What’s the issue?
The utilization of the historically lightly used Congressional Review Act (CRA) to rescind late inning regulations implemented by the outgoing Administration is very likely, given one party control of Congress and the presidency.
Why does it matter?
There are regulations implemented within the “reviewable” time window for CRA action that impact the oil and gas industry.
What’s our view?
Multiple regulatory actions of the Trump Administration, such as EPA methane standards, will be rescinded.
Those who have served in the federal government or have otherwise associated with the regulatory process know it involves equal parts bureaucracy and democracy. Executive regulatory action “rulemaking” is painstaking and can take years (the bureaucracy), because it includes multiple agency reviews and public notice and comment periods (the democracy).
This core executive branch function has increasingly been how the government implements policy as it issues regulations to interpret and implement statutes passed by Congress. This is because Congress has become significantly less prolific so far this century and a lack of, or overly vague legislation often leads to more executive regulation.
But Congress can get the last word, when it’s able to speak with a majority and has an approving President. This leads to the Congressional Review Act (CRA) — an obscure law widely written about recently. In summary, it allows Congress to rescind regulations on a simple majority vote by Congress and the president’s signature. It is most always used for regulations implemented at the end of an outgoing administration, depending on the date they were promulgated. (Go here for a more detailed overview – Congressional Review Act | GW Regulatory Studies Center). In our hyper-partisan world, this means the same party needs to control the White House and Congress.
In October, when we wrote about what the CRA could mean to the oil and gas industry, it was hard to predict what parties would win the presidency and congressional majorities. We know now, and it is very likely the new administration and Congress will use the CRA to rescind many regulations not aligned with their policy goals. This last happened in 2017 and was notable then for its lack of precedent.
According to the Regulatory Studies Center at George Washington University (GW), any final regulation issued after August 21, 2020 is eligible for recision. When we first looked at this, the critical date was May 15, and from that date, the below chart shows over 1600 regulations were possibly susceptible to CRA action.
Complexities of the congressional calendar moved that date to the right, but the list still contains over 1300 rescindable rules. (Here is a google sheet, again from GW, that lists all of them: Rules in the Congressional Review Act Window)
And here is a list of a few we are watching with oil and gas implications:
For more detail, you can look up any of these in the Federal Register.
Please contact us if you’d like to discuss this issue in more detail as it pertains to the energy industry.
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