Analysis by Energy Workforce President Tim Tarpley
On Monday, President Trump was sworn into office as the 47th President of the United States. Shortly after the swearing-in and the traditional lunch with members of Congress, President Trump joined supporters at Capitol One Arena and began the process of signing and issuing a series of Executive Orders that will guide his agencies on a variety of issues important to EWTC members.
These orders are not meant to be a complete guide of all that the administration will do on these issues. Still, they are very important to review as they give us a good picture of the new administration’s priorities and what direction we can expect priorities to be directed towards.
Unleashing American Energy
This order is made up of a variety of directives that are intended to jumpstart US energy production in the United States. It directs related agencies to establish that it is the policy of the United States to encourage energy production and exploration on Federal lands and waters and ends the electric vehicle (EV) mandate. In addition, the order calls for the immediate review of all agency actions that could potentially burden the development of domestic energy resources, focusing on oil, natural gas, coal, hydropower, biofuels, critical minerals and nuclear energy resources. The order gives each agency 30 days to consult and report to OMB and the NEC to develop and implement action plans to suspend, revise, or rescind all agency actions identified as unduly burdensome. The agencies will also consult with the Attorney General in this process and determine whether pending litigation against illegal, dangerous, or harmful policies should be resolved through stays or other legal relief.
The order also directs the Director of NEC and the Director of the Office of Legislative Affairs to jointly prepare recommendations to Congress that will facilitate the permitting and construction of interstate energy transportation and other critical energy infrastructure such as pipelines and streamline the Federal permitting process including streamlining judicial review of NEPA.
Also important to many of our companies, this executive order pauses the distribution of all funds appropriated through the Inflation Reduction Act and Infrastructure Investment and Jobs Act. The pause gives agencies 90 days to report to the Director of NEC and OMB. Until this review is finalized and approved, no funds may be distributed. The language of this section is somewhat vague and appears to apply to all yet-to-be-appropriated funds and funds that have been appropriated but not distributed. The language could arguably apply to tax credit payments from the IRA, but further clarification is necessary here as those credits are tied to legislation passed by Congress. Even so, a temporary pause on distribution may be permissible and has been used by previous administrations with other legally mandated actions, the LNG “pause” being a recent example. Ultimately, it is likely that some of these details will need to be settled by the courts, but what we can be sure of is that the distribution of IRA-related loan guarantees and awards will likely be halted by this order regardless of where the process is. The tax credits will need more clarification as to this point.
This order also directs the Secretary of Energy to begin reviewing applications for LNG export terminals again, ending the Biden administration’s “pause” on new approvals for export facilities to non-FTA countries. The language also directs DOE to review existing applications as fast as possible and consider the impact on the security of allies and partners in the analysis. This directive should allow DOE to move to approve the pending permits quickly.
Declaring a National Energy Emergency
This executive order uses Presidential powers under the National Emergencies Act (NEA) to declare a national energy emergency. The order directs all executive departments and agencies to identify and exercise any lawful emergency authorities available to expedite the leasing, siting, production, transportation, refining and generation of domestic energy resources. The order focuses on federal lands and projects that may require emergency permitting under the Clean Water Act. It also directs the Administrator of the EPA to consider issuing emergency fuel waivers to allow the year-round sale of E15 gasoline.
After an initial summary is sent from each agency on their actions, a supplemental report is required to be submitted on a 30-day basis as long as the national emergency remains. In practice, this order is a way to expedite energy infrastructure permitting in the short term until Congress can act on a larger, more permanent permitting reform fix. These authorities seem solid enough to survive legal challenges, and previous presidents have declared national emergencies in similar ways. However, there will likely be legal challenges to the approach.
America First Trade Policy
In a closely watched development for many EWTC companies that rely on global supply chains, President Trump released a trade-related EO, which did not take any specific action on tariffs (on day one) as he had indicated he would do on the campaign trail. Instead, the EO directed relevant agencies to deliver to him by April 1st a report assessing unfair trade practices, currency manipulation, US technology controls and discriminatory foreign taxes that America faces with trading partners. It also directs agencies to examine the flow of migrants and drugs from Canada, China and Mexico to the United States and to determine the compliance level of these countries with their existing trade agreements with the United States. Additionally, the order directs officials to investigate the causes of large and persistent trade deficits and recommend appropriate measures, such as a global supplemental tariff or other policies to remedy such deficits. The order also directed relevant officials to investigate the feasibility of creating an “External Revenue Service” to collect tariffs. It is possible that this report may make recommendations for either new tariffs or modifications to existing tariff structures.
While the order itself does not take any direct action on tariffs, comments made by President Trump during the signing indicate they are still on the table. President Trump said he was considering imposing a 25% tariff on products from Canada and Mexico on February 1st. He also indicated he “may” impose a universal tariff on all imports but did not mention a timeframe or details of this possibility. Many took these comments to indicate that the President intends to take additional trade actions beyond those taken in this Executive Order. There appears to be continuing discussions by members of his transition team on additional tariffs without a clear consensus on a preferred path forward. Also of note is that he did not mention China specifically when asked about plans for that country. EWTC will continue to closely follow up on this issue and host a weekly tariff task force update call to follow up on developments. If you would like to sign up for the task force, please sign up here.
EWTC is continuing to review all of these Executive Orders and the effect that they will have on our membership. Additional details and clarifications can be expected from individual agencies in the coming weeks, and we will keep our members informed and updated as developments occur. We will also be holding a virtual briefing on the IRA and Trade related elements of the new policies next week.
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Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
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