Breaking Down the Energy Executive Order

UPDATED 03.31.2017 The Executive Order has been published in the Federal Register, 82 Fed. Reg. 16,093. Also, the Office of Management and Budget released a statement regarding the budgetary impact analysis for this executive order.

Earlier this week, President Trump signed a much-anticipated Executive Order addressing energy and environmental policy.  As expected, the Executive Order specifically identifies the Clean Power Plan (CPP) and directs the EPA Administrator to review whether the CPP and related rules are consistent with the Trump Administration’s approach to these issues, and if not, begin the process of suspending, revising, or rescinding these rules.  (Since the Executive Order was released, the Department of Justice has requested that the D.C. Circuit hold the litigation over this rule in abeyance while the EPA conducts its review of this rule.)

However, the scope of the Executive Order is much broader than just the CPP.  Notably, it directs all agencies to review their existing actions that might burden the development or use of domestic energy resources, particularly non-renewable resources.  It also eliminates the social cost of carbon estimates that the Obama Administration put in place for agency cost-benefit analysis.  Below we break down each of the eight sections of the Executive Order.

Section 1 sets forth the Trump Administration’s overarching energy policy.  It identifies three energy-related national interests: (1) “promot[ing] clean and safe development of our Nation’s vast energy resources”; (2) “avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation”; and (3) “ensur[ing] that the Nation’s electricity is affordable, reliable, safe, secure, and clean, and that it can be produced from coal, natural gas, nuclear material, flowing water, and other domestic sources, including renewable sources.”  It then describes two policies.  The first policy is that “all agencies should take appropriate actions to promote clean air and clean water for the American people, while also respecting the proper roles of Congress and the States.”  The second policy is that “necessary and appropriate environmental regulations comply with the law, are of greater benefit than cost, when permissible, achieve environmental improvements for the American people, and are developed through transparent processes that employ the best available peer-reviewed science and economics.”

Section 2 outlines a 180-day process by which the heads of agencies are to review all existing 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.”  However, this review process does not include agency actions that are mandated by law, necessary for the public interest, or consistent with the policy described in Section 1 of the Executive Order.  The plans and reports required of agency heads under this section are to be provided to the Director of the Office of Management and Budget (OMB), the Vice President, the Assistant to the President for Economic Policy, the Assistant to the President for Domestic Policy, and the Chair of the Council on Environmental Quality.  After the final reports describing recommended agency actions are submitted, the OMB Director, in consultation with the Assistant to the President for Economic Policy, shall be responsible for coordinating these recommendations.

Section 3 revokes particular climate-related presidential and regulatory actions enacted by the Obama Administration.  Among these actions are: (1) Executive Order 13,653 (Preparing the United States for the Impacts of Climate Change); (2) The Report of the Executive Office of the President of June 2013 (the President’s Climate Action Plan); and (3) the Council on Environmental Quality’s “Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews.”  This section also requires the heads of agencies to identify and, as soon as practicable, suspend, revise, or rescind existing agency actions related to these now-revoked presidential and regulatory actions.

Section 4 targets the Clean Power Plan and related actions.  It directs the EPA Administrator to immediately begin review of the CPP, the New Source Performance Standards, and the proposed Federal Implementation Plan and Model Rule for consistency with the policies described in this Executive Order.  The Administrator is to promptly notify the Attorney General of any actions taken pursuant to this Executive Order, so that the Attorney General may take appropriate actions in the litigation over these rules, such as requesting the court stay litigation, which the Department of Justice has since done.  While the new Administration’s stance opposing the CPP is clear, the Executive Order does not require the EPA to propose a replacement rule for the CPP, nor does it reference EPA’s 2009 greenhouse-gas Endangerment Finding.

Section 5 directs agencies to no longer use the Obama Administration’s social cost of carbon estimates.  The Executive Order disbands the Interagency Working Group on the Social Cost of Greenhouse Gases and withdraws several technical support documents issued by that group.  In their place, agencies are to use in their cost-benefit analyses estimates that are consistent with the guidance contained in the OMB Circular A-4 of September 17, 2003.

Section 6 directs the Secretary of the Interior to take all necessary and appropriate steps to amend or withdraw the Obama Administration’s moratorium on new leases for coal mined from federal lands, and to commence Federal coal-leasing activities, consistent with applicable law.

Section 7 requires the EPA Administrator to review the EPA’s final rule on emission standards for the oil and natural gas sector, as well as any related guidance, for consistency with the policies of this Executive Order.  As with the section addressing the CPP, this section directs the Administrator to promptly notify the Attorney General of any actions taken based on this Executive Order, so that the Attorney General may take appropriate steps in the litigation over this rule.

Section 8 sets forth general provisions explaining that this Executive Order does not impair or otherwise affect the existing authority of executive agencies or the functions of the OMB Director.  It also provides that the Executive Order is to be implemented consistent with existing law.

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