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Trump Administration Poised to Reverse Direction on Oil & Gas Industry Regulation
Though the Biden administration advanced rules regarding the oil and gas industry over the last four years, the incoming Trump administration is likely to undo or take a different approach to many of these actions.
One of the most notable actions taken by the Biden administration was the finalization of the Methane Rule, which revised New Source Performance Standards (NSPS) for Crude Oil and Natural Gas facilities under 40 C.F.R. Part 60, subparts OOOO, OOOOa, and OOOOb and established presumptive emissions guidelines for existing facilities under subpart OOOOc. The regulations, which went into effect on May 7, 2024, reinstated methane-specific rules that were rescinded during the first Trump administration, strengthened leak detection and repair requirements for fugitive emissions, and restricted the use of natural gas flaring. The rule also established a new Super Emitter Program, whereby certified third parties may monitor methane emissions using advanced measurement technologies such as aerial or satellite technologies and report events emitting greater than 100 kilograms of methane per hour to EPA. Owners and operators in the vicinity must then investigate and address the cause of the event and report the results to EPA. The regulations, including the Super Emitter Program, are currently being challenged by certain states and industry groups but the Supreme Court recently denied a request to stay the rules while the litigation is pending. It is doubtful, however, that the Trump administration will devote resources towards defending or enforcing the Methane Rule and instead will more likely work to reinstate the standards favored by the first Trump administration. Of course, these actions will likely spawn their own wave of litigation, raising additional uncertainty as to status of methane regulation of the oil and gas industry in 2025.
In addition to the NSPS, in November 2024 EPA finalized a rule to collect a Waste Emissions Charge from certain oil and gas sources that emit methane at levels greater than 25,000 metric tons of carbon dioxide per year. Republican leaders in Congress have stated that they intend to repeal this rule, either through the Congressional Review Act or legislation to address the Inflation Reduction Act, the statute that gives EPA authority to impose the charge.
Many also believe that the Trump administration will lift the current pause on licenses to export liquified natural gas (LNG) to countries without Free Trade Agreements (FTAs), though a recent study issued by the Department of Energy (DOE) could delay such approvals. In January 2024, the Biden administration paused approvals for LNG exports to countries without FTAs with the U.S., pending updated economic and environmental studies by the DOE that would be used to determine whether such exports are “consistent with the public interest,” as required by the Natural Gas Act. On December 17, 2024, DOE published this updated study, which included a number of key findings related to greenhouse gases, and environmental and community effects that could make it more difficult for applicants to argue that an export license is consistent with the public interest. So, while incoming President Trump has promised to approve LNG export licenses on his “very first day back,” any hastened approvals may be subject to challenge under the Natural Gas Act, citing the recently published DOE study.
Other oil and gas initiatives of the Biden administration that may be on the chopping block for the Trump administration include green energy credits and electric vehicle tax credits. In addition, the Trump administration has also voiced its intent to shrink the size of national monuments to allow more drilling and mining on public lands.
