Lightning-fast changes continue to happen daily as the Trump administration seeks to implement its energy policies. With stated policies firmly in support of promoting America's fossil fuel development, curtailing renewable energy, and reducing regulatory burdens, recent and ongoing actions reflect these goals. What remains to be seen are what impacts the broad swath of energy related policy changes effectuate.
Due to the significantly increased legal and regulatory uncertainty, which only grows daily with new executive orders, threatened tariffs, agency staffing changes, and enforcement shifts, it is more critical than ever that companies and industries remain actively engaged with policy initiatives and outreach, and stay abreast of all potential legal changes. Until any sense of certainty returns to the legal and regulatory landscape, the industry must be ready to adapt quickly to survive.
COMMENTARY
The Trump administration's push to implement its deregulatory agenda is certainly met by broad approval across the energy space, among other industries. The push to reform the NEPA process, overhaul Waters of the U.S. regulations, streamline permitting, encourage investment, and strengthen America's energy independence and security are broadly supported. Unfortunately, for a broad and growing swath of the energy industry—notably the renewable energy sector—the deregulatory push is also being met with stated opposition by the administration. Without taking a position on the likelihood of success that any of the administration's changes to date may have in terms of furthering energy security and independence, what must be created for success is business and regulatory certainty.
As an environmental and regulatory attorney who works across the energy spectrum, every four years always brings a shift in my practice. Priorities change with administrations, which impacts regulatory interpretation, enforcement objectives, and the general strategy companies approach projects from. But this time is much different. The changes are happening by executive order, staffing reductions, defunding initiatives, along with the more traditional method of directing an agency to pursue a particular policy initiative. The pace of change itself has created uncertainty for the energy industry, but it is not borne equally.
The Trump administration took office with the domestic oil and gas industry producing at historic levels, small-scale nuclear projects under development, and a renewable energy industry on fire. Wind, solar, hydrogen, and other projects were springing up across Texas, Oklahoma, Kansas, Arkansas, Missouri, North Dakota, and elsewhere. While every client I have ever represented—a renewable developer or an oil and gas operator—hopes for deregulation, what they really hope for is certainty. Regulatory uncertainty is costly and inefficient for the energy sector. For an industry planning many projects on multi-decade timelines, complete upheaval serves little benefit. What would serve the energy industry best is creating long-term regulatory certainty. This could be completed by the following:
Permitting Reform: The federal permitting process needs to be streamlined and consistent. Staffing levels need to be sufficient to review permit applications and resolve issues in a timely manner with qualified technical staff.
Taxes: Taxes should be fair and globally competitive. Taxes effectively act as regulations. Tax incentives and reform should focus on creating an even-handed, fair, and competitive tax code that encourages investment (and research) across the energy spectrum.
Trade: Trade wars affect all aspects of the energy industry, from the pipe, panels, and equipment used, to the import and export of raw and refined products, to the importing and exporting of electricity. Trade wars, including the use of tariffs, add regulatory uncertainty by imposing additional costs with potentially unknown sunset dates to projects (and supplies), requiring the reworking of entire supplier chains, among many other effects. Trade wars do not benefit the energy sector. Economic growth and trade security do. Policies that promote economic growth and stability are pro-energy.
The path forward for specific sectors of the energy industry looks very different. The oil and gas industry has ardent supporters now running the Department of Energy, Bureau of Land Management, and the EPA, among others, so it is certain to experience significantly less enforcement and reduced regulatory burden, at least for now. Meanwhile, renewable energy projects are being halted for further permit review, and agencies are being directed to re-evaluate prior approvals. These actions are obviously in direct contrast to one another but reflect the Trump administration's focus on America's fossil fuel industries.
Now, more than ever, it is critical that companies involved in the energy space stay vigilant about legal and policy updates. Reading the tea leaves can be helpful, which indicate a period of potentially significant deregulation. What is not known is whether the changes done outside of Congress can stand legal challenges, what the looming tax reform looks like to the energy industry, and how the President's trade wars are resolved. Now, more than ever, it is critical to stay informed, engaged, and focused.
Originally published by POWER, 19 March 2025
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