President Issues Executive Order on Energy and Climate

On March 28, President Donald Trump issued an executive order called Promoting Energy Independence and Economic Growth (Order). The Order charts a new course for United States energy policy by directing agencies to reverse actions taken by the Obama administration to address climate change, including the Clean Power Plan. Specifically:

  • Review of the “Clean Power Plan” and Related Rules. The Order directs the U.S. Environmental Protection Agency (EPA) to review rules regulating carbon emissions from existing electricity generating units, known as the Clean Power Plan (CPP), as well as the rule establishing performance standards for greenhouse gas (GHG) emissions from new generating units. If EPA concludes that these rules “unduly burden the development of domestic energy resources,” E.O. § 1(c), EPA must initiate proceedings to suspend, revise or rescind the rules. EPA will also notify the Attorney General so he can advise the courts in pending cases of EPA’s review and seek a stay or other relief while EPA completes this review.
  • Review of Rules and Polices That May Burden Development of Domestic Energy Sources Generally. The Order directs federal agencies to review all existing agency actions “that potentially burden the development or use of domestically produced energy resources,” particularly oil, natural gas, coal and nuclear. It establishes a process for agencies to complete this review in 180 days. Based on the review, agencies may take further steps to rescind or revise identified actions.
  • Withdrawal of Executive Actions by President Barack Obama and the Council on Environmental Quality. The Order revokes several executive orders, presidential memoranda and other actions by the Executive Office of the President related to energy and climate. It rescinds the guidance by the Council on Environmental Quality (CEQ) on how to consider GHG emissions and the effects of climate change in project reviews under the National Environmental Policy Act. The Order also instructs federal agencies to identify and reverse other actions “related to or arising from” these executive actions.
  • Elimination of Social Cost of GHGs. The Order disbands the Interagency Working Group on Social Cost of Greenhouse Gases and withdraws all technical documents associated with the social cost of carbon and social cost of methane. These documents put a price on GHG emissions, and EPA and other agencies used that price to calculate benefits of GHG emission reductions when conducting cost-benefit analyses. The Order also directs that agencies use the Office of Management and Budget’s established guidance when monetizing the value of changes in GHG emissions.
  • End the Federal Land Coal Leasing Moratorium. The Order directs the Department of the Interior (DOI) to lift the January 2016 direction by the Interior Secretary imposing a moratorium on all coal leasing activities on federal lands. Activities will resume based on applicable law.
  • Review of Regulations Related to Oil and Gas Development. The Order further directs that EPA and DOI review certain regulations issued in 2015 and 2016 related to domestic oil and natural gas development. This includes EPA’s final rule known as the Quad Oa rule setting emission standards for new and modified sources, as well as four DOI rules, including the rule setting standards for the use of hydraulic fracturing on federal and tribal lands. Here as well, the agencies are to notify the Attorney General to take appropriate actions to obtain a stay or other relief in pending litigation.

Five Things to Consider

  1. The Order Resets Federal Policy. By focusing on domestic energy development and rescinding specific executive actions, reports and guidance addressing climate change, the Order moves to reshape federal energy and environmental policy. For EPA, addressing climate change has been a central focus over the past eight years. Now, EPA and other agencies will reconsider past actions with an eye to rescinding or replacing them to promote development of fossil fuels.
  2. The Executive Order Does Not Reverse Existing Regulations. Although the Order does immediately reverse several executive orders issued by President Obama, its direction to review and, if appropriate, rescind or revise regulations such as the CPP does not actually change any of those regulations. Although eliminating the CPP and other regulations would remove significant barriers to fossil fuel use and development and allow fossil fuels and nuclear energy to compete on a level economic playing field with other energy sources, significant further administrative action will be required to effectuate any changes.
  3. The Process for Reversing Existing Regulations Is Complex. The process of rescinding or even substantially revising existing climate regulations will be time consuming and complex for several reasons. First, to do so, agencies must generally follow the same notice and comment rulemaking process they used to issue regulations in the first place. They will have to provide compelling bases for shifting course and overcome evidence already in the record supporting the prior rules. Second, states, nongovernment organizations (NGOs) and others that oppose these changes in policy will certainly oppose any new rules that rescinds or revises climate change regulations. Third, some of the existing rules are already in litigation, and resolution of existing lawsuits may further complicate and delay the process. Thus, it could take many months or even years for EPA and other agencies to comply fully with the Order. EPA and other agencies have no easy way to make the existing rules ineffective during this rescission/revision process, although there are several tactics they may use in the interim period, such as administrative stays or statements of enforcement discretion.
  4. Although Broad, the Order Does Not Explicitly Address All Climate Issues. Notably, the Order does not address the United States’ commitments to the Paris Agreement on Climate Change. It leaves for another day whether President Trump will seek to withdraw from that accord. Likewise, the Order does not specifically direct EPA to take any action on the endangerment finding that EPA issued in 2009 under Title II of the Clean Air Act (or any later such finding, such as the one supporting aircraft engine regulations). However, the Order leaves EPA room to reconsider its endangerment findings when reviewing agency actions that “potentially burden” domestic energy development or that are “related to” the presidential and CEQ actions the Order eliminates. Finally, the Order does not speak to the mobile source “waiver” granted to California that permits California to require more stringent mobile source emissions standards, including GHG standards, for vehicles sold there.
  5. States, NGOs and Others Will Vigorously Oppose the Order. Issuance of the Order does not end the fight over whether and how to regulate GHG emissions in the United States. The states retain their own authority to regulate sources of GHG emissions and, thus, may maintain and even expand their existing regulations. Some state attorneys general have already sought to use their subpoena powers against energy companies and those efforts could expand. NGO citizen suits, nuisance litigation and other challenges are likely each step of the way, as the protests over the Dakota Access and XL pipelines amply demonstrate.