On March 28, 2017, President Trump signed an Executive Order, titled “Promoting Energy Independence and Economic Growth,” that is designed to roll back several of President Barack Obama’s efforts to address climate change.  While some of the Executive Order’s provisions are self-executing, many will require lengthy administrative procedures to become effective and certainly will face legal challenges.

 

Clean Power Plan and Related Rules

The Order requires Environmental Protection Agency (“EPA”) Administrator Scott Pruitt to immediately review the Clean Power Plan (“CPP”) and, “if appropriate,” to initiate a new notice-and-comment rulemaking to suspend, revise, or rescind the plan.   The CPP, which established carbon dioxide (CO₂) emission limits for existing fossil fuel-fired power plants and state-specific CO₂ emission performance goals, had been stayed by the United States Supreme Court pending the resolution of a legal challenge in the D.C. Circuit.  In the aftermath of the Order, EPA filed a motion asking the D.C. Circuit to hold that proceeding in abeyance during the agency’s review of the CPP.

The Order also directs EPA to review the rule setting greenhouse gas emission standards for new power plants.  EPA filed a motion asking for the suspension of legal proceedings against this new source rule as well, which is currently scheduled for oral argument in the D.C. Circuit on April 17, 2017.

 

Review of Agency Actions that Potentially Burden the Development or Use of Domestic Energy Resources

The Order requires the heads of all Federal agencies to immediately review all agency actions that “potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources,” and to develop reports containing recommendations to alleviate or eliminate those actions that impose a burden.  “Burden” is defined broadly to mean “unnecessarily obstruct, delay, curtail, or otherwise impose significant costs on the siting, permitting, production, utilization, transmission, or delivery of energy resources.”  Upon finalization of the reports, the agency heads must “as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding, those actions, as appropriate and consistent with law.”

The promulgation of rules implementing the finalized recommendations, or rescinding the Clean Power Plan, will be subject to notice and comment procedures, which will provide opportunities for public involvement, and, if ultimately promulgated, will be subject to legal challenge under the Administrative Procedure Act.  In such a proceeding, the Administration would have to show there is a rational basis for the reversal in government policy, which may not be simple to accomplish given the administrative records developed when the original regulations were promulgated.

 

Rescission of Obama-Era Energy and Climate-Related Actions

The Order unilaterally revokes one Executive Order (“Preparing the United States for the Impacts of Climate Change”), three Presidential Memorandums (“Power Sector Carbon Pollution Standards,” “Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment,” “Climate Change and National Security”), and two Reports (“The President’s Climate Action Plan” and “Climate Action Plan Strategy to Reduce Methane Emissions”).

In addition, the Order instructs the Council on Environmental Quality (“CEQ”) to rescind its 2016 guidance for considering climate change in environmental impact reviews under the National Environmental Policy Act (“NEPA”).  The rescission of this guidance is likely to increase confusion and uncertainty for Federal agencies undertaking NEPA reviews, because several courts have required climate impact analysis under NEPA independent of CEQ’s guidance.

 

Social Cost of Carbon, Nitrous Oxide, and Methane for Regulatory Impact Analysis

The Order also rescinds a series of documents issued under the Obama Administration relating to the social cost of carbon, the dollar value of the long-term damage done by a ton of carbon dioxide emissions in a given year.  EPA and other Federal agencies have used estimates of the social cost of carbon and certain other greenhouse gases (“GHGs”) to evaluate the costs and benefits of proposed regulatory actions.  In addition to withdrawing six documents relating to the social cost of carbon as “as no longer representative of governmental policy,” the Order disbands the Interagency Working Group on Social Cost of Greenhouse Gases (“IWG”) that had been formed to study this issue.  The Order directs agencies seeking to monetize the value of greenhouse gas emissions to refer to the general cost-benefit guidelines issued by the Bush administration in 2003, which do not provide a dollar estimate for the social cost of carbon or recommend a specific methodology for such calculations.

 

Federal Land Coal Leasing Moratorium

The Order directs the Secretary of Interior to amend or withdraw the January 16, 2016 Order, “Discretionary Programmatic Environmental Impact Statement (PEIS) to Modernize the Federal Coal Program” and to lift all moratoria on federal land coal leasing activities.

 

Methane Regulations

The Order directs EPA Administrator Pruitt and the Secretary of the Interior to review and consider suspending, revising, or rescinding several regulations adopted in 2015 and 2016 that are designed to reduce methane emissions from oil and gas production.  Again, such regulatory action would be subject to public notice and comment, as well as judicial review.

 

Looking Forward

The Order is notably silent on the United States’ plans with respect to the United Nations Framework Convention on Climate Change’s Paris Agreement, an international accord under which more than 140 countries (including the United States) agreed to limit their emissions of GHGs pursuant to country-specific plans.  While the Trump Administration is reportedly still considering whether to withdraw from the Paris Agreement, the rescission or modification of existing GHG regulations could compromise efforts to achieve the emissions targets contained in the plan that the Obama Administration submitted pursuant to that Agreement.

The Order also is silent on, and therefore implicitly indicates an intent to leave in place, EPA’s “endangerment finding,” whereby EPA determined, based upon scientific evidence, that greenhouse gas emissions threaten the public health and welfare of current and future generations.  Unless that finding is revoked, EPA is constrained by controlling Supreme Court precedent, Massachusetts v. EPA, to regulate GHGs under the Clean Air Act.  The nature of the regulation of GHGs in the aftermath of the Order is unknown.

As noted above, many of the actions required by the Order require lengthy notice-and-comment rulemakings that likely will be the object of legal challenge, so the regulatory impacts of the Order could remain uncertain for years.  In the meantime, several states and cities including New York have vowed to continue working to reduce greenhouse gas emissions, which likely will result in additional state and local regulations intended to fill gaps left by actions resulting from the Order.

For additional information, contact Jeff Gracer or Katherine Ghilain.