On his first day in office, President Joe Biden issued an Executive Order titled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” The Executive Order directs the Environment Protection Agency (EPA) and other agencies to undertake the immediate review of agency actions taken between January 20, 2017, and January 20, 2021. In addition, the Executive Order directs these agencies to consider revisions to vehicle fuel economy and emissions standards, methane emissions rules, and appliance and building efficiency standards. In conjunction with the Executive Order, the Biden White House published a “List of Agency Actions for Review,” referencing more than 100 regulations and other executive actions issued by the Trump Administration that the new administration will scrutinize over the coming days. Climate change and environmental justice were key pillars of President Biden’s campaign platform, and the Executive Order demonstrates the Biden Administration’s intention to move quickly on those issues and other environmental regulatory rollbacks of the Trump Administration.
The List of Agency Actions for Review represents a sweeping initial step to implement the Biden environmental agenda, one that encompasses policies and regulations that will affect businesses and organizations in all areas of the economy. One of the items on the list can be checked off already: The 2019 rule that was intended to repeal and replace the Obama-era Clean Power Plan was struck down by the United States Court of Appeals for the District of Columbia Circuit on the day before President Biden was inaugurated. Many of other actions on the list are the subject of ongoing litigation. Certain regulations issued in President Trump’s final weeks in office are subject to repeal under the Congressional Review Act (CRA). The review and potential rollback of key environmental regulations creates a period of uncertainty for affected stakeholders, but also presents an important opportunity to participate in the creation of revised or replacement rules.
In this client alert, we discuss how the CRA may be used by the Biden Administration to review recently issued regulations. We then highlight several key Trump-era regulations likely to be reversed or overhauled in the coming weeks and months. Finally, we recommend steps companies can take to navigate this period of regulatory change.
The Congressional Review Act
The CRA allows Congress to pass, and the President to sign into law, a joint resolution disapproving regulations that were finalized within the last 60 session days before Congress adjourns.1 Accordingly, regulatory actions issued on or after August 21, 2020, are subject to review under the CRA. In 2017, the Republican-controlled Congress used the CRA 16 times to overturn Obama-era regulations, and the change of Congress to Democratic control makes the CRA one avenue to review and potentially overturn some regulations enacted by the Trump Administration. Once a rule has been repealed, an agency may not reissue a substantially similar rule.
Key Regulations to Watch
- National Environmental Policy Act Reform
The List of Agency Actions for Review includes the Trump Administration’s overhaul of the regulations implementing the National Environmental Policy Act (NEPA).2 As analyzed in our prior alert, the new NEPA regulations significantly changed NEPA analysis. Key changes included eliminating cumulative impact analysis, revising the definition of effects, narrowing what actions are subject to NEPA review, and allowing project proponents a greater role in the environmental review of their own projects. While industry has generally welcomed the new NEPA regulations, opponents, including many environmental groups, have criticized the changes for their potential negative impacts on the environment and have argued that restrictions on public participation, including by minority communities, in federal decision-making has negatively affected the environment and public health. It is anticipated that the Biden Administration will work to rescind and replace the new NEPA regulations and place more emphasis on evaluation of greenhouse gas emissions and climate change impacts.
- BLM Methane Waste Prevention Rule
The List of Agency Actions for Review also includes the September 28, 2018 rescission of the Bureau of Land Management’s (BLM) so-called Methane and Waste Prevention Rule that was completed in 2016.3 The 2016 rule sought to reduce methane waste from natural gas flaring, venting, and leaks from oil and gas production on federal lands by imposing venting and flaring requirements and requiring oil and gas operators to capture a certain percentage of gas produced each month. The recission eliminated some, but not all, of the venting and flaring requirements in the Waste Prevention Rule. The rule has been challenged by several states in federal court, and that litigation is ongoing. Given the controversy that has ensued over both the original 2016 Waste Prevention Rule and the 2018 rescission, it is expected that the Biden Administration will move to reinstate requirements that the Trump Administration rescinded.
- “Waters of the United States” Rule
The Biden Administration has targeted the April 21, 2020 Navigable Waters Protection Rule, which was the Trump Administration’s effort to define “waters of the United States” (WOTUS) under the federal Clean Water Act and replace the Obama-era WOTUS Rule (for more background on the April 2020 rule, see our client alert here). Defining WOTUS has long been a source of controversy,4 and the Navigable Waters Protection Rule was challenged by states, tribes, and environmental groups in federal courts in several jurisdictions. Implementation of the rule was stayed in Colorado, and additional litigation is ongoing. Given the level of opposition to the rule, it is expected that the Biden Administration will dismantle the Navigable Waters Protection Rule and propose a broader rule—similar to the Obama-era WOTUS rule— to replace it.
- Clean Water Act 401 Certification Rule
The List of Agency Actions for Review also includes the July 13, 2020 Clean Water Act (CWA) 401 Certification Rule, which narrowed states’ and Indian tribes’ ability to object to federally permitted projects based on water quality standards (for more background on the rule, see our client alert here). The CWA 401 Certification Rule was challenged by states, tribes, and environmental groups in federal courts in several jurisdictions, and that litigation is ongoing. Implementation of Section 401 has long been the subject of litigation on a project-specific basis, as developers seek federal permits and others oppose those permits. Even if the new rule remains in effect, that litigation is likely to continue. EPA issued the new rule pursuant to President Trump’s April 10, 2019 Executive Order 13868, which directed other federal agencies to update their guidance or rules based on EPA’s new CWA 401 rule. On Inauguration Day, President Biden revoked Executive Order 13868. While certain agencies, such as the Federal Energy Regulatory Commission, had begun to propose agency-specific rules based on that order and the Trump EPA’s 401 rule, such rulemaking is expected to come to a halt.
- Safer Affordable Fuel-Efficient Vehicles (SAFE) Rule, Parts I and II
The Biden Administration will review the Trump Administration’s two-part rule, known as the Safer Affordable Fuel-Efficient Vehicles (SAFE) Rule, that significantly decreased vehicle carbon dioxide (CO2) emissions and corporate average fuel economy (CAFE) standards, and revoked California’s authority under the Clean Air Act to set its own CO2 vehicle emissions standards (for more background on the rule, see our client alert here). Both SAFE Rule Part I, which revoked California’s authority to set its own standards, and SAFE Rule Part II, which lowered vehicle CO2 and CAFE standards, were challenged in court shortly after publication. That litigation is ongoing, setting the stage for the Department of Justice (DOJ) to change its position and request a remand of the rules to EPA and the National Highway Traffic Safety Administration for reconsideration. While the Biden Administration’s rollback of SAFE Rule Part I will resolve more easily—restoring California’s authority to set more stringent standards—replacing the more technical SAFE Rule Part II will likely require a lengthier rulemaking process. As a result, the automotive industry should expect to face uncertainty about emissions and CAFE standards for the foreseeable future.
- Supplemental Environmental Projects
The List of Agency Actions for Review also includes the December 16, 2020 Prohibition on Settlement Payments to Non-Governmental Third Parties, the DOJ’s regulation prohibiting settlement agreements that allow defendants in environmental cases to perform Supplemental Environmental Projects (SEPs). As discussed in a previous client alert, SEPs have been an important component of many environmental settlements. Reversing this rule would be a relatively noncontroversial way to advance the Biden Administration’s goal of restoring broader environmental protections. And given the timing of the rule, this is an example of a rule that could stripped away by the CRA.
Navigating the Changing Landscape
By issuing the List of Agency Actions for Review mere hours after taking office, President Biden signaled that his administration intends to act quickly to review and potentially undo many of the Trump Administration’s environmental regulations and policies. The Biden Administration’s swift efforts to reverse course on the prior administration’s environmental agenda brings with it a period of uncertainty for regulated entities. In many instances, however, replacement rules will require agencies to undertake the full, deliberate rulemaking process—including notice and comment—that affords stakeholders the opportunity to participate. Affected entities should stay abreast of these rulemakings, participate in the process and otherwise engage with the relevant agencies to ensure their interests are considered.