Winds of Change: the Environment and Executive Power in the New Administration

Introduction

With “drill baby drill” being a campaign rallying cry, it was apparent that, if elected, the Trump administration would seek to shift US energy policy. Few, however, were prepared for the near-dizzying pace of Executive Orders (EOs) and proposed agency actions that will have potentially long-lasting impacts for the US energy industry. Given the detail set forth in the EOs, it is clear the administration was prepared well in advance for this moment.

On the surface, the administration seeks to rationalise environmental regulation to reset the economic balance between renewable energy and fossil fuels, and perhaps to favour fossil fuel development. That, however, is a superficial analysis. The administration’s approach to energy development is intertwined with its foreign policy. This article identifies key EOs issued to date and related agency actions affecting environmental regulation of the energy industry, and discusses their impact on the energy industry. The article concludes with a discussion of what the future may hold for the industry and for the environmental legal and regulatory community. Of course, all of this requires a crystal ball of the highest quality – and few environmental crystal balls were able to predict the Trump administration’s first five months.

Key EOs and Agency Actions Directed Generally at Energy Production

Declaring a national energy emergency: EO 14156

By formally declaring the existence of a national energy emergency, President Trump has invoked the National Emergencies Act (NEA). The scope of Presidential authority under the Act remains unclear, as there has been little litigation interpreting it. Prior to its passage in 1976, pre-NEA emergency powers were understood to include a wide range of authority, including the ability to regulate the operation of private enterprise. 

Given that expanse of potential authority, it is possible that a President – when declaring an energy emergency – could reasonably assert that laws and rules restricting an industry, hindering energy production or making it unreasonably more costly could be suspended or revoked entirely. Courts have been loath to challenge an executive’s assertions of emergency. As such, it is possible that the Trump administration could use the concept of emergency power to seek to suspend or revoke rules it deems to be impacting the industry.

At this time, it is unclear whether the administration intends to push the bounds of such an emergency declaration. As this is new ground, it is difficult to predict what actions could be taken and whether they would ultimately survive judicial challenge. That said, the EO declaring an emergency details certain actions that will have a direct effect on the environmental regulation of the energy industry. Importantly and interestingly, the EO’s definition of “energy” does not mention or assume solar or wind as a resource. 

EO 14156 declares a national emergency to foster energy and mineral production necessary to meet the “high demand for energy and natural resources to power the next generation of technology”. The EO’s stated goal, among others, is to expedite the federal permitting and review functions required for energy development and infrastructure projects. The EO directly calls on the Army Corps of Engineers to undertake action to facilitate energy development. Likewise, it seeks to streamline consultation under the Endangered Species Act (ESA) and directs the Secretaries of the Interior, Energy and Defense Departments to identify vulnerabilities in US transportation and refining infrastructure. 

Some commentators argue that emergency conditions do not exist given that oil and gas production are at or near record levels. The administration, however, appears to believe that national security will be strengthened in the future by:

• promoting oil and gas investment; and
• fostering higher returns on that investment in order to (among other things) meet the energy requirements of the data centres that will be needed to ensure that the USA is at the leading edge of the artificial intelligence (AI) race. 

In that sense, the emergency declaration aligns with the administration’s goal of more effectively competing with China – that is, to the extent investment in and return on US energy production is hastened, the USA should be positioned to better supply its allies with fossil fuel exports, while undercutting other countries’ dependence on China’s energy exports, such as liquefied natural gas (LNG).       

Unleashing American energy: EO14154

This EO requires administrative agencies to identify and review regulations, orders, guidance documents, settlements, consent orders and other agency actions to determine whether they pose an undue burden on energy production, and, if so, to develop an action plan to mitigate inefficiencies. The EO specifically requires efficient permitting and encourages utilisation of general permitting and permits by rule. The EO also lifts a moratorium on US permits to export LNG. The Biden administration halted the issuance of these authorisations based largely on climate concerns. By lifting barriers to LNG exports, the Order positions the USA to better compete with China.

EOs and agency actions affecting climate change regulation

The Trump administration rapidly took steps to offset EOs and other policy decisions by the Biden administration that were designed to foster the reduction of greenhouse gas (GHG) emissions. Some commentators assert that the Biden administration sought to “pick winners” by establishing regulations so stringent that compliance by the fossil fuel industry would not be reasonably possible. The Trump administration, on the other hand, has issued EOs that appear to be designed to undercut renewable energy development by levelling the investment playing field between renewables and traditional energy. Among the more significant climate change-related actions taken to date are the following.

Reconsideration of the Environmental Protection Agency’s (EPA) GHG Endangerment Finding

Without doubt, the most ambitious action of the Trump administration regarding climate change is the EPA’s announcement that it will formally reconsider its 2009 finding that GHG emissions threaten public health and welfare (the “Endangerment Finding”). The Endangerment Finding was made by the EPA in response to the Supreme Court’s 2007 decision in Massachusetts v EPA that GHGs are “air pollutants”, asserting that current and projected GHG concentrations threaten public health and welfare. The Endangerment Finding formed the foundation for the EPA’s regulation of GHG emissions. 

In its announcement, the EPA provided several reasons for reconsidering the Endangerment Finding. The EPA stated that in 2009 it did not consider future costs, and at the time believed the finding was cost-neutral. The EPA further pointed out that the Finding “did not directly find that carbon dioxide emissions from US cars endanger public welfare.  Instead, the finding looks at a combination of emissions of six different gasses – and cars don’t even emit all six”. Thus, the EPA is forecasting certain of the arguments it will use to attempt to show that the finding was inaccurate or arbitrary. Regarding the reconsideration, Energy Secretary Wright has questioned the science underpinning the Endangerment Finding and contended that it has negatively affected the lives of US citizens through (among other things) costly regulation. 

Regardless of the merits of the EPA’s new position, the significance of this announcement for the regulated community cannot be overstated. The Endangerment Finding is the lynchpin for the EPA’s overall regulation of methane. Should this finding be set aside, prior regulation of methane emissions will certainly be on the EPA’s chopping block, and meaningful prospective methane regulation would be likely foreclosed. Certainly, any rule-making effort to reconsider the Endangerment Finding will be subject to the Administrative Procedures Act and extensive opposition. The EPA has already stated that it will seek public comment on the reconsideration, including comment on the development of technology and mitigation measures that have been curtailing GHG emissions.

While hotly contested litigation should be expected, recent US Supreme Court decisions have indicated the Court’s openness to reconsidering seemingly decided issues on agency interpretations of statutory language. For example, in Loper Bright Enterprises v Raimondo, the Court struck down the “Chevron doctrine”, which generally required courts to defer to an agency’s interpretation of ambiguous statutory language. Additionally, in West Virginia v EPA, the Court invoked the “major questions doctrine” to restrict agencies from imposing regulation with “vast economic and political significance” unless there is clear statutory authority for doing so. 

Whether and which direction these judicial doctrines ultimately take remains to be seen, but there is no question that a potentially receptive Supreme Court is a factor that Administrator Zeldin took into account in deciding to reconsider the Endangerment Finding. The outcome of the judicial battles over the finding will have significant ramifications for the ability to regulate GHGs in the USA. 

Putting America first in international agreements: EO141462

This EO withdraws the USA from the Paris Climate Agreement and revokes any financial commitment by the USA pursuant to the UN Framework Convention on Climate Change. These efforts are consistent with those taken in the first Trump administration. While the EO is stark, its simplicity makes clear that climate change considerations will be secondary to developing US fossil fuel energy markets.

Unleashing American energy: EO141541 (Provisions Addressing Financial Impacts of Carbon Emissions)

This Order (discussed previously) revokes many Biden administration EOs that were designed to mitigate climate change, including the termination of all programmes and agreements of the American Climate Corps. Notably, the Order also directs the EPA to no longer consider the Social Cost of Carbon (SCC) in permitting and regulatory actions or decisions. This is significant because the SCC was a foundation for justifying the increased cost of regulation on the fossil fuel industry by offsetting the impacts of that cost burden with the regulation-based financial benefit of GHG emissions reduction. 

To fully understand the magnitude of the issue, as of 2023, the EPA estimated the dollar value of the SCC at USD190/CO₂ ton, with proposed increases to USD308/ton by 2050. EPA Administrator Zeldin has stated that attributing this dollar value to emissions has “logical deficiencies”, “a poor basis in empirical science” and lacks “a foundation in legislation”. In the absence of attribution of these costs, it will be increasingly difficult for additional climate change regulations to get material traction.

Other actions taken by the administration affecting efforts to regulate climate change include a 20 January 2025 EO temporarily halting wind energy leasing within the Offshore Continental Shelf. The EO also directed federal agencies to not issue or renew approvals, rights-of-way, permits, leases or loans for onshore wind projects pending a “review of federal wind leasing and permitting practices”. The review is directed to encompass environmental factors, such as wildlife impacts, as well as the impact of intermittent energy generation on the viability of the wind industry in the absence of subsidies. 

Proposed Regulatory Reform

The administration is implementing policy that attempts to shape environmental regulation for the foreseeable future through specific and detailed EOs and EPA proposals. For example, EO 14192 (Unleashing Prosperity Through Deregulation) mandates cost-based deregulation through two specific requirements. First, it requires that each new regulation proposed or promulgated must be offset by the repeal of ten regulations. Second, new incremental costs imposed by rule must be offset by incremental cost reductions associated with the repeal of ten prior regulations.

In addition, pursuant to EO 14270, the administration is calling for zero-based regulatory budgeting regarding rules affecting energy development. Specifically, agencies including the EPA are directed to include sunset provisions in new regulations governing energy production and to integrate sunset provisions where permitted by law into existing regulations, thereby requiring periodic re-examination of a rule’s public benefit. The Order directs the EPA to develop a list of rules that will be covered by the sunsetting requirement.

It is likely that many climate change-related rules will become subject to examination based on these EOs. For example, the EPA has already announced that it will reconsider the GHG Reporting Program (GHGRP), which requires the energy industry to calculate and submit annual reports of generated GHG. In doing so, the EPA noted that the GHGRP is not related to a specific rule and, according to the new administration, does not improve air quality; rather, it creates cost burdens, particularly on small businesses.

Impact on State Law and Regulations

The administration is looking to handcuff states from focusing policy, regulatory and enforcement initiatives on the fossil fuel industry. On 8 April 2025, the administration issued EO 14260, “Protecting American Energy from State Overreach”. This Order provides that the administration will seek to dismantle “burdensome and ideologically motivated ‘climate change’ or energy policies…”

This is an unmistakable effort by the Trump administration to target state efforts to develop their own initiatives to address climate change concerns in the absence of federal action. For example, certain states impose more stringent requirements on fossil fuel development – such as strict geographic restrictions on development and labyrinthian permitting procedures – than they do on renewable energy development projects. Other states have filed or indicated their intention to file lawsuits against energy companies for alleged climate change harms under state laws. 

The EO also directs the US Attorney General to identify such state and local laws and to take necessary actions to stop the enforcement of these laws, to the extent that they are illegal. Laws specifically targeted include climate change-related Superfund-type laws, certain carbon cap, trade and ESG-based laws, climate deception laws, and others that impede review of fossil fuel-related permit applications. Towards that end, as of 5 June 2025, the Department of Justice already initiated suits against Hawaii, Michigan, New York and Vermont challenging those states’ ability to seek damages from fossil fuel companies for alleged climate change harms.

Other Important Environmental Developments Affecting Specific Regulatory Programmes

The administration is aggressively seeking to minimise environmental regulatory burdens. If upheld, these efforts would result in significantly reduced costs for the industry. A few of these initiatives are described below.

Waste Emissions Charge (WEC) rule filings and payment

Pursuant to the Congressional Review Act, the final WEC rule was disapproved, and the EPA has announced that WEC filings due on 2 September 2025 – including the waste emissions tax payment – are no longer required. The final WEC rule was published in November 2024 and, among other things, provided methodologies for calculating the methane tax, as well as guideposts for emissions netting and exemptions from the methane tax programme.

The EPA is evaluating its obligation to implement provisions of the Inflation Reduction Act (IRA) that authorised the methane tax. In light of the WEC rule disapproval, the administration will look to erode these statutory provisions. It is interesting that the US House of Representatives did not seek to address these provisions of the IRA in its recently promulgated budget bill, the “One Big Beautiful Bill Act”.  The One Big Beautiful Bill proposes to dismantle many incentives for renewable development contained in the IRA. It is possible that representatives concluded that elimination of the IRA’s WEC provisions do not fit within the framework of the budgeting bill.

Environmental justice (EJ)

Pursuant to EO 14173, the administration revoked prior EOs that were the basis for the EPA’s EJ Program, and the EPA has removed from its website definitions and references to EJ. As a result, EPA enforcement and permitting decisions will no longer take into consideration the demographic make-up of impacted communities.

EPA deregulatory agenda

In March 2025, the EPA announced that it will pursue a regulatory roll-back of “trillions in regulatory costs and hidden ‘taxes’ on US citizens”. Programmes under review that are affecting the energy industry include the following:

• Quad Ob/Oc, affecting the upstream and midstream industries;
• power plant regulations, including Clean Power Plan 2.0;
• the GHGRP;
• waste water regulation of the oil and gas industry;
• roll-back of certain risk management plan requirements;
• re-evaluation of the PM 2.5 standard;
• consideration of the SCC;
• reconsideration of certain National Emission Standards for Hazardous Air Pollutants (NESHAPs) affecting the energy sector;
• streamlining NSR permitting; and
• many others.

Enforcement in the Trump Era

There has been a clear shift in EPA enforcement activities during the first months of the second Trump administration. For example, while the Biden administration implemented certain enforcement initiatives to target oil and gas methane emissions, the Trump administration has already eliminated those initiatives and indicated that the EPA will no longer incorporate EJ considerations into its enforcement decisions. The EPA’s national enforcement and compliance initiatives (NECI) will be aligned with the priorities set forth in the administration’s EOs and other EPA pronouncements.

With higher levels of staffing, the EPA during the Biden administration increased the number of inspections and information requests, resulting in more enforcement orders with higher civil penalty amounts for GHG-related Clean Air Act cases. Biden’s flyover initiative in the Permian Basin of Texas resulted in a significant number of enforcement orders targeting the oil and gas industry between 2019 and 2024. Perhaps the clearest indication thus far of the shift in the enforcement approach can be seen by the fact that the Department of Justice (DOJ) does not appear to have instituted any significant new civil environmental enforcement actions since inauguration. 

Furthermore, in March 2025, the DOJ dropped a contentious Clean Air Act lawsuit against a chemical company on the eve of trial, citing “President Trump’s Mandate to End Radical DEI Programs”. At the same time, the DOJ has been focusing its litigation resources on bringing suit to prospectively challenge states’ ability to seek climate-related damages from oil and gas companies. Given the changes in priorities and the reduced staffing and funding at the EPA, it is reasonable to expect these federal enforcement trends to persist over the coming years. As during the first Trump administration, the EPA will likely prioritise more traditional, straightforward environmental enforcement cases that can be resolved administratively on a more expedited basis.   

The industry may, however, face unintended consequences from the decreased federal enforcement activities. Potential deference to state-led enforcement efforts could lead to a wide range of disparate results throughout the country, and require extensive planning by the industry to address a potentially increasing number of differing state programmes to fill perceived gaps associated with federal deregulation efforts. Companies in business-friendly states may have opportunities for more favourable settlements, while operators in other states should expect increased state-level enforcement pressures as state agencies seek to counter-balance any perceived lack of federal enforcement. For example, the EPA and the New Mexico Environment Department partnered in 2024 to investigate emissions and identify violations at hundreds of oil and gas facilities. This type of partnership will likely not occur regularly during the new administration. 

Conclusions Regarding Environmental Impacts on the Energy Industry

The administration’s emphasis on the importance of the fossil fuel industry for national security reasons should have extensive impacts on the fossil fuel industry, though these impacts may not be immediate. The de-emphasis of renewables may foster investment in fossil fuel development. Thus, heightened development – more energy production, and storage, processing and transmission projects – should come online in the relatively short-term. The industry’s environmental professionals and lawyers will be busy, though many of the EPA’s deregulatory efforts will likely not be fully implemented in the short-term and will be challenged by certain states and NGOs. 

Regardless, any deregulation and streamlining of permitting should allow independent producers to compete more effectively with the larger enterprises. In the past, the complicated labyrinth of rules promulgated by the EPA (and states) imposed a significant and disproportionate burden on smaller enterprises. Larger companies typically have significant in-house staffing available to track and address regulatory changes. Further, the administration’s focus on state efforts to challenge or undermine fossil fuel development should create some pressure for even-handed regulation. Of course, traditional environmental statutes typically allow for state delegation where state programmes are at least as stringent as federal programmes. Challenging state laws and rules as overly burdensome or inconsistent with federal law could well raise issues about the breadth of federal pre-emption as well as regarding a President’s emergency powers.

It is easy to envision scenarios where states could impose more stringent regulatory standards or maintain standards that the federal EPA is rolling back. How the administration will handle these scenarios is difficult to predict and will likely be litigated.

Moreover, even with a regulatory roll-back, the industry should remain prepared for enforcement of existing rules. Many rules that present operational and financial challenges will remain on the books. For example, rules requiring volatile organic compound (VOC) leak detection and repair, as well as prohibitions on unauthorised emissions, will require constant oversight. Given the pervasiveness of and diminution in cost associated with optical gas imaging, these rules are easy for agencies to enforce or present an easy target for citizen’s suits. 

Finally, the administration will likely still pursue traditional environmental enforcement actions, albeit not targeted at the industry. The environment is too political of an issue for any administration to be perceived as lax. The industry should prepare to maintain staffing and be vigilant in reviewing the status of state regulatory programmes and how states react to the many federal environmental initiatives.