legal challenge pending in the U.S. Court of Appeals for the District of Columbia Circuit, which could make its way to the Supreme Court. By then, the Supreme Court would likely have on it a justice appointed by then-President Trump. Should it survive, the Administration could discretionarily enforce the rule, approving lenient State Implementation Plans (SIPs). Also endangered is the Clean Energy Incentive Program (CEIP) established under the Clean Power Plan, which the Obama Administration is unlikely to finalize before Trump's inauguration.

Waters of the United States Rule

The Waters of the United States regulation, finalized in May 2016, updated the Clean Water Act's jurisdiction by redefining "navigable waters of the U.S." to include ditches, seasonal wetlands and other waters previously outside the Environmental Protection Agency's (EPA) jurisdiction. The rule has been the subject of criticism from agricultural, energy, local government and development interests. They all allege the regulation will give the EPA carte blanche power, and, for that reason, the rule will be a target for the new Administration and the Republican Congress alike. It is unlikely to be eliminated via legislative action this Congress, so if it survives its existing legal challenge pending in D.C.'s Sixth Circuit Court of Appeals, the 115th Congress may seek to address the issue in 2017. Additionally, President-Elect Trump has vowed to block WOTUS administratively – likely by discretionarily enforcing the rule until the EPA is able to mount a successful legal case to alter the regulation.

Renewable Fuels Standard 2017 Rule*

Released on Nov. 23, 2016, and still awaiting publication in the Federal Register, the Renewable Fuel Standard (RFS) 2017 rule establishes targets for U.S. renewable fuel blending in 2017. Should a Congressional Review Act (CRA) vote pass repealing this annual regulation, the RFS could be permanently crippled as the CRA forbids agencies to ever create a similar rule.

GHG NEPA Guidance

The Council on Environmental Quality (CEQ) issued, on Aug. 1, 2016, its final guidance requirement for all federal agencies to consider GHG emissions and the effects of climate change in National Environmental Policy Act (NEPA) reviews. Criticisms levied against CEQ's direction allege the guidance goes beyond the requirements of the underlying NEPA statute, which already requires NEPA reviews to consider air quality concerns, geologic conditions, water quality risks, existing wetlands conservation policies and safety concerns, among other requirements. It is expected that this guidance will be quickly eliminated.

Social Cost of Carbon Guidance

In 2010, the Office of Management and Budget (OMB) directed federal agencies to consider financial estimates of the "social cost of carbon," set by pricing the benefits of avoided greenhouse gas (GHG) pollution, when engaging in rulemakings. Essentially used as a calculation to justify regulations on climate change, this guidance has long been a target for Republicans.

Stream Protection Rule*

Since just after taking office, the Obama Administration has been working to complete its Stream Protection Rule that updates the permitting process for coal mines established in the 1983 Surface Mining Control and Reclamation Act (SMCRA). The proposed rule was issued in July 2015 and the administration is rumored to be close to finalizing it. If it is published before the Obama Administration leaves office, a CRA vote on this, along with several additional U.S. Department of the Interior (DOI) regulations regarding energy development and public lands, is likely in the cards.

Venting and Flaring Rule*

The DOI issued, on Nov. 15, 2016, final regulation that will limit venting and flaring of natural gas. While the DOI argues that the rule will combat climate change and gather otherwise-wasted natural gas to be reused at power plants, industry interests insist the regulation should provide for more expediency in the permitting process for gas-gathering lines on federal land. The regulation would be an easy target for a CRA vote.

Ozone

The EPA finalized, on Oct. 1, 2015, its national ambient air quality standard (NAAQS) for ozone from 75 parts per billion (ppb) to 70 ppb. The standard is facing legal challenges from both environmentalists, who assert it does not go far enough to protect public health, and states and industry interests that contend some areas will never be able to achieve the requirement due to existing background levels or upwind pollution sources. The Trump Administration may explore options to revise the standard back to 75 ppb.

* Denotes possible midnight regulation or recently finalized actions subject to the CRA. Holland & Knight's Energy Team will continue to update this list as regulations are finalized. To learn more about the CRA and midnight regulations, see Holland & Knight's alert, " U.S. House to Consider Bill to Limit, Overturn Midnight Regulations," Nov. 16, 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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