Promoting Energy Infrastructure and Economic Growth

Background

Before it was revoked, Executive Order 13868 significantly impacted several aspects of U.S. energy infrastructure policy. It primarily aimed at streamlining the permitting process for energy infrastructure projects, which theoretically would reduce the delay and cost associated with regulatory compliance. A key directive was towards the Environmental Protection Agency (EPA), urging the reconsideration and possible amendment of section 401 of the Clean Water Act. This section gave states and tribes the authority to certify that proposed infrastructure projects complied with applicable water quality standards. The order mandated the EPA to clarify ambiguities in existing guidelines, thus reducing the delay in approvals that energy companies often faced.

Additionally, the order called upon the Department of Transportation to revise safety regulations for Liquefied Natural Gas (LNG) facilities and transportation methods. The Secretary of Transportation was tasked with updating regulations to facilitate the movement of LNG by rail, thus enhancing the flexibility and reach of natural gas distribution across the country. These adaptations were designed to take advantage of the domestic natural gas boom by making it easier for companies to export and transport gas, contributing to the U.S. geopolitical strategy of leveraging energy independence.

Furthermore, the order influenced the fiduciary responsibilities related to investments in the energy sector. The Secretary of Labor was directed to assess trends in retirement plans' investments in the energy industry, potentially to ensure that investments were consistent with maximizing returns from the flourishing sector. This was part of a broader move towards aligning federal policy with a philosophy that valued energy independence highly, bolstering traditional energy sectors such as oil and gas, thereby framing energy policy in an economic growth context.

Reason for Revocation

The revocation of this executive order by President Biden on January 20, 2021, was emblematic of a larger ideological shift from the previous administration's policies. Biden’s energy policy sought to pivot away from fossil fuels towards renewable energy in response to growing concerns over climate change. This executive order was seen as a barrier to that transition, as it facilitated the expansion and deregulation of fossil fuel infrastructures without sufficient environmental oversight. Revocation reflected Biden’s commitment to prioritizing environmental protection over expedited energy infrastructure development.

The Biden administration prioritized tackling climate change both as a domestic imperative and a central tenet of its international policy agenda. By revoking this order, the administration underscored its commitment to honoring environmental concerns raised by states and indigenous tribes over the federal imposition. It reconfirmed the administration's intention to restore traditional regulatory processes that provide longer timelines for review to weigh environmental impacts more thoroughly. This stance was included in a comprehensive plan to transition the American economy towards reduced carbon emissions and support renewable energy developments over fossil fuels.

The revocation also fitted within the broader context of Biden's campaign promises to address infrastructure through a sustainable lens, looking to implement the American Jobs Plan. This intended to rebuild outdated transportation and utility infrastructure with a focus on resilience to climate change, electric vehicles, and renewable energy infrastructure. Thus, the repeal was not a standalone act but part of a grand strategy to align U.S. energy policy with climate goals and promote a green economy.

Winners

The revocation of this executive order was particularly beneficial to environmental advocacy groups who had long criticized the streamlined processes for putting environmental quality and localized ecological considerations at a disadvantage. These groups had argued that the order's provisions effectively diminished the impact that state regulations could have on halting or slowing projects deemed harmful. By dismantling Trump's mandates, groups engaged in environmental protection could ensure stricter adherence to regulations like the Clean Water Act, ensuring more measured progress on projects with potential environmental ramifications.

Renewable energy sectors, particularly those involved in wind, solar, and emerging green technologies, also stood to gain. By revoking the order, the Biden administration reinforced its commitment to shifting federal focus and resources towards clean energy development. Companies like Tesla, which are heavily invested in renewable tech and electric vehicles, stood to benefit from the preferential treatment that would follow, including potentially increased federal grants, subsidies, and research investments towards green innovations.

State governments, especially in regions that aggressively regulate pollutants and have strict environmental standards, gained as well. The revocation restored their ability to apply full scrutiny to projects under section 401 of the Clean Water Act, allowing them to consider broader environmental impacts and enforce stringent conditions to protect local ecosystems. This shift empowered states like California and New York, often at the vanguard of progressive environmental legislation, to exert more authority over large infrastructural developments, striking a balance between infrastructure growth and environmental preservation.

Losers

The fossil fuel industry, particularly oil and gas producers and the coal industry, faced substantial setbacks due to the rescindment of the executive order. Companies like ExxonMobil and Chevron, which had benefited from expedited processes and decreased regulatory oversight, now had to contend with the complexities and delays associated with a return to more rigorous federal and state environmental assessments. This process could potentially slow down the approval of new projects and infrastructure expansions, impacting their operational timelines and financial projections.

Supporters of traditional energy infrastructure development experienced a reduction in competitive advantages. The policies stemming from the executive order had aimed at fortifying the U.S. position as a dominant energy exporter by reducing the constraints on building necessary transport and distribution facilities. Revocation hindered the momentum gained in expanding America’s energy footprint internationally, particularly in natural gas exports, affecting businesses reliant on infrastructure developments as a platform for growth.

Regions economically reliant on fossil fuel industries, such as parts of the Appalachian region and states like West Virginia and Texas, could endure adverse economic impacts. These areas depended heavily on jobs and revenues provided by the oil and gas sector. By rolling back a policy designed to enhance the energy sector's adaptability and expansion, there were concerns about job losses and reduced economic activity in these regions, particularly in short-term scenarios where infrastructure projects would face increased scrutiny and extended approval processes.