Trumping Obama’s Interior Department
President-elect Donald J. Trump made clear on the campaign trail that he intends to roll back regulations affecting domestic oil and gas and coal production on public lands. A methane rule finalized by the Department of the Interior (“Interior”) one week after the election will no doubt be on top of his list. However, the methane rule is just one of many Obama Administration Interior initiatives that will be carefully reviewed by the Trump Administration to “identify and eliminate unnecessary regulations that kill jobs and bloat government.”
After assessing the Trump Administration’s rollback options, this article examines four Interior initiatives outside the fossil fuel context that may be reconsidered in the near future. Those initiatives include Interior’s landscape-scale planning policies; a new “net gain” mitigation policy; migratory bird enforcement; and new wind and solar energy permitting rules.
The Trump Administration’s efforts to shift Interior policies toward a more consumptive, development-based agenda may be more difficult in some instances than others, depending on the legal form of Interior’s current initiatives.
New Departmental guidance can replace old guidance without much difficulty. New policy statements in the form of executive or secretarial orders can similarly replace the old. But policies are more difficult to change once implemented through specific regulatory processes. For example, Interior policies often find expression through land use plan amendments (“LUPAs”) under the Federal Land Policy and Management Act (“FLPMA”). LUPAs can only be altered through a formal National Environmental Policy Act (“NEPA”) environmental impact review process that usually requires public notice and opportunities to comment. LUPAs often take years to approve because they cover large geographic areas.
Attempts to change regulations promulgated under the Administrative Procedure Act (“APA”) require more process as well. Just how much depends on whether the regulation in question is pending or final. A new administration has several options regarding pending “midnight” regulatory proposals that do not take effect before Inauguration Day.
For example, the day the George W. Bush Administration took office, the President’s Chief of Staff issued a memorandum directing all departments and agencies to (i) not send proposed or final rules to the Office of the Federal Register, (ii) withdraw rules that had not yet been published in the Federal Register, and (iii) postpone for 60 days the effective dates of rules that had been published but had not yet taken effect. The Clinton and Obama administrations issued similar memoranda shortly after Inauguration Day, as well. President-elect Trump has indicated he intends to do the same. But even if their effective dates are successfully postponed, final rules published in the Federal Register by an outgoing administration can only be repealed or modified by the incoming administration through procedures prescribed by the APA. Subject to certain limited “good cause” exceptions, those procedures require public notice and comment. They also require a reasoned explanation justifying repeal or modification of the rule in question.
Published final rules can also be repealed or modified by an act of Congress under the Congressional Review Act (“CRA”). The CRA requires an agency to submit a rule to Congress before it takes effect. In addition, “major” rules cannot take effect for 60 session days, rather than the 30 calendar days normally required by the APA. During that period, Congress may enact a “resolution of disapproval,” which, if passed and signed by the President, can overturn any rule promulgated by a federal agency. A carryover review period for major rules submitted in the final 60 session days of a congressional session greatly extends the CRA’s reach. These rules can be disapproved within 75 legislative days of commencement of the next session of Congress.
The CRA has overturned a rule just once since its enactment in 1996. The mechanism is only effective for incoming administrations whose party is in control of Congress. The Trump Administration and the Republican-controlled Congress are likely to use the CRA to scrutinize and potentially rescind major “midnight” rules promulgated as far back as the end of May 2016.
There are other options, as well. On the formal end of the spectrum, Congress can undermine a rule by amending the statute upon which it is based. One less formal approach is to simply de-fund the rule or policy. Another informal strategy could involve the administration directing agencies not to enforce a policy initiative. An element of risk would remain, however. The adopted rule could be funded or enforced in a future administration, with potential enforcement risk for parties who did not comply during an unfunded or unenforced period. Such risks can complicate financing.
The concept of landscape-scale public land planning has been a hallmark of current Interior Secretary Jewell’s tenure. The environmental community has praised Interior for placing emphasis on frontloaded, nationally-directed planning efforts to provide additional predictability for conservation and project development through layered management and habitat “zoning”. But many developers believe Interior has used the concept to sharply restrict multiple-uses of public lands. At a minimum, the new Administration will likely take a long and critical look at four such landscape-level efforts.
BLM Planning Rule 2.0. In February 2016, the Bureau of Land Management (“BLM”) published a proposed rule to “amend existing regulations that establish the procedures used to prepare, revise, or amend land use plans pursuant to [FLPMA].” Known as BLM’s Planning 2.0 initiative (“BLM 2.0”), it intends to further solidify and implement the landscape-scale concept by requiring land-use planning procedures that designate where and under what conditions future development may take place over large swaths of the West.
Western states have expressed concern this approach will lead to increased influence from national stakeholders, reduce access to the lands, and dilute the influence of state governors and local communities. BLM released a final BLM 2.0 rule in late November that has yet to be published in the Federal Register. The high level of Republican opposition to it in Congress suggests the new administration may seek to suspend the rule once it is published.
Federal Sage-Grouse Strategy. The Federal Sage-Grouse Strategy is one of Interior’s trailblazing landscape-scale efforts. The Strategy is composed of a series of LUPAs with a geographic scope of 67 million acres across 10 states. Eight pending legal challenges, a proposal to withdraw over 10 million acres from future mineral development, BLM’s recent issuance of seven “Instruction Memoranda” implementing, in particular, the livestock grazing and oil and gas portions of the LUPAs, all make the Federal Sage-Grouse Strategy a target for modification by the new Administration.
The linkage between the Strategy and the U.S. Fish and Wildlife Service’s (“FWS”) decision not to list the sage-grouse, including the agency’s commitment to re-evaluate the status of the species in five years, may give the Trump Administration pause before deciding on a path forward to provide regulatory relief. But even with those administrative hurdles, industry and some states will push LUPA modification of the Federal Sage-Grouse Strategy and attendant NEPA review because it affects virtually every extractive industry across 10 western states.
Western Solar Plan. The President-elect is skeptical of anthropogenic climate change. But Mr. Trump has also evinced a more pragmatic, market-based “all of the above” approach to energy. Preserving and creating jobs appears to be one of his highest priorities. The solar industry has created 300,000 jobs to date. The industry is large enough to seek and possibly obtain regulatory relief in stride with more traditional resource extraction industries.
One avenue for relief might involve Interior’s six-state, 100-million-acre 2012 Western Solar Plan. The Western Solar Plan is another flagship of landscape-scale planning that may be revisited by the Trump Administration. While presented as a planning initiative designed to encourage utility-scale solar energy, many in the industry view the plan as a hindrance, in no small part because it removed 79 million acres of BLM lands from development. The plan did set aside a quarter million acres as preferential solar zones, but the best management practices imposed on those zones have often been viewed as much more restrictive than would otherwise be the case. When the oil and gas, mining, and agribusiness industries seek relief from the Trump Administration for the Federal Sage-Grouse Strategy, the solar industry may join them over the Western Solar Plan. There is a reasonable chance of revision because the Western Solar Plan can be modified administratively by a series of LUPAs instead of by APA rulemaking or by act of Congress.
Desert Renewable Energy Conservation Plan (“DRECP”). TheDRECP is a 22.5 million-acre LUPA that covers most of the southern quarter of the state of California, including some of the best solar and wind energy resources in the State. Initially presented as a tool for streamlining endangered species permitting for wind and solar projects on public and private lands, the DRECP has received a cold reception, with California counties notably refusing to sign on to the private lands component of the plan.
BLM nevertheless pressed forward in September 2016 by adopting the plan insofar as it applied to BLM lands. That decision designated roughly 6.5 million acres of lands as off limits to any form of development. The DRECP process reduced California BLM lands open to solar development under the Western Solar Plan by more than 50 percent, with further restrictions imposed on the remaining acres. The wind industry has been particularly vocal in its opposition, asserting the DRECP has essentially zoned out further wind development of BLM-administered lands in Southern California. While all indications point to a Trump Administration that will not favor renewable energy development over fossil fuels, landscape-level LUPAs like the DRECP risk modification if they are perceived to limit economic growth through unnecessary regulation.
On November 3, 2015, President Obama issued a memorandum to several federal departments and agencies directing them to revise their existing policies to incorporate a new “net benefit goal” for mitigating the impacts of natural resource development. While the mitigation goal established in the White House Policy may not per se be new, the implementation of the “net benefit goal” has raised the bar for future project development. The policy shift also follows several other Interior policy initiatives, including landscape-scale strategies (above), advance conservation efforts, and the continued “zoning out” of certain areas for development.
Interior’s application of the White House’s mitigation initiative has largely been in the form of nonbinding guidance that could easily be modified or undone by the new Administration. This outcome is possible in light of questions raised regarding the authority of federal agencies to impose the “net gain” standard. For example, FWS recently released a final new “net gain” policy on compensatory mitigation under the Endangered Species Act (“ESA”) that some will contend is in excess of the ESAs statutory “jeopardy” standard.
Migratory Bird Treaty Act
On May 26, 2015, FWS published a Notice of Intent outlining a proposal for a rule requiring a multi-layered permitting program under the Migratory Bird Treaty Act (“MBTA”). The permitting program would regulate private activities that inadvertently injure or kill members of most bird species in the United States. The program would affect a wide range of industries and activities, reaching well beyond the renewable energy and oil and gas sectors that have been the subject of enforcement actions over the last several years. If finalized, the proposal almost certainly would draw legal challenges from industry stakeholders. No progress has been made since the initial announcement, however. The Trump Administration is unlikely to take the process any further.
MBTA enforcement may also be influenced by the new Administration. FWS has relied on Court of Appeal decisions in the 2nd and 10th Circuits to enforce (or threaten to enforce) the MBTA’s strict criminal liability provisions against multiple wind and oil and gas facilities, sometimes resulting in multi-million-dollar settlements. However, the 5th, 8th and 9th Circuits have disagreed with this interpretation, holding that the MBTA applies to purposeful activities only (such as unlicensed hunting) and does not apply to unintentional “take” of migratory birds.
The Interior Secretary under the Trump Administration could rely on the 5th, 8th and 9th Circuit court precedents to issue a regulation, or at a minimum, an internal policy memorandum, that prohibits enforcement of the MBTA against non-purposeful forms of take.
Wind and Solar Competitive Leasing Rule
On November 10, 2016, Interior released a final rule to establish a framework for the designation of preferred “designated leasing areas” (“DLAs”) for wind and solar projects that would be subject to competitive leasing rather than the current first-in-time, first-in-right regime. The rule would also codify certain wind and solar bonding, rental, megawatt capacity fee, and pre-application policies implemented by BLM for the past five years without formal rule making. The solar and wind industries have strenuously opposed the rule on almost every front. Whether the competitive leasing concept remains will likely depend on whether the Trump Administration decides to alter the analogous competitive leasing regime applied to public land oil and gas leases for the past 30 years. The top-down DLA zoning concept might strike a Trump Administration as contrary to a market-based approach. The megawatt capacity fee may be perceived as an illicit tax outside Interior’s statutory mandate. However, the final rule likely will be published in the Federal Register before December 22, 2016 and therefore take effect before the President-elect is sworn in. If that is the case, rescinding or modifying the competitive leasing rule would require a new rulemaking (congressional action through the CRA would not apply because the application is not classified as “major”). The formal rulemaking process may handicap efforts to modify a rule that focuses almost exclusively on renewable energy facilities.
There is little doubt Interior will place greater emphasis on the consumptive use of resources under the Trump Administration. In addition to reducing restrictions on fossil-fuel development, President-elect Trump’s focus on creating jobs and reducing regulation in general will likely include an attempt to roll back the Obama Administration’s landscape-scale planning and mitigation strategies, both because they cut across industries and because they are generally easier to amend. The extensive reach of the Federal Sage-Grouse Strategy guarantees it will receive ample attention from the new Administration. The recently proposed MBTA permitting program will likely be abandoned. MBTA enforcement may be relaxed, as well. Wholesale modification of BLM’s wind and solar competitive leasing rule seems less likely. Its final status and narrow focus on the renewable energy industry may insulate it against extensive modification. Overall, however, Interior will loosen natural resources regulation across all industries to implement the President-elect’s broad goal of reducing federal regulation in general.
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