President Trump Orders Agencies to Roll Back Regulations on Energy Development

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On March 28th, President Trump issued an Executive Order entitled “Promoting Energy Independence and Economic Growth.” In addition to rescinding key pieces of the Obama administration’s environmental agenda, the Order requires federal departments and agencies to begin a review process that will likely result in the rolling back of Obama-era regulations designed to prepare the country for climate change and reduce pollutants such as carbon and methane. This loosening of regulations on fossil fuel industries signals President Trump’s intent to withdraw from climate change action.

Although President Trump’s order stops short of withdrawing the U.S. from the Paris Climate Agreement, the directive is clearly aimed at preventing regulatory overreach.  It mandates that federal agencies present to the OMB a plan for reviewing all agency actions (regulations, orders, guidelines, policies, etc.) that “potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.” Interestingly, the Order specifically states that agencies are not required to review “agency actions that are mandated by law.” In fact, the Order states multiple times that it is not intended to interfere with or change any requirements imposed by law – presumably meaning that regulations mandated by NHPA and NEPA will be unaffected.

Nevertheless, because it rescinds the White House Council on Environmental Quality’s 2016 guidelines, President Trump’s order will reduce pressure on federal agencies to factor climate change into NEPA reviews. However, if agencies begin producing environmental reviews without considering greenhouse gas effects, litigation will certainly ensue, with plaintiffs alleging that under NEPA, agencies legally cannot disregard climate change. Courts will therefore remain at the crux of such considerations no matter how much President Trump attempts to loosen the regulatory reins.

While these strokes of the pen will result in some quick changes for agency programs, many potential impacts of President Trump’s order will be more delayed.  Rescinding or revising current regulations will trigger lengthy formal rule-making procedures, which can take up to two years. Court challenges will also hinder implementation of President Trump’s order in the short term and perhaps dampen its practical significance.

Analyzing the White House’s Budget Blueprint

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The White House and OMB have released “America First: A Budget Blueprint to Make America Great Again.”

This outline reiterates the current administration’s commitment to developing an infrastructure package and indicates that infrastructure will be part of the full budget released later this spring.

The budget blueprint seeks to eliminate a number of programs and sources of funding, including:

  • The National Endowment for the Humanities and National Endowment for the Arts
  • The community development block grant program at HUD ($3 billion per year)
  • Funding for National Heritage Areas (“which are more appropriately funded locally”)
  • Treasury Department would eliminate the Community Development Financial Institutions (CDFI) grants. CDFIs are used by local communities to finance historic preservation projects and to deploy new markets tax credits.

The blueprint likewise aims to shrink budgets across the board:

  • Overall 12% decrease for the Interior Department ($1.5 billion reduction)
  • Reduces funding for any new federal land acquisition
  • State Department dramatically cut by 28.7%. Educational and Cultural Exchange programs cut except for Fulbright.
  • Transportation cut by 12.7%: “Limits funding for the Federal Transit Administration’s Capital Investment Program (New Starts) to projects with existing full funding grant agreements only. Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.” This program funds light rail, heavy rail, commuter rail, streetcar, and bus rapid transit projects.
  • EPA gets a dramatic cut (31.4%).
  • Small Business Administration gets 5% decrease; SBA outreach centers will be reorganized.
  • Army Corps of Engineers would get a 16.3% decrease in funding.

Other items of note include:

  • Interior Department: “Strengthens the Nation’s energy security by increasing funding for DOI programs that support environmentally responsible development of energy on public lands and offshore waters. Combined with administrative reforms already in progress, this would allow DOI to streamline permitting processes and provide industry with access to the energy resources America needs, while ensuring taxpayers receive a fair return from the development of these public resources.”
  • Tribes at DOI: “Supports tribal sovereignty and self-determination across Indian Country by focusing on core funding and services to support ongoing tribal government operations. The Budget reduces funding for more recent demonstration projects and initiatives that only serve a few Tribes.”
  • Increase investment in deferred maintenance in the National Parks
  • “Leverages taxpayer investment with public and private resources through wildlife conservation, historic preservation, and recreation grants. These voluntary programs encourage partnerships by providing matching funds that produce greater benefits to taxpayers for the Federal dollars invested.”

The Union of Concerned Scientists published a helpful blog post that explains the budget process and how these recommendations fit in.

Executive Order on Reorganizing the Administrative State

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On March 13th, President Trump issued an Executive Order “On a Comprehensive Plan for Reorganizing the Executive Branch.”

Another step in President Trump’s plan to “deconstruct the administrative state,” this order focuses on reducing the size of the executive branch by reorganizing – and eliminating – federal agencies. The stated purpose of the order is to “improve the efficiency, effectiveness, and accountability of the executive branch” through a reorganization that would “eliminate unnecessary agencies…components of agencies, and agency programs.” Complemented by President Trump’s recently-released budget plan and January hiring freeze memorandum, the order challenges domestic programs and the federal workforce.

The cost- and function-cutting measures that President Trump seeks to impose will not, however, result in an immediate reorganization of the entire executive branch. The order directs each agency to devise a “proposed plan to reorganize the agency, if appropriate,” and to submit it to OMB within six months. Not every agency will find such reorganization “appropriate,” nor will lawmakers give President Trump unilateral authority to reinvent the federal administrative system. President Trump will need to work together with Congress in order to realize his goals.

Waters of the United States Rule

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On February 28, 2017, President Trump issued an Executive Order on “Restoring the Rule of  Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule (WOTUS).”

Another effort to roll back Obama-era environmental protections, the order directs the EPA and Army Corps of Engineers to revise or repeal WOTUS, which applies to approximately 60% of bodies of water in the US. The order thus amounts to an attempt to redefine, and thereby shrink, the federal government’s permitting jurisdiction under the Clean Water Act. Reduced federal jurisdiction would result in fewer projects that need permits; a requirement for fewer permits would, in turn, result in fewer Section 106 reviews.

Although President Trump has offered few clues about the path his administration will take to eliminate or rewrite the rule, the process will not be quick. Key administrative positions at both the EPA and Army Corps of Engineers remain unfilled, meaning that major players in what will be a convoluted and drawn-out review process are still missing. Moreover, rewriting or repealing WOTUS would require a rulemaking of its own, which requires Federal Register notice and a comment period – a process that can take up to two years.

Enforcing the Regulatory Reform Agenda

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On February 24th, President Trump issued an Executive Order on “Enforcing the Regulatory Reform Agenda.”

This Order requires agencies to designate an official as the “Regulatory Reform Officer” to enforce compliance with previous Executive Orders on regulatory reform. Agencies also must create a Regulatory Reform Task Force to evaluate existing regulations and make recommendations for repeal, modification, or replacement.

Note that similar efforts were made under the Obama Administration and the Clinton Administration, although taken together with other executive orders by President Trump, it is clear the effort is part of a broader Administration-wide goal of reducing and repealing regulations.