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Trump signs orders aimed at smoothing the way for new energy projects

U.S. President Donald Trump signed a pair of executive orders aimed at smoothing the way for energy infrastructure projects like pipelines as a number of projects languish amid challenges.

The first order, titled "Promoting Energy and Infrastructure Growth" is aimed at streamlining regulations and approval processes to help move energy infrastructure projects forward more quickly. "By promoting the development of new energy infrastructure, the United States will make energy more affordable, while safeguarding the environment and advancing our nation's economic and geopolitical advantages," the order said. It takes aim at water quality certifications under Section 401 of the Clean Water Act, saying the outdated federal guidance and regulations "are causing confusion and are hindering the development of energy infrastructure."

Under the second order, cross-border approval permits that allow the construction of energy transmission infrastructure across international boundaries would become the sole responsibility of the president. Most of those projects had been handled by the U.S. Department of State, with the Secretary of State making a recommendation for approval or denial. The newly signed order directs the Secretary of State to adopt procedures that would see most of applications handled and referred to the president within 60 days of application.

"My action today will cut through destructive permitting delays and denials," Trump said in a speech prior to signing the orders in Crosby, Texas, on April 10. "You know about delays, where it takes you 20 years to get a permit? Those days are gone. Now you may not get it at all, but it's going to be quick if you don't."

The president was in the town just south of Houston as part of a trip that included a fundraising lunch in San Antonio. He signed the orders at the International Union of Operating Engineers training and education center in Crosby. The union represents heavy equipment operators and other workers on large energy infrastructure projects.

Investment review

The first order also orders the U.S. Department of Labor to examine data from retirement plans covered by the federal Employment Retirement Income Security Act to "to identify whether there are discernible trends with respect to such plans' investments in the energy sector" and to review its guidance on the "fiduciary responsibilities for proxy voting" to determine if those guidelines need to be updated. A group advocating for social and environmental change within corporations said the order is aimed at chilling attempts to promote responsible investment.

The order "flies in the face of a growing body of evidence showing that environmental, social, and governance [ESG] issues are indeed fundamental to the financial success of a company," Danielle Fugere, president of advocacy group As You Sow, said in a statement. "Shareholder engagement on ESG issues is critical to promoting long-term value and risk avoidance."

A directive to facilitate coordination to renew expired rights-of-way for energy projects, particularly electric transmission lines, is also contained in the first order. The Secretaries of Interior, Agriculture and Commerce were ordered to develop a master agreement for the renewals and within one year "initiate renewal or reauthorization processes for all expired energy rights-of-way grants, leases, permits, and agreements, as determined to be appropriate by the applicable secretary and to the extent permitted by law."

SNL Image

Executive orders signed by President Donald Trump are aimed at smoothing the process for pipeline development.
Source: AP image

The second order, titled "Issuance of Permits with Respect to Facilities and Land Transportation Crossings at the International Boundaries of the United States," would not affect existing presidential permits, including the one issued to TransCanada Corp. for construction of its Keystone XL pipeline. That pipeline, which would connect the oil sands region of Western Canada with a pipeline hub in Nebraska, was initially denied by the Obama administration, then approved by Trump shortly after his election. Trump's initial permit was revoked in late March and replaced with one that appeared to more forcefully make the case for the project. Opponents have challenged the second permit.

"We approved the Keystone pipeline almost from Day One," Trump said in his speech. "And we got the Dakota Access pipeline out of a lot of trouble."

Trump was referring to his initial presidential permit for Keystone XL and the administration's granting of a water-crossing permit for the Energy Transfer LP-led Dakota Access line which was slowed by widespread protests.

"Too often badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists," Trump said.

Warm reception from industry

Among the supporters of the initiatives backed in the president's orders was the Interstate Natural Gas Association of America, which represents the nation's biggest transporters of the fuel. The group's members have found projects stalled by state regulators and challenges under Section 401 of the act. The order directs the U.S. Environmental Protection Agency to revise regulations under the act within 13 months.

"Procedural inefficiencies can delay a process that already spans several years," Donald Santa, the association's CEO, said in an emailed statement. "Streamlining the process to ensure it is safe, comprehensive and predictable is a top priority, along with EPA clarifying Clean Water Act section 401 water quality certification requirements so that one state cannot interfere with interstate commerce."

The American Gas Association, which represents utilities, said hold-ups by states have caused some gas vendors to curb new service additions. "When states say 'no' to the development of natural gas pipelines, they force utilities to curb safe and affordable service and refuse access to new customers including new businesses," AGA's newly instated CEO Karen Harbert said in a statement. "Limiting access and choice for Americans — driving up costs and emissions in the process — is simply bad policy."

The Tulsa-based GPA Midstream Association, which represents about 80 petroleum pipeline and processing companies, said the changes will be welcomed by its members. "We have previously seen some states use the 401 permit process to essentially stall valid pipeline projects, and that isn't right," CEO Mark Sutton said in a statement. "I applaud this administration for taking a stand against this type of invalid action. Too often we see bureaucracies stopping growth. It's great to see an administration promoting a pro-growth and pro-jobs agenda for the midstream industry."

Across the country, the Marcellus Shale Coalition, a Pittsburgh-based organization that represents producers and pipeline operators in the Appalachian region, said the orders should weaken New York Gov. Andrew Cuomo's efforts to block projects. "We thank the president for taking action directly aimed at lifting the Cuomo administration's energy blockade that has left the northeast starved for natural gas," Coalition President David Spigelmyer said.

Electricity-focused groups, too, welcomed the executive orders.