Thursday, February 23, 2017

Shale Law in the Spotlight: Use of the Congressional Review Act to Alter Energy and Environmental Policy in the Early Days of the Trump Administration

Written by Chloe Marie – Research Fellow

During his presidential campaign and since taking office, President Donald Trump has repeatedly expressed concern about the “burdensome regulations on [the U.S.] energy industry.” He has vowed to “eliminat[e] harmful and unnecessary policies,” which are inconsistent with his energy agenda.  Working with Congress, President Trump already has used the Congressional Review Act as a method to alter existing energy and environmental policies since he assumed office. This article will discuss the Congressional Review Act while future articles in the Shale Law in the Spotlight series will address other methods that President Trump has utilized to implement or amend energy and environmental policies.

Congress has within its general powers the ability to overturn federal agency rules in conformity with the 1996 Congressional Review Act (CRA). Under the CRA, Members of Congress have sixty “days of continuous session” to introduce a joint resolution of disapproval from the date the rule is received by Congress and published in the Federal Register. If both the House of Representatives and the Senate pass the joint resolution, the President may sign or veto the disapproval joint resolution. Prior to the recent change in Presidential administrations, only one regulation ever had been struck down using the CRA. In March of 2001, President George W. Bush signed into law the repeal of workplace ergonomic rules promulgated by the Clinton Administration’s Occupational Safety and Health Administration in the Department of Labor.

In an interesting report released in November 2016, the Congressional Research Service explained that “perhaps the most widely cited reason why the CRA has been used to overturn only one rule is that a President is generally expected to veto a joint resolution of disapproval attempting to overturn a rule proposed by his own Administration.” As an illustration of this point, President Obama vetoed a total of five joint resolutions during his time in office. The authors of the CRS report go on to state that “during a transition following the inauguration of a new President, however, the CRA is more likely to be used successfully.”

In this context, on February 16, 2017, President Trump signed into law a joint resolution – H.J. Res. 38 – disapproving the Stream Protection rule promulgated by the Interior Department’s Office of Surface Mining Reclamation and Enforcement and published in the Federal Register on December 20, 2016. This joint resolution was introduced by U.S. Congressman Bill Johnson, on January 30, 2017, in the U.S. House of Representatives. In justifying such nullification, the Trump administration explained that the Stream Protection rule “would establish onerous requirements for coal mining operations, and impose significant compliance burdens on America’s coal production.” In addition, the administration posited that the rule “also duplicates existing protections in the Clean Water Act and is unnecessary given the other Federal and State Regulations already in place.”

The Stream Protection Rule was to become effective on January 19, 2017, and its stated purpose was to “better protect water supplies, surface water and groundwater quality, streams, fish, wildlife, and related environmental values from the adverse impacts of surface coal mining operations and provide mine operators with a regulatory framework to avoid water pollution and the long-term costs associated with water treatment.”

In addition, on February 14, 2017, President Trump signed another joint resolution of disapproval into law – H.J. Res. 41 – disapproving the Securities and Exchange Commission’s rule on “disclosure of payments by resource extraction issuers.” This rule imposed upon resource extraction issuers to report annually any payment made to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals. The Commission’s rule was published in the Federal Register in July 2016 and took effect on September 26, 2016. In disapproving the rule, the Trump administration pointed out that it “would impose unreasonable compliance costs on American energy companies that are not justified by quantifiable benefits.” Moreover, its administration underlined the fact that “American businesses could face a competitive disadvantage in cases where their foreign competitors are not subject to similar rules.”

HJ. Res. 38 and 41 could be the first of many joint resolutions of disapproval to come in the early days of the Trump administration in matters of energy and the environment. On January 30, 2017, another joint resolution – H.J. Res. 36 – was introduced, seeking to disapprove the “Waste Prevention, Production Subject to Royalties, and Resource Conservation” rule that was published in the Federal Register by the Interior Department’s Bureau of Land Management on November 18, 2016. The U.S. House of Representatives passed this joint resolution on February 3, 2017, and it is awaiting action in the Senate. The BLM rule was scheduled to become effective on January 17, 2017.

Significant federal regulatory activity took place during the final months of the Obama administration – actions including those related to the Climate Action Plan, Waters of the United States rule, BLM Hydraulic Fracturing rule, Clean Power Plan, and the Venting and Flaring rule among others. Stay tuned to see if Congress and the Trump Administration take action, including through the use of the CRA, to roll-back any of these regulatory activities related to energy and the environment.

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