President Biden’s January 20 Public Health and the Environment EO included specific directives for some of the most notorious actions of the Trump administration that undermined regulations designed to reduce GHG emissions. These are also important building blocks for the country’s commitments under the Paris Agreement and for a new Nationally Determined Contribution.
EPA’s Methane Rules
In 2012, EPA issued New Source Performance Standards (NSPS) for volatile organic compounds (VOCs) from oil and gas sources. This rule did not directly regulate GHGs but did contribute indirectly to reducing emissions of methane because controls for VOCs also had the side benefit of controlling methane emissions. In 2016, EPA issued a new NSPS rule for oil and gas that separately regulated methane in addition to VOCs. Both rules covered emissions sources at the well site, gathering and boosting stations, processing plants, and compressor stations but the 2016 rule expanded the sources covered by the standards at those sites. EPA also issued Control Technique Guidelines in 2016 to states with moderate nonattainment areas for ozone, in effect directing them to amend their state implementation plans to address VOCs from existing sources via a set of controls that would also reduce methane emissions at those sources. Less than two weeks later, EPA issued an Information Collection Request (ICR) to operators, asking them to identify ways to control methane from existing oil and gas sources—a necessary information gathering step for developing methane emissions regulations for existing oil and gas sources.
Trump’s EPA took a very different stance on regulating methane emissions. It canceled the Information Collection Request for existing oil and gas operations and withdrew the Control Technique Guidelines. President Trump directed EPA to reconsider the 2016 methane standards for the oil and gas industry in his Executive Order on Promoting Energy Independence and Economic Growth. In September 2020, EPA published two final rules: the Review Rule (also referred to as the Policy Rule) that eliminated methane emissions standards for oil and gas sources and removed storage and transmission sources from the VOC standards, and the Reconsideration Rule (also referred to as the Technical Rule) revising the remaining requirements for controlling VOCs.
To eliminate methane regulation and cut storage and transmission sources from the oil and gas source category, EPA relied on an interpretation of its own authority under the Clean Air Act (CAA) that differed significantly from its prior positions. In the 2020 rules, EPA argued that the prior rule improperly included transmission and storage sources in the Crude Oil and Natural Gas Production Source Category. EPA also said it must make a new determination that methane emissions from the remaining sources in the category contribute significantly to pollution that can endanger public health or welfare in order to regulate their methane emissions. This is an additional step EPA had not previously understood the CAA to require. (See EELP’s analysis of the final oil and gas methane rules for a more extensive explanation of the legal theories in these rules and how they break with prior agency positions.) EPA acknowledged in its Regulatory Impact Analysis that these rule changes would result in higher emissions than would have occurred under the rule promulgated during the Obama administration.
President Biden’s January 20 Public Health and the Environment EO directs the EPA to consider “suspending, revising, or rescinding” the Reconsideration Rule by September 2021. (Sec. 2(a)(i)) It also directs the agency to consider proposing new standards of performance and emission guidelines for methane and VOC emissions from existing oil and gas operations that include the exploration and production, transmission, processing, and storage segments by September 2021. (Sec. 2(c)(i))
To finalize rules for existing sources, EPA must have standards in place for methane emissions from new sources. EPA will have to contend with the legal positions taken in the September 2020 Review and Reconsideration Rules. In order to reestablish methane emissions standards for oil and gas sources in all of the segments outlined in the Public Health and the Environment EO (E&P, transmission, processing, and storage), the agency will either 1) make a new finding of significant contribution specific to the transmission and storage segments as their own source category, following the Trump-EPA reasoning that these were not part of the original oil and gas source category, and issue New Source Performance Standards for methane for both source categories, or 2) rescind the legal interpretations of the Review Rule and enact an NSPS that includes all of these segments under one source category, as the Obama-era rule did.
The Biden administration will have substantial support for renewed efforts to regulate methane from oil and gas sources. Major oil and gas industry players opposed the Trump-era rollbacks of the original standards and recognition of the importance of controlling methane is only growing within the industry. New data on methane releases from oil and gas operations has reinforced the importance of the topic, likely significantly changing any cost benefit or contribution analysis. The financial sector and investors have increased pressure on companies to address the problem of unnecessary methane emissions, leading to new corporate commitments.
In addition to controlling methane emissions from oil and gas development, EPA is expected to review emissions guidelines for methane from existing municipal landfills.
Interior Methane Controls
At DOI the new administration may consider reviving efforts to control methane and other air pollutants in onshore and offshore oil and gas activities as it works through the regulatory review directed by the Public Health and the Environment EO.
This includes the offshore air quality rule. The rule finalized in June 2020 gutted much of the requirements included in the Obama-era proposal, significantly limiting its impact on emissions from offshore oil and gas operations. The Biden administration will likely want to revisit the proposal and consider revising the rule to better control methane and other emissions from offshore operations.
Additionally, BLM must consider whether to revive the waste prevention rule designed to capture otherwise flared and vented methane. Both the original 2016 rule and the Trump administration’s rollback of it finalized in 2018 were vacated by federal courts. This leaves the BLM in a position to start fresh but with two opinions that exhibit sometimes contradictory interpretations of the Bureau’s authority to contend with in doing so.
Biden’s Climate Crisis EO ordered a review of the leasing and permitting program as a whole (discussed in more detail in the Oil & Gas Production section below). How DOI decides to address methane control regulations will likely figure into this whole-program review.
Abandoned Mines and Wells
President Biden’s January 27 Climate Crisis EO also sets a policy to address leaks at abandoned mine and oil and gas sites and provide job opportunities in energy communities by cleaning up these sites. (Sec. 217) Recent studies indicate that the amount of methane emitted by the approximately 3.2 million abandoned oil and gas wells in the country is much higher than previously acknowledged. Prioritizing funding for cleaning up these sites would contribute significantly to methane control. The new administration may also want to reconsider a proposed rule that would reduce the amount of financial assurance required for offshore oil and gas development in favor of a more protective approach. This could help prevent the number of offshore orphaned wells in the future.
Fuel Economy and Greenhouse Gas Standards for Vehicles
Transportation is the largest source of greenhouse gas (GHG) emissions in the United States, accounting for nearly 29% of total emissions nationwide. The largest share of these emissions comes from cars and trucks. In the EO on Public Health and the Environment, President Biden directs EPA and the National Highway Traffic Safety Administration (NHTSA) to consider revising, suspending, or rescinding two Trump-era rules that prevent both the federal and state governments from setting stricter environmental standards for vehicles. The first, The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program, revoked California’s 2013 waiver under the CAA that allowed the state to set tougher GHG emission and zero-emission vehicle (ZEV) standards than the federal government, and blocked other states from adopting those standards. That rule must be reviewed by April 2021. The second, The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks, weakened Obama-era GHG and fuel economy standards for light duty vehicles. That rule must be reviewed by July 2021.
The order frames these reviews as a crucial step in “establishing ambitious, job-creating fuel economy standards,” and requires the agencies to “consider the views of representatives from labor unions, States, and industry.” (For more background on these rules, visit EELP’s Regulatory Rollback Tracker Page). On February 8, 2021, the DC Circuit granted a request from EPA and NHTSA to pause litigation challenging the One National Program until the administration’s review is complete. Under the court’s order, the government must submit updates to the court every 90 days.
In order to reach net-zero economy-wide emissions by 2050, EPA and NHTSA will need to do more than undo Trump’s regulatory rollbacks. The Biden administration will need to set new, more ambitious tailpipe standards while gaining buy-in from the US auto industry to meet these new standards. Recent climate commitments made by General Motors, the nation’s largest automaker and other manufacturers signal a positive “sea change” towards enhanced cooperation after decades of intransigence.
EPA and NHTSA will have to decide how strict those new standards should be. The Obama-era rules required 5% annual improvements, which the Trump rule decreased to 1.5% through model year 2026. Current voluntary agreements between the California Air Resources Board (CARB) and six automakers require 3.7% annual reductions in GHG emissions from new passenger cars. The participating automakers include BMW of North America (including Rolls Royce for purposes of the agreement), Ford, Honda, Volkswagen Group of America (including VW and Audi), and Volvo.
Crafting new clean car rules will also take time. Under the Energy Policy and Conservation Act (EPCA), the Secretary of Transportation must give automakers 18 months lead time before introducing new fuel economy standards. EPA is already drafting interim auto pollution standards, likely based on the CARB agreement, to be released by April 1, 2021 (April 1 is the cutoff date for model year 2022).
The Biden administration can also empower states to adopt even stricter GHG emission and ZEV standards by restoring California’s CAA waiver or granting a new waiver request. Approving California’s waiver would also restore rules in 13 other states that have committed to adopt California’s standards. However, EPA would first have to first rescind the One National Program rule finalized under the Trump administration, which would likely be subject to further litigation. (For more on how the Biden EPA could rescind and replace the One National Program rule and reissue California’s waiver under the CAA, see analysis by Lia Catteneo, JD 2021, here).
Appliance- and Building-Efficiency Standards
Under former President Trump, the DOE declined to set compliance dates for certain standards, modified other standards, and proposed changes to its process for developing standards and testing equipment. Among these changes was a new “process rule” that changed how DOE develops energy conservation standards for household and commercial appliances. Specifically, the rule establishes a “threshold” that new or revised rules must meet, and allows the use of industry-led test procedures to determine efficiency standards. DOE also issued the “economic justification rule,” which requires DOE to simultaneously consider costs when setting energy efficiency standards. As part of the administration’s broad regulatory review under the Public Health and the Environment EO, President Biden ordered DOE to review both rules and propose major revisions by March 2021, and any remaining revisions by June 2021. There are several cases pending challenging the legality of both rules. The order also requires DOE to review the Test Procedure Interim Waiver Process rule, which requires DOE to issue a decision on whether to grant an applicant’s request for a test procedure waiver within 45 business days, or the waiver is automatically granted.
The Trump DOE also issued two notices adopting updated energy efficiency codes and standards for buildings. The first notice, issued December 10, 2019, adopted the 2018 version of the country’s model building energy code, the International Energy Conservation Code (IECC), triggering a statutory obligation on states to either adopt or exceed those standards. However, the US Conference of Mayors (USCM) already unanimously adopted these standards in 2018. The second notice adopted the 2016 minimum energy efficiency standard for buildings (excluding low-rise residential buildings) set by three standards organizations (ANSI, ASHRAE, and IESNA). Under the same EO, President Biden ordered DOE to review both of these notices by May 2021, likely in anticipation of adopting the 2021 IECC code.
President Biden also requires DOE to review several final rules issued under former President Trump delaying, maintaining, or weakening energy efficient standards for particular consumer products, including clothes washers and dryers, dishwashers, incandescent light bulbs, commercial boilers, portable air conditioners, industrial air compressors, and uninterruptible power supplies. However, the order does not explicitly require DOE to review Trump-era rules setting new energy conservation standards for ceiling fans, walk-in freezers, and residential central air conditioners and heat pumps, and narrowing testing requirements for showerheads. (See EELP’s Rollback Tracker page covering some of these efficiency standards here.)
Power Plant Emissions
One of the Trump administration’s top priorities was to repeal the Obama-era Clean Power Plan (CPP), a landmark rule that set carbon pollution limits on existing power generators for the first time. On July 8, 2019, the Trump EPA repealed and replaced the CPP with the Affordable Clean Energy (ACE) Rule, based on a narrow interpretation of the CAA. This narrow interpretation would have prevented the Biden administration from adopting more flexible and efficient mechanisms of reducing GHG emissions at coal and fossil fuel-powered plants.
In recognition of the ACE Rule’s debilitating impact on the Biden administration’s ambitious climate agenda, President Biden ordered EPA to review the CPP repeal and ACE Rule as part of the broader review required under the Public Health and Environment EO. However, just before Biden took office, the DC Circuit struck down the ACE Rule, finding that the Trump EPA based the rule on a “fundamental misconstruction” of the CAA, and remanding the rule to EPA. EPA has since issued a memo to its regional administrators confirming its view that the DC Circuit’s opinion did not reinstate the CPP, suggesting the administration will likely issue updated emission standards for existing power plants that reflect “ongoing changes in electricity generation.”
In addition to regulating GHG emissions from power plants under the CPP, the Obama EPA issued Mercury and Air Toxics Standards (MATS) limiting the amount of mercury and other toxic pollutants emitted from coal- and oil-fired power plants. Under Section 112 of the CAA, EPA may set pollution-control standards for power plant emissions of hazardous air pollutants (HAPs) if the agency finds it “appropriate and necessary” to do so based on an assessment of the public health hazards posed by those emissions.
While the MATS rule does not directly regulate GHGs, it does address a crucial public health concern: power plants continue to be the dominant emitters of air toxins in the US, including mercury, acid gases, and many toxic metals. Also, the Trump EPA’s efforts to undermine the MATS rule are emblematic of a broader legal strategy used by the administration to facilitate its deregulatory agenda. Despite bipartisan and industry support of the MATS rule, in May 2020, EPA published a final rule withdrawing the supplemental appropriate and necessary finding. The Trump EPA argued that the significant “co-benefits” of reducing soot (PM2.5) should not be included in the agency’s cost-benefit analysis, simply because PM2.5 is regulated under a different statutory provision than HAPs. At the same time, EPA also finalized a residual risk and technology review determining that the 2012 MATS adequately protect public health and should not be tightened. The Trump EPA would later finalize a rule requiring EPA to isolate the “direct” and co-benefits of all future air pollution regulations, which could affect the Biden administration’s ability to issue rules reducing GHG emissions (see discussion of this rule below under Social Cost of GHGs and Cost-Benefit Analysis). While EPA left the MATS rule intact, reversing the supplemental finding removes the rule’s legal foundation, thus making the standards vulnerable to legal challenge. There are now several ongoing lawsuits challenging the legality of the MATS, EPA’s reversal of the supplemental finding, and EPA’s residual risk and technology review. As of February 24, 2021, all are being held in abeyance.
In the Public Health and the Environment EO, President Biden specifically directed the EPA Administrator to consider suspending, revising, or rescinding the May 2020 rule reversing the appropriate and necessary finding. EPA must complete that review by August 2021.
In April 2020, EPA also issued a final rule adjusting emissions limits for four power plants that burn eastern bituminous coal refuse (a form of coal mining waste), allowing the affected plants to release higher amounts of acid gas and sulfur dioxide. Three of those plants are located in Pennsylvania (the Scrubgrass, Ebensburg Power, and Colver Power Plant Project), and one in West Virginia (the Grant Town Power plant). Environmental groups filed a petition for review in June 2020 challenging the rule; this litigation is still ongoing. To-date, the Biden EOs have not explicitly addressed this rule.
Social Costs of GHGs and Cost-Benefit Analyses
In addition to rolling back source-specific environmental requirements, the Trump EPA changed how the costs and benefits of environmental regulation are measured in order to justify its deregulatory agenda. In the context of regulating GHGs and other air pollutants under the CAA, EPA did this in two ways: 1) it created a cost-benefit analysis process that prevents full consideration of the public health benefits of air pollution regulation and 2) it adopted an arbitrarily low estimate of the cost of GHG emissions, ignoring extensive scientific work already conducted on the topic. President Biden took steps to reverse both of these actions in his January 20 Public Health and the Environment EO.
First, Biden instructed EPA to review and consider revising or rescinding a rule finalized in December 2020 defining a restrictive approach to considering benefits and costs in the CAA that could substantially limit the agency’s ability to improve air quality and reduce emissions. (Sec. 4) The rule, deceptively titled “Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process,” requires the agency to disaggregate the public health benefits “targeted” by the regulation from other co-benefits, forcing the agency to arbitrarily minimize the value of reducing harmful air pollutants not targeted under the particular statutory provision. The rule also requires a clear or likely causal relationship between the exposure to the pollutant and its health effects based on human data (which the administration restricted the use of in its “Secret Science” rule discussed above). (See more about how this rule diminishes the ability of EPA to fulfill its obligations under the CAA in our previous analysis.) Biden instructed EPA to address this rule “as soon as possible.”
In Section 5 of the Public Health and the Environment EO Biden reinstated the Interagency Working Group on the Social Cost of Greenhouse Gases disbanded by Trump, outlining a new list of members. The order also directed the Working Group to publish an interim Social Cost of Carbon, Social Cost of NOx (Nitrous Oxides), and Social Cost of Methane within 30 days of his order, and final versions by January 2022. The Working Group published its interim Social Cost of GHGs on February 26, completing the first part of this directive. These interim estimates are the Obama-era estimates adjusted for inflation. They restore the prior discount rate, and consider global impacts rather than just domestic. The Working Group will now turn to considering new science developed since the Obama-era estimates were published, the National Academy of Sciences critiques and recommendations, and additional public comment collected through an upcoming Federal Register notice, as well as a planned robust stakeholder engagement process. The interim estimates place the Social Cost of Carbon at $51 per ton at a 3% discount rate, but the final estimates could use a lower discount rate and result in a higher cost.
President Biden also instructed the Working Group to recommend where these Social Costs of GHGs should be applied (such as which areas of decision making, budgeting, and procurement) by September 1, 2021, and to recommend a process for regular review and updating of the figures by June 1, 2022.
The president’s instructions on the social costs of GHGs signals a sharp break with the Trump administration’s approach. Noting how important it is for agencies to “capture the full costs of greenhouse gas emissions as accurately as possible, including by taking global damages into account,” Biden begins to repair the damage done by the prior administration that instead undercut efforts to quantify these costs and narrowed the range of costs and benefits considered relevant to the rulemaking process. The Trump EPA sought to change how the agency calculated regulatory benefits through myriad actions that shrank the scope of benefits the agency considered, changed the methodologies used to calculate benefits, and restricted the scientific evidence the agency could rely on in its decision making (for more on these actions, visit EELP’s EPA Mission Tracker). These actions were evident in numerous rulemakings at EPA, such as in the Affordable Clean Energy rule (ACE) that replaced the Clean Power Plan and the MATS rule (both discussed in the Power Plant Emissions section above), as well as in other agencies’ rulemakings like BLM’s rollback of the Methane Waste Prevention Rule, whose use of the Trump-era interim social cost of methane was heavily criticized by the court that vacated the action.
Of particular note is that in the Public Health and Environment EO, Biden commented on the importance of “taking global damages into account” when assessing the costs and benefits of GHG regulation. The Trump administration restricted its consideration of costs and benefits of rulemakings that would lower GHG emissions to only those it could determine were within the confines of US borders—an endeavor that defied logic and science, and was specifically pointed to as an arbitrary approach in the case about the BLM Methane Waste Prevention rule rollback. In addition, Biden pointed to the importance of considering a wide range of climate-related impacts such as “changes in net agricultural productivity, human health, property damage from increased flood risk, and the value of ecosystem services.” This could provide some insight into the type of work the revived Interagency Working Group will take on. Biden also asked the Working Group to consider “the extent [to which] current methodologies do not adequately take account of climate risk, environmental justice, and intergenerational equity.” In a possible nod to concerns raised by youth climate activists, as well as the Trump administration’s devaluation of the future benefits of GHG regulation, Biden said the new methodologies should “reflect the interests of future generations in avoiding threats posed by climate change.”