Regulation

Energy attorney Weissman says Trump order could impact nearly all environmental regulation

Could President Trump's recent executive action on climate and energy have impacts that are so far-reaching, they could potentially affect almost all environmental regulations with ties to energy? During today's OnPoint, Andrew Weissman, senior counsel at Pillsbury Law and founder of EBW Analytics, an energy market research and analysis group, explains why he believes the EO is a game changer for regulation, litigation and the options available for industry.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Andrew Weissman, a senior counsel at Pillsbury Law and founder of EBW Analytics, an energy market research and analysis group. Andrew, thank you for joining me.

Andrew Weissman: My pleasure.

Monica Trauzzi: So, Andrew, the Trump administration in its first 100 days has taken some pretty dramatic steps on energy and climate that are counter to what we saw, of course, during the Obama administration. You believe the impacts of the executive action could be far-reaching. Potentially, almost every environmental regulation that affects energy in any way could be impacted. Talk a bit about what you see coming ahead on regulation and litigation in terms of energy and environment policy.

Andrew Weissman: It's energy regulations across the board. They don't even have to be specifically environmental regulations.

What I think is particularly important is provisions in President Trump's March 28 executive order. That executive order has a very high profile because it's the executive order that it contained all the provisions rolling back President Obama's Climate Action Plan, but I think there's actually a more important set of provisions in the executive order that deserve significantly more attention. That's actually the first two pages of the executive order.

There are really two parts. The first part, as you were indicating, specifically requires every federal agency and department, no limitations whatsoever, to review all its existing regulations, policies, guidelines, orders and practices and assess quickly whether they in any way burden energy development, and if they do, within a very short time frame those agencies are required to determine whether they should potentially rescind entirely or modify potentially in very major ways those regulations in order to facilitate energy development and economic growth.

Monica Trauzzi: What is that metric for determining whether energy development is negatively impacted?

Andrew Weissman: Well, when I put my lawyer's hat on, that's actually a particularly interesting aspect of it because the way I interpret it, and we'll see how all this is applied in practice, but the way I interpret it, in effect it's an effort to create — it's almost a new legal standard for determining where the line ought to be drawn in regulating industry.

Specifically, what it does is basically, again, initially at least, it's aimed at existing regulations, policies and orders and, therefore, presumably regulations, policies and orders that are consistent with existing statutes or whatever authority the agency was using.

What the executive order says, basically, is that's not good enough. You need to go back a couple of steps, and you need to make a new assessment of whether that regulation or order burdens energy development or use in any way, and if you do, then the standard you apply, it's a very broad one, it's a public interest standard that essentially contemplates that you will weigh and balance all the factors that caused you to draw the regulatory line here to begin with and whether it's really in the public interest to be that stringent or whether when you take into account the public interest and the effects on energy development, you should potentially rescind the regulation entirely or at least relax it potentially in a major way.

Monica Trauzzi: Then, of course, all of that will be challenged in court.

Andrew Weissman: Probably over and over and over again. We'll see. It's possible there'll be generic challenges to these orders, but I think it's more likely that what will happen is every single time an agency applies this, at least where it's doing so pursuant to an existing statute, that its application of this new standard is likely to be challenged in court.

Monica Trauzzi: What kind of door does this open for industry in terms of how they act?

Andrew Weissman: Well, my view, again, it depends how this is applied in practice, but this executive order goes many steps further than the previous Trump administration executive orders relating to regulation, and it opens the door for industry and potentially others to seek reconsideration basically of dozens or hundreds of regulations by almost every administrative agency.

It is directed in part to environment regulation. There's no question about that. If you look so far, the environmental regulation that's received the most attention is EPA regulation. For EPA, such a broad area, there's still dozens and dozens of areas where this can be applied where there's no action, but includes every other federal agency that regulates in any way health issues, environmental issues, safety issues, and I think it potentially can be applied much more broadly, even to agencies like the Federal Energy Regulatory Commission or the Commodity Futures Trading Commission.

Monica Trauzzi: Talk a bit about the FERC element.

Andrew Weissman: Well, again, this is all very early, so this is my thinking. We'll see whether it evolves in the way that at least it might, but if you think about the FERC, again, there are many different ways this executive order could be applied.

One of the most straightforward, and an area where I think it's certain to be applied, relates to the policies and practices regarding approval of pipelines. There are many, many changes that can be made there that industry might seek.

I think that there's room at least for creative lawyers or creative companies within the energy industry to use it even more broadly. The FERC has exclusive jurisdiction over the market rules for the power markets in about 70 percent of the country at this point. Those rules have a huge effect on energy development and use. They affect nuclear. They affect coal. They have huge effects for renewables, and I think that there is room here to go before the FERC and say, "FERC, you've never really explicitly looked at the extent to which your market rules are impeding energy development." They are in a very major way.

If you look at current price levels in the structured wholesale markets around the country, they're actually virtually all the forward curve, the future strip is actually too low to justify any more construction of new power plants.

The FERC market rules have actually had a major role in periling the nuclear industry and forcing the shutdown of a number of nuclear plants for which I think there's actually a very strong justification to operate them, and it's certainly affected some coal-fired plants, and within the renewable community, I think there's concern that the current market rules actually may slow renewable development very soon.

I think that a possible use of this rule could be critical is to say, "FERC, you have to review all your current market rules and consider potentially major changes so that they will be more consistent with the goals of the president's order promoting energy use and economic growth."

Monica Trauzzi: We'll be talking to FERC later this week, and I'll be asking specifically about this.

Andrew Weissman: I'll definitely pay a lot of attention to the interview when you conduct it.

Monica Trauzzi: One final question before we run out of time, on the Clean Power Plan, because that is an element of the executive order, of course. What are the steps that you're watching most closely, and what are the key benchmarks that you'll be looking out for? Then there's this question of whether it's just rescinded and/or potentially rewritten.

Andrew Weissman: Well, I think there's a major issue. That's actually an area that's near and dear to my heart, because I helped pioneer the use of emissions trading in the United States years ago under an earlier federal program.

It remains to be seen. I think the agency obviously is going to initiate a rulemaking important issue that I'm sure you're tracking closely regarding whether there'll be a court ruling first, but the review of the regulation is certainly gonna occur. It will be very interesting to see the kind of record that's developed and whether EPA can actually justify relaxing the current program, which really doesn't have all that much bite.

Monica Trauzzi: All right. We'll end it right there. Certainly a lot to watch.

Andrew Weissman: Definitely.

Monica Trauzzi: It won't be a boring four years.

Andrew Weissman: No question.

Monica Trauzzi: Thank you so much for coming on the show.

Andrew Weissman: Thanks for having me. Thanks, Monica.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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