Trump's Environmental Regulatory and Deregulatory Agenda at Risk Due to COVID-19

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Editorial Note: This Advisory was updated on June 1, 2020.

Introduction

The coronavirus (COVID-19) has struck at a critical time in the Trump Administration's environmental regulatory and deregulatory agenda. With only seven months left until election day, the unprecedented crisis caused by COVID-19 has resulted in significant regulatory, litigation, and economic disruption. This may result in some of the Administration's key agenda items being delayed, rushed, pushed into the Congressional Review Act (CRA) "lookback" period (which may have already begun), or left to the next presidential term. Moreover, the impacts of COVID-19 might shift environmental policy priorities with an emphasis on revitalizing the economy. Indeed, President Trump recently issued an Executive Order directing agencies to promote economic recovery through greater consideration of deregulatory actions.¹ At the same time, the crisis has also prompted calls for Congress to incorporate climate policies in relief programs, as recently demonstrated by Senate Democrats' request to condition government assistance to the airline and cruise line industries on reductions in greenhouse gas emissions and ocean dumping.²

This Advisory discusses possible outcomes for the remainder of Trump's environmental agenda and highlights the key rules that could be affected. Potentially at risk are rules that have been proposed but not yet finalized, final rules being reviewed in court, and regulatory initiatives that have been promised but not yet proposed. Practitioners and regulated entities should stay closely apprised of developments as the volatile situation unfolds throughout the rest of 2020.

Proposed Rulemakings at Risk

Many of the Administration's key regulatory efforts are currently in rulemaking limbo—the agency has proposed a rule but has not completed review of public comments and/or interagency review. Finalizing all of these regulatory actions would be difficult to achieve even without the strain of the pandemic on the federal workforce and public. In the midst of the current crisis, some public interest groups and states have called for the Administration to halt work on deregulation and focus resources on the COVID-19 response instead.³ All told, the disruption caused by COVID-19 could have significant implications for the Administration's agenda in a number of different ways.

That being said, it should be noted that EPA has made significant progress on a number of major initiatives since stay-at-home orders were announced. Since April 9, EPA has released the final greenhouse gas and fuel economy standards for light duty vehicles, finalized two separate revisions under the Mercury and Air Toxics Standards (MATS), proposed a rule retaining the current NAAQS for Particulate Matter, proposed streamlining the fuels regulatory program under the Clean Air Act (CAA), and committed to finalizing the NAAQS for Ozone by the end of the year. Whether EPA can keep up this pace remains to be seen; but this recent flurry of activity indicates that EPA is not slowing down its efforts.

Delays and Disruption In the Rulemaking Process . The disruption caused by COVID-19 could delay comment periods, or, alternatively, cause the Administration to push the limits of the public review process. Courts have interpreted the Administrative Procedure Act (APA) to require a "meaningful" opportunity for public comment. Although the APA does not establish a minimum public review period, certain other statutes do ⁴, and Executive Orders encourage agencies to provide at least 60 days for public comment. ⁵ On April 1, House Democratic leaders, citing concerns over the public's ability to meaningfully participate in the rulemaking process during the pandemic, urged the White House Office of Management and Budget (OMB) to extend all active comment periods "by at least 45 days beyond the end of the declared national emergency."⁶ House Democrats reiterated this request in a letter to EPA Administrator Wheeler on April 8.⁷ Senate Democrats have also urged the Administration to halt rulemaking processes.⁸ Most recently, a group of twenty-one Senate Democrats requested that OMB indefinitely extend all public comment periods and pause any new rulemakings unless explicitly required for the COVID-19 response.⁹ OMB has advised agencies to use their discretion to extend comment periods on a case-by-case basis.¹⁰

Moreover, agencies commonly hold in-person public hearings to ensure that all members of the public have the ability to participate in the rulemaking process. Some statutes, such as the CAA, specifically require the opportunity for "oral presentations," which has generally necessitated in-person meetings.¹¹ However, EPA has announced that, due to the crisis, it will carry on with comment periods without in-person meetings, relying instead on electronical submittals.¹² EPA has yet to announce how it will resolve other rulemaking requirements, such as making dockets open for public inspection.¹³

In addition, many of President Trump's remaining proposals have received hundreds of thousands of comments on particularly controversial issues, and agencies are required to consider and respond to those that are "significant." Doing so adequately before issuance of a final rule is time- and resource-intensive. Finalizing rules commonly requires numerous briefings with stakeholders and senior agency officials, which may prove difficult to coordinate among a remote workforce. The current strain on resources due to COVID-19 could cause further delays in finalization, or a rush job that could be more susceptible to challenges in court.

The timing of a rule's finalization depends, in part, on where it is in the OMB review process. Pursuant to E.O. 12866, OMB review can take up to 90 days (which can be extended) to allow for adequate interagency consideration. Emergency measures to address the COVID-19 crisis, including federal staff telework and elimination of in-person hearings and meetings, could cause further delay in an already stressed regulatory review process. EPA's recent refusals to grant extensions or postpone hearings due to the pandemic may signal that the agency intends to charge ahead to the extent possible.¹⁴

The "Lookback" Period Under the Congressional Review Act (CRA) . Delays caused by COVID-19 may push the release of final rules into the "lookback" period, during which they could be subject to eventual repeal under the CRA. The repercussions of this will be significant if Democrats win both houses of Congress and the Presidency in the fall. Under the CRA, Congress has the authority to pass a joint resolution disapproving an agency rule issued toward the end of the previous administration. This joint resolution is powerful because it makes the rule "of no force and effect" and bans the agency from issuing another rule in "substantially the same form" unless specifically authorized by statute. The Trump Administration and the 115^th Congress made unprecedented use of the CRA—repealing 15 rules issued by the Obama Administration.¹⁵ Notably, in April 2019, OMB issued an expansive definition of the types of agency actions covered by the CRA, including interpretive rules and some guidance documents.¹⁶

The ability of a potentially new Democratic Administration to take similar advantage of the CRA will depend on two factors: (1) when federal agencies submit their rules to Congress for review, and (2) the number of remaining legislative days in the 116^th Congress. Upon submission of a rule, Congress has 60 days to introduce a joint resolution of disapproval.¹⁷ If Congress adjourns its annual session before 60 session days in the Senate (or 60 legislative days in the House) have elapsed, the review period restarts in the next legislative session—creating a "lookback" period.¹⁸ In other words, for rules issued by the current Administration to avoid CRA review, they must be submitted to Congress with at least 60 session and legislative days left on the calendar.

It is not possible to determine the precise date on which the "lookback" period begins until all legislative and session days have been held.¹⁹ Some have speculated that this deadline could be as early as late-May.²⁰ Only time will tell whether, and the extent to which, the tool that kicked off this Administration's deregulatory agenda will also be its undoing.

These are some of the key proposals on President Trump's agenda that are not yet final (in reverse chronological order, beginning with those whose comment periods will close last).

• National Ambient Air Quality Standards (NAAQS) for Particulate Matter: Comment period closes June 29, 2020; the proposal retains the current standards (initially set in 2013); a group of senators sent a letter to Wheeler expressing concerns that the proposal weakens public health protections during the pandemic, linking air pollution to higher death rates due to COVID-19; EPA previously announced Dec. 2020 as the target date to finalize these standards. ²¹
• EPA’s Guidance Documents Rule: Comment period closes June 22, 2020; EPA proposed procedures and requirements to manage issuance of guidance subject to Executive Order 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents.”²²
• Fuels Regulatory Streamlining Rule: Comment period closes June 15, 2020; the proposal seeks to overhaul the fuels regulatory program via a host of revisions which are slated to take effect on January 1, 2021.²³
• Federal CCR Permit Program Proposal: In response to public interest groups' request for a 120-day extension of the comment period due to the COVID-19 pandemic, EPA extended the comment period by only 30 days, to May 20, 2020.²⁴
• Rule for RCRA Operators to Seek Delays of Ash Disposal Compliance Deadlines: Comment period closed Apr. 17, 2020; EPA declined to extend the 45-day comment period amid the COVID-19 crisis because of the 'critical timeframes' presented in the rule and 'straightforward' changes; during an Apr. 7 virtual hearing, environmental groups argued that EPA’s work toward finalization of the rule during the COVID-19 crisis unreasonably limits public participation.²⁵
• Significant New Use Rule for Long-Chain Perfluoroalkyl Carboxylate Substances: Comment period closed Apr. 17, 2020; EPA declined requests to extend the comment period due to COVID-19; under the 2020 National Defense Authorization Act, EPA has a deadline of June 22 to take specific actions on PFAS, including finalization of this rule.²⁶
• Rule Restricting Scientific Studies Relied upon in Rulemakings: EPA extended the comment period by 30 days, to May 18, 2020, due to the COVID-19 crisis; scientists and physicians have opposed the proposal.²⁷
• Rollback of Penalties for Companies that "Incidentally" Kill Birds: U.S. Fish & Wildlife Service comment period closed Mar. 19, 2020; the proposal codifies a December 2017 U.S. Department of the Interior, Office of the Solicitor legal opinion; some states argue that the rule runs counter to the Migratory Bird Treaty Act and filed briefs in related litigation challenging the opinion in early May 2020.²⁸
• Comprehensive Overhaul of National Environmental Policy Act (NEPA) Regulations: CEQ comment period closed Mar. 10, 2020; opponents argue the proposal violates NEPA and the APA.²⁹
• Lead and Copper Revisions under the Safe Drinking Water Act: Comment period closed Feb. 12, 2020; state drinking water regulators, drinking water utilities, and former EPA officials have raised concerns over the revisions.³⁰
• Revisions to Obama-era Effluent Limitations Guidelines for Power Plants: Comment period closed Jan. 21, 2020; environmentalists argue that the rule unreasonably assumes that facilities will voluntarily adopt stricter requirements in exchange for longer compliance deadlines.³¹
• Overhaul of Environmental Appeals Board Review: Comment period closed Jan. 2, 2020; the proposal faces opposition by environmental groups and some states .³²
• Greenhouse Gas New Source Performance Standards (NSPS) for the Oil and Gas Sector: Comment period closed Nov. 25, 2019; environmental groups have alleged the proposal will lead to increases in greenhouse gas emissions.³³
• Repeal of the "Once in, Always in" Rule for Major Sources under the CAA: Comment period closed Nov. 1, 2019; EPA's goal has been to finalize the rule by Apr. 2020; environmentalists and some states have raised concerns that the proposal will result in plants removing important pollution controls.³⁴
• Regulation of Persistent, Bioaccumulative Toxic (PBT) Substances: Comment period closed Oct. 28. 2019; TSCA requires finalization of the rule before the end of the year; comments reveal concerns over whether EPA should conduct a risk analysis of PBT chemicals before regulating.³⁵
• Coal Ash Landfill Rule Governing Disposal of Waste: Comment period closed Oct. 15, 2019; a number of environmental and industry groups are critical of the proposal.³⁶
• New Source Review "Applicability" Revisions to Project Emissions Accounting: Comment period closed Oct. 8, 2019; this is one of a series of controversial measures designed to reform the New Source Review program under the Clean Air Act.³⁷
• Perchlorate Drinking Water Regulation: Comment period closed Aug. 26, 2019; EPA and environmental groups have agreed to an extension until June 19, 2020 for the agency's court-ordered deadline to finalize the long-delayed rule.³⁸
• Revision of 2015 NSPS for Power Plants: Comment period closed Mar. 18, 2019; environmental groups have opposed the proposal's revocation of certain pollution control technology requirements; due to delays related to COVID-19, EPA does not expect to finalize until summer 2020.³⁹
• Repeal of Emission Requirements for Glider Vehicles and Engines: Comment period closed Jan. 5, 2018; initially proposed in 2017, interested industry groups urged EPA to revive the proposal to scrap Obama-era limits.⁴⁰

Final Rules Stalled in Court

Proposed rules are not the only ones at risk. The Trump Administration is also in a race against the clock for the judicial review process to play out in challenges to final rules that have already been issued. Proponents of these rules would prefer that this Administration's appointees oversee briefing and oral argument and that courts issue decisions before a potential new administration could reconsider the position of the executive branch. In particular, for cases in which the Administration has promulgated a rule that advances an interpretation of a statute, judicial determination that the interpretation is correct would be more difficult for a future Administration to overcome.

COVID-19 has already stalled some of these cases. Many courthouses have closed their doors, postponed oral arguments, and extended briefing schedules. Courts are also considering how to transition to remote forms of oral arguments and hearings. As many courts are now prioritizing essential proceedings, it is becoming increasingly unlikely that courts will decide some of these cases before the end of the year. Indeed, there are certain rules whose fate may well rest on the pace and timing of the litigation challenging their validity:

• Narrowing Timing and Scope of State Review under Clean Water Act § 401: Administrator Wheeler signed the final rule on June 1, 2020; some states and environmental groups have argued that the rule unlawfully curtails state authority.⁴¹
• Rollback of Obama-era Mercury and Air Toxics Standards (MATS) Rule: Finalized May 22,2020; the rule's new cost-benefit methodology has faced criticism by environmentalists who argue that the new method could be used to weaken regulations for other air pollutants; litigation over the rule is already underway in the DC Circuit.⁴²
• Greenhouse Gas Fuel Economy Standards for Light Duty Vehicles: Finalized April 30, 2020; EPA has received some criticism for finalizing during the COVID-19 crisis; lawsuits have already been filed in the DC Circuit.⁴³
• The Navigable Waters Protection Rule: Finalized Apr. 21, 2020; challenges have already been brought against the rule and more are expected in district courts across the country; these cases can proceed concurrently, raising the possibility that some courts will stay the rule while others will affirm.⁴⁴
• Rule Creating Subcategory of Power Plants under MATS: Finalized Apr. 15, 2020; opponents argue that the rule weakens the MATS limits for the new subcategory of power plants, resulting in increased air pollution. ⁴⁵
• Repeal Appliance Maintenance and Leak Repair HFC Regulations: Finalized Mar. 11, 2020; a coalition of 16 states have argued the proposalrule is unlawful and would increase, rather than decrease, emissions; litigation is expectedthe NRDC as well as the States of New York, Connecticut, Illinois, Maine, Maryland, Minnesota, New Jersey, Oregon, Virginia, Washington, the city of New York, and the District of Columbia have challenged the rule in the DC Circuit.⁴⁶
• Renewable Fuel Standards Blending Volume Obligations for 2020: Finalized Feb. 2020; challenges have already been brought by various industry groups in the DC Circuit.⁴⁷
• Rollback of Obama-era Risk Management Plan (RMP) Rule: Finalized Dec. 19, 2019; litigation underway in the D.C. Circuit; challengers moved to hold the case in abeyance for approximately six-months for EPA to take action on pending administrative petitions for reconsideration of the rule; on May 15, 2020, the DC Circuit ordered the motions granted and the case be held in abeyance pending further order by the Court.⁴⁸
• SAFE Vehicles Rule Part One Rule: Finalized Sept. 27, 2019; revokes waiver for California to implement more stringent greenhouse gas and fuel economy standards; litigation underway in both the DC Circuit and DC District Court.⁴⁹
• Rollbacks under the Endangered Species Act (ESA):  Three separate rules under the ESA were finalized Aug. 27, 2019 (the “Listing Rule,” the “Interagency Consultation Rule,” and the “4(d) Rule”); multiple environmentalist groups, animal rights activists, and a coalition of states filed suits over the three rules in the Northern District of California; on May 18, 2020, the District Court Judge dismissed the environmental groups and animal rights activists’ lawsuits on standing grounds, giving them until June 8, 2020 to amend their Complaints.⁵⁰
• Landfill Methane "Delay" Rule: Finalized Aug. 26, 2019; litigation underway in the DC Circuit; under the current schedule, briefing will be completed by Aug. 31. ⁵¹
• The Affordable Clean Energy (ACE) Rule: Finalized July 8, 2019; rescinds and replaces Obama-era Clean Power Plan; litigation underway in the DC Circuit but briefing schedule extended due to COVID-19 .⁵²

Regulatory Initiatives Not Yet Proposed

As time, attention, and resources are diverted to the COVID-19 response effort, there will be less room for new regulatory proposals before January 2021, much less their completion. Nevertheless, there are some promised initiatives that are worth watching to see if they materialize or wind up derailed in light of the crisis:

• RFS Standards for 2021, Biomass-Based Diesel Volumes for 2022:  A proposal setting forth the renewable fuel volume obligations (RVOs) was submitted to OMB for review on May 13, 2020.⁵³
• Cost-Benefit Rule under the CAA: EPA committed to issue a series of regulations addressing methodology for cost-benefit analysis on a media-specific basis;⁵⁴ EPA’s Office of Air and Radiation is the first office to submit its proposal for OMB review (which it did Apr. 10, 2020).⁵⁵
• Reissuance and Modification of Clean Water Act § 404 Nationwide Permits: The Army Corps of Engineers submitted a proposed rulemaking to OMB on January 29, 2020; a district court vacated NWP 12 as applied the construction of new oil and gas pipelines on May 11, 2020.⁵⁶
• Risk Evaluation of Perchloroethylene (PCE):  EPA’s draft risk evaluation of PCE has recently faced some criticism, with some raising concerns that there are flaws in the model underpinning EPA’s analysis.⁵⁷
• NAAQS for Ozone: In preparation for a proposal, EPA staff drafted a recommendation to retain the existing standards for peer review in Jan. 2020; reviewers pointed out flaws in the agency's risk methodology and recommended that the agency consult with outside experts; acknowledging the “difficulty of this task,” Administrator Wheeler has directed his staff to complete review of the Ozone NAAQS by the end of the year. ⁵⁸
• Exceptions to Toxic Substances Control Act Fees Rule: On Mar. 25, 2020, EPA announced its plan to consider exemptions to the rule's self-identification requirements associated with EPA-initiated risk evaluations.⁵⁹
• Renewable Fuel Standards "Reset" of Statutory Blending Volumes for 2021 and 2022: A proposal was under review at OMB in Oct. 2019, but EPA formally withdrew its draft two months later.⁶⁰
• Heavy Duty Truck NOx Emission Cuts: EPA is considering reductions in NOx emissions as part of its "Cleaner Trucks Initiative" to tighten standards for air emissions from heavy-duty trucks; interested industry groups have called for EPA to delay developments on this initiative due to COVID-19.⁶¹

Conclusion

The COVID-19 pandemic has caused great uncertainty throughout the economy, and has had a devastating impact on the country. It is still too early to determine its effect on the Administration's efforts to remake the environmental regulatory landscape, but it is not premature to say that its imprint will be significant. As the crisis persists, we will continue to closely monitor the implications for a variety of industries and we will issue additional guidance as the situation develops.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.