After the proverbial death and taxes, few things in life are as certain as the issuing of a flurry of often controversial midnight regulations by outgoing administrations of both parties. The Obama Administration was no exception, and in fact set a record, publishing 38 “major rules” (defined as rules with economic impacts exceeding $100 million) since November 8, 2016 totaling $40 billion in compliance costs.
Fortunately, Congress and the Trump Administration have at their disposal a powerful tool to kill the most onerous of these regulations: the Congressional Review Act. Passed by Congress in 1996 and signed by President Clinton, the CRA provides a 60-day window to overturn costly and contentious rules promulgated in the waning days of an outgoing Administration.
President Trump and the leadership of both chambers of Congress are expected to employ the CRA early and often, and it appears that several energy rules could receive top billing. On January 25, House Majority Leader Kevin McCarthy (R-CA) announced in the Wall Street Journal that the House of Representatives would soon vote to nullify a particularly onerous regulation known as the Stream Protection Rule (SPR).
Finalized by the Department of Interior on December 20, 2016—more than six weeks after Election Day—the highly controversial SPR is precisely the type of 11th-hour action the CRA was designed to address. In short, the SPR is a solution in search of a problem. It is a one-size-fits-all federal mandate that interferes with the longstanding federal-state balance overseeing mining operations. Among the key concerns raised during the rulemaking process (including by the U.S. Chamber) but ignored by the Obama Administration:
- The SPR will place massive amounts of coal reserves—and the affordable energy they provide—off limits. It does so by ignoring the diversity in mining operations or physical conditions that occur across the U.S. The National Mining Association estimates that companies could lose access to up to 40% of nationwide coal reserves, and remaining reserves will be far more costly to mine.
- The rule is expected to eliminate up to 270,000 jobs, including 80,000 mining jobs. The annual value of coal lost to production as a result of the rule is estimated to be between $14 billion and $29 billion. This translates to reduced annual federal and state tax revenue due to lost production of between $3.1 and $6.4 billion.
- The negative impacts of the regulation will be felt far beyond the coalfields, extending to railroads, utilities, and the companies that service and support mining communities, from restaurants to hotels to equipment suppliers. The rule will drive up energy costs for families and businesses, and it will reduce state and local tax revenues in areas of the country that have already been devastated in recent years. This means negative impacts to schools, roads, first responders and nearly all state and local government services in affected areas.
- The SPR interferes with longstanding state authorities and successful state efforts to protect water quality under previous rules that emphasized federal-state cooperation. For example, the Department of Interior’s own Annual Evaluation Reviews of state regulators routinely show outstanding environmental performance with 90% of active operations free of any off-site impacts.
- Further, it is well documented that states—which are responsible for implementing the rule— were excluded from providing meaningful input during the regulatory process. A comprehensive investigation by the House Committee on Natural Resources found that the Interior Department repeatedly limited states’ participation during the rulemaking and manipulated estimates of the job and economic impacts of the rule to make it appear less onerous than it actually was.
As President Trump has repeatedly emphasized, we need an energy policy that unlocks our domestic natural resources to increase our global competitiveness and benefit U.S. jobs and the economy.
A swift Congressional veto of the job-killing stream rule is a great step in the right direction.