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April 24, 2017

Trump's Environmental Agenda: The 1st 100 Days

Energy Law360, Environmental Law360, Native American Law360, Project Finance Law360, Public Policy Law360

The first 100 days of the Trump administration have been momentous for environmental policy. President Donald Trump has issued multiple executive orders related to environmental issues and regulatory reforms, directed approval of the Keystone XL and Dakota Access pipelines, ordered a review of former President Barack Obama's mandate for more fuel-efficient automobiles, and proposed a massive one-third cut in the U.S. Environmental Protection Agency's budget.

This article will outline what we know so far about Trump's environmental agenda. In addition, we will identify key unknowns; that is, areas where there are as many questions as answers with respect to the administration's environmental policy. And lastly, we will identify five major obstacles that Trump will face as he seeks to implement his environmental agenda.

Key Actions So Far

The Trump administration has taken several decisive actions toward its policy objectives of promoting domestic energy resources, encouraging development, reducing the perceived regulatory burden from environmental regulations, and reversing Obama's policies related to climate change.

The highlights include:

  • Changing Direction on Climate Regulation: On March 28, 2017, Trump issued Executive Order 13783 entitled "Promoting Energy Independence and Economic Growth (energy independence EO), outlining his plan to reconsider, revise and/or rescind actions taken by Obama to address global climate change. The energy independence EO takes aim at a series of key programs and policies, including the Clean Power Plan; oil and gas methane regulations issued by the EPA and the Bureau of Land Management; BLM's fracking regulations; BLM's coal leasing moratorium; the social cost of carbon metric (which is used to monetize the impacts of climate change when conducting cost-benefit analysis); the National Environmental Policy Act greenhouse gas guidance from the White House Council on Environmental Quality (CEQ); and Obama's "Climate Action Plan." The energy independence EO also calls for a sweeping reexamination and potential rebalancing of U.S. policy regarding energy and the environment. It sets into motion a new regulatory review process affecting all federal agencies whose actions "potentially burden" the development or use of domestic energy resourcesparticularly oil, natural gas, coal and nuclear powerregardless of whether the actions relate to climate change. The review process culminates in a 180-day deadline for agencies to identify additional regulations and policies for reconsideration or rescission.
  • Seeking Comprehensive Regulatory Overhaul: The regulatory review process initiated by the energy independence EO is only one piece of a larger, comprehensive regulatory reform effort triggered by several other executive orders (in particular, Executive Order 13771 on "Reducing Regulation and Controlling Regulatory Costs," and Executive Order 13777 on "Enforcing the Regulatory Reform Agenda"). Pursuant to these orders, federal agencies have moved quickly to set up processes for identifying regulations, policies and programs for possible reconsideration, which will certainly include environmental regulations. EPA Administrator Scott Pruitt, for example, has established a Regulatory Reform Task Force, led by his key policy advisers, who will be submitting a series of recommendations on high-priority regulatory reforms at the agency. The EPA has opened a docket for public comments (closing May 15, 2017), and each EPA program office (including the offices regulating air, water, chemicals and waste) has scheduled a series of public meetings beginning April 24, 2017, to gather additional input. Other agencies, including the U.S. Departments of the Interior and Commerce, have also sought stakeholder input on identifying priorities for regulatory reform.
  • Limiting Clean Water Act Jurisdiction: On Feb. 28, 2017, Trump issued an Executive Order entitled "Restoring the Rule of Law, Federalism and Economic Growth by Reviewing the 'Waters of the United States' Rule" (waters of the U.S. EO), which defined the geographic scope of the Clean Water Act. The waters of the U.S. EO mandates a reconsideration of the Obama administration rule that embraced the "significant nexus" approach in defining jurisdictional waters. Under that approach, which is based on U.S. Supreme Court Justice Anthony Kennedy's concurring opinion in Rapanos v. United States, any water that has a "significant nexus" to navigable waters is potentially subject to regulation. The waters of the U.S. EO directs the EPA and U.S. Army Corps of Engineers to reconsider that rule and instructs them, instead, to consider adopting the test proffered by Justice Antonin Scalia's plurality opinion in Rapanos. Under Justice Scalia's approach, jurisdictional waters would include only those "relatively permanent, standing or continuously flowing bodies of water" and "wetlands with a surface connection to" those types of waters.
  • Expediting Permitting: On Jan. 24, 2017, Trump issued Executive Order 13766 entitled "Expediting Environmental Reviews and Approvals for High-Priority Infrastructure Projects" (infrastructure EO) related to environmental permitting. Specifically, the infrastructure EO requires CEQ to establish expedited procedures for environmental reviews and approvals of "high-priority" infrastructure projects such as the electric grid.
  • Review of Fuel Economy Standards: Trump signaled that he may revisit Obama-era regulations on greenhouse gas emissions from light-duty vehicles, which required a fleet average fuel efficiency standard of 54.5 miles per gallon for 2022 to 2025 model cars and light-duty trucks. To that end, the EPA withdrew the Obama administration's "mid-term evaluation," which had concluded that it would not be necessary to reopen those standards.
  • Revoking Stream Protection Rule: Employing the little-used Congressional Review Act (CRA),1 on Feb, 16, 2017, the president signed into law a congressional resolution revoking the Stream Protection Rule, which had been issued by the U.S. Department of the Interior's Office of Surface Mining in December 2016. The rule had been designed to protect streams and waterways in the vicinity of coal mining operations from being polluted by operational waste. Significantly, the CRA process not only revokes the regulation in question but also prohibits the future promulgation of any substantially similar rules. The president's plan to use the CRA as a deregulatory tool has not been entirely successful, however, as congressional resolutions targeting some other regulations (such BLM's methane flaring and waste prevention rule) have thus far not garnered the necessary votes to pass both houses of Congress. The window for voting on pending CRA resolutions will close around May 9, 2017.
  • Allowing Pipeline Projects: The Trump administration also reversed Obama on several high-profile projects related to energy development. For example, the U.S. Department of State issued a permit for the controversial Keystone XL pipeline, which will transport crude oil from the so-called "Tar Sands" in Canada to refiners in the United States. Similarly, the Army Corps issued an easement to developers of the Dakota Access pipeline to construct an oil pipeline under the Missouri River, reversing the Corps' earlier decision to withhold the easement until it completed an additional environmental review of alternate pipeline routes and tribal treaty rights.
  • Proposing Major Budget Cuts to the EPA: Perhaps most significantly, Trump presented a budget proposal that would reduce the EPA's budget in 2018 by 31 percent (from $8.2 billion to $5.7 billion). It has been widely reported that such a budget would eliminate funding for many popular programs such as regional initiatives in the Great Lakes and Chesapeake Bay. In addition, the president's proposal would reduce funding for research and development and eliminate the EPA's Environmental Justice Program.

Key Unknowns

While no one will criticize Trump for a lack of activity in the area of energy and environmental policy, the actions above raise as many questions as they answer. Here are four examples:

  • Climate Policy: Will the United States withdraw from the Paris agreement? Trump has famously called climate change a hoax, and his energy independence EO presages an explicit roll-back of all aspects of the Obama administration's Climate Action Plan. That said, the Trump administration has yet to take a stand on whether the United States will withdraw from the landmark international climate change agreement brokered in Paris at the December 2015 United Nations Climate Change Conference, which went into effect in November 2016. Under the Paris agreement, the United States pledged to reduce greenhouse gas pollution by 26 to 28 percent by 2025 (from 2005 levels). It is widely reported that the Paris agreement is being hotly debated within the administration. A decision is expected by the time the United States participates in the G7 summit at the end of May 2017. If the United States remains in the Paris agreement, the next question will be whether the United States seeks to modify the agreement or revise the U.S. pledge, given the Trump administration's decision to reconsider regulatory initiatives, such as the Clean Power Plan, aimed at controlling greenhouse gas emissions. Such decisions could, in turn, provoke reactions from other nations.
  • Clean Air Act: Which additional regulations will be withdrawn or revisited? There are still many unknowns about how the EPA will implement the president's policies related to the Clean Air Act. For example, as discussed by several commentators, there are a wide range of options that could result from the EPA's review of the Clean Power Plan.2 Will the EPA seek only to "repeal" the CPP, or will it "repeal and replace" it with a less stringent program for addressing carbon emissions from the power sector? In addition, it is unclear if the EPA will seek to reconsider its endangerment finding with regard to greenhouse gases.3 So far, Pruitt had been reluctant to take this on, but there is reportedly significant pressure for him to do so. Finally, there is uncertainty about how the president's energy independence EO will impact Clean Air Act regulations of pollutants other than greenhouse gases, such as the 2015 National Ambient Air Quality Standards for Ozone,4 or the Mercury and Air Toxics Rule for power plants.5 The EPA has announced its intent to reconsider both of these rules, and has requested that the D.C. Circuit hold in abeyance the relevant court cases challenging them. Efforts to reconsider these rules will certainly be litigated by environmental groups and a number of states, who had previously intervened on the EPA's behalf.
  • Superfund: Can the Trump administration really deliver? According to many, hazardous waste site cleanups in this country take too long, involve too much uncertainty, and are disproportionately expensive compared to the actual environmental benefits achieved. Pruitt has said he would like to expedite the cleanup of the over 1,300 Superfund sites across the country, though he has not provided any detail for how he will achieve this goal. Furthermore, Trump's initial budget would slash the EPA's Superfund budget by over $300 million, potentially undermining the administrator's objective. By many accounts in Washington, D.C., there is significant disagreement within the administration and amongst Congressional leaders about whether, and how much, to reduce the EPA's funding and grants for site cleanup. There are also questions whether the administration will attempt to streamline risk assessments and cleanup decision-making at large, complex sites. Finally, with regard to natural resource damages (the statutory provisions designed to restore natural resources injured from pollution events), the Trump administration may seek to fix a regulatory regime that many view as badly broken, inefficient and cumbersome.
  • Infrastructure and Permitting: How will the Trump administration deliver on its promise to streamline the infrastructure permitting process? Trump is not the first to recognize the cumbersome nature of the permitting process for major infrastructure projects, which requires developers to run a gauntlet of different statutory requirements (including, for example, NEPA, wildlife and species statutes, historic preservation, and Sections 401 and 404 of the Clean Water Act) implemented by multiple federal agencies. Indeed, in 2015, Obama signed into law the Fixing America's Surface Transportation Act (FAST Act). Among other things, the FAST Act established a Federal Permitting Improvement Steering Council and an online permitting dashboard, which presents project-specific permitting timetables, including projected dates for completion of environmental reviews and issuance of permits.6 Trump's infrastructure EO charges CEQ with responsibility for implementing improved processes for high-priority infrastructure projects. One key question will be how CEQ implements this mandate, including whether it will seek to build upon the mechanisms created by the FAST Act. Other key questions include: (1) how many projects will be eligible for streamlined or expedited processing; (2) who will decide which projects are covered; (3) will renewable energy projects (wind and solar) be on equal footing with conventional oil and gas projects; and (4) will additional legislation be required? One thing is for certain: attempts to streamline permitting will be met with legal challenges.

Five Obstacles

President Trump will face numerous obstacles as he seeks to achieve his environmental agenda. Here are just five examples:

  • Market Forces Will Continue to Drive the Country's Energy Mix: When Trump presented his energy independence EO at EPA headquarters, a couple dozen coal miners stood behind him. Before signing, the president looked at the miners and said, "this means you're going back to work." Whether the president's energy independence EO will bring back many coal jobs, however, is far from clear. Many commentators have noted that the decline of the coal industry in America is due more to competition from natural gas, which is less expensive to extract and significantly cleaner than coal. The practical effect of repealing the Clean Power Plan may be limited, for example, to the extent energy prices render investments in new coal-fired power plants impractical and lead utilities to continue to build new capacity using natural gas, wind and solar. The capital cost of wind and solar is dropping, and methods to resolve the intermittency of wind and solar are improving. Furthermore, companies may be hesitant to rely on the current administration's position favorable to coal-fired power in making long-term investments that will depend on conditions far beyond the length of this administration.
  • Many States Are Taking Proactive and Robust Steps to Thwart the Trump Environmental Agenda: Pruitt has stated that he would like to return environmental enforcement and regulatory authority to the states. Whether such a policy will result in a decrease in overall enforcement activity, or will merely shift the locus of enforcement responsibility from the federal to the state levels, is unclear. Shortly after the election, we predicted that certain states would likely seek to compensate for a decrease in federal enforcement by boosting their own enforcement capacities and regulatory initiatives.7 While it is still too early to measure any uptick in environmental enforcement at the state level, there are several indications that certain states will work actively to counteract Trump's efforts. For example, as discussed above, the EPA recently announced that it will revisit Obama-era fuel efficiency standards for light-duty vehicles. In response, California voted to maintain its own strict fuel efficiency standards. This sets up a possible showdown over the Clean Air Act waiver that allows California to set its own fuel economy standards (and allows other states to match California). In sum, whether through direct lawsuits or through their own regulatory activity and enforcement efforts, many states appear to be gearing up for a fightand the framework of cooperative federalism may be sorely tested.
  • Environmental Groups Gear Up: Similarly, a variety of nongovernmental organizations are amassing resources to resist Trump's environmental agenda. In response to the anticipated increase in infrastructure development and fossil fuel extraction, we predict citizens and environmental groups will vigorously try to halt or slow down these efforts through citizen suits, NEPA law suits and other challenges. To the extent the Trump administration seeks to expedite permits and other administrative reviews, the environmental groups will likely argue that the administration circumvented environmental requirements. In light of this dynamic, any project proponent would be wise to balance the need for permitting speed with the long-term objective of surviving legal challenges. Finally, many federal environmental statutes provide robust citizen suit provisions, including under the Resource Conservation and Recovery Act and the Clean Water Act. We fully expect a multipronged, aggressive strategy by these claimants to enforce environmental laws, slow down new fossil-fuel energy development, and challenge regulatory changes.
  • Courts Take a Hard Look: The president has signaled the beginning of an ambitious regulatory reform agenda, but effecting change is hard and effecting lasting change can be even harder. Some changes, such as withdrawing the CEQ guidance on greenhouse gases and rescinding the social cost of carbon metric, may be realized with the stroke of a pen in an executive order. (Even these easy-to-achieve changes may result in unintended consequences, as agencies revert to ad hoc approaches that may cause uncertainty and delays in decision-making, which may be more vulnerable to legal challenge.) But other changes, such as repealing and/or replacing the Clean Power Plan and the waters of the United States rule, will require lengthy administrative processes and public notice and comment rulemaking. For each of these initiatives, one question is whether the administration will engage in a lengthy rulemaking process and attempt to build strong records with judicial review in mind, or whether the administration will seek to move as quickly as possible regardless of litigation risk. Other administrative hurdles may be self-imposed. For example, on Jan. 30, Trump issued an executive order on "Reducing Regulation and Controlling Regulatory Costs." Pursuant to that order, executive agencies must identify two regulations to be repealed for every new regulation proposed. Depending on how the "2-for-1" executive order is construed, agencies may be required to initiate three rulemaking processes for every new regulation it seeks to promulgate.
  • Major Environmental Incidents Could Change the Dynamics: For decades, the American public has consistently demanded government assurances of clean air and clean water, regardless of political preferences. While many voters may not be focused on the specifics of the president's environmental policies at the moment, if a major environmental incident occurs, voters will demand governmental intervention. This was clearly true during the Deepwater Horizon oil spill where Republican governors of affected states were no less aggressive than Democratic elected officials, including Obama. A similar dynamic occurred after the drinking water emergency in Flint, Michigan, and the Volkswagen investigation regarding diesel engine emissions. If (or perhaps when) a major environmental incident occurs in the future, there will be significant pressure on the Trump administration to respond with vigorous efforts to protect citizens and the environment. To the extent that such an incident results (or is perceived to result) from Trump's sweeping changes in the country's environmental policies, the pressure on the EPA and others in the administration will be even more intense.

Conclusion

While we are still in the early days of the Trump administration, and the early days of the Republican Party controlling both the White House and Congress, it is clear that profound changes are happening in all aspects of environmental policy. That said, numerous questions remain and there is significant uncertainty about how the president's policy objectives will be implemented. Finally, Trump will continue to face major obstaclesincluding from states, NGOs and the courtsas he pursues an aggressive agenda of regulatory change.


Brian D. Israel and Ethan G. Shenkman are partners at Arnold & Porter Kaye Scholer LLP in Washington, D.C. Israel is chairman of the firm's environmental practice group. He previously served as an honors trial attorney in the Environmental Enforcement Section of the U.S. Department of Justice. Shenkman previously served for seven years as a political appointee in the Obama administration, most recently as deputy general counsel at the Environmental Protection Agency.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

  1. Kevin O'Neill et al., "Restraining the Current Regulatory State Through the Congressional Review Act," Arnold & Porter Kaye Scholer Advisory (Jan. 17, 2017).

  2. Ethan G. Shenkman et al., "Trump's EO: What's Next for Energy, Enviro and Climate?" (March 31, 2017).

  3. Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,495 (Dec. 15, 2009) ("Endangerment Finding"); aff'd, Coal. for Responsible Regulation, Inc. v. Envtl. Prot. Agency, 684 F.3d 102 (D.C. Cir. 2012), aff'd in part, rev'd in part on other grounds sub nom. Util. Air Regulatory Grp. v. Envtl. Prot. Agency, 134 S. Ct. 2427 (2014).

  4. National Ambient Air Quality Standards for Ozone, 80 Fed. Reg. 65,291 (Oct. 26, 2015) (to be codified at 40 C.F.R. pts. 50, 51, 52, 53, and 58).

  5. National Emission Standards for Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units, 77 Fed. Reg. 9,303 (Feb. 16, 2012) (to be codified at 40 C.F.R. pts. 60 and 63).

  6. See Edward McTiernan et al., "Expediting Environmental Review and Permitting of Infrastructure Projects: The 2015 FAST Act and NEPA," Real Est. Fin. J.(2016).

  7. Arnold & Porter Kaye Scholer, "Post-Election Analysis, The Policy Choices, Challenges, and Consequences of an Outsider in the White House: What You Need to Know After the 2016 Election," (2016).

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