Trump Drive to Boost Fossil Fuels Hits a Wall in Federal Courts

offshore rig
Photo: Shutterstock / Leo Francini

By Jennifer A. Dlouhy (Bloomberg) — From easing regulations on coal mining to opening more federal land to oil drillers, President Donald Trump has kept a laser focus on bolstering the U.S. fossil fuel industry to achieve what he calls “energy dominance.”

Time and time again, federal judges have gotten in the way.

The latest setback came April 19, when a judge ruled Trump’s Interior Department illegally lifted an Obama-era moratorium blocking the sale of coal on federal land. And last week, people familiar with the administration’s plans said it had abandoned until after the 2020 elections its two-year campaign to expand oil drilling to new U.S. waters, following a March 29 ruling against a presidential edict to resume selling drilling rights in the Arctic.

Those decisions came on top of judges rebuking the administration’s attempts to permit pipelines and delay a raft of Obama policies, including limits on methane leaks from oil wells, requirements for risk-management plans at chemical facilities and efficiency standards for household appliances.

The setbacks in fulfilling campaign pledges could deny Trump bragging rights as he mounts his re-election bid.

“This is a remarkably shoddy track record that the Trump administration is developing,” said Robert Glicksman, an environmental law professor at George Washington University. At least anecdotally, Glicksman said, he hasn’t “seen anything of this magnitude before.”

Some of the rulings could be reversed on appeal. And even in cases where courts faulted Trump agencies for unlawfully delaying rules, the actions may have served their intended purpose: suspending federal regulations until the administration could begin formally rewriting them. “Even these attempted rollbacks that are eventually slowed down have had the effect of delaying essential protections,” said Jill Tauber, vice president for climate and energy at Earthjustice.

Nevertheless, the legal defeats are complicating the administration’s campaign to unravel federal regulations the president blames for throttling U.S. energy production and the country’s economic potential. In some cases, the losses are forcing agencies to make multiple attempts to unwind environmental mandates, siphoning time away from other priorities and jeopardizing the administration’s ability to finalize regulatory reforms sought by industry.

The Interior Department abandoned efforts to expand drilling to new U.S. waters until at least after next year’s elections, following an Alaska-based federal district judge’s ruling against the president’s bid to resume selling offshore oil leases in the Arctic.

And on March 29, a California-based district judge blocked the Trump administration’s attempted reversal of an Obama plan forcing mining companies to pay more for coal extracted from federal lands. The ruling reinstated a requirement that royalty payments be pegged to the value of arm’s length transactions with independent parties, instead of sales to affiliates at potentially rock-bottom prices.

The decision is a telling indication of rulings to come, as the first one targeting a final environmental repeal by the Trump administration, said Jayni Foley Hein, natural resources director at New York University’s Institute for Policy Integrity.

“It’s emblematic of the challenges this administration has faced in trying to carry out the energy dominance agenda,” Hein said. “When you are weakening or rolling back environmental standards, you’re going to be challenged in the court, and there are certain substantive and procedural hurdles you have to overcome in order to carry that out.”

Some environmental activists say the rulings are already restraining the administration’s deregulatory campaign.

“If Trump is thrown out of office in 2020, then these cases will have made a big difference,” said Pat Gallagher, director of the Sierra Club’s Environmental Law Program. “They will have slowed down or stopped the energy dominance agenda and the climate denial agenda.”

Trump supporters shrug off the legal defeats. Myron Ebell, who helped guide the presidential transition and directs an energy center at the conservative Competitive Enterprise Institute, says he is “disappointed but not really discouraged.”

“The real danger of any administration is when inertia sets in, and I don’t think inertia has set in with this administration yet,” Ebell said. “The big thing is to make sure they keep up their momentum despite the setbacks — that they don’t just start sitting on their hands.”

Shifting Landscape

The legal landscape may be shifting in Trump’s favor as he appoints more federal appellate judges that have taken skeptical views of government regulation and agency power. The Supreme Court appears likely to overturn a precedent that judges generally should defer to federal agencies’ interpretations of their own regulations.

“It’s too early to tell the impact of those decisions on the agenda, in part because they are decisions that have been made on the district court level, and we will have to see what takes place in any appeals of those,” said Michael Schon, deputy chief counsel with the U.S. Chamber Litigation Center.

Trump and his executive agencies have wide latitude to rewrite and rescind rules, but they generally must follow a process outlined under the 1946 Administrative Procedure Act, by formally proposing changes, taking public comment on the plans and incorporating that feedback into final regulations. Policy pivots can’t be “arbitrary and capricious,” and the Supreme Court has said agencies must provide a “reasoned explanation” to justify changes.

Courts have repeatedly rapped Trump agencies for falling short of those procedural requirements. But the latest defeats are more squarely focused on the substance of administration actions — not just procedural mistakes made while pursuing them, Glicksman said.

“It seems to me that the courts are taking issue as strongly at this stage as they have in the earlier stage,” he said.

Trump’s agencies are also up against “an enormous record demonstrating the value of the environmental and health protections that they are trying to undo,” said Aaron Colangelo, co-director of the Natural Resources Defense Council’s litigation program.

“They can’t rewrite decades of research on the environmental harms or the public health benefits” at issue, he said. “They can’t just wave away the science.”

Former President Barack Obama encountered legal blows too. The centerpiece of his climate change policy — the EPA “Clean Power Plan” rule aimed at slashing carbon dioxide emissions from generating electricity — was stayed by the Supreme Court in 2016.

But the Obama administration also reinforced its environmental policies with detailed justifications and scientific data, establishing a formidable record designed to be hard for successors to tear down.

“The Obama administration was very careful about providing very complete and convincing documentation to support its actions, and it’s just not going to be easy for the Trump administration to say that record does not withstand scrutiny,” Glicksman said. If an agency’s “prior determination is based on facts that have not changed, you have to explain why the initial facts are wrong or why they’re no longer relevant, and that’s going to be a hard road to hoe for a lot of these policies.’’

© 2019 Bloomberg L.P

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