President Trumps All or Does He?
President Trump issued two Executive Orders on Wednesday; the first one concerns the approval process for cross-border infrastructure and the second one addresses an array of issues concerning the regulatory impacts on energy infrastructure in particular.
We review these two orders with a view as to the type of pipeline projects they might impact, and consider when those impacts might be felt. The bottom line is that we don’t see a lot of real-world impact on projects that are currently being held up, especially since the second Executive Order essentially just calls for studies, reports and potential regulatory changes, suggesting that any impact from it will be felt months, if not years, into the future.
Good News for Keystone XL is Extended to All
On March 29, 2019, President Trump issued an order in which he divested authority from the State Department over the decision to grant Keystone XL a Presidential permit for its cross-border project. The immediate impact of that order was to moot the challenges pending in federal court over the propriety of the previous permit. Unlike actions taken by the Secretary of State, Presidential actions are not subject to the National Environmental Policy Act (NEPA), which means that court challenges for failing to comply with the requirements of NEPA would not be available against permits issued directly by the President.
The clear purpose of the first Executive Order is to extend this exemption under NEPA to other cross-border projects, but, interestingly, it does not extend this new process to projects that are currently regulated by the Energy Department and FERC, namely cross-border electric transmission and natural gas pipelines. But for the projects to which the order applies, this will undoubtedly be good news.
Unlike the second Executive Order, this one will have an immediate impact, in that it revokes prior Executive Orders and directs the Secretary of State to review the department’s regulations to make them consistent with the authority being vested directly with the president. Interestingly, the order gives the Secretary of State until May 29, 2020, to make the appropriate changes, which seems to be a long time, given that the previous Executive Orders are revoked immediately.
A Lot of Heat; Not Much Light
The second Executive Order addresses a number of issues, but has no immediate impact because it either directs the agencies involved to review their regulations to align them with the goals of the administration or to provide the administration with studies to guide future decisions. While the goals are certainly good news for the industry, there will be quite a bit of time before any project is directly impacted by the actions directed in this order. The order sets forth the following focus areas, but the actions specified are unlikely to have any immediate real-world impact.
