President Donald Trump on April 9 instructed energy and environmental agencies — including the Federal Energy Regulatory Commission — to insert a sunset date into their rules "governing energy production," with the goal of requiring agencies to "reconsider every regulation."
The sweeping new executive order sets a tight timeline for agencies to set sunset dates for rules on the books. Rules not explicitly reviewed and extended would expire on Sept. 30, 2026, according to an accompanying fact sheet.
The order directs agencies to establish a tentative termination date for all existing "covered regulations," which are rules under specific statutes laid out in the order. Some of the statutes cited are more than a century old.
Each agency would set this termination date in a so-called sunset rule, which has to go into effect no later than Sept. 30. This initial termination date would need to fall within one year of each sunset rule's effective date.
Agencies would then have to actively decide to extend the sunset date for each regulation, although never for more than five years at a time, the order said.
Future covered energy rules would have to include a sunset date within five years of their creation, unless they are deregulatory in nature.
The executive order stretches to energy-related agencies across the federal government, including the US Energy Department, US Nuclear Regulatory Commission, Bureau of Safety and Environmental Enforcement, and Interior Department agencies the US Bureau of Ocean Energy Management, Bureau of Land Management, US Fish and Wildlife Service of Energy and Office of Surface Mining Reclamation and Enforcement.
Also, within 30 days, the US Environmental Protection Agency and US Army Corps of Engineers are to provide a list of statutes vesting them with regulatory authority subject to the order.
"Zero-based regulation uses the bureaucracy against itself," a White House fact sheet describing the effort said. "If bureaucrats move slowly, the default is deregulation and free markets — not the sclerotic status quo."
The executive order said that sunsetting regulations would remove burdensome and unnecessary regulations to free up energy production and support investment.
"This regime of governance-by-regulator has imposed particularly severe costs on energy production, where innovation is critical," the order said. "By rescinding outdated regulations that serve as a drag on progress, we can stimulate innovation and deliver prosperity to everyday Americans."
The order would affect rules promulgated by nearly two dozen governing statutes — including the Federal Power Act, the Natural Gas Act, the Energy Policy Act and the Atomic Energy Act, among many others. The Federal Power Act and Natural Gas Act were both enacted in the 1930s.
With an eye toward encouraging energy production, however, the order does not apply to permitting regimes authorized by statute.
The effort comes as the White House, in a separate deregulatory order, told agencies to bypass notice and comment procedures in some cases, as regulators begin culling rules that they deem unlawful or at odds with recent US Supreme Court rulings.
Industry impacts
The executive order could lead to significant regulatory uncertainty, as rules would constantly be changing to comply with sunset dates and potential renewals, some observers said.
"Regulated entities would be left without any regulatory certainty because the regulation you are following today will be gone in a year unless FERC renewed the regulation — a process that is time-consuming and fraught with uncertainty," said Rich Glick, a former FERC chairman under President Joe Biden. "There isn't one person that knows how FERC operates that could honestly say this is a good idea."
The order could touch on many regulations that businesses rely on, including rules governing open access transmission rules and market-based rates, attorneys said.
"Everything that industry has built its operations around for a very long time could be eliminated with the swipe of a pen," said Nick Guidi, senior attorney at the Southern Environmental Law Center.
However, James Broughel, a senior fellow at the Competitive Enterprise Institute, a free-market think tank, said sunset provisions would help ensure agency rulemaking is efficient and compliant with applicable law.
"I'm a big proponent of incorporating sunset provisions into regulations as a means to periodically review them to ensure they're working and achieving their objectives," he said.
Concerns over sunset provisions leading to uncertainty are usually "unfounded," Broughel added, noting that Idaho and Texas require similar reviews at state agencies.
"In practice, many countries have sunset review processes, many states have them," Broughel said. "The foundational regulations that establish the process that everybody's been following for decades, those aren't the kind of regulations that expire under these processes."
Several oil and gas groups said they were still reviewing the tangible impacts of the order.
Implementation challenges
For the sunset rule to be legally sound, agencies would have to undergo a notice and comment period for each rule they are trying to rescind, which would require extensive resources, several industry observers said.
"Since it requires seeking comments on all existing regulations and then issuing orders extending them based on that record — FERC is going to need a lot more staff," said Neil Chatterjee, a former FERC chairman during the first Trump administration and current chief government affairs officer at Palmetto.
The order, however, comes at a time when the Trump administration is trying to reduce the size of the federal workforce to rein in spending. A federal appeals court on April 9 paved the way for the administration to fire thousands of probationary employees — which include 555 workers at the DOE and 419 at the EPA. FERC so far has been spared of any firings.
Agencies also had to submit plans for "large-scale reductions-in-force" to the White House Office of Management and Budget in March.
"They have fired people or intimidated them, and people are just running away from working at FERC and DOE so it's unclear who is going to implement this," said Gretchen Kershaw, chief operating officer at consulting firm Grid Strategies and a former attorney at FERC and the DOE.
Agencies could argue that adding sunset provisions were "housekeeping" changes that had "good cause" to circumvent lengthy notice and comment proceedings under the Administrative Procedures Act, but that mechanism is on shakier legal footing and would still require extensive resources, said Emily Mallen, an energy and regulation partner at law firm Akin.
"The manpower that would be required would tie up an agency, even if you're just making a housekeeping change," Mallen said.
Legal challenges
The order stipulates that all sunset provisions should be "consistent with applicable law."
"Some of the statutes that are listed actually require the agencies to adopt rules and so having no rules in place would leave the agencies at risk of not complying with the statutes as directed by Congress," Kershaw said. "'Consistent with applicable law' is doing a lot of work here."
The order, which extends to independent agencies including FERC and the Nuclear Regulatory Commission, comes a day after the US Supreme Court allowed Trump to temporarily fire independent agency heads while it considers a lower court ruling.
Under current Supreme Court precedent, FERC and the NRC are independent of White House control and must pass all regulations and rule changes by majority vote. However, the Trump administration has been pushing to exert greater control over the regulators — issuing an executive order in February that stated no executive branch member could advance a legal opinion that differed from that of the president and the US attorney general.
"The [April 9] executive order is completely unworkable with respect to FERC," Glick said. "FERC can't just insert a modification to existing regulations sunsetting them within a year. Instead, this requires a majority vote of commissioners."
A spokesperson for FERC said April 10 that the agency was "reviewing and analyzing" the executive order but had nothing further at this time. An EPA spokesperson said the agency is working to implement the administration's executive orders, including this one.
A representative from the DOE was not immediately available for comment on April 10.
