On Tuesday, President Trump issued an executive order (EO or Order), "Promoting Energy Independence and Economic Growth," targeting a broad swath of Obama-era climate change and other environmental regulations and initiatives, including, most notably, the Clean Power Plan (CPP). The EO, coupled with the recent release of the administration's "skinny" FY 2018 budget proposal, are the President's most significant actions to date in unraveling President Obama's climate change legacy. The effectiveness of the Order, however, remains to be seen. While it directs the EPA and other federal agencies to begin the process of rescinding or rewriting certain high-profile environmental regulations, the timing and substance of how these rules are to be changed or repealed is unclear. In addition, some states and environmental organizations are expected to sue the administration to block any final agency actions to repeal or significantly weaken these rules.

Clean Power Plan

The EO directs the EPA to begin work on repealing the CPP, the centerpiece of President Obama's Climate Action Plan, which sets Clean Air Act (CAA) standards for CO2 emissions from existing power plants. While many expect that a continued shift to lower-emitting resources, such as renewables and natural gas, will reduce emissions in the short term, the CPP was expected to drive reductions in CO2 emissions in the medium- to long-term. According to 2015 EPA estimates, the CPP would reduce CO2 emissions by 17 percent by 2030, whereas emissions would increase by 2.7 percent in the absence of the rule. The Order also asks the EPA to rewrite the CAA's New Source Performance Standards (NSPS) for CO2 emissions from new fossil fuel power plants, which currently require operators to install partial carbon capture technology for coal-fired plants.

After the Order was signed yesterday, the Department of Justice (DOJ) filed motions with the US Court of Appeals for the DC Circuit requesting that the CPP and New Source Performance Standards (NSPS) be remanded back to the EPA given the agency's directive to revise or rescind these rules. States and environmental organizations, who are parties to these cases and in support of these rules, are expected to challenge these motions by the DOJ to remand these climate change regulations back to the EPA. A decision from the DC Circuit on the CPP could come any week, though a motion to rescind the rule back to the EPA could complicate the timing of the court's work on this case.

As to the administrative process for undoing the CPP, it is unclear how the EPA, under Administrator Scott Pruitt, will roll back the rule. The CPP’s existing standards factor in not only efficiency upgrades but also “beyond the fence line” measures, such as shifting dispatch from coal-fired plants to natural gas-fired plants or increased renewable energy generation. Some stakeholders have suggested that, going forward, the EPA might pursue narrower CO2 standards for existing power plants. Others are arguing that the EPA might declare that Section 112 of the CAA prohibits it from regulating CO2 emissions under Section 111 (the provision the Obama-era EPA relied on in promulgating the CPP). During the enactment of the 1991 amendments to the CAA, Congress never reconciled differing House and Senate language on Section 112. The House language would prohibit the EPA from regulating the same source under both Sections 112 and 111 of the CAA, whereas the Senate language would block the agency from regulating the same pollutant under both sections. Opponents of the CPP point to the House language in arguing that the EPA may not regulate power plants under Section 111 since they are already regulating power plants’ mercury and air toxics emissions under Section 112.

Whatever path it ultimately chooses, the EPA will have to pursue a lengthy and complicated rulemaking process to undo the CPP that will likely be challenged by environmental organizations and some states. The legal and regulatory hurdles for reversing course via a rulemaking process will be challenging based on precedent. In Motor Vehicle Manufacturers Ass’n. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983), the US Supreme Court rejected an attempt by the Reagan Administration unilaterally to rescind an existing rule requiring automatic seat belts. To eliminate a rule previously promulgated through notice and comment procedures, that precedent appears to require not only notice and comment but also a rational basis in the record that will survive judicial review.

Other climate change and environmental policies

The EO attacks other Obama-era climate change and environmental policies. Specifically, the Order disbands the interagency working group on the social cost of GHGs and withdraws the social cost of carbon (SCC) estimates developed during the Obama Administration. The Obama administration SCC estimates are important in that the EPA and other federal agencies used these estimates to develop cost-benefit analyses for climate change regulations. Instead of the Obama-era SCC estimates, federal agencies will revert back to a 2003 White House Office of Management Budget guidance in assessing the relative costs and benefits associated with potential federal regulation. The EO also rescinds a number of President Obama's executive orders and memorandums on climate change.

In addition, the EO takes the following actions:

  • Lifts a moratorium on federal coal leasing
  • Rescinds the White House Council on Environmental Quality guidance on climate change, which attempted to provide clarity to federal agencies as they considered climate change impacts related to major federal actions
  • Directs the Bureau of Land Management (BLM) to review regulations on unconventional oil and gas leasing
  • Directs the BLM to review venting and flaring regulations on oil and gas operators on federal lands
  • Directs the BLM to review new National Park Service and Fish and Wildlife Service regulations on oil and gas operations

As with the EPA's CO2 standards for power plants, the EO allows the Attorney General to request that a court remand any litigation involving BLM's regulations referenced in this Order.

Finally, the Order directs federal agencies to "appropriately suspend, review, revise, or rescind" existing regulations that "unduly burden the development of domestic energy production." The Order requires that federal agency heads submit reports to the White House on regulations, orders, guidance documents, policies and other agency actions that burden the development of energy resources, and submit recommendations on how to "alleviate or eliminate" these federal actions.

What's not covered—the Paris Agreement and the Endangerment Finding

One subject that the EO does not address is the Paris Agreement on climate change. There is reportedly disagreement within the Trump White House regarding the Paris Agreement with some advisors calling for the US to withdraw from the climate change pact, and others urging the US to remain part of the agreement. The President is also reportedly asking for input from energy companies as to whether the US should withdraw from the Paris Agreement. For instance, last week ExxonMobil advocated that the US remain part of the Paris Agreement, calling it "an effective framework for addressing the risks of climate change."

Finally, the Order does not address the EPA GHG endangerment finding, which has served as the legal prerequisite for the CPP as well as other CAA climate change regulations. Some conservatives have called for revoking the endangerment finding but a repeal would likely face a difficult time withstanding a likely legal challenge.