Likely Energy and Environmental Priorities of

the
Trump Administration
January 3, 2017

Prepared by Paul Bledsoe, Senior Advisor to Edelman, and

President, Bledsoe & Associates

To learn more, please contact Amy Hemingway at amy.hemingway@edelman.com

or call (202) 371-0200.

Overview
The major energy policy focus areas under the Trump Administration and the new
Republican Congress will likely be renewed expansion of fossil fuel production,
including on public lands, and creating a more robust U.S. energy and transportation
infrastructure.
The Trump Administration is also likely to attempt to overturn, or water down, some
Obama Administration regulations, especially those regarding greenhouse gas
emissions. In particular, the Trump Administration may target the Clean Power Plan
(CPP), which regulates utility emissions that are currently in U.S. Appeals Court.
President-elect Trump made the economic value of energy production a central
theme in his campaign, basing his policies largely on increasing production of U.S.
fossil fuels. For example, he said he would increase U.S. coal production and use,
even though most independent analysts note that cheap natural gas itself is
responsible for crowding out coal use. Trump also urges expansion of fracking for
shale oil and natural gas development.
The Administration is certain to immediately overturn the social cost of carbon
standards in a wide variety of federal permits and reverse Obama-era guidance on
greenhouse gas emissions from infrastructure projects. In general, the application of
stringent National Environmental Policy Act standards will be less frequent and allencompassing, with attempts to expedite reviews as the norm.
Since the election, Trump has said he will have an open mind about climate
change policy, and has met with former Vice President Al Gore on the issue. That
said, Trumps domestic cabinet choices reflect strong and deep skepticism about
climate science and policy actions among top Administration officials. Climate denial
or skepticism seems to be the rule among Trumps top appointments and advisers,
not the exception.

Presidential Appointees
President-elect Trump has appointed the following individuals to carry out his
Administrative priorities.

Secretary of Energy: The nomination of former Texas Governor Rick Perry

as Secretary of Energy has led many to believe he will emphasize fossil fuels
to the exclusion of renewable energy. In keeping with Trumps campaign
promises, Perry will undoubtedly focus on how to better utilize coal for power
production, perhaps prioritizing carbon capture and storage technologies
more aggressively through tax credits and other policies to help coal use.
Additionally, he will likely prioritize oil and gas technologies. Perry also knows
that Texas is the leading wind energy producer among states, and will
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therefore be aware of the increasing economic value of renewable

technologies. Of course, nuclear weapons, nuclear waste disposal and nuclear
power issues often dominate much of an Energy Secretarys time and the
Departments budget. A key question will be how enthusiastic Secretary Perry
and Trump are regarding incentives for advanced nuclear power.

Environmental Protection Agency: The nomination of Oklahoma

Attorney General Scott Pruitt, who has spearheaded the legal effort to
challenge the CPP rules and has close ties to the oil and gas industry, is a
clear sign that the Trump Administration is determined to do all it can to
prevent these regulations from taking effect as finalized under President
Obama. More broadly, Pruitt has made efforts to devolve regulatory authority
back to the states, a hallmark of his work in Oklahoma, but such actions face
tall hurdles under the Clean Air Act, Clean Water Act, and other statutes and
regulatory precedent. Nonetheless, a broad attempt to lessen regulations
from the EPA will be a priority for Pruitt should he be confirmed.

Department of the Interior: The nomination of Rep. Ryan Zinke (R-MT) as

Interior Secretary aligns with efforts to expand fossil fuel development on
federal lands, but less so with the possible devolution of federal lands to state
or private control. For example, Zinke quit his post as a member of the GOP
platform-writing committee after the group included language that would
have transferred federal land ownership to the states, and has since called
for the full and permanent reauthorization of the Land and Water
Conservation Fund, a program created to protect and purchase public lands.
Zinke, however, also has supported a bill to designate millions of acres for at
least local management. Sources say that the transition team veered away
from their expected selection of Rep. Cathy McMorris Rodgers (R-WA) due to
her strong support for the sale of federal land. Zinke has also opposed
Interior regulations to limit methane waste from oil and gas wells, and has
generally supported additional development of coal, oil and gas on public
lands. In addition, Zinke has taken exception with some species listed under
the Endangered Species Act, and has equivocated on climate change science.

Department of State: The nomination of Exxon CEO Rex Tillerson as

Secretary of State, in conjunction with Trumps rhetoric, suggests a possible
return to a more Kissinger-like realpolitik set of practices, where geo-strategic
considerations of oil and gas flows play a larger role in overall foreign policy.
This may prove especially true as the United States is now the worlds largest
producer of oil, gas and hydrocarbon, and Republicans have been
increasingly aggressive in seeking international markets for U.S. oil and gas.
It has been suggested, for example, that an office of U.S. Energy Exports be
created within the DOE in which State may have a role. On climate change,
given Exxons climate science acknowledgement and support for the Paris
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agreement, there is a possibility that a Secretary Tillerson will encourage the

Trump Administration to grudgingly engage on climate change issues
internationally, rather than simply attempt to withdraw from the Paris
agreement. Tillersons relationships with foreign leaders might smooth the
transition, but his long-time business ties to Vladimir Putin may cause
confirmation problems, as the U.S. Senate is wary about, and likely to
investigate, Russias role in the last election.

Office of Management and Budget: The nomination of Freedom Caucus

co-founder and deficit hawk Rep. Mick Mulvaney (R-SC) as Director of the
Office of Management and Budget should be seen as an attempt to reassure
conservative Members of Congress that the Trump Administration will keep a
lid on federal spending, despite the fact that (or perhaps because)
independent analysis has found Trumps tax proposals alone would increase
the federal debt by more than $5 trillion. Mulvaney has been a strong critic of
the Obama-era environmental and energy regulatory agenda; one can expect
an initial Trump budget containing deep cuts in funding for the EPA, parts of
DOE, and other agencies charged with environmental regulation and clean
energy incentives.

Agency Assessments
Below are more specific actions agency heads may advance or consider, taking into
consideration the Republican Congress.

Department of the Interior/Army Corp of Engineers

The U.S. DOI under the Trump Administration in conjunction with the Congressional
majority is likely to:

Reinstate coal leasing on public lands, which was suspended under President
Obama;
Expand oil and gas leasing on public lands and in public waters, which might
include opening areas of the south Atlantic coast, in Alaska and elsewhere;
Expedite permitting of coal, oil and gas development on public lands;
Overturn recent regulations of methane from the oil and gas sector,
specifically those on public lands through the Bureau of Land Management,
which will probably be killed by Congress using the Congressional Review Act
statutes;
Choose a more selective approach to listing of species under the Endangered
Species Act, and other conservation regulations;
Increase approval of applications for minerals extraction, including some
controversial projects;
Add funding for irrigation projects and other infrastructure efforts on Western
lands; and
Approve the Dakota Access Pipeline should it be resubmitted for permitting.
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DOI under Trump may also:

Attempt to devolve some federal lands to state ownership or, more likely,
local control;
Devolve specific regulatory functions of federal lands to the states; and
Reduce budgets for several agencies within DOI, including the Fish and
Wildlife Service and the U.S. Geological Survey.

Environmental Protection Agency

At the EPA, the Trump Administration is likely to:

Attempt to undo EPA regulations on greenhouse gas emissions, including the

Clean Power Plan (111d rules under the Clean Air Act) regulations of
emissions from the electric power sector. The Obama regulations are under
review by the U.S. Appeal Courts; Supreme Court review and additional legal
battles are nearly certain;
Attempt to overturn, relax enforcement of or defund recent regulations on
methane from oil and gas sector development on private lands;
Relax current fuel economy regulations that are due for a mid-program
review by 2018 to set the 2022-2025 standards;
Revisit and relax a wide range of regulations on air, soil and water quality
standards;
Fate of the Renewable Fuels Standard is less clear; in general candidate
Trump has supported the RFS, though some campaign documents (later
withdrawn) questioned the blending credit system; and
Overturn or defund regulation of smaller bodies of water under the Waters of
the United States rule, which has already been widely challenged by states
and localities in the courts.

Department of Energy
At the DOE, the Trump Administration and Republicans in Congress are likely to:

Retain renewable energy tax credits for wind and solar, which were extended
in December of 2015, to phase out over the next five years;
Expand tax credits for carbon capture, utilization and storage (CCUS)
technology that can permanently capture and sequester emissions of carbon
dioxide, from coal plants, natural gas facilities and industrial sources;
Incentivize enhanced oil recovery through tax credits related to CCUS, which
can greatly increase low cost oil production from older fields;
Retain or increase tax incentives for production of coal, oil and gas on public
and private lands;
Increase funding for research into improved fossil fuel extraction and
combustion methods;
Increase funding for advanced nuclear technologies, perhaps including
research and demonstration of modular nuclear power;
Reduce funding for energy efficiency and renewable energy research;
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Retain most efficiency standards for appliances and other applications, but
not increase these;
Retain or slightly reduce R&D funding for breakthrough energy technologies
such as commercial scale electricity storage (retaining ARPA-E but perhaps at
lower levels);
Approve construction of a wide variety of energy infrastructure, including grid
expansion and enhanced grid security, natural gas, oil and CO2 to pipelines,
ports, highways and other transportation projects related through a major
Infrastructure Bill;
Revisit the largely static Strategic Petroleum Reserve policy; and
Potentially create an office of energy exports focused on expediting
approval of and creating markets for the export of U.S. crude oil, natural gas
and coal.

State Department, Defense Department and International

The Trump Administration is likely to:

Approve the Keystone XL pipeline should it be resubmitted for permitting.

The Trump Administration may or may not:

Attempt to formally withdraw from the Paris climate agreement or underlying

UN climate process;
Negotiate increased government assistance and private U.S. contracts to
expand nuclear power with select countries including India;
Retain joint clean energy research and commercialization projects with China,
India and other major developing nations;
Continue Defense Department programs to reduce reliance on oil across
many programs, including reducing supplies to active military operations; and
Expand efforts to export U.S. oil, gas and coal to market around the world,
including reduced permitting requirements and other measures.