United States: From ESA To Keystone To EPA, Changes Coming Fast

Few things are certain leading up to Donald Trump's presidency. But there is no question that environmental and energy policy will take center stage in the days – perhaps hours – following his inauguration.

Much of President Obama's environmental legacy, particularly the parts stemming from executive actions, will be rolled back – and, more broadly, Washington is about to become a friendlier place for the fossil-fuel sector.

Here are the top issues we are watching in the early days of the Trump presidency.

The Endangered Species Act

House Natural Resources Committee Chairman Rob Bishop (R-UT) made headlines last month when he said the best way to reform the Endangered Species Act might be "to start over again," advocating for a "repeal and replace" approach.

But we believe that, rather than starting over, Congress will more likely consider discrete amendments targeting provisions that benefit neither business nor the environment. Specifically, they could return implementation – in the hands of the executive and judicial branches for 25 years – to Congress and reduce the role of litigation in driving listing decisions for individual species. This second could prove particularly significant – donations to environmental groups surged after Mr. Trump's win, and those groups now have fewer places to spend money among elected leaders in Washington, leaving them with formidable litigation war chests. We expect more litigation challenges but we also expect the Trump administration to mount a much more aggressive defense to those suits.

Energy Production and Distribution

During the presidential campaign, Mr. Trump promised to accelerate development of U.S. energy resources, promising energy independence and vowing support for the Keystone XL Pipeline, rejected by President Obama in 2015, and the Dakota Access project, which has been put into further environmental review after months of intense protests in 2016.

While Mr. Trump could effectively reverse President Obama's rejection of Keystone with the stroke of a pen, changing the December decision that halted the Dakota project would require a Congressional action. More broadly, a Trump administration will almost certainly greenlight new pipelines and be more supportive of projects to extract oil and gas through hydraulic fracturing, notably in North Dakota and the Upper Midwest.

Climate Change, Coal Ash and Fracking

Mr. Trump has consistently repudiated President Obama's Clean Power Plan and vowed to withdraw from the Paris Climate Accords. And while the president-elect is on record calling climate change a hoax, his stance has become more nuanced since the election — and several cabinet nominees have testified that they do not agree it's a hoax.

Still, with revenue needed to offset a likely reduction in corporate tax rates, tax credits for solar, wind, fuel-cell and other renewable energy technologies could be on the chopping block. But we expect Congressional resistance to that effort, especially from members who represents districts where renewable energy has become a significant economic engine.

Mr. Trump's pick of Oklahoma Attorney General Scott Pruitt to lead the Environmental Protection Agency means that an individual who has historically been hostile to many of the agency's efforts will now be in charge of that organization. Pruitt has spent years fighting the EPA in court and his tenure could bring a reduction of regulation in many areas, including coal ash and hydraulic fracturing.

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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