NS4054 Spring Term 2017 United States Energy Deregulation Oxford Analytica, United States: Courts Will Slow Energy Deregulation May 10,2017

Overview President Trump signed memorandum May 8, 2017 guiding all agency heads to review relevant regulations that: “Potentially burden the development of domestically produced energy resources” President has targeted rules and regulations implemented by former president Obama’s government on the environment and climate change as he looks to boost fossil fuel industry White House has sought to Expand offshore oil drilling Revoke Clean Power Plan Cut environmental rules for coal producers and Reduce fuel efficiency standards

Initial Achievements Pipelines Signing off on two controversial pipeline projects that had been held up by Obama administration Dakota Access Pipeline and Keystone XL Dakota Access now carrying oil from Bakken shale oilfields in North Dakota to refineries in Illinois Keystone still faces difficult road ahead Little chance it will start up before end of Trump’s first term

Agenda I Congressional Activity Trump signed legislation repealing section of Dodd-Frank financial reforms that would have required oil and gas companies publicly listed on US stock exchanges to report in more detail their payments to foreign governments Oil and Gas industry had spent years lobbying against the rule Executive orders and presidential statements Trump’s more ambitious efforts to overhaul energy relations have come through executive orders Administration calls these rapid policy action Really just statements calling on agencies and departments to review existing rules and recommend courses of action to modify or rescind environmental regulations

Agenda II As of early June 2017 little has been achieved March 28 “Promoting Energy Independence and Economic Growth” executive order set in motion wide-ranging review of regulatory issues including The Clean Power Plan Rules regulating fracking on federal lands and limiting methane emissions from oil and gas operations The social cost of carbon metric, which requires regulators to consider the costs of carbon emissions when evaluating new rules and A moratorium on new coal leases on federal lands

Agenda III Trump also Signed an order to review federal rules regarding automakers to ensure their vehicle fleets average 54.4 miles per gallon fuel efficiency by the mid-2020s Tasked the government with finding ways to expedite the permitting process for new infrastructure projects such as pipelines and LNG gas export plants Is seeking to overturn the “Waters of the United States” rule which significantly expanded the government’s regulatory powers over waterways Wants to expand offshore oil and gas drilling into new areas on the Outer Continental Shelf off the East Coast and in the Arctic off Alaska Wants to reduce power of EPA by cutting its budget by more than 30%

Obstacles I Reviews set in motion by these executive orders likely to produce a raft of proposed regulatory changes over the coming years and years No doubt will generate political pushback and be difficult to implement Most significant changes such as overturning the Clean Power Plan and the Waters of the United States rule will require extensive administrative deliberation May not be able to clear statutory hurdles across the US bureaucracy where decades of rules and precedent have entrenched federal standards

Obstacles II Executive orders Certain to be challenged in the courts by environmental and other non-environmental groups backed by an activist opposition that is highly energized to resist Trump administration proposals. These court challenges even in unsuccessful, will tie-up the proposed rule changes for months and potentially years. States will also push back against federal rules weakening environmental protections California has long set its own more stringent fuel efficiency standards and will continue to keep up that fight if Trump administration tries to impose weaker national standards

Obstacles III On the clean energy front, many states including those led by Republicans have implemented renewable portfolio standards These standards mandate a certain amount of power generation to come from renewable resources which will undermine Trump’s efforts to increase coal-fired power generation

Markets I Markets will also influence decisions Little incentive to oil and gas companies to drill in new frontier offshore areas with oil prices around $50 per barrel Other companies will have customer-driven business imperatives to pursue climate change mitigation initiatives Trump loudest energy pledge to revive the coal industry and bring back mining jobs is being undercut by cheap and plentiful natural gas and increasingly competitive wind and solar.

Assessment Despite Trump administration’s desire to move ahead quickly on energy initiatives, it will likely face months and possibly years of Studies Rulemaking efforts and Pubic hearings Across the bureaucracy to implement the broad goals in its executive orders Legal challenges will come from States Environmental groups and Other non-governmental organizations The market too is working against many of his proposals.