In parallel with his declaration of a National Energy Emergency on January 20, U.S. President Trump released a complementary Executive Order entitled “Unleashing American Energy.” The Executive Order emphasizes an intent to increase the energy and critical mineral production capacity of the United States while also removing many of the incentives that the Biden Administration established to promote electric vehicles and renewable energy.
The Executive Order outlines President Trump’s energy policy priorities, most of which display a stark redirection away from the Biden Administration’s policies on energy and climate change. Rather than incentivizing renewable energy and electric vehicles, the new administration’s objective is to bolster market competition across the energy sector and encourage a shift back to natural gas and oil. The Executive Order encourages energy exploration and production on Federal lands and waters, particularly on the Outer Continental Shelf; eliminates President Biden’s electric vehicle (“EV”) mandate; revokes a number of regulations that the Order says constrained market competition and consumer choice; and generally encourages innovation and production in natural gas, coal, hydropower, and critical minerals to protect national security by ensuring an abundant supply of reliable energy.
The Executive Order also revokes several Executive Orders from the Biden presidency, many of which reflected efforts to combat climate change.
Electric Vehicles
The Executive Order is expected to immediately impact the EV industry through the revocation of the “electric vehicle mandate,” which sought to ensure half of all vehicles sold in the United States by 2030 were electric. Moreover, the Executive Order terminates emission waivers, subsidies, and other such policies that “favor EVs over other technologies” to create what the Executive Order describes as a level regulatory playing field.
Notably, Section 7 of the Executive Order, entitled “Terminating the Green New Deal,” directs all agencies to pause immediately the disbursement of funds “appropriated through the Inflation Reduction Act of 2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act (Public Law 117-58), including but not limited to funds for electric vehicle charging stations made available through the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program.” No funds shall be disbursed from these programs unless “such disbursements are consistent with any review recommendations [the agencies] have chosen to adopt.”
Overall, in contrast with the Biden administration, the Trump administration is choosing not to incentivize the purchase of EVs and the development of EV related technologies.
Critical Minerals
The Executive Order places importance on the United States becoming a leading producer of “non-fuel minerals, including rare earth minerals” to decrease dependence on other countries. The Order does not clearly define “critical minerals” but does instruct the Secretary of the Interior and Director of the U.S Geological Survey (“USGS”) to “consider” updating the USGS list of critical minerals, specifically mentioning consideration of including uranium as a critical mineral.
Section 9 of the Executive Order is focused on increasing the United States’ capacity to produce critical minerals for domestic supply chains. There are two points regarding trade specifically mentioned in this section. Firstly, the Executive Order asks the United States Trade Representative (“USTR”) to assess whether foreign projects related to critical minerals are unlawful or have a burdensome effect on the United States’ ability to compete globally. This language suggests USTR could use an investigation under Section 301 of the Trade Act of 1974 to perform the assessment. Secondly, the Secretary of Commerce is tasked with assessing the national security implications of “the Nation’s mineral reliance and the potential for trade action,” language that suggests the possible use of Section 232 of the Trade Expansion Act of 1962. As there are no details on how these assessments will be conducted or what recommendations USTR and Commerce may make to the President, industries in the United States with supply chains dependent on imports of foreign critical minerals should monitor future developments in this space.
Regulatory Changes Going Forward
The Executive Order instructs a variety of other regulatory actions, several of which are briefly summarized below.
Section 3 of the Executive Order directs the heads of all agencies to review all existing regulations, orders, guidance documents, policies, settlements, consent orders, and any other agency actions to identify actions that impose an undue burden on the identification, development, or use of domestic energy resources or that are otherwise inconsistent with the policy priorities of the Executive Order, including restrictions on consumer choice of vehicles and appliances.
Although there is no definition of energy provided in the Executive Order, Section 3 requires the agencies to pay “particular attention to oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy resources.” The Executive Order does not address energy storage projects, regardless of the source or type of energy being stored. Thus, it is unclear whether and to what extent storage projects related to electricity, oil, gas, or petroleum products may benefit from the Executive Order.
Further, the Executive Order seeks to overhaul the permitting process through changes to analyses conducted by the Environmental Protection Agency (“EPA”) and providing guidance on how to implement the National Environmental Policy Act. Within the Order, there is a rejection of former regulatory processes used by the EPA, and these will either be abandoned or reformed.
Section 8 of the Executive Order is focused on increasing exports of natural gas by restarting the process in which related projects are approved, “as expeditiously as possible.” Given the complexity of the regulatory approval process, it remains to be seen what impacts this will have on American exporters of liquified natural gas and others in the gas sector.
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Cassidy Levy Kent has extensive experience assisting clients in understand the evolving U.S. energy policy landscape and leveraging opportunities presented by new legal developments. Contact us with any questions.