The Regulatory Prognosis Under President Biden (Part 1)

The Regulatory Prognosis Under President Biden (Part 1)

By: Mike Krancer, Principal & Co-Founder, Silent Majority Strategies, November 11, 2020

In my last article I outlined certain immediate Executive actions President-elect Biden could take to quickly reverse Trump environmental and energy policy. While many Trump policies were initiated through Executive Action and can be reversed with the stroke of a pen (which will happen), some graduated into the rulemaking process; a much more durable way to implement policy. Biden will undoubtedly do many things via Executive Order, but his real goal will be to implement more durable change through the rulemaking process. This article will introduce a portion of where the Biden Administration may be heading.

For those impacted by these rulemakings, and there will be many, rulemaking by the Biden Administration is a golden opportunity to influence future regulation not afforded by the Executive Order process. The regulatory and rulemaking process offers opportunities for impacted parties to weigh in with written comments on the open public docket. These opportunities should not be missed because the Agency, by law, must address all germane comments on the record. Silent Majority Strategies specializes in helping to craft regulatory docket comments for interested parties which are strategic, credible and credentialed. By seizing the opportunity to comment, the direction of rule changes can be, and is often, altered significantly. Our direct experience is that such comments make a difference and we have, in the past, accomplished important results for our clients in this way. 

Climate Change is at the top of the Biden, and the Democratic Party’s, policy agenda. There are a host of rulemakings he will likely focus on and I will focus on a “first wave” in this piece.

In many cases discussed there is an old Obama era Rule to revert to. While Biden did not endorse the Green New Deal, the proposals in the GND must be considered. A significant and aggressive faction of the Democratic Party is determined to implement it and are not likely to be deterred by disappointing election results. The Biden Administration will likely find it necessary to make compromises with proponents of the GND. As legislation is highly unlikely to pass, the regulatory arena will be the main policy and political battlefield for the GND. Votes have no impact on ideology.

The ACE Rule-Existing Power Plants. Very high on the Biden target list will be the Trump Affordable Clean Energy (ACE) Rule.  That Rule repealed the Obama Clean Power Plant Rule that aimed to control emissions from existing coal and natural gas power plants.  EPA withdrew two other proposed rules relating to greenhouse gas emission guidelines and the Clean Power Plan Clean Energy Incentive Program. 

Expect that the Biden EPA will soon issue a notice of proposed rulemaking (NPR) repealing ACE and proposing to replace it with a new Rule that will likely go much further than the Obama style Clean Power Plan. Here, simple reversion back to the Clean Power Plan might be out of the question as the Clean Power Plan was headed for trouble in the Supreme Court (and that was before Justice Barrett was confirmed).

New Power Plants. Biden’s EPA will withdraw the proposed rule of December 2018 regarding performance standards for new coal power plants. That will leave the existing Obama standards in effect. It is likely, though, that a new NPR could be issued revamping those standards to be more stringent.

Methane Emission Control in the Oil and Gas Sector.  There are two final rules in play here with respect to new sources both finalized just this past August 2020.  EPA rescinded the methane standards for new facilities and VOC standards for pipelines. It also revised VOC standards for new operations including leak detection and repair obligations.  The Biden EPA will certainly issue an NPR to repeal the August 2020 rules and replace them with at least the prior existing standards or new more stringent standards. Given the Green wing’s aversion to drilling for natural oil or natural gas at all we might expect standards which might be aimed at shutting down that activity to the extent possible. This is why the opportunity to comment on the docket on such proposed Rules is so important. Establishing a case for technical impracticality or the threat to human life and health that a sudden shut down of US oil and gas extraction activity, which such new Rules may bring about, would be critical. 

As to existing sources, the Biden EPA could simply pick up where the Obama administration left it. Back in 2016 EPA issued a massive Information Collection Request (ICR) aimed at obtaining the information it needed to impose regulations. That ICR was withdrawn by the Trump EPA and it said that it was not going to proceed with regulating emissions from existing sources. Expect the Biden EPA to reissue the ICR and move forward with a NPR. 

Federal Lands.  The Biden administration will introduce various new proposed rulemakings relating to hydrocarbon energy development on federal lands. These measures could include, among other things: (1) and NPR relating to hydrocarbon extraction operations in Sage Grouse Habitats impacting California, Colorado, Idaho, Nevada, Oregon, Utah and Wyoming; (2) a new proposed environmental impact study assessment relating to the Coastal Plain of the Arctic; (3) an NPR relating to, and possibly ending, federal coal leasing; (4) a new ICR relating to leasing the outer continental shelf; (5) an NPR relating to how the Bureau of Land Management evaluates and addresses how it addresses the changing conditions of land under its control caused by climate change. 

Natural Gas Exports. The Biden administration will likely put the brakes on or stop natural gas export approvals. A new NPR will be issued to repeal the 2018 final small-scale export approval rule. This Rule allowed for automatic approval of exports up to 51.75 cubic feet per year to certain countries. A Trump era proposed rule would have excluded gas export from the NEPA process and would have been most applicable to larger scale exports. Biden will likely undertake an NPR to require even further GHG analysis of natural gas exports (upstream and downstream impacts)

Motor Vehicle Fuel Efficiency.  The Trump NHTSA Safe Affordable Fuel Efficient (SAFE) Vehicle Rule finalized in March 2020, and under current court challenge, will be subject to an NPR.  The Biden NPR will seek to rescind SAFE and likely replace it with new Rule as opposed to simply reinstating the Obama Rule. Either way, a process of notice and public comment will be involved. 

Climate Change Review Under NEPA. The Trump Council of Environmental Quality repealed Obama’s approach to how climate change is handled under the National Environmental Policy Act. Almost every project undergoes a NEPA Environmental Impact Study before the project can proceed. The Biden administration will undertake an NPR for a new rule that it will view as strengthening NEPA review in terms of climate change. At the same time either that or a different NPR will be aimed at reversing the July 2020 CEQ final rule governing NEPA’s implementing regulations. 

I will cover additional areas of upcoming regulatory changes and opportunities for comment on the public docket in future articles.

Mike Krancer is the former Pennsylvania Secretary of the Department of Environmental Protection and Chief Judge of the Pennsylvania Environmental Hearing Board.