Biden Administration Regulatory Activity is a Race Against Congressional Review Clock

It's worth understanding what's driving the tremendous amount of recent regulatory activity and announcements from the Biden administration on climate and energy policy — which is likely to continue in the weeks ahead.

The reasons are twofold. First off, President Biden is working hard to shore up support among key constituencies in his base — including youth and climate-focused voters — who have felt alienated by administration policies they feel don’t match the urgency of the moment.

Secondly, the clock is ticking on the “lookback” period under the Congressional Review Act (CRA), which allows Congress an up-or-down vote to block administration regulations from taking effect.

The CRA, enacted as part of the 104th Congress’ (1995-1996) “Contract with America,” established a special parliamentary procedure whereby Congress can, by enacting a joint resolution into law, disapprove a rule promulgated by a federal agency. Whenever a rule is finalized and submitted to Congress under the CRA, it is subject to an overall period of congressional review, lasting approximately 60 days of Senate session, where “fast track” parliamentary procedures are available to consider a joint resolution invalidating the rule.

If a rule is submitted to Congress so late in the year, however, that the final adjournment of the session prevents either chamber from enjoying this full 60-day review period, that CRA review period — and its associated “fast track” parliamentary procedures — occur again in their entirety in the next season of Congress. This is known as the CRA “lookback” mechanism and the conventional wisdom is that the window for getting regulations safely out ends sometime near the end of May.

Here’s a few major rulemakings/announcements that have already been finalized or are expected to in the days ahead:

Energy Department (DOE)

Transformer Rule: DOE on April 4 finalized congressionally mandated energy efficiency standards for distribution transformers to increase the resiliency and efficiency of America’s power grid. These updated standards, which includes a longer compliance timeline of five years, will save American utilities and commercial and industrial entities $824 million per year in electricity costs, and result in more demand for core materials like grain-oriented electrical steel (GOES). These standards are expected to protect existing domestic supply of core materials used in distribution transformers, increasing resiliency in the distribution transformer supply chain, while preserving steel union manufacturing jobs in Pennsylvania and Ohio. The GOES production at these same locations will also benefit from DOE’s recent $75 million grant for furnace upgrades to lower carbon emissions, which are expected to make U.S. domestic GOES among the lowest emission GOES in the world. More information can be found in the press release here.

EPA

Low-income solar grants: As part of its Earth Day activities, EPA today announced 60 selectees will receive $7 billion in grant awards through the Solar for All grant competition to deliver residential solar projects to over 900,000 households nationwide. These funds come from the Inflation Reduction Act’s $27 billion Greenhouse Gas Reduction Fund. More information can be found here. This announcement was made by President Biden today at Prince William Forest Park in Triangle, VA, where he also announced that the American Climate Corps program will begin accepting applications for the first 2,000 positions.
 
Power plant rules: The EPA on Thursday is expected to release four regulations addressing carbon, air, water and waste pollution from power plants during an event at Howard University in Washington, DC. The rules include carbon standards for existing coal-fired power plants, an update to the Mercury and Air Toxics rule, wastewater, and coal ash.
 
PFAS/PFOA as hazardous under CERCLA: EPA last week issued a final rule designating PFOA and PFOS as hazardous substances under CERCLA, marking the first time the agency has used its authority under CERCLA Section 102 to designate substances as hazardous. More information can be found here.

FERC

Big Transmission Day: FERC on May 13 will hold an ad hoc meeting to issue the final regional transmission rule as well as a rule to implement its augmented backstop siting authority from the Infrastructure Investment and Jobs Act (IIJA). The backstop siting authority rule will likely be a bit controversial since FERC will run a concurrent clock with state review. We expect Commissioner Mark Christie to dissent on the rule.

Interior Department

Putting Alaska lands off-limits: The Interior Department last week published a final rule to prevent oil and gas drilling on 13 million acres of the National Petroleum Reserve in Alaska, while also blocking a permit needed to build the Ambler Road, which would enable access to crucial minerals in the Ambler Mining District in Northwest Alaska. More details can be found here. 
 
BLM conservation rule: The Bureau of Land Management (BLM) last week announced the release of the final Conservation and Public Lands Health Rule, aka the Public Lands Rule. The rule adds conservation as a recognized “use” under the Federal Land Policy and Management Act’s multiple use framework for public lands. It also provides BLM with additional tools for conservation uses, including protection of intact landscapes, restoration and mitigation leases, and clarifies practices to designate areas of critical environmental concern. In the final rule, BLM seeks to address a common concern raised during the rulemaking process by emphasizing that conservation will not be elevated over other uses, and instead will be among the considerations of the multiple use framework.
 
Expanding California Monuments: Biden is soon expected to expand the boundaries of the San Gabriel Mountains National Monument and the Berryessa Snow Mountain National Monument, both in California (Washington Post).
 
Renewable Energy Rule: DOI earlier this month announced a final Renewable Energy rule from the BLM that will lower consumer energy costs and the cost of developing solar and wind projects, improve renewable energy project application processes, and incentivize developers to continue responsibly developing solar and wind projects on public lands. The final Renewable Energy Rule will reduce capacity fees for these projects by 80 percent and facilitate development in priority areas by streamlining application review, delivering greater certainty for the private sector and the opportunity for more clean energy for American households. BLM is currently taking comment on a draft analysis of the Utility-Scale Solar Energy Programmatic Environmental Impact Statement. A link to a webpage on the final Renewable Energy rule can be found here; more information can be found in the press release here.

Securities and Exchange Commission (SEC)

Climate disclosure rule: The SEC in March released its long-awaited climate disclosure rule, which requires companies to report climate-related risks that are reasonably likely to have a material impact on a company's business strategy, results of operations, or financial condition. While the SEC has stayed the rule pending the outcome of multiple lawsuits, it’s also under fire on Capitol Hill, where CRA resolutions are on the move in the House and Senate. So far, Sen. Joe Manchin (D-WV) is the lone Democrat to support overturning the rule.

White House Council on Environmental Quality (CEQ)

Phase 2 NEPA rules: We’re hearing that any day now CEQ could finalize the Phase 2 National Environmental Policy Act (NEPA) regulation, which attempts to “revise, update and modernize” NEPA according to the Fiscal Responsibility Act of last summer.

Department of Defense, NASA and the General Services Administration

Federal Acquisition Rule (FAR): Also expected shortly is the FAR rule, which requires companies that do business with the federal government to disclose certain emissions information based on the size of their contract.

Keep an eye out for additional Administration action in the weeks to come as the Biden Administration works to shore up support with younger/climate voters and as they race against the CRA clock.