By Michael Kuser

MARLBOROUGH, Mass. — Environmental activists and state and RTO officials agreed Thursday that President Trump’s rollback of Obama administration energy and climate policies are causing uncertainty for New England officials even as some states attempt to fill the void.

Two panels at the Northeast Energy and Commerce Association Environmental Conference on June 15 discussed the implications of the Trump administration’s policies, including proposed EPA budget cuts and two executive orders to reduce regulations and prevent implementation of the Clean Power Plan.

Ad Hoc Decision Making

Former EPA Deputy General Counsel Ethan Shenkman said Trump’s May 28 order — which called for a sweeping re-examination of all U.S. energy and environmental policies to eliminate burdens on domestic energy resources — may result in ad hoc decision making (Executive Order 13783). (See Trump Order Begins Perilous Attempt to Undo Clean Power Plan.)

In addition to seeking to eliminate the Clean Power Plan, the order also directs the Council on Environmental Quality to rescind its guidance on how federal agencies should consider greenhouse gas emissions and the effects of climate change in National Environmental Policy Act (NEPA) reviews. CEQ coordinates federal environmental efforts and works with agencies and White House offices in the development of environmental policy. NEPA reviews are required for any “major” federal action.

Trump also ordered the elimination of the Interagency Working Group on Social Cost of Greenhouse Gases, created by the Council of Economic Advisers and the Office of Management and Budget in 2009, and dismissed the group’s work products as “no longer representative of governmental policy.” Instead, Trump ordered that “when monetizing the value of changes in greenhouse gas emissions resulting from regulations,” agencies rely on a 2003 Bush-era finding by OMB.

Withdrawing the guidance document means “you’re back to a situation of uncertainty and some ad hoc decision making as each agency in region by region decides how they’re going to address these issues going forward,” said Shenkman, a partner with law firm Arnold & Porter Kaye Scholer.

State Funding Worries

ISO-NE environmental and regulatory analyst Patricio Silva gave a presentation that highlighted Trump’s proposed 31% reduction in EPA’s budget for fiscal year 2018, to $5.7 billion from $8.2 billion this year. Silva said the cuts could impact New England states’ capacity to enforce environmental regulations. In 2016, Connecticut, Vermont, Massachusetts and Maine relied on EPA for 21 to 24% of their environmental agency budgets, while New Hampshire and Rhode Island saw the federal grants fund 35%.

Roger Reynolds, of Connecticut Fund for the Environment/Save the Sound, said the proposed 31% reduction would eliminate funding for estuaries and the Great Lakes. “And since we’re closely associated with Long Island Sound, that concerned us greatly,” he said. “Long Island Sound generates $18 billion annually for the regional economy, and that’s on the low end of the estimates.”

Noting that his group received $8 million in federal funding in 2017, twice its 2016 outlay, Reynolds said that “it’s not entirely clear — in fact, quite the opposite — that Congress is necessarily in lock-step [with Trump], especially on environmental funding.”

Silva also pointed out that presidents’ proposed cuts don’t always survive Congress. For example, President Ronald Reagan proposed 25% to be cut from the EPA budget over two years, and the budget for fiscal 1982 ended up being decreased by 7%, Silva said.

‘Rollback Rebound’

“There is a significant amount of uncertainty now facing all segments of the industry when it comes to determining what’s going to happen and what are the consequences of the regulatory agenda that the incoming administration has been outlining,” Silva said.

After Trump announced his decision to withdraw from the Paris Agreement on climate change June 1, several states, including most of New England, vowed to uphold U.S. commitments to reduce greenhouse gas emissions. Silva said this is evidence of the risk of a “rollback rebound” — a term he credited to D.C.-based consultants ClearView Energy Partners. If states rush to fill the vacuum left by the Trump administration, Silva said, they could create a patchwork of regulatory policies that further complicate business for energy developers. (See Trump Pulling U.S. Out of Paris Climate Accord.)

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“We have no idea what’s going to happen with the high-priority infrastructure initiative that the administration’s put out,” said Silva. “Again, with the absence of any staff at CEQ to implement these programs and also … the withdrawal of policy guidance on how greenhouse gas is accounted for… we now run the risk that if a new transmission project is developed here in the region, it could be facing different greenhouse gas standard assessments by FERC, Fish and Wildlife [Service] and Army Corps of Engineers. And then CEQ would be stuck trying to reconcile all those different approaches.”

Lack of staff could jeopardize permitting and oversight not only for new transmission, but also for generators, pipelines, fuel storage and port projects, he said.

Silva repeated a comment by lobbyist and former Trump transition official Michael McKenna, president of MWR Strategies, who said “personnel is policy.”

“At 120 days in, we have any number of federal departments and other entities that affect energy policy across the country that have significant vacancies,” Silva said. “[At] EPA, only two out of 13 senior staff positions [have been] either nominated or confirmed.”

FERC’s loss of its quorum in February is “a source of particular anxiety, since they regulate us,” Silva said. “There are many ISO/RTOs that have more pressing matters that have been delayed by the lack of the quorum.” A Senate panel on June 6 cleared nominees Neil Chatterjee and Robert Powelson for a vote by the full Senate. (See LaFleur Ready to Welcome New Members as FERC Backlog Grows.)

FERC will be controlled 3-2 by Republicans once all the vacancies are filled, raising the chance of a change in ideology. For now, a lack of clear policy from the commission on the treatment of nuclear resources and integrating markets and public policy “could complicate a variety of both state initiatives, but more importantly from our perspective, it complicates and makes planning much more difficult,” Silva said.

Freeze on Rulemaking

Executive Order 13771, issued Jan. 30, calls for federal agencies to rescind two regulations for every one promulgated, making it perhaps the most significant of Trump’s orders, said Seth Jaffe of law firm Foley Hoag. “It’s not about regulatory budgeting or anything; it’s about a freeze on significant regulations,” said Jaffe, who moderated a panel on regulatory changes at the end of the day and also participated with his own presentation.

The March order also could be significant because it is not only about getting rid of the CPP, but also rescinding all the Obama administration executive orders and guidance on climate issues, Jaffe said. “Top to bottom, wipe the slate clean on everything Obama did on climate and federal [policy].”

Jaffe said Trump picked a good point of attack on the CPP, which some experts say may have exceeded EPA’s authority by seeking to impose regulations beyond generators’ “fence line.”

“The Trump administration [could] say ‘We’re not going to get rid of the endangerment finding. We’re still going to regulate greenhouse gases from power plants where we have jurisdiction, but what we’re going to do is just regulate greenhouse gases from those power plants, rather than somehow pretend that what we’re regulating is emissions from power plants when what we’re really doing is incentivizing renewable energy.’”

While that is a sound legal argument, Jaffe said, the Trump administration may risk losing the deference usually shown by the courts to the executive branch if it ignores climate science and fails to provide a rational basis for its reversal of Obama policies.