In a video released Monday, president-elect Donald Trump pledged that in his first 100 days in office he would abolish a host of regulations to stimulate domestic energy production.
“I will cancel job-killing restrictions on the production of American energy, including shale energy and clean coal, creating many millions of high-paying jobs,” he said. “That’s what we want, that’s what we’ve been waiting for.”
Trump didn’t spell out what restrictions he has in mind. While energy experts and businesses can point to a variety of federal environmental regulations on oil and gas drilling, most were perplexed by what Trump might have been talking about with regard to restrictions on “clean coal.”
“There aren’t any restrictions on clean coal, on the research on making coal cleaner. I don’t think that there’s restrictions on that. Indeed the Department of Energy has been actively funding research on clean coal. So what he must be implying there is that any restrictions on coal are restrictions on clean coal,” said Tom McGarity, a law professor at the University of Texas at Austin who specializes in the regulatory process.
In addition, creating “many millions of high-paying jobs” seemed unlikely. According to the Bureau of Labor Statistics, a total of 352,800 people are currently working in the oil and gas and mining sectors.
“I think the right way to read that is that he intends to scrap a lot of environmental rules that regulate coal production and end the Clean Power Plan that would accelerate the decline of coal,” said Jason Bordoff, founder of Columbia University’s center for global energy policy. “And the use of the word ‘clean’ is just propaganda to pretend all coal is clean.”
Experts note that coal is not ever clean. The mining process disturbs the lands. Burning coal produces toxic waste in the form of coal ash. And coal-fired power plants also emit traditional pollutants such as mercury as well as carbon dioxide, which speeds climate change. Carbon-capture-and-storage systems can reduce carbon dioxide emissions, but there is no technology that can do this economically at large scale. In some places, it is done when the carbon dioxide can be used for enhanced oil recovery or other industrial purpose.
“The coal industry has been declining for many reasons much more important than government regulation,” Bordoff said, citing competition from cheaper natural gas, the falling cost of producing energy from renewable sources such as solar and wind, and weak Asian demand for coal. “So eliminating environmental rules like the Clean Power Plan can slow the decline of coal but the coal industry is not coming back as he promised even if he eliminates all these rules.”
When it comes to oil and gas drilling, there are more identifiable targets for Trump and the industry. Those options increase if Trump has the cooperation of the U.S. Congress, which he surely will, and chooses to use a Gingrich-era law called the Congressional Review Act. This allows, in certain circumstances, for an incoming president and sympathetic Congress to nullify late-arriving regulations finalized by the previous administration. If the regulations were finalized within 60 days of the end of either the House’s or Senate’s sessions, then they can fall victim to the objections of the next Congress. If the party holding the White House has changed, then a resolution under the Act is unlikely to be vetoed.
According to a Congressional Research Service determination issued just after the November election, this would apply to regulations finalized after May 30, 2016 if Congress did not come into session again this year. As the congressional calendar changes between now and the close of the year, that date will move forward. This would subject some Obama administration rules to potential reversal.
“They can pass a joint resolution, and if it’s signed by the president, then that regulation disappears,” said Tom McGarity, a law professor at the University of Texas at Austin who specializes in the regulatory process. “It’s void. And worse, in my view, is that the agency can never publish a regulation on a substantially similar topic without express authorization of Congress. It not only kills the reg but it makes it so nobody can do it again.”
So what regulations are vulnerable here? Perhaps the most obvious is a recently finalized Interior Department rule controlling the flaring, venting, and unintended leaking of methane gas from oil and gas operations on federally owned or Native American lands. Because the rule took effect so close to the end of the Obama second term, it’s possible that Congress could use the Congressional Review Act to block the regulation — passing a resolution to do so that Trump would then be willing to sign as president.
Another Obama methane regulation, promulgated by the Environment Protection Agency and designed to reduce methane gas leaks in the name of climate change, was finalized back in mid-May, so it seems unlikely to be subject to such a sweeping rollback option.
Trump might also be referring to other obstacles, such as permits for oil and natural gas pipelines. The hotly disputed Dakota Access pipeline from North Dakota to Illinois would probably receive the additional approvals it needs to be completed. The Keystone XL pipeline, rejected by President Obama, would get a fresh look. Companies seeking to build gas pipelines out of gas-rich Pennsylvania could get Trump administration support, though federal agencies have not been standing in the way of gas pipelines.
How the politics of shale energy play out is uncertain. A rising number of Americans oppose fracking — the hydraulic fracturing and horizontal drilling technique used to unlock oil and gas from shale rock. But Trump could benefit from lucky timing, Bordoff said.
“I think to pretend that federal regulation has been a major barrier to us developing our shale resources is incorrect,” he said, noting that shale drilling has slowed because world oil prices have plunged.
“We may well see a scenario where a Trump administration scraps a bunch of environmental rules, oil ticks up, U.S. shale production goes up again because industry efficiencies are up so much and then the Trump administration claims credit for making U.S. oil production go up,” Bordoff said.
And this too may be only the beginning of what Trump can do to roll back Obama moves to tighten regulations for drilling and exploitation of domestic energy sources. “The deregulatory impulse of the next Administration will likely proceed through direct alteration or repeal of regulations; legislation; or use of more esoteric strategies like appropriations riders, resolutions of disapproval under the Congressional Review Act, or even judicial settlements,” Scott Segal, a partner at the law firm Bracewell who focuses on energy regulation, said in an email.
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