Deregulation as Abdication

We are beginning to learn how the Trump Administration is approaching implementation of the sweeping “Promoting Energy Independence and Economic Growth” Executive Order that the President issued in March. The President’s Order called on cabinet secretaries to “immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources.”

First, the Administration is leaning on the recently promulgated Executive Order to falsely claim that Administration roll backs of environmental and safety regulations are immediately producing new jobs. Just this morning (June 11, 2017), Trump referred to his Executive Order by tweeting that energy “regulations [are] way down” and “600,000+ new jobs added” – inferring that the Administration’s deregulatory agenda has opened employment floodgates in the energy sector. 

It’s an absurd proposition. As Trevor Houser of the Rhodium Group illustrated in the chart above, employment in the oil and gas sector tracks the price of oil. There’s no correlation with promised (but, thankfully, still mostly unrealized) roll-backs of environmental or safety protections in the energy industry.

Second, we are learning through court pleadings that the Trump Administration is cynically turning a “suspend, revise or rescind” process into an excuse to walk away from the government’s obligation to protect the environment, health and safety.  It’s deregulation as abdication.

Take the case of the federal government’s oversight of oil and gas fracking operations on public lands. After an elongated, public process, Interior’s Bureau of Land Management issued protective requirements in 2015 that apply to oil and gas operators engaged in fracking operations on public lands. The protections reflect BLM’s core management responsibilities: requiring, among other things, that lessees submit detailed information about their proposed oil and gas operations on public lands, manage the contaminated water recovered from those operations in a responsible way, and disclose the chemicals that they are injecting into public lands.

The State of Wyoming challenged the rules, asserting before a friendly court that the federal government had no authority to regulate fracking activities on public lands.

The forum shopping worked. The Wyoming District Court accepted the State of Wyoming’s far-fetched argument and ruled, to legal scholars' uniform surprise, that BLM could not regulate fracking activities conducted by its oil and gas lessees on public lands. 

Predictably, the federal government immediately appealed to the 10th Circuit, noting that the lower court was clearly wrong and that the government had ample, well-established authority to regulate fracking – an oil and gas drilling technique that is utilized on more than 90% of the thousands of wells located on public lands. 

The case was ripe for decision when the new Administration came in. The Tenth Circuit asked the Trump Justice Department to file a supplemental brief on the question before it: does the BLM have the authority to regulate fracking?

Justice’s supplemental brief forthrightly admits that the decision below was wrong, and that BLM has the authority to regulate fracking. 

But rather than have the 10th Circuit confirm this vitally important legal point, Trump’s Justice Department tries to sidestep the issue, urging the appellate court to allow BLM to revise or rescind the rule, while holding off any review of the fundamental question about BLM’s authority to regulate fracking in the first place.

Trump’s Justice Department has no plausible "good government" reason to avoid judicial review. The underlying authority question will remain vitally relevant to on-going BLM oil and gas activities. Indeed, a bipartisan group of former high level officials, including former Deputy Interior Secretary Lynn Scarlett from the Bush Administration and me (Deputy Interior Secretary in the Clinton and Obama Administrations), has filed an amicus brief in the 10th Circuit, urging it to decide the case and confirm that the federal government can, and should, be regulating oil and gas operations on public lands. 

It's truly extraordinary. Even though Trump's Justice Department has admitted that the lower court decision was wrong, the Administration is doing everything it can to avoid correcting the error and acknowledging the federal government's authority – and obligation – to ensure that oil and gas fracking operations are conducted safely, and in an environmentally protective manner, on the public lands. 

This isn’t about deregulation.  It’s about abdication -- of fundamental governmental responsibilities.