REGULATION

Trump's 'energy independence' order: Where do things stand?

President Trump's deregulatory agenda has been relentless.

Nine months into his presidency, Trump and his team have tossed reams of environmental standards in the trash, working to fulfill a promise to lighten the energy industry's regulatory burdens.

Many industry players have argued that President Obama and his Cabinet enlarged the administrative state by crafting layers and layers of new regulations, including fresh requirements for oil and gas development, power plant emissions and coal leasing.

The current administration has moved aggressively in the other direction, most notably with a March 28 "energy independence" executive order. In it, Trump plainly stated his objective: Revisit all federal regulations that fetter the operations of U.S. energy producers — especially those developing fossil fuels.

"I am going to lift the restrictions on American energy and allow this wealth to pour into our communities," Trump said in March.

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So how much has the administration gotten done? It varies by issue, but agencies are quickly moving in on the order's targets.

This month, Trump officials hit two milestones in their wide-ranging examination of Obama-era rules for domestic energy production, electricity generation and greenhouse gas emissions.

U.S. EPA Administrator Scott Pruitt formally proposed a repeal of the Clean Power Plan, after determining that the rule went beyond the agency's Clean Air Act authority. The rule aimed to cut carbon emissions from the power sector 32 percent from 2005 levels by 2030.

EPA's proposal came just days after the Bureau of Land Management unveiled its plan to postpone key parts of a rule the Obama administration introduced to limit venting, flaring and leakage of natural gas from energy operations on public and tribal lands.

The rule was one of four Interior Department oil and gas regulations explicitly listed in Trump's executive order and a March 29 order from Secretary Ryan Zinke implementing the White House directive.

Zinke's order also instructed each bureau and office head to report to Deputy Secretary David Bernhardt all actions that could burden domestic energy production.

Wood Mackenzie analyst Matt Preston noted that many regulations targeted by the executive order have not yet taken effect, limiting the on-the-ground impacts.

"Most of the things that are being reversed now hadn't actually had an impact as of yet," he said. "So the fact that they could be reversed or replaced or repealed pretty much holds the status quo."

But environmental law experts warn that the scope of the president's directive is immense. Vermont Law School professor Pat Parenteau said the scale of the deregulatory effort was "greater than what I expected" but added that administrative and legal complications could ultimately keep the Trump administration from reaching its goals.

"One thing is, as bad as we thought it was going to be, it's worse — in terms of the assault," he said. "In terms of the actual effects? Too early to say."

Fossil fuel producers have roundly praised the administration's direction, calling it a much-needed effort to rein in numerous new rules instituted under Obama. Still, they acknowledge that the rollbacks will not happen overnight.

"It's like turning a large cargo ship — you can't just do it on a dime," said Dan Naatz, senior vice president of government relations and political affairs for the Independent Petroleum Association of America. "I know the administration's moving forward on a number of regulatory rollbacks or reforms or changes, and we're certainly engaged in that process, but that's going to take some time.

"The environmental [nongovernmental organizations] are going to fight it every step of the way," he added, "but we think it's well worth continuing that effort to move forward."

Here's where things stand on Trump's primary targets:

Clean Power Plan

The Clean Power Plan has long been on the Trump administration's kill list. The president's executive order marked the first step toward rolling back the regulation, and EPA two weeks ago unveiled its formal plan to get rid of it.

The rule was stayed by the Supreme Court in 2016 and has never taken effect. Now its prospects are even dimmer. Pruitt's plan would roll back the regulation entirely, finding that it exceeded EPA's authority under the Clean Air Act. The agency has not committed to replacing it with any narrower standards.

A federal court considering challenges to the Obama rule has so far declined to weigh in on major legal questions that have swirled around the regulation. Supporters of the Clean Power Plan continue to hold out hope for a ruling. But they're also gearing up for the next battles: commenting on the Trump administration's repeal proposal and planning to file new legal challenges once it's finalized.

Trump's March order also calls out another power plant regulation: EPA's 2015 rule for carbon emissions from new and modified sources. Unlike the Clean Power Plan, the new source rule is in effect. EPA is reviewing it but has not announced a timeline for action (Climatewire, Oct. 11). Litigation over that measure is on hold.

Social cost of carbon

One piece of the "energy independence" order that had immediate effects was a provision that called for scrapping the Obama administration's favored approach to measuring the cost of greenhouse gas emissions.

With the stroke of a pen, Trump disbanded an interagency working group that focused on the social cost of carbon and related tools that put a dollar amount on the impacts of carbon, nitrous oxide and methane. The group was charged with building a set of values to help agencies consistently weigh the benefits of reducing emissions.

Trump's order promptly killed the group and related technical documents that guided how federal agencies approached climate issues in cost-benefit analyses and environmental reviews. It also directed agencies to revert to an older method of weighing benefits from emissions reductions, focusing on domestic gains rather than global effects.

That U.S.-centric approach has already taken center stage in the rollback of the Clean Power Plan.

The Trump administration's proposal features a new regulatory impact analysis that revises the social cost of carbon calculation to focus on domestic benefits. Overall, the analysis projects annual climate benefits at about $20 billion less than Obama's EPA had contended. Similar revisions appeared in BLM's recent proposal to stall its methane rule.

But the social cost of carbon and related metrics won't disappear quietly, as courts have repeatedly pressed agencies to do some type of analysis reflecting those impacts (Greenwire, Sept. 1).

For example, a district court in Montana slammed the Interior Department in August for not weighing the cost of emissions related to coal mining when it had the social cost of carbon tool available. A week later, an appellate court in Washington, D.C., pressed the Federal Energy Regulatory Commission to explain why it opted not to use the metric when weighing the effects of natural gas pipelines.

Oil and gas

When Trump handed down his executive order on energy, Congress appeared poised to single-handedly abolish BLM's 2016 Methane and Waste Prevention Rule, one of four Interior regulations set for the chopping block.

Six weeks later, the Senate failed to secure the support of a simple majority behind the Congressional Review Act (CRA) resolution, and Interior turned to its instructions from the White House to "suspend, revise or rescind" the rule.

The department's systematic dismantling of the rule began in June, when BLM published a notice in the Federal Register indicating that it would excuse companies from complying with provisions of the rule that had yet to take effect.

A California district court later ruled that the delay was improperly executed.

The decision came the same day as BLM's formal proposal to postpone many of the rule's requirements to July 2019, giving the Trump administration more time to decide whether it should revise the rule or rescind it altogether.

EPA's attempt to roll back separate methane standards has also landed the agency in hot water. Pruitt moved to freeze New Source Performance Standards through a formal reconsideration process earlier this year but was blocked by a federal court in July. The rule is now in effect while the agency goes through a broader review of whether to keep it intact (Energywire, Aug. 22).

Efforts to roll back an Obama rule for hydraulic fracturing on public and tribal lands have taken their own strange turns. The regulation was struck down by a district court in 2016 and has never taken effect. Government lawyers appeared in a federal appeals court over the summer to defend the Bureau of Land Management's authority over fracking but urged the court to stay out of the issue while the agency reconsiders the standards.

A panel of judges took the government's advice — sort of. They agreed to toss litigation over the Obama rule without a decision, finding it unfit for a ruling given the new administration's review process. But they also scrapped the lower court's decision that sidelined the rule in 2016. The result? The fracking rule is set to take effect once the appeals court issues a formal mandate in the case.

To stop the Obama measure from taking effect, the Trump administration must finalize a rescission plan before that mandate issues. BLM has already circulated and received comments on a proposal and could issue a final plan any day. The court's mandate is expected by mid-November, but fracking rule opponents could persuade the court to hold off.

Action to repeal two other Interior rules listed in the executive order has lain dormant since the clock ran out on the CRA earlier this year.

Resolutions to scrap the Fish and Wildlife Service's "Management of Non-Federal Oil and Gas Rights" and the National Park Service's "General Provisions and Non-Federal Oil and Gas Rights" never reached a House vote. Repeal under the CRA would have required the backing of a simple majority in both chambers.

The power to propose changes or rescissions to those rules now rests squarely in Interior's hands.

There is no new information on those rules at this time, department spokeswoman Heather Swift told E&E News.

Coal leasing

The Obama administration's moratorium on new federal coal leasing was another immediate casualty of the "energy independence" order. Zinke issued an order lifting the leasing freeze a day after the president's directive.

The revival of the coal leasing program hasn't yielded any major results so far. Interior has not held any auctions this year and has approved only one noncompetitive lease modification.

That's mostly because the coal industry isn't looking for new leases right now. Coal companies have backed away from five pending leases representing 874.9 million tons of coal since the moratorium ended and have only submitted one new application representing 4.1 million tons (Greenwire, Aug. 29).

Meanwhile, two related legal fights are moving forward. Environmentalists and tribal advocates are challenging the Trump administration for lifting the moratorium. They say Interior should have done an environmental review to study the impacts of restarting federal leasing. Green groups have also revived an old lawsuit that sparked the Obama-era moratorium in the first place.

A far-reaching order

Every time the Trump administration weighs an energy-related issue — even one that is not specifically mentioned in the executive order — the document's commands loom large.

EPA has pointed to the president's directive in a number of proposals to scrap Obama-era regulations that weren't mentioned by name. Government lawyers told a federal court, for example, that it should freeze litigation over EPA's ozone standards while the agency undertakes a review pursuant to the executive order.

EPA cited the document again in seeking to delay a lawsuit related to the Obama administration's regulation for mercury emissions from coal-fired power plants.

They pinpointed additional rules for repeal in a report submitted to the White House last month (Greenwire, Sept. 25). That review has not been made public.

Interior is also targeting regulations not called out in Trump's order. A rule to adjust oil, gas and coal royalty collection procedures in Interior's Office of Natural Resources Revenue wasn't listed as a target, but the agency announced a plan shortly after the order's release to review the regulation (Energywire, April 4).

Interior moved first to delay and then to ditch the ONRR rule. The delay effort was overturned by a federal court, but the repeal was finalized in August.

The executive order also colored discussions around Interior's national monuments review. For some, the order served as an indication that undoing or adjusting monument designations made under the Antiquities Act could create new avenues for energy development. But those lands aren't necessarily in high demand by industry (Energywire, Aug. 23).

Interior has declined to share its broader analysis of which agency rules impede domestic energy development. Swift said there were "no announcements" when asked if the department had conducted its review and shared the results with the White House — as the president instructed.

Even agencies not subject to the executive order have taken up its cause. FERC Chairman Neil Chatterjee last week said the commission, which as an independent agency was not required to review its regulations to comply with the order, decided to take up a voluntary review "to identify actions that potentially burden domestic energy use and production." The review is in progress.

Click here to view an annotated PDF of the executive order.

Twitter: @ellengilmer Email: egilmer@eenews.net

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