Outlook on the New Administration: EPA’s Environmental Agenda in the Energy Sector

For finalized regulations that have already taken effect, the process of fully withdrawing and replacing a rule can last several years. The Administrative Procedure Act (“APA”) and parallel requirements in statutes like the Clean Air Act require agencies to follow certain procedural requirements and provide justification behind their decisions when reversing formal rules. APA requirements proved to be a significant speedbump for the EPA under Trump’s first term, when the agency lost over 80% of cases challenging its rollbacks of Obama-era regulations. The incoming administration may ask courts to hold cases challenging Biden administration rules in abeyance while the EPA considers developing a new rule. However, those orders typically pause litigation concerning a rule for only a few months.

Any of the reported plans to restructure the EPA and reduce its workforce could also stretch the time it takes to achieve deregulation objectives if the work of justifying new policies and writing new rules falls on fewer shoulders. And even once new rules are finalized, blue states and environmental advocates are almost guaranteed to challenge them in court, potentially pushing the effective timeline further back.

Changes in administrative law since Trump’s first term could also complicate an ambitious deregulatory agenda. In the 2024 Loper Bright decision, the Supreme Court eliminated the Chevron doctrine, which had instructed courts to defer to agencies’ interpretation of ambiguous statutory language.¹ Now, courts are free to strike down agency action that does not reflect what the courts understand to be the best reading of the statute. In the EPA context, this means that the agency will be constrained when promulgating new regulations and must hew closely to the language of environmental statutes and the established jurisprudence that interprets their text. Loper Bright did leave in place the doctrine of Skidmore deference, which places a thumb on the scales in favor of agencies’ technical interpretations. Given that many environmental regulations are grounded in scientific and technical judgments, EPA may still have a certain degree of latitude so long as it can build a record to support its new actions. However, building such a record takes time and agency resources. For the broader objective of rolling back Biden administration regulations, these legal developments could push the incoming administration toward acting through legislation, especially with Republican majorities in both houses of Congress.

This unified federal government also opens the possibility for action through the Congressional Review Act (“CRA”). This statute allows Congress to pass a resolution officially disapproving of an agency action, so long as the rule was adopted within the last 60 “legislative days.” The CRA also has a lookback provision that provides Congress with additional time to use the CRA to review rules that were submitted towards the end of the previous session. If Congress passes — on simple majority votes — and Trump signs a CRA resolution, the agency is not only bound to retract and reconsider its rule, but it is also barred from promulgating any rules “substantially similar” to the disapproved regulation. The CRA has its limits: it only applies to rules that are adopted within the specified timeframe, and it can only be used to abrogate rules in their entirety, as opposed to removing individual provisions. It has not been used frequently, but some Republican lawmakers have already announced plans to invoke the CRA against recent environmental regulations. The Congressional Research Service has estimated that the CRA “legislative days” lookback period for the next congressional session will extend to rules adopted on or after August 1, 2024. With a unified government, this strategy could provide Republicans with a powerful tool to quickly dismantle portions of President Joe Biden’s regulatory agenda and prevent future administrations from pursuing similar policies.

Regulatory Targets from the Biden Administration

The incoming administration is widely expected to take action removing or revising the EPA’s April 2024 suite of regulations governing air emissions, wastewater effluent, and solid waste from fossil fuel power plants. The incoming administration has reason to believe that these were adopted in concert as part of the Biden’s administration’s plans to accomplish the generation-shifting objectives of the Clean Power Plan overturned by the Supreme Court, largely by imposing costs or technical control obligations on coal-fired and some gas-fired power projects to render them uncompetitive. The Trump EPA “landing team” will be looking for confirmation of this once they have access to Biden administration records and will use any such information to “confess error” in pending litigation challenging this suite of rules.

The greenhouse gas emissions rule has drawn the ire of industry allies for its aggressive carbon reduction targets. Under the rule, new natural gas-fired facilities must achieve carbon emissions reductions of 90 percent by 2032, while all existing coal plants must hit the same target by 2039. Those targets were set by obligating the implementation of carbon capture, utilization, and storage (“CCUS”) technology — but many in industry consider CCUS to be untested at scale. While the greenhouse gas emissions rule has been challenged in court, it remains in effect after the Supreme Court declined to grant a stay. Republican lawmakers have threatened CRA action against the rule, and the incoming administration is expected to revoke it in its entirety. Given what many view as the untested nature of CCUS at scale, an EPA revocation is likely to survive judicial review on legal, technical, or economic grounds. Less certain is what could replace the rule: the incoming administration could develop more attainable targets or decline to regulate greenhouse gas emissions from power plants at all. While the Clean Air Act requires the EPA to regulate carbon emissions from existing power plants because it already regulates them from new generation facilities, there is no statutory deadline under which to develop those regulations. Under the incoming administration, the EPA could choose to remain in development of a new greenhouse gas rule for the foreseeable future.

Other EPA regulations, including the Mercury and Air Toxics (“MATS”) rule, coal plant wastewater rule, and coal ash disposal rules, have been characterized as part of a Biden administration strategy to eliminate coal-fired generation. Like the greenhouse gas rule, these regulations have remained in effect as various courts of appeals have declined to issue stays against them. Given the existential threat these rules pose to stakeholders in the coal industry, the incoming administration is likely to take action on these regulations. The EPA’s “Good Neighbor Rule” may follow a different story. This regulation of ground level ozone, the main constituent of smog, was stayed by the Supreme Court in June, which signals that the rule is substantively weak. The incoming administration will almost certainly pursue courses of action that will unwind the predicates for the Good Neighbor Rule and return regulatory responsibility for emission management to the affected states.

In addition to the power plant rules, the Biden administration’s EPA grabbed headlines with its new methane emissions regulations for oil and gas facilities. Promulgated as Subparts OOOOb/c (“Quad Ob/c”) of the agency’s New Source Performance Standards, the new rules regulate methane emissions from new and modified oil and gas sources and set guidelines for states when developing their own regulatory implementation plans for existing sources. The changes to Quad Ob/c, which require oil and gas producers to take extensive measures to reduce methane emissions from their operations, are currently subject to litigation but remain in effect after the Supreme Court denied challengers a stay.

Many consider Quad Ob/c more likely to be revised rather than outright withdrawn. Certain sectors of the industry support the Biden administration methane rules to some degree, as regulated entities are often already subject to similar requirements by state environmental agencies and their own emissions goals. In addition, the Biden administration’s signature legislative achievement, the Inflation Reduction Act (“IRA”), incorporated the methane emissions regulations into its Waste Emissions Charge (“WEC”) program. The IRA’s WEC provision charges operators hundreds of dollars for every pound of methane released as waste emissions. This negative incentive is paired with a positive one: if operators are in compliance with the Quad Ob/c methane regulations, they are eligible for an exemption from paying the WEC. The Biden administration pressed forward with implementing this program and released its final WEC implementing regulation on November 11, 2024.

This web of regulations and statutory mandates puts the Biden administration methane rules in an uncertain spot under the incoming administration. The EPA could attempt to pull back parts of the methane rule without withdrawing the rule entirely; a provision known as the “Super Emitter Program,” which allows third parties to monitor and report methane leak events, is considered vulnerable under the incoming administration. But while the methane rule and the WEC program remain unpopular among industry, actions taken to revoke the WEC implementation rule, including by utilizing the CRA, would not create a lasting fix to the underlying issue. Because the WEC program has a statutory mandate in the IRA, operators will still be required to pay the charge for their 2024 emissions regardless of whether there is a regulation in place that provides instructions on how to pay it. Using the CRA in this context is further complicated by the fact that the previous Trump administration methane rule was itself disapproved by a CRA resolution in 2021. With that action barring the EPA from promulgating any rule that is “substantially similar” to the Trump EPA’s previous methane rule, it is difficult to predict what could replace a withdrawn Biden administration methane regulation.

Industry groups have drafted blueprints on legislative action to repeal the IRA provisions supporting the Biden administration methane rules. Lawmakers could try to push a limited repeal through the congressional budget process, mirroring how the IRA was passed in the first place. However, with some of the IRA’s grant programs having an outsized impact on the economies of key red states, only time will tell whether a repeal of the methane tax is politically feasible in the next Congress.

Changes in Enforcement

The incoming administration could use new enforcement strategies to supplement its regulatory agenda. A new enforcement strategy will almost certainly not discontinue any current, significant enforcement cases. As with prior transitions, EPA will have to brief new leadership on its ongoing enforcement efforts, particularly in more significant cases. Efforts from the previous Trump administration to limit agencies’ reliance on guidance documents and improve transparency in enforcement could be revived in the incoming administration. Finally, Trump’s history with the EPA indicates that staffing levels at the EPA may decrease, which could impact the pace and level of enforcement activity.

The incoming administration will almost certainly revise the EPA’s enforcement priorities. However, any shift in enforcement priorities is unlikely to happen immediately, as it will take time to fill appointed positions and for the new leadership to articulate their new priorities. A shift may not necessarily impact the total amount of enforcement activity, but it could change where enforcement is occurring and the types of violations being pursued. Under the Biden administration, the EPA’s 2024–2027 enforcement priorities stressed environmental justice, climate change, and addressing per- and polyfluoroalkyl substances (“PFAS”) contamination. The incoming administration could refocus the agency’s enforcement resources. In 2020, the previous Trump administration announced EPA enforcement priorities centered around hazardous air pollutants and volatile organic compounds (“VOCs”), reducing noncompliance with National Pollutant Discharge Elimination System permits and drinking water standards at community water systems, and decreasing the likelihood of accidental releases at industrial chemical facilities.

EPA enforcement could also revive collaboration with state environmental enforcement agencies. During the previous Trump administration, the EPA’s enforcement office published a policy supported by red and blue states that deferred to state enforcement of environmental laws unless the state was unable or unwilling to enforce the law. That policy was reflexively overturned by the Biden administration’s EPA, which returned the EPA to an antiquated “gorilla in the closet” approach to oversight of state enforcement. A collaborative approach with modern, sophisticated state environmental agencies will allow the EPA to focus its enforcement resources on the most important and complex cases.

The incoming administration could also shift the working relationship between the EPA’s civil and criminal enforcement offices. Under the Biden administration, the EPA announced a policy to improve coordination between the two offices, including monthly meetings between the civil and criminal enforcement managers. The full impacts of this increased communication are unknown, as the EPA only promulgated this policy in April 2024. However, some have speculated that the policy could cause more civil matters to be elevated to criminal cases as a result. The incoming administration could reverse course on this policy, which would mean a return to the status quo ante.

The incoming administration could also spell the end of Supplemental Environmental Projects (“SEPs”) in settlements. SEPs are used in settlement agreements to offset penalty amounts when the defendant party agrees to undertake a project with environmental benefits. During the previous Trump administration, the Department of Justice Environmental and Natural Resources Division (“ENRD”) discontinued the use of SEPs in civil judicial consent decrees. The Biden administration revived the use of SEPs in settlements, but the incoming administration could once again remove SEPs from ENRD’s toolkit for settlement negotiations.

Enforcement policy can also be changed through executive orders. During his first term, President Trump issued Executive Order 13892 to restrict how agencies used guidance to bring enforcement actions and to provide regulated parties with various protections. The Biden administration revoked Executive Order 13892 in one of Biden’s first executive orders. The incoming administration could resurrect Executive Order 13892’s approach to enforcement actions, which would provide regulated entities with more opportunities to contest agency determinations that led to enforcement and to use voluntary disclosures to reduce penalty amounts.

If staffing levels at the EPA are decreased, it may impact the enforcement capabilities of the agency. In his first term, Trump requested significant cuts to the EPA’s budget, although approved funding for the EPA remained relatively flat. The Biden administration’s EPA received more funding and gradually increased staffing levels. Given Trump’s history with the EPA, it is unlikely that this trend will continue in the incoming administration. President-elect Trump has also promised to revive his executive order that introduced Schedule F, which created an essentially at-will class of federal employees. These developments could lead to reduced staffing at the EPA, whether existing staff members leave by choice or are fired in the incoming administration and not replaced. If the enforcement staff at the EPA is reduced, the number of cases that the agency can pursue at any given time may be limited. Taking all of the above potential developments together, the EPA enforcement regime in the energy sector under the incoming administration could look very different compared to the previous four years.

International Dimensions

Finally, the incoming administration portends various changes to how the United States will engage with international environmental and energy issues. Chief among these changes is the likely departure of the United States from the Paris Agreement. The outcome of the 21st Conference of the Parties (“COP”) to the United Nations Framework Convention on Climate Change, the Paris Agreement is an international treaty on climate change that features a goal of limiting temperature increases to 1.5 degrees Celsius above pre-industrial levels. The United States initially adopted the Paris Agreement, but, during his first administration, Trump withdrew the United States from the Agreement. On his first day in office, Biden acted to have the United States rejoin the Paris Agreement, and in February 2021, the United States officially became a Party to the Agreement again. However, news reports following the election indicate that Trump plans on signing an executive order after taking office to once again withdraw the United States from the Paris Agreement. Depending on the accuracy of these reports, the United States might find itself outside the bounds of the Paris Agreement again in the near future, which could have various effects on other elements of American diplomacy on energy and environmental issues.

The new leadership of the EPA might approach international environmental issues in different ways than the Biden administration. Shortly after the election, Trump announced plans to nominate former New York representative Lee Zeldin to be the Administrator of the EPA. Should Zeldin be confirmed, he will be poised to oversee the agency at a time of heightened global attention to environmental issues and energy development. As a former member of the House Foreign Affairs Committee, Zeldin could also bring experience with global dynamics and systems to bear in charting the EPA’s course in the coming years, including with respect to international cooperation and other issue-specific areas (for example, climate change, or promoting global energy development). Issues to keep an eye on include whether, and how, the EPA may pivot away from its current understanding that Executive Order 14008 (on Tackling the Climate Crisis at Home and Abroad) and Biden’s Emergency Plan for Adaptation and Resilience at COP27 “together embody the breadth of America’s commitment to helping communities adapt and build resilience to the intensifying climate crisis, placing climate at the center of U.S. foreign policy and national security.”

While the election could shake up how the United States approaches issues including climate and sustainability disclosures, in recent years an increasing number of companies have begun to voluntarily disclose climate-related efforts and activities using frameworks like those established by the Task Force on Climate-Related Financial Disclosures. For companies that have voluntarily agreed to such frameworks, or that are subject to international environmental regimes, a deregulatory approach from the incoming administration may not meaningfully impact some of their obligations. In addition, the incoming administration’s approach to international trade could have knock-on effects on energy development, including renewable energy, in the United States. For instance, if the incoming administration imposes high tariffs on Chinese goods, renewable energy supply chains could be impacted by a decreased supply of materials, such as critical minerals, and products that play important roles in the development of renewable energy projects. How such policies might be imposed, and what their long-term impacts would be on energy development in the United States, remains to be seen. Nonetheless, depending on Trump’s approach to trade in office, American energy development could experience turbulence in the coming years.

¹Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244 (2024).