US President Executive Orders and Energy Development—A New Chapter in US Policy

Written By Serge Dupont

Executive orders issued by President Donald J. Trump during his first day in office signaled a sharp shift in US policy as may affect the development and use of energy resources in the United States—particularly oil, natural gas, coal, hydropower, biofuels, critical mineral and nuclear energy resources.

The orders may affect profoundly the North American energy landscape and energy trade and investment flows, with implications for business strategies in the energy industry in the United States. and globally. 

The Executive Orders

This note summarizes the key policy shifts and early implementation steps set out in three orders:

• Declaring a National Energy Emergency
• Unleashing American Energy
• Unleashing Alaska’s Extraordinary Resource Potential

The orders together aim to muster all the emergency and normal powers of the executive agencies of the US government to accelerate the development of affordable and reliable energy resources and infrastructure and to serve US prosperity and US energy, economic and national security.

They rescind numerous executive orders and actions of the prior administration considered to be in conflict with this policy intent.

The President also signed an order entitled “Putting America First In International Environmental Agreements” that, among other steps, instructs the US Ambassador to the United Nations to immediately submit formal written notification of the United States’ withdrawal from the Paris Agreement under the United Nations Framework Convention on Climate Change.

An additional order, not described herein, undertakes the Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and a Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects.

Declaring a National Energy Emergency

“The United States’ insufficient energy production, transportation, refining, and generation constitutes an unusual and extraordinary threat to our Nation’s economy, national security, and foreign policy. In light of these findings, I hereby declare a national emergency.”

This order instructs the heads of executive departments and agencies to identify and exercise any lawful emergency authorities available to them, as well as all other lawful authorities they may possess, to:

• facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands;
• expedite the completion of all authorized and appropriated infrastructure, energy, environmental, and natural resources projects that are within their authority to advance;
• facilitate the supply, refining, and transportation of energy in and through the West Coast of the United States, Northeast of the United States, and Alaska.

To facilitate the Nation’s energy supply, agencies are further directed to use to the fullest extent possible and consistent with applicable law:

• the emergency Army Corps permitting provisions pursuant to the Clean Water Act, the Rivers and Harbors Act, and the Marine Protection Research and Sanctuaries Act;
• the Endangered Species Act regulation on consultations in emergencies.

The Order also instructs the Secretary of Defense to conduct an assessment of the Department of Defense’s ability to acquire and transport the energy, electricity, or fuels needed to protect the homeland and to conduct operations abroad. The Order cites specific vulnerabilities, including insufficient transportation and refining infrastructure in the Northeast and West Coast regions.

The Order identifies the reporting obligations of the heads of agencies in carrying out the Order and the oversight roles of senior administration officials, including the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, the Director of the Office of Management and Budget (OMB) and the Chairman of the Council on Environmental Quality (CEQ).  The accountability structure ensures strong oversight by the White House.

Unleashing American Energy

"America is blessed with an abundance of energy and natural resources that have historically powered our Nation’s economic prosperity. In recent years, burdensome and ideologically motivated regulations have impeded the development of these resources, (…) It is thus in the national interest to unleash America’s affordable and reliable energy and natural resources."

This Order establishes as the policy of the administration to encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf, and to establish the United States as a leading producer and processor of non-fuel minerals, including rare earth minerals.

The Order also cites the elimination of the “electric vehicle (EV) mandate” and the promotion of consumer choice, market competition and innovation for motor vehicles and for a variety of goods and appliances.

The Order instructs the heads of all agencies to review all existing regulations, orders, guidance documents, policies and other agency actions to identify those actions that impose an undue burden on the identification, development or use of domestic energy resources. Within 30 days, each agency, in consultation with the directors of the OMB and the National Economic Council (NEC), must develop and begin to implement action plans to suspend, revise, or rescind these actions.

The Order proposes to “unleash energy dominance” through efficient permitting. The Chairman of the CEQ will convene a working group to coordinate the revision of regulations for consistency, with a goal to expedite permitting approvals and meet deadlines established in the Fiscal Responsibility Act of 2023. Agencies are directed to prioritize efficiency and certainty over any other objectives, “including those of activist groups, that do not align with the policy goals set forth in (…) this order or that could otherwise add delays and ambiguity to the permitting process.”

Consistent with the Order on the National Energy Emergency, the Order asks that for any project that an agency deems essential for the economy or national security, all possible authorities, including emergency authorities, be used to expedite the adjudication of Federal permits. 

Further, the Director of the NEC and the Director of the Office of Legislative Affairs will prepare recommendations to Congress to:

• facilitate the permitting and construction of interstate energy transportation and other critical energy infrastructure, including, but not limited to, pipelines, particularly in regions that have lacked such development in recent years; and
• provide greater certainty in the Federal permitting process, including, but not limited to, streamlining the judicial review of the application of the National Environment Policy Act.

Additionally, the Secretary of Energy is directed to restart reviews of applications for approvals of liquified natural gas export projects as expeditiously as possible, consistent with applicable law.

The Order purports to terminate the “Green New Deal”, instructing all agencies to immediately pause the disbursement of funds appropriated through the Inflation Reduction Act (IRA) or the Infrastructure Investment and Jobs Act (IIJA). Agencies must review their processes, policies, and programs for issuing grants, loans, contracts or any other financial disbursements of such appropriated funds for consistency with the Administration’s policy as enunciated in the Order. No funds identified will be disbursed until the Director of OMB and the Assistant to the President for Economic Policy have determined that such disbursements are consistent with the policy.

Analysis by the Financial Times suggests that the consequence of the order is to freeze disbursement of US$50 billion in Department of Energy loans already agreed and another US$280 billion worth of loan requests under review for energy infrastructure investments.¹ The Order does not affect the tax credits which deliver the bulk of the subsidies for clean energy projects under the IRA.

The Order disbands the Interagency Working Group on the Social Cost of Greenhouse Gases. It states that the calculation of the social cost of carbon is marked by logical deficiencies, a poor basis in empirical science, politicization and the absence of a foundation in legislation. Within 60 days, the Administrator of the Environmental Protection Agency (EPA) will issue guidance to address these inadequacies and consider eliminating the social cost of carbon calculation from any Federal permitting or regulatory decision. 

To “restore America’s mineral dominance”, the Order instructs the Secretary of the Interior, the Secretary of Agriculture, the Administrator of the EPA, the Chairman of CEQ and the heads of other relevant agencies to identify all agency actions that impose undue burdens on the domestic mining and processing of non-fuel minerals and undertake steps to revise or rescind such actions.

The Secretary of the Interior will instruct the Director of the US Geological Survey to consider updating the Survey’s list of critical minerals, including for the potential of including uranium.

Further, within 60 days, the Secretary of State, Secretary of Commerce, Secretary of Labor, the United States Trade Representative and the heads of other relevant agencies will submit a report to the Assistant to the President for Economic Policy with policy recommendations to enhance the competitiveness of American mining and refining companies in other mineral-wealthy nations.

Unleashing Alaska’s Extraordinary Resource Potential

“The State of Alaska holds an abundant and largely untapped supply of natural resources including, among others, energy, mineral, timber, and seafood. Unlocking this bounty of natural wealth will raise the prosperity of our citizens while helping to enhance our Nation’s economic and national security for generations to come.”

This Order instructs the heads of all agencies to exercise all lawful authority and discretion available to them to prioritize, in particular, the development of Alaska’s LNG potential, including the permitting of all necessary pipeline and export infrastructure related to the Alaska LNG Project.

In collaboration with the Secretary of Defense, the heads of agencies must identify and assess the authorities and public and private resources necessary for the development and export of energy resources from Alaska—including the long-term viability of the Trans-Alaska Pipeline System.

The Order instructs the heads of agencies to exercise all lawful authority to rescind, revoke, revise, amend, defer or grant exemptions from any and all regulations, orders, guidance documents, policies and other agency actions that are inconsistent with the policy intent of the Order.

Observations

President Trump on day one of his mandate sharply redirected US energy policy, rescinded, reversed or suspended a large universe of actions implemented or initiated under the Biden administration, and instructed heads of agencies to use all available powers, including emergency powers, to align executive action toward the energy policy of the new administration.

The policy is to accelerate and expand the development of oil, natural gas, coal, hydropower, biofuels, critical mineral and nuclear energy resources and to roll back parts of the agenda of the prior administration that promoted a transition to a clean economy and that the new administration judges to have hindered US energy, economy, and national security interests. The withdrawal from the Paris Agreement establishes clearly that the new administration will not feel constrained by domestic emission targets.

The sweeping orders fundamentally re-orient US policy and regulation. However, implementation may prove more difficult than the signing of the executive orders.

First, President Trump is instructing agencies to undertake a massive review and overhaul of regulation and programs under the tightest of timelines. Many of the agencies will at the same time be undergoing a change of leadership and internal reorganizations. There may, very early, be signs of some distance between ambition and capacity to deliver within the prescribed timelines.

Second, the orders are already considered in some cases to stretch the executive authority of the President and many of the initiatives will be challenged in court. Legal proceedings will add to administrative burden and may ultimately frustrate some of the goals of the administration.

Third, some actions such as suspension of loan disbursements or payments under programs for which funds were appropriated by Congress and for which enforceable contracts were signed with private third parties are likely to prove ineffectual. Yet, they will cause much disruption and uncertainty.

Finally, there may be political push back in Congress or among some states, including from Republican ranks, for some of the measures that may conflict with strong private or public interests.

Nonetheless, the strong affirmation of a new direction of policy will stimulate investor interest in new prospects for energy investment for domestic use and export, particularly oil and natural gas, and over time is likely to have significant impacts for global energy and investment flows.

This new context will be an important factor for medium term policy and business strategy for Canadian governments and industry.

The senior advisors in our Public Policy group and our legal practitioners in the domains of Energy and International Trade and Investment stand ready to assist our clients in assessing the strategic, business and legal implications of the new energy landscape

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