New Administration Takes Initial Steps to Reduce Environmental Regulatory Burden



As anticipated by his America First Energy Plan, President Trump signed an Executive Order (EO) on March 28 directing regulatory agencies to review all agency actions—largely from the Environmental Protection Agency (EPA) and the Department of the Interior (DOI)—that "potentially burden the safe, efficient development of domestic energy resources." The EO gave agencies 45 days to submit to the Office of Management and Budget (OMB) their plans for the review, and then 180 days to submit a final report of recommended actions to reduce the burden on the development of domestic energy resources.

In short, the EO achieves the following:

  • Rescinds or revokes several Obama Executive Orders and reports related to climate change, including the President's Climate Action Plan
  • Directs the Council on Environmental Quality (CEQ) to rescind its August 2016 guidance to federal agencies on how to address greenhouse gas (GHG) emissions and climate change in National Environmental Policy Act (NEPA) reviews
  • Directs the EPA Administrator to take "all steps necessary to review" the final rules, supporting memos, and federal plan requirements for the GHG Existing and New Source Performance Standards (NSPS), also known as the "Clean Power Plan" (CPP), and to take appropriate steps to revise, suspend, or rescind those rules
  • Disbands the Interagency Working Group on Social Cost of Greenhouse Gases, and clarifies that documents issued by that Working Group no longer represents U.S. government policy
  • Directs the EPA Administrator to review and potentially revise or rescind the June 2016 NSPS for sources in the oil and natural gas source category (NSPS Subpart OOOOa)
  • Requires federal agencies to follow the guidance in OMB Circular A-4, September 17, 2003, when they monetize the value of changes in GHG emissions
  • Requires actions by the Secretary of Interior related to various rules related to mineral rights and extraction practices on federal lands, including the "Venting and Flaring" rule issued by the Bureau of Land Management (BLM)s

While some impacts of the EO are immediate, there are many aspects that will take time to resolve. Although the EO targets several GHG regulations, it does not direct EPA to review its 2009 Endangerment Finding, which requires EPA to regulate GHG emissions in order to protect public health. With the Endangerment Finding in place, total withdrawal of GHG-related regulations could be an uphill battle as it would require EPA to build a case directly contradicting earlier represented justification.

As of the writing of this article, EPA has announced its intent to commence agency review of the CPP and NSPS OOOOa regulations.

Rolling Back Obama-era Policies and the President's Climate Action Plan

Effective March 28, 2017, the EO revoked (i.e., repealed) the following Obama-era actions:

  • Executive Order 13653 (Preparing the United States for the Impacts of Climate Change)
  • Presidential Memorandum dated June 25, 2013 (Power Sector Carbon Pollution Standards)
  • Presidential Memorandum dated November 3, 2015 (Mitigating Impacts on Natural Resources from Development and Encouraging Relating Private Investment)
  • Presidential Memorandum dated September 21, 2016 (Climate Change and National Security)

The EO also rescinded the following Obama-era reports and CEQ guidance document:

  • The Report of the Executive Office of the President of  June 2013 (The President's Climate Action Plan)
  • The Report of the Executive Office of the President of March 2014 (Climate Action Plan Strategy to Reduce Methane Emissions)
  • Notice issued by CEQ titled Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act (NEPA) Reviews (August, 2016)

Lastly, the EO orders the disbanding of the Interagency Working Group (IWG) on the Social Cost of Greenhouse Gases and the withdrawal of the following documents:

  • Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (February 2010)
  • Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis (May 2013, November 2013, and July 2015)
  • Addendum to the Technical Support Document for Social Cost of Carbon: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide (August 2016)
  • Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis (August 2016)

Man with Directional Arrows

Regulatory Reviews: Clean Power, Oil and Gas, and Energy Production

In the interest of supporting domestic coal, oil, and natural gas development, the EO directs EPA and DOI to start the process of reviewing rules and, based on that review, to propose revising, suspending, or withdrawing regulations initially developed to curb GHG and criteria pollutants from a variety of energy sources.

The EO also directs the EPA Administrator to immediately take steps necessary to commence the review, and subsequent revision or withdrawal, of regulations (and supporting legal memos or guidance) developed to cut GHG emissions from electricity generating units found within the CPP, codified within the regulations listed below. On April 4, 2017, EPA Administrator Scott Pruitt announced the agency's intent to review these rules.

  • Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units; Final Rule: 40 CFR Part 60, Subpart UUUU Emission Guidelines for Greenhouse Gas Emissions and Compliance Times for Electric Utility Generating Units
  • Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units; Final Rule: 40 CFR Part 60, Subpart TTTT Standards of Performance for Greenhouse Gas Emissions for Electric Generating Units
  • Federal Plan Requirements for Greenhouse Gas Emissions From Electric Utility Generating Units Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations; Proposed Rule: 40 CFR Part 62, Subpart MMM Greenhouse Gas Emissions Mass-based Model Trading Rule for Electric Utility Generating Units That Commenced Construction on or Before January 8, 2014

Previously, the U.S. Supreme Court stayed the implementation of the CPP in February 2016 while the D.C. Circuit Court was considering appeals. In a separate action also on March 28, 2017, after the announcement of the agency's intent to review the rules, the Department of Justice (DOJ) requested that the D.C. Circuit Court delay any ruling on the pending case in order to allow EPA time to rework the rule.1 As of the writing of this article, the D.C. Circuit Court had not responded to DOJ's request.

NSPS OOOOa Also Up for Review

S2017 Article 1 Quote

The EO also directs the EPA Administrator to review regulations broadly applicable to oil and gas development, and specifically calls out air pollution standards for new, modified, and reconstructed sources in the oil and natural gas source category: 40 CFR Part 60, Subpart OOOOa (NSPS OOOOa). NSPS OOOOa provides emission standards for both criteria pollutants (specifically, volatile organic compounds, or VOC) and GHG emissions. EPA's announcement to revisit this rule was included in the April 4, 2017 Federal Register notice.

Unlike the CPP, this rule is presently in place without a court-ordered stay on implementation. Thus, EPA must undertake a complete regulatory rulemaking process in order to enact any revision or removal of the rule. This will entail the release of a revised proposed rule (or a justification for the full suspension of the rule), public comment, potentially revised versions of the rule, and then a final rulemaking. Until such time that NSPS OOOOa has undergone this process, this finalized rule remains in force. A concern raised by the regulated community when NSPS OOOOa was initially developed centered around EPA's economic and cost/benefit analysis. Based on the language in the EO, it seems likely that EPA will re-visit that analysis and provide an updated rule based on a substantially revised estimate of the expected cost of compliance.

BLM's Venting and Flaring Rule and the Congressional Review Act

The EO orders the DOI to rescind, suspend, or revise the DOI's Waste Prevention, Production Subject to Royalties, and Resource Conservation (often referred to as BLM's venting and flaring rule. This rule was promulgated recently enough in the tail-end of the Obama administration to qualify for review under the Congressional Review Act (CRA). The CRA allows Congress to call back any rule passed within the past 60 legislative days and, in effect, pause its effective date until the rule has been reviewed. If a full disapproval resolution is enacted, not only does the rule not take effect, but also another similar rule cannot be issued without "substantive statutory authorization."2

Federal Lands and Energy Extraction

The EO also orders DOI to lift orders freezing coal leasing activities on public lands (Order 3338). Finally, the EO orders the Secretary to suspend, revise, or rescind the following:

  • Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands (43 CFR Part 3160, Final Rule)
  • General Provisions and Non-Federal Oil and Gas Rights (National Park Service, 36 CFR 1 and 9; Final Rule)
  • Management of Non Federal Oil and Gas Rights (Fish and Wildlife Service, 50 CFR Part 28 and 29; Final Rule)

Conclusion

Trump's EO has had an immediate impact on some Obama-era memos and policies, but many of the regulations targeted by it were already ensnared in numerous legal or congressional complications. Regulations already finalized and codified must undergo a full rulemaking process—a transparent process which can take many months, sometimes years. While many things are uncertain, one thing is clear: new agency actions will be forthcoming and will need to be monitored closely in the coming months and years.


1  USCA Case #15-1363, Document 1668274, Filed 3/28/2017

2  5  U.S.C 802(a)