January 07, 2016

President Obama Unveils 2016 Energy and Environment Agenda

Last month, the White House released its fall Unified Agenda, which provides a look at the various regulations being developed by each agency and where each is in the rulemaking process. In the energy and environment space, the Environmental Protection Agency (EPA), Department of Energy(DOE) and Department of Interior are the primary regulators, with the Department of Labor and Department of Transportation playing supporting roles. Highlighted below are some of the most significant actions taking place in 2016, with access to the full list of initiatives from each agency available at the links above.

Environmental Protection Agency

The EPA is doing the bulk of the heavy lifting in the administration’s environmental efforts. EPA has rolled out a number of plans that will be finalized this summer. The EPA has proposed rules regulating many greenhouse gasses, including carbon, methane and ozone.

  • Clean Power Plan: The EPA’s Clean Power Plan is the most significant regulation on energy the administration has proposed yet. The model implementation portion of the plan is scheduled to be complete by August, which would require states to submit a plan, file for extension, or adopt (or be imposed with) a federal plan by September 6. EPA will continue taking comments until January 21. Meanwhile, 27 states are suing the government over the rule, and courts could issue their decision on whether to stay the rule as early as January.
  • Mercury Rule: EPA has until mid-April to respond to the Supreme Court’s ruling that it should have considered the costs of the rule earlier in the rulemaking process. The case is still in the D.C. Circuit Court of Appeals to determine if EPA can modify the existing rule or must start from scratch.
  • Methane Rule: EPA plans to reduce methane emissions from the oil and gas sector by establishing a set of new source performance standards. The final rule is expected in June.
  • Oil and Gas Wastewater: Expected to be finalized in August, the rule sets pretreatment standards for the disposal of wastewater generated during fracking. The rule would filter certain compounds before allowing the wastewater to enter public treatment facilities.

Department of Energy

DOE will play a major role in energy conservation by rolling out a wide variety of new efficiency standards for many consumer and industrial products. Taking the view that the quickest way to lower energy use is to improve the efficiency of the end user, President Obama is utilizing DOE efficiency improvements to account for nearly half of the carbon cuts he has pledged. DOE proposes new efficiency standards in the following areas:

  • Direct Heating Equipment and Pool Heaters (Prerule Stage)
  • Electric Motors (Prerule Stage)
  • Manufactured Housing (Proposed Rule Stage)
  • Vending Machines (Proposed Rule Stage)
  • Industrial Air Compressors (Proposed Rule Stage)
  • Central Air Conditioners and Heat Pumps (Proposed Rule Stage)
  • Residential Dishwashers and Ceiling Fans (Proposed Rule Stage)
  • Commercial and Industrial Pumps, Fans and Blowers (Final Rule Stage)
  • Residential Dehumidifiers and Boilers (Final Rule Stage)

Department of Interior

Interior is also making a big push to finish a number of new regulations before mid-2016, many regarding the treatment of fossil fuel use on federal land leases. Use of Interior to readjust leasing rates for coal, oil and gas taken from public land is both part of an effort to include the “social cost of carbon” in pricing the resource, and, whether intentionally or not, will inevitably be caught in the “keep it in the ground” movement.

  • Stream Protection: Interior’s Office of Surface Mining and Reclamation Enforcement (OSM) has been busy moving along their Stream Protection Rule, which is now six years in the making. The rule was included in the appropriations omnibus as report language that requires OSM to better incorporate the input from the state.
  • Flaring Rule: Interior is developing its rule for venting and flaring of natural gas produced on federal land, and is aiming for a final rule in June.
  • Coal Valuation: Interior hopes to finish new standards on coal royalties from federal lands to include the “social cost of carbon,” among other considerations.
  • Oil and Gas Leasing: Similar to coal valuation proposals, this would adjust the royalty rate on oil and gas leases on federal land and increase bonding requirements.

Pipeline and Hazardous Materials Safety Administration (PHMSA)

PHMSA is part of the Department of Transportation and will be overseeing modernization of oil pipeline regulations that are the result of several high-profile leaks and train delivery incidents from the past several years. As the U.S. becomes a more significant producer of oil and gas resources, look to PHMSA to increase its presence as our pipeline system expands to meet increased demand.

  • Pipeline Safety: PHMSA released its updates to strengthen oil pipeline safety in October. The comment period closes in January, but there is no word on when the rule will be complete.

Department of Labor

The Labor Department is set to implement Phase II of its regulations to fight black lung in coal miners by February, pending the request by industry for a stay on the rule until further analysis can be performed. The Labor Department’s Mine Safety and Health Administration (MSHA) is readying the second part of its respirable dust requirements, with the third and final phase (lowering tolerable amounts) scheduled for August.

  • Coal Dust/Rock Dust: MHSA is hard at work implementing the second stage of its rule on rock dust, ventilation and mine examinations, expected in February.

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