The Fuse

Biden’s Executive Orders on Energy and Climate

by Nick Cunningham | January 21, 2021

On his first day in office, President Joe Biden signed a stack of executive orders related to immigration, the pandemic, government accountability, racial equality, and of course, energy and climate change. “I thought with the state of the nation today, there’s no time to waste. Get to work immediately,” Biden said a few hours after his inauguration. “There’s no time to start like today.”

During the 2020 presidential campaign, Biden had promised to rejoin the Paris Climate Agreement on Day 1. He made good on that promise, and the U.S. will officially be back in the agreement in February following a 30-day period.

President Biden’s order likely kills Keystone XL for good.

He followed that up with a series of other executive orders that made fresh headlines. He cancelled the Keystone XL pipeline that would have carried oil from Alberta to the Gulf of Mexico. The pipeline was originally scrapped during the Obama administration, but was immediately revived when President Trump took office in 2017. President Biden’s order likely kills the project for good.

The significance of scrapping Keystone XL is up for debate, as the global oil market has largely moved on from the project. When it was originally proposed in 2008, the oil market was entirely different. The need for the pipeline today is questionable at best. Alberta’s oil industry has already placed bets on alternatives. The Line 3 pipeline to Minnesota and the Trans Mountain Expansion to Canada’s Pacific Coast are two pipelines that are under construction but also face stiff resistance from Indigenous communities situated in the path of each pipeline. The Canada Energy Regulator recently published a forecast looking at the need for takeaway capacity from Alberta through the 2020s, and Keystone XL was going to be surplus and likely unneeded.

The orders on Paris and Keystone XL garnered most of the attention, but there were some intriguing decisions on a slew of other issues. President Biden ordered a review of rules issued under the Trump administration to see which conflicted with a new overarching goal of worker protections, public health, the environment and environmental justice. It’s unclear where this will lead, but ultimately the agency heads will scrounge around and identify Trump-era rules to be eliminated, a process that will be lengthy in some cases.

But President Biden singled out a bunch of specific areas of action. First, he wants to revisit methane regulations on oil and gas operations. Perhaps attempting to get ahead of the process, the American Petroleum Institute suggested on Thursday that it could potentially support a return of federal methane regulations, despite pushing for the rollback during the Trump administration. Heightened scrutiny on flaring and venting of methane has led to blowback abroad. On at least two recent occasions, European customers have balked at purchasing U.S. LNG over methane concerns.

President Biden also ordered a review of the Trump administration’s decision to water down fuel economy standards for cars and trucks with model years 2021-2026. Biden wants a new plan by July 2021.

Another order addressed appliance standards, which, again, were weakened under Trump. Presumably, the Biden administration will scrap the Trump effort. He also ordered a look at hazardous air pollutants from coal-fired power plants.

President Biden also had several orders related to federal lands. He directed the Interior Department to look into restoring national monuments that were shrunk by the Trump administration, including Bears Ears National Monument and Grand Staircase-Escalante. Interior was also directed to place a moratorium on all oil and gas leasing in the Arctic.

Industry largely shrugged at a highly-anticipated inaugural lease sale in the Artic National Wildlife Refuge

The political salience of oil drilling the Arctic evaporated to some degree earlier this month when the industry largely shrugged at a highly-anticipated inaugural lease sale in the Artic National Wildlife Refuge (ANWR). No notable oil companies offered bids – high costs meant that the state of Alaska itself was the only major participant to show up.

Meanwhile, Interior’s acting secretary ordered a 60-day moratorium on all fossil fuel leasing on federal lands.

President Biden also ordered the agencies to once again include the “social cost of carbon” in their decision-making. This is a way to account for the damages from carbon pollution, such as changes in agricultural activity, flood risk, impacts to ecosystem services, etc., which are not normally directly incorporated into agency actions.

Executive orders with limited reach
Orders signed by President Biden take effect immediately, but their reach is limited. Aside from Keystone XL and drilling moratoria, the orders mostly just direct agencies to get to work. The real teeth will come during the rulemaking process at the agency level – new fuel economy standards, for example, or new limits on power plant emissions. This process takes time.

But hoping to spark a full-scale energy transition on an accelerated timeline will not be easy, and will likely require action from Congress. With the Senate split at 50-50 with the Democrats in control, there is no margin for error. President Biden’s legislative prospects for big green stimulus is “limited at best,” according to ClearView Energy Partners. Unless the Democrats tear up the Senate filibuster, the only main vehicle that has a chance of moving on Capitol Hill is a big spending package passed under “reconciliation,” a budget process that allows for a simple majority.

President Biden has proposed a $1.9 trillion stimulus, which could contain lots of provisions on energy, but its odds of passage are unclear. Time will tell.

But the long list of executive orders signed on Wednesday suggest that the administration recognizes it has little time to waste.

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