President Biden’s Energy Policy: Early Executive Orders and Key Rapid Regulatory Changes

February 4, 2021

After setting lofty climate change goals and promising a clean energy revolution, the Biden administration is expected to move quickly in its first hundred days to restore regulations and revamp agencies. This alert summarizes changes made and analyzes potential future actions.

Campaign Promises

A key component of President Biden’s campaign was to set the United States on an “irreversible path to achieve economy-wide net-zero emissions no later than 2050.” Campaign literature outlining the plan offers insight into the administration’s key priorities. Of particular note, President Biden promised to:

  • immediately rejoin the Paris Climate Agreement and convene an international climate summit;
  • pursue legislation instituting a carbon cost system;
  • allocate $400 billion of public investment in clean energy over the next 10 years and create a new research agency focused on climate technologies;
  • reduce the carbon footprint of the U.S. building stock by 50 percent by 2035;
  • partner with states and localities to deploy 500,000 public electric vehicle charging outlets by 2030;
  • ensure that federal agencies prioritize the fair treatment and meaningful involvement of all people regardless of race, color, national origin or income, with respect to the development, implementation and enforcement of environmental laws and policies;
  • require public companies to disclose climate-related financial risks and emissions; and
  • reform the black lung benefits system.

With a closely divided Congress, actions requiring lawmakers’ spending or taxing power face an uncertain path. Consequently, President Biden promised to “pull every lever of government to take on the urgent, existential threat of climate change.” In practice, expect a host of executive orders and regulatory rollbacks within the first hundred days.

Executive Orders and Regulatory Actions Already Taken

Within its first week of office, the administration has taken several significant actions impacting the energy sector.

  • Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis (Jan. 20, 2021). This order:
    • directs federal agencies to review all actions taken under the Trump administration that could thwart specified environmental objectives;
    • directs agencies to consider rescinding or suspending four pending agency actions related to (1) methane emissions rollbacks in the oil and gas sector, (2) relaxed fuel economy vehicle standards, (3) deferential energy efficiency appliance testing and (4) a finding that scrapped the basis for Obama-era mercury controls on power plants;
    • places a temporary moratorium on oil and gas activity in the Arctic National Wildlife Refuge and directs agencies to consider restoring certain national monument boundaries;
    • establishes an interagency working group on the social cost of greenhouse gases and tasks it with publishing a cost of carbon within 30 days for agencies to use in rule-making
    • revokes the Keystone XL Pipeline permit; and
    • revokes most Trump administration executive orders related to the energy sector.
  • Acceptance of the Paris Climate Agreement (Jan. 20, 2021). President Biden unilaterally agreed to the Paris Climate Agreement, a global carbon reduction pact from which President Trump withdrew. Previously under the agreement, the United States pledged to reduce economy-wide greenhouse gases by 26-28 percent of 2005 levels by 2025. The United States has 30 days to submit a “nationally determined contribution.”

  • Executive Order on Tackling the Climate Crisis at Home and Abroad (Jan. 27, 2021). This order:
    • sets climate change as a key consideration for U.S. national security and foreign policy;
    • affirms the administration’s plans to host an international climate summit, begin developing its nationally determined contribution under the Paris Climate Agreement and have Cabinet members develop policies reflective of climate change;
    • establishes a White House Office of Domestic Climate Policy and National Climate Task Force;
    • directs the National Climate Task Force and other agencies to develop a plan and leverage federal procurement to decarbonize the electricity sector by 2035 and replace government vehicles with zero-emission vehicles;
    • pauses new oil and gas leases on public lands;
    • directs the secretary of the interior to double offshore wind by 2030;
    • directs federal agencies to identify and eliminate fossil fuel subsidies and find opportunities for federal funding to spur clean energy technologies;
    • directs federal agencies to develop climate action plans;
    • creates a Civilian Climate Corps Initiative; and
    • establishes interagency working groups related to coal community economic revitalization and environmental justice.
  • Executive Order on the President’s Council of Advisors on Science and Technology (Jan. 27, 2021). This order establishes a council to advise the president on policy affecting science, technology and innovation.

Potential Future Actions

Considering the regulatory directives in these executive orders, clients should prepare for energy policies that include heightened emissions restrictions, federal procurement in support of clean energy technologies, increased environmental scrutiny through the National Environmental Policy Act process, and federal rule-making prioritizing climate impact in cost-benefit analyses.

Additionally, key campaign promises remain unaddressed by the executive orders. For instance, the president is likely to direct the U.S. Securities and Exchange Commission to require companies to make climate disclosures.

Others priorities will require legislative and regulatory support. McGuireWoods will continue to watch the space, paying particular attention to the progress of infrastructure and environmental bills. In particular, a carbon cost regime, clean infrastructure program and restoration of the electric vehicle tax incentives are likely to be key issues in the coming months. The Federal Energy Regulatory Commission will also be a focus that could move to incorporating carbon prices on electricity and slowing down natural gas pipelines.

McGuireWoods lawyers and governmental affairs professionals are experienced in energy transactions, project finance, tax equity and energy regulatory affairs. Please do not hesitate to reach out to the alert contributors or a member of our renewable energy team to discuss any of the above information.

Named as a finalist for Am Law’s energy corporate department of 2020, McGuireWoods is a leading law firm in the renewable energy industry. We have represented utilities, developers, independent power producers and infrastructure funds in projects totaling over 27 GWs in 40 states. We have a full-service practice, advising in all aspects of the development, acquisition/disposition, construction, offtake, debt finance, tax equity finance, ownership and operation of renewable energy projects. In addition, our experience spans the resource spectrum utilized today, including solar, biomass (including wood, wood waste, landfill gas, animal and plant waste), wind (on- and offshore), energy storage and geothermal projects. 

The authors also want to acknowledge the assistance in preparing this article of John M. Yates, a case assistant with McGuireWoods.

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