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Trump's war on regulations ripples through energy sector

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Trump's war on regulations ripples through energy sector

President Donald Trump is following through on his pledge to reduce federal regulations for energy companies. The number of rules that were proposed or issued by federal energy agencies after Trump took office are down sharply compared to those proposed or issued during 2016 and during the first roughly seven months of Barack Obama's first term in office. The trend will likely continue as the White House defends its order for federal agencies to repeal two existing rules for every new one they finalize.

Between Trump's inauguration on Jan. 20 and Aug. 14, the U.S. Department of Energy finalized eight significant regulatory actions, down from 32 in the same period in 2016 and below the 10 finalized by DOE during the same time frame of Obama's first term. A significant regulatory action is one that has an annual economic impact of $100 million or more or adversely affects the economy, jobs or the environment, among other areas.

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The U.S. Department of Interior, which oversees leasing of federal lands and waters for energy production, has also completed eight significant regulatory actions so far in Trump's presidency, below the 23 completed during the same period a year earlier, and also down from the 10 completed during the same months in 2009. Several of Interior's significant regulatory actions in 2017 have been aimed at repealing existing rules, as opposed to creating new ones.

The decline in rulemaking reflects Trump's call to slash regulatory obligations for American businesses in an effort to spur economic growth and create jobs. In January, the White House released an executive order requiring nonindependent federal agencies to rescind at least two existing regulations for every major new rule they finalize. A coalition of environmental and citizen groups sued to block the order, saying the directive was arbitrary and would grind rulemaking to a halt, but the mandate remains in effect for now.

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Since Trump took office, a total of 860 federal regulatory actions have been withdrawn or removed from active status, the Office of Management and Budget reported July 19. During that same time period agencies proposed about 58 economically significant regulations, a 50% drop from those proposed in 2016, while the 372 "other significant regulations" are down by around 40% compared with those that existed during President Obama's "Fall 2016 agenda," the OMB said.

The decrease in new rules partly stems from a lag in Trump filling key agency appointments. As of Aug. 17, Trump had still not nominated a deputy administrator for the U.S. Environmental Protection Agency, and the U.S. Senate only recently confirmed deputy secretaries for Interior and DOE.

But the regulatory cutbacks also reflect Trump's push to free the energy sector from government burdens and open up more federal areas to oil, gas and coal production. Among other policies, the president is seeking to repeal the EPA's Clean Power Plan and replace it with a less stringent rule for cutting carbon emissions from existing power plants. The EPA under Trump has also proposed suspending for two years parts of the methane rules for oil and gas producers while those rules are reevaluated.

The U.S. Bureau of Land Management has proposed rescinding its 2015 rule to regulate hydraulic fracturing on public lands and to suspend regulations to cut methane emissions from oil and gas production sites in federal areas. Trump also lifted a moratorium on new federal coal leases, reversing an Obama-era order for the BLM to withhold new leases until it reviewed the climate-related impacts of the program, and is repealing a DOI coal, oil and gas valuation rule aimed at increasing royalty revenues for taxpayers.

Much of the regulatory rollbacks have or will encounter legal challenges, making the fate of Trump's agenda unclear. On the question of whether Trump will drastically shrink the administrative state, "it's still too early to tell," said Philip Wallach, a senior fellow for governance studies at the Brookings Institution. "The regulatory process is slow, and the Trump administration has proven willing to at least go through the [Administrative Procedures Act] motions such that the real action is yet to come."