A number of the new administration’s executive actions are intended to implement a significant shift in energy and environmental policy, including the following, all issued on January 20, 2025.
“Unleashing American Energy” (Executive Order 14154) declares that it is U.S. policy to encourage energy exploration on federal properties and to be a leader in nonfuel minerals. At the same time, the order pauses the disbursement of funds appropriated under the Inflation Reduction Act of 2022 (IRA) and Infrastructure Investment and Jobs Act of 2021 (IIJA) pending a review of the consistency of those disbursements with legal requirements and administration policy.
In the days following the order, the Office of Management and Budget (OMB) issued — and subsequently rescinded in response to litigation — a memorandum intending to freeze a broader set of activities related to obligations and disbursements under federal financial assistance programs.
The pause on IRA and IIJA funds disbursement implemented by Executive Order 14154 remains in effect, though subject to potential judicial action, and federal agencies seeking to disburse funds are directed to undertake the required review and obtain prior approval from the director of the OMB and the assistant to the president for economic policy (who is also head of the National Economic Council (NEC)).
The order raises immediate questions for energy and infrastructure investors, including:
- How does the pause affect (i) disbursements of grants and loans pursuant to contractually binding financing and grant agreements for which OMB’s apportionment has been completed, (ii) forward progress on projects for which conditional commitments have been granted, and (iii) OMB apportionment activities related to projects that are otherwise nearing financial close?
- How will the agencies, OMB and NEC implement the review and disbursement approval process? Will entire programs be approved or will separate approvals apply to each transaction or disbursement? We understand that efforts are being made by some project sponsors and federal agencies to undertake the review and approval process on a project-by-project basis.
- The order requires federal agencies to submit recommendations on how to align affected federal programs with the order’s policy objectives within 90 days and implies that OMB and NEC approvals will be based on those recommendations. It is unclear how this would affect efforts to complete reviews and obtain approvals on a per-project basis.
- Will federal agencies recommence work on in-progress loan and grant transactions that are not expressly paused by the order, but that were paused by the now rescinded OMB memo?
Beyond the pause on IRA and IIJA disbursements, the order has broader policy implications for energy markets and environmental regulation. It also calls for a review of all existing federal agency actions that place an “undue burden” on domestic energy resources and orders the resumption of approvals of liquefied natural gas exports.
Additionally, the order requires the Council on Environmental Quality to rescind its agency-level regulations implementing the 1970 National Environmental Policy Act (NEPA) and to issue new NEPA implementing guidance. NEPA requires an assessment of the potential environmental effects of federal agency actions, including permitting decisions, land management actions and federal construction projects.
Finally, the order calls for the elimination of the “electric vehicle (EV) mandate,” including subsidies for these vehicles and funding programs that specifically promote EVs, such as the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program.
“Declaring a National Energy Emergency” (Executive Order 14156) directs agencies to use existing emergency powers (i) to facilitate “the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources” and (ii) “to expedite the completion of all authorized and appropriated infrastructure, energy, environmental, and natural resources projects” within their authority.
This order addresses using emergency powers to, among other actions: (i) approve energy projects; (ii) expedite permitting by the U.S. Army Corps of Engineers, including under the Clean Water Act; and (iii) identify actions that may be eligible for expedited, emergency consultations under the Endangered Species Act.
While the ability to use emergency powers granted under existing statutes will ultimately depend on the specific actions taken, it is likely that any such specific actions could be challenged as beyond the scope of the powers granted by such statutes.
“Unleashing Alaska’s Extraordinary Resource Potential” (Executive Order 14153) instructs federal agencies to exercise all lawful authority to “rescind, revoke, revise, amend, defer, or grant exemptions from” regulations and other governmental requirements that are inconsistent with (i) maximizing the development of the natural resources of federal and state lands in Alaska, (ii) expediting permitting and leasing of energy and natural resource projects in Alaska, or (iii) prioritizing the development of liquified natural gas in Alaska.
The order also calls for the rescission of the Department of the Interior’s cancellation of leases in the Article National Wildlife Refuge.
Similar to the “Declaring a National Energy Emergency” executive order, the use of emergency powers may be challenged.
“Temporary Withdrawal of All Areas on the Outer Continental Shelf From Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects,” a memo, withdraws all outer Continental Shelf areas from wind leasing until further notice. However, it specifically allows leasing related to other purposes, including oil, gas and mineral extraction, and environmental conservation. It also calls for a review of the ecological, economic and environmental necessity of terminating or amending existing wind leases. Notwithstanding the title, the order goes on to mandate that federal agencies not issue new or renewed approvals, rights of way, permits, leases or loans for either onshore or offshore wind projects pending the completion of a comprehensive assessment and review of federal wind leasing and permitting practices. That assessment should consider the economic costs associated with the intermittent generation of electricity and the effect of subsidies on the viability of the wind industry. This pause appears to present a substantial challenge for wind projects under development, as it is unclear what this assessment will involve or how long it will take.
“Putting America First in International Environmental Agreements” (Executive Order 14162) withdraws the U.S. from the Paris Agreement under the United Nations Framework Convention on Climate Change. It also rescinds the U.S. International Climate Finance Plan and calls for relevant agencies to rescind any policies that were implemented to advance this plan.
See the full Executive Briefing publication
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