Insight to President Trump’s Executive Order “Promoting Energy Independence and Economic Growth”

This article comes from law firms Holland & Knight LLP and is authored by  Isabel C. LaneDimitrios J. Karakitsos and Beth A. Viola.

Highlights of the order:

Isabel C. Lane, (top) Dimitrios J. Karakitsos, and Beth A. Viola

  • President Donald Trump’s Executive Order (EO) entitled “Promoting Energy Independence and Economic Growth” is a broad directive accomplishing a number of the Trump Administration’s energy-related priorities.
  • The EO focuses on encouraging domestic energy production by “unraveling the red tape” and initiating rollbacks on more than 30 Obama-era environmental documents and regulations, including the Clean Power Plan.

President Donald Trump’s Executive Order (EO) entitled “Promoting Energy Independence and Economic Growth” is a broad directive designed to accomplish a number of the Trump Administration’s energy-related goals.

The EO, issued on March 28, 2017, is sweeping in nature, with a focus on encouraging domestic energy production by “unraveling the red tape” and initiating rollbacks on more than 30 Obama-era environmental documents and regulations. Its directives will take years to fully implement, particularly the regulatory rewrites that will be required to adhere to Administrative Procedures Act (APA) process.

Below is a section-by-section analysis of the Order.

Section 1. Policy

This section of the EO establishes broad policy directives that set the Trump Administration’s tone for energy-related policy. The order encourages “clean and safe development” of domestic energy resources, referencing, in this order: coal, natural gas, nuclear material, hydropower, and other domestic sources including renewables. The order also encourages agencies to take actions to promote clean air and clean water, while inserting a caveat that agencies must also respect “the proper roles of the Congress and the States” – echoing federalist environmental doctrine typical of Republican administrations. The order simultaneously discourages “regulatory burdens” that “unnecessarily encumber” energy production, and directs the review of existing regulations to this effect. This is fully fleshed out in Section 2.

The final paragraph under the policy section also directs the use of the “best available peer-reviewed science.” This language dovetails with Republican efforts to reform the U.S. Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) and add greater transparency in future decision making. To date, the House has passed two bills on party lines related to the use of the “best available” science: H.R. 1430, the Honest and Open New EPA Science Treatment (HONEST) Act on March 29, 2017, and H.R. 1431, the EPA Science Advisory Board Reform Act on March 30, 2017.

Of note, the EO’s only mention of national security or international policy asserts that “prudent development” of natural resources is essential to ensuring geopolitical security. Absent is any mention of the U.S. commitments to the Green Climate Fund or the Paris Agreement of 2015. Although Trump campaigned on promises to withdraw the United States from the Paris Agreement, White House Press Secretary Sean Spicer stated on March 30, 2017, that the Administration is still “reviewing” the agreement but expects to have a decision by the time of the upcoming G7 summit on May 26-27, 2017.1 A group of more than 1,000 companies – including Fortune 50 businesses such as HP and Johnson & Johnson – have signed a letter to the Administration and Congress calling on the government to continue U.S. participation in the Paris Agreement.2 Some within the business community support a withdrawal while others favor the long-term policy certainty the Agreement seeks to engineer and see business opportunities in the fulfillment of the Agreement.

Rep. Kevin Cramer (R-N.D.), who served as an energy advisor to President Trump’s campaign, is currently circulating a “Dear Colleague” letter, which encourages the U.S. to remain a party to the Agreement rather than losing “its seat at the Paris table to defend and promote our commercial interests.” The letter instead advocates for the U.S. to reduce its current commitment to reduce greenhouse gas (GHG) emissions by 26 percent to 28 percent by 2025 – a goal many say is infeasible without implementation of the Clean Power Plan – while also urging President Trump to follow through on his promise to end financial commitments to the Green Climate Fund. By exploring such a compromise, the Administration may find additional support from the business community.

Section 2. Immediate Review of All Agency Actions that Potentially Burden the Safe, Efficient Development of Domestic Energy Resources

This section directs the “heads of agencies” to review all agency actions that potentially burden the development or use of domestically produced energy resources, noting in particular fossil fuel and nuclear resources while omitting hydropower and other renewables. The section defines “burden” as “to unnecessarily obstruct, delay, curtail, or otherwise impose significant costs” on activities related to development of energy resources. Of note, Section 1 of the EO directs that that “departments and agencies” review existing regulations and suspend, revise or rescind those that “unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law.” While this section provides a definition of “burden,” the meaning of “unduly” is left ambiguous, leaving portions of the Order particularly vulnerable to subjective interpretation and possible future legal challenges.

Indeed, several directives in the EO are similarly equivocal, leaving uncertain even basic questions regarding jurisdiction of the EO. It is not traditional that EOs apply to independent regulatory agencies such as the Federal Energy Regulatory Commission (FERC), U.S. Nuclear Regulatory Commission (NRC) or U.S. Securities and Exchange Commission (SEC). In keeping with this tradition, the interim guidance issued by the White House’s Office of Information and Regulatory Affairs (OIRA) on President Trump’s “Reducing Regulation and Controlling Regulatory Costs” EO exempted independent regulatory agencies. Similar clarification would be par for the course.

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