Audit, Compliance and Risk Blog

Since last November’s election, reporters, pundits and rumor-mongers have all worked overtime trying to predict President-elect Trump’s actions. I’ve resisted joining that chorus. Environmental issues received only a tiny portion of candidate Trump’s rhetorical attention (I presented a compilation before the election here), and he had said and done little about these issues since the election.

On December 7 it was announced that President Trump  nominated Oklahoma Attorney General E. Scott Pruitt to be Administrator of the Environmental Protection Agency (EPA). Because AG Pruitt has an extensive public track record, all of which appears consistent with Mr. Trump’s stated policy perspectives, I’m ready to present the following expectations.

Both Trump and Pruitt have focused most of their public attention on “environmental” matters on what I would characterize more narrowly as “energy” matters – regulation of greenhouse gases (GHGs) and other emissions from fossil fuel energy use is the biggest focus. Both have argued that regulation in general needs to be less aggressive and intrusive, and pointed to several EPA programs as prime examples. It seems clear that they will reverse EPA’s push to regulate fossil fuels more aggressively, but it remains to be seen how widely their de-regulatory efforts will go.

What Public Positions Does A.G Pruitt Bring?

Pruitt has been Oklahoma’s state Attorney General since 2011; he was previously a state legislator. He has pressed a series of state and multi-state initiatives against Obama Administration initiatives. As stated on his official website, he “established Oklahoma’s first federalism unit to combat unwarranted regulation and overreach by the federal government. He is a national leader in the cause to restore the proper balance of power between the states and federal government, having served two terms as president of the Republican Attorneys General Association. Pruitt filed the first lawsuit challenging the implementation of the Affordable Care Act, and is a leading advocate against the EPA’s activist agenda.” The Clean Power Plan (see below) has been a particular target.

General Background: How Do Agencies Change Course Under New Management?

EPA and other agencies exist officially to administer (and in some cases, enforce) laws assigned as their responsibilities. Assuming Administrator Pruitt would want to change EPA’s course, agency actions that might have quick effect include:

• Drop pending rulemakings. This can be done immediately, since it’s designed to stop a pending change.

•  Accept pending petitions for reconsideration or rehearing on rules recently issued but still within a statutory administrative review period (or cooperate with Congressional veto under the Congressional Review Act). This would nominally reopen matters that the Obama administration sought to finalize before the change in Presidential administration, but where these administrative processes are not entirely complete. Once reopened, EPA might be able to use an existing administrative record to reach different conclusions, or could redirect or drop further rulemaking in the proceeding.

• Reopen a rulemaking, overall or with respect to a matter that’s been previously determined, and stay/extend the effectiveness of compliance requirements pending this further review. Depending on the particular law and administrative record in the proceeding, this action might range along a spectrum from legally solid to arguably an abuse of discretion that itself might be successfully appealed to federal court.

•  Alter enforcement priorities. EPA can direct its own staff, and the Department of Justice can direct its own staff. However, “citizen suit” provisions in major environmental laws mean that environmental groups and others can seek to enforce provisions left on the books, and in some cases to seek to force agency action.

•  Change the agency’s stance regarding a matter that was decided administratively but has been appealed to federal court, perhaps seeking to settle the litigation by agreeing to narrow the earlier determination or even to reopen the proceeding. Settlements are subject to the federal judge’s review and approval or disapproval.

Longer term administrative actions include:

• Open new rulemakings to revise existing regulations – these are likely to be multi-year efforts.

•  Support (publicly or privately) riders in Congressional budget bills that would preclude agency action on selected programs. These depend on the vagaries of Congressional politics.

•  Seek statutory changes to recast EPA’s authority that fit the Trump Administration’s priorities. These depend even more on Congressional politics, but are more likely to draw in support from President Trump and/or other members of his Administration.

Readers should also note that incoming Presidents George W. Bush and Barrack Obama each took immediate action to stay all pending rules from their predecessors, as a stop-gap block to so-called “midnight regulations,” although each Administration eventually approved at least some of those rules they inherited. I suspect President-elect Trump’s advisors are counselling the same action.

Rolling Back U.S. Participation in International Climate Change Treaties

President Obama made this a major international priority, reversing the longstanding U.S. role as a laggard and helping to negotiate important updates and expansions of global commitments to fight climate change – notably the 2015 Paris Agreement and the 2016 Kigali Agreement (I blogged about this here). Implementation would largely be accomplished by statutory (i.e., Congressional) and administrative (e.g., EPA) action. President-elect Trump and AG Pruitt have both expressed skepticism about climate change science, and sought to reduce rather than expand US engagement on the issue. Whether President Trump actually pulls the US out of the Paris framework, it seems clear he will ensure that the US ceases to lead the issue forward. EPA’s role in this process would be to reduce its regulatory efforts to restrict GHG emissions.

Rolling back EPA’s Expansive Use of Clean Air Act on Climate Change Issues

Trump and Pruitt both use the characterization of President Obama’s climate initiatives as a “war on coal”, so:

• Clean Power Plan, which is a major Obama EPA initiative directed toward reducing CO2 emissions from fossil fuel power plants. It was adopted in October 2015, and presently is stayed by a Supreme Court order from February 2016, pending ongoing litigation in federal courts. I expect EPA to change its position and accept enough criticisms to pull the initiative back to kill it.

•  Performance Standards for coal-fired electricity generating units – also issued in October 2015 and also under litigation. I expect these will also be pulled back.

•  Endangerment finding for GHGs from aircraft (I blogged about this here). Judicial appeal has been filed; EPA may pull this back.

•  General CAA endangerment finding for GHGs, which EPA issued in 2009, and has since used as the statutory underpinning for its attempts to regulate CO2 and other GHGs from stationary and mobile sources under CAA. A leaked document from Trump’s Transition Team suggests that EPA might revisit and revise or revoke this finding. Given the administrative record behind the existing finding, I assume this would take a lengthy rulemaking.

Rolling Back EPA’s Reaffirmation of the “Waters of the U.S.” Rule Used to Regulate Projects

The Clean Water Act (CWA) governs activities that may affect “waters of the United States” – sometimes called “navigable waters.” Since 2006, a series of U.S. Supreme Court decisions upended a century of administrative and regulatory practices defining that term. In 2015, EPA and the Army Corps of Engineers issued new definitions that responded to the Court decisions in ways that re-maximized their regulatory authority (I blogged about this here). This redefinition has been appealed, and its enforcement is presently stayed. President Trump and AG Pruitt have attacked the expanded definition, so we can expect this to be rolled back. I expect EPA and the Corps to change their positions in the litigation, and either settle on narrower definitions or pull the matter back and re-start the regulatory processes.

What Else?

EPA does a lot more than regulate – or not regulate – GHGs. What else would Administrator Pruitt’s EPA do if he’s confirmed? The answer to this question is much less clear, but I can extract themes and make inferences:

• Pruitt has supported the domestic energy industry, so it’s less likely that expensive new controls will be imposed. This covers a host of air emissions from traditional extraction and fracking, and from processing and use of fossil fuel energy (in stationary power plants and industrial facilities, and in mobile automobiles and trucks). It may include President Obama’s push to increase safety at major industrial plants, including the CAA Accidental Risk Prevention (ARP) program.

• Pruitt has supported state’s rights vis-à-vis the federal government, and so would be less likely to push the state agencies operating air, water and waste programs with delegated federal authority, and more likely to expand state flexibility.

• Pruitt has been dubious about many scientific conclusions about risk, not just climate change but other engineering or public health calculations. So it’s likely that EPA’s internal thresholds for the levels of scientific “proof” necessary to justify additional regulation of “toxics” will probably be higher. The biggest question in my mind is how that might affect EPA’s new responsibilities under the 2016 amendments to the Toxic Substances Control Act (TSCA), which include greater authority and discretion, but which also impose specific deadlines for a variety of regulatory measures. (I blogged about these amendments in three parts, here, here, and here).

As actual decisions are announced, I will continue to write about them.

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photo credit: Gage Skidmore Scott Pruitt via photopin (license)