Energy policy in the 2018 State of the Union

U.S. President Donald Trump delivered the 2018 edition of the State of the Union speech on January 30, 2018. Unlike many previous such addresses, this one barely covered energy policy, focusing instead on a variety of other matters. But the speech offers insight into the Trump administration's view of the national situation, as well as into its priorities.

Energy policy and resources have often featured prominently in previous State of the Union addresses, and in remarks in 2017 President Trump advocated for a national strategy of "energy dominance." By contrast, President Trump's 2018 State of the Union speech mentioned U.S. regulation, production, and trade in energy only briefly, emphasizing his deregulatory agenda and pro-export philosophy.

The Trump administration posted an online version of his 2018 remarks as prepared for delivery. In that version, only two sentences use the word "energy":

We have ended the war on American Energy — and we have ended the war on clean coal.  We are now an exporter of energy to the world.

A transcript released by the U.K. media source The Independent suggests President Trump stuck close to his script on this (and other points):

We have ended the war on American energy, and we have ended the war on beautiful clean coal. We are now very proudly an exporter of energy to the world. 

These statements appear to relate to announcements made over the last year. Back in March 2017, President Trump signed an executive order which he described as "putting an end to the war on coal. We’re going to have clean coal — really clean coal." The U.S. does export a significant amount of energy -- and last year the Energy Information Administration projected that the U.S. would likely become a net exporter of energy within several years "as petroleum liquid imports fall and natural gas exports rise." Subsequent developments over the last year have lent preliminary support to this prediction.

President Trump's 2018 State of the Union speech did not otherwise directly address energy policy. That said, he did emphasize policy goals and achievements with respect to economic factors, such as tax cuts, job creation in manufacturing and other sectors, and improved small business confidence, as well as matters like national defense and immigration.

It can be tempting to infer administrative priorities from what is or isn't covered in a speech like this. At the same time, any leader has limited time to cover a host of important topics. With respect to energy matters, the speech emphasizes the Trump administration's focus on reducing regulations and increasing exports of America-produced energy resources.

US withdrawal from Paris climate agreement resources

President Donald Trump has announced that the U.S. will withdraw from the Paris climate agreement reached in 2015.  Here is a quick roundup of relevant resources.

On December 12, 2015, the Parties to the United Nations Framework Convention on Climate Change adopted Decision 1/CP.21, adopting the Paris Agreement under that convention.  The Paris climate accord calls for signatories to limit the increase in the global average temperature to "well below" 2 °C above pre-industrial levels (and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels), to support adaptation and resilience to climate change's impacts, and to align finance flows with a pathway towards low greenhouse gas emissions and climate-resilient development.

Since its adoption, 195 countries have signed off, including the U.S.  President Obama announced U.S. ratification of the Paris agreement in September 2016, along with China.  Among members of the U.N. Framework Convention on Climate Change, only Syria and Nicaragua are are not parties to the Paris Agreement.

But President Trump had criticized the deal, and on June 1, 2017, announced that "the United States will withdraw from the Paris Climate Accord... but begin negotiations to reenter either the Paris Accord or a really entirely new transaction on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers."

According to President Trump's statement, "the United States will cease all implementation of the non-binding Paris Accord and the draconian financial and economic burdens the agreement imposes on our country.  This includes ending the implementation of the nationally determined contribution and, very importantly, the Green Climate Fund which is costing the United States a vast fortune."

President Trump also addressed the integration of renewable energy sources into the grid, expressing skepticism that renewables could suffice in an era of increased U.S. economic expansion:

At 1 percent growth, renewable sources of energy can meet some of our domestic demand, but at 3 or 4 percent growth, which I expect, we need all forms of available American energy, or our country ... will be at grave risk of brownouts and blackouts, our businesses will come to a halt in many cases, and the American family will suffer the consequences in the form of lost jobs and a very diminished quality of life.

At several times, the President expressed interest in renegotiating the terms of the Paris Agreement or some "new deal":

I’m willing to immediately work with Democratic leaders to either negotiate our way back into Paris, under the terms that are fair to the United States and its workers, or to negotiate a new deal that protects our country and its taxpayers... And we’ll sit down with the Democrats and all of the people that represent either the Paris Accord or something that we can do that's much better than the Paris Accord.   

A White House press release provided additional information from the administration's perspective.  It calls the U.S. "already the world's energy leader," and cites an analysis prepared by NERA for the American Council for Capital Formation and the U.S. Chamber of Commerce's Institute for 21st Century Energy which found that "meeting President Obama’s commitment under the Paris Climate Accord would cost the United States nearly $3 trillion by 2040".  The press release notes that under the Paris agreement "the United States would carry the burden while other countries would get the benefits," and that full international compliance with the Paris agreement "would barely impact the climate."

Trump executive order on domestic energy policy

U.S. President Donald Trump has signed an executive order affecting domestic energy policy.  His March 28, 2017 Presidential Executive Order on Promoting Energy Independence and Economic Growth includes a variety of directives, generally aimed at reducing federal regulations affecting domestic energy production.  Here's a look at his Executive Order targeting Obama-administration climate regulations and other agency actions that potentially burden the development or use of domestically produced energy resources.

The Executive Order includes 8 operative sections.  One provides policy statements; six call for regulatory reviews that could lead to rule changes or revocations, or directly revoke and rescind Obama-era actions.  The final section includes general provisions.

Section 1 includes five policy statements, such as that "is in the national interest to promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation."  It also sets a federal policy "that executive departments and agencies (agencies) immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law."

Section 2 calls for an immediate review of all agency actions that potentially burden the safe, efficient development of domestic energy resources, "with particular attention to oil, natural gas, coal, and nuclear energy resources."  It directs agency heads to submit a memorandum to the Office of Management and Budget detailing such potentially burdensome actions, and including "specific recommendations that, to the extent permitted by law, could alleviate or eliminate aspects of agency actions that burden domestic energy production."  With respect to actions targeted with specific recommendations in a final report, agency heads are directed to "as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding, those actions, as appropriate and consistent with law."

Section 3 rescinds or revokes a variety of Presidential actions and reports, including several of President Obama's executive orders regarding climate change, the President's 2013 Climate Action Plan, and the Council on Environmental Quality's 2016 final guidance for federal agencies on consideration of greenhouse gas and climate issues in performing reviews of agency actions under the National Environmental Policy Act.

Section 4 calls for the Administrator of the Environmental Protection Agency to "immediately take all steps necessary to review" the Clean Power Plan governing electricity-sector emissions and related rules "for consistency with the policy set forth in section 1 of this order and, if appropriate, shall, as soon as practicable, suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules."

Section 5 disbands a working group on the social cost of greenhouse gas emissions, and restricts the ways agencies may account for the monetary value of changes in greenhouse gas emissions resulting from regulations.

Section 6 calls for the Secretary of Interior to lift moratoria on federal land coal leasing activities imposed under a 2015 order, and to commence federal coal leasing activities.

Section 7 calls for review of federal regulations affecting emissions from the oil and gas sector, including 2016 emissions standards for new, reconstructed and modified sources, and a 2015 rule governing hydraulic fracturing on federal and Indian lands, among others.

Section 8 includes general provisions, generally similar to those found in other executive orders.

BLM rule for renewable energy leasing of federal lands

The federal Bureau of Land Management has issued a final rule establishing a competitive process for leasing federal lands for renewable energy development.  The Obama administration describes the rule as strengthening the agency's existing "Smart from the Start" leasing program, consistent with the president's Climate Action Plan.  But following the 2016 election, the future Trump administration could change the agency's course.

Part of the Department of the Interior, the BLM manages federal lands across the U.S.  While BLM lands have been used for mining for years, under the Obama administration BLM took steps to open up federal lands for leasing for renewable energy projects.  Under federal laws including the Federal Land Policy and Management Act (FLPMA) and the Mineral Leasing Act (MLA), BLM is authorized to issue what it calls "grants" -- easements, leases, licenses, and permits to occupy, use or traverse public lands for particular purposes -- for facilities for the generation, transmission, and distribution of electric energy, and oil and gas pipelines.

On November 10, BLM released its final rule, "Competitive Processes, Terms, and Conditions for Leasing Public Lands for Solar and WindEnergy Development and Technical Changes and Corrections for 43 CFR Parts 2800and 2880.”  It amends BLM's regulations governing rights-of-way issued under two federal laws.  BLM described the amendments as necessary to "facilitate responsible solar and wind energy development on BLM-managed public lands and to ensure that the American taxpayer receives fair market value for such development."

The final rule includes provisions to promote the use of preferred areas for solar and wind energy development.  These areas, called “designated leasing areas” (DLAs), are defined parcels of land with specific boundaries identified by the BLM land use planning process as being a preferred location for solar or wind energy that can be leased competitively for energy development.

The rule expands BLM's existing regulations, allowing BLM to offer lands competitively on its own initiative, both inside and outside DLAs, even in the absence of identified competition. Within DLAs, the rule will require competitive leasing procedures except in certain circumstances, when applications could be consider ed outside the competitive process. Outside DLAs, the BLM will have discretion whether to utilize competitive leasing procedures.

The final rule also updates payments charged by BLM, to ensure that it obtains fair market value for the use of public lands.  Updated fee structures include both an acreage rent and a megawatt-capacity fee.

Given the November 8 election results, it is unclear whether the Trump administration will continue in this direction.  While campaigning, President-elect Trump emphasized leasing more federal land for fossil fuel production.  The BLM renewable energy rule's future is thus in question.