Regs changeable, maybe

Alaska’s resources developers will find a sympathetic ear in the new Congress and Trump administration on regulatory issues, but it may take a long time before the “regulatory state” of former President Obama can be dismantled, if it even can.

Tim Doyle, vice president for policy and general counsel to the American Council of Capital Formation, a business-orientated Washington think-tank, presented a sober assessment of prospects at the Alaska Support Industry Alliance’s annual “Meet Alaska” conference in Anchorage Jan. 13.

Bottom line: It will take time. However, there are hopes that some issues, for example the previous administration’s special “Arctic rule” that loads up costs on offshore exploration and a new stream protection rule that adversely affects coal mines, including those in Alaska, Doyle told the Alliance.

In many cases undoing regulations will be as complicated as creating them in the first place and there may be limits. “For example, we just can’t undo a rule by reinterpreting the law. There has to be new information,” to show the action is justified, Doyle said. Any such moves will also prompt lawsuits.There are still many ways, however, the new administration can begin chipping away at Obama-era rules. For a start, a little-used group in the Office of Management and Budget charged with reviewing new federal regulations can be strengthened.

“There’s a lot of power in this group but it has been little used,” during the Obama years. “Its staff is now about half the size it was. We expect President Trump to develop a more robust capability to go after agencies like the Environmental Protection Agency,” one federal agency that has frequently used rulemaking to expand its powers.

“Obama had actually asked agencies to periodically review regulations but there was not a lot of push behind this and agencies always reasons found to keep them on the books,” Doyle said. Regulations give people things to do, and why would any agency voluntarily reduce its activity?

Another change that could be implemented quickly, he said, is to stop the use of informal agency “guidance” documents that help shape decisions. “Agencies can do this without formal procedures that require advance notice and an opportunity to comment,” by affected industries.

The Obama administration made more frequent use of this than any other president. One reason was that it was quick to do, mainly because the agency doesn’t have to go through a formal rulemaking,” Doyle said.

“There are no checks and balances, and no opportunity for those affected to challenge a guidance document. This is real regulatory dark matter,” he said.

Pursuit, or not, of litigation

Another action the new administration can take is to decide whether or not to pursue litigation that is already underway. Decisions can be made to not pursue appeals, for example. There may be cases where the new administration may want to let the litigation play out, just to get certainty. “This will be a tricky area,” Doyle said.
An example of this is the power plant carbon dioxide emissions rule that is in court but temporarily stayed. The Obama administration rule on CO2 emissions is being challenged, but some states and major utilities have intervened on the side of the government.

If the Trump administration tries to back away from the rule, which seems likely, it will have to contend with a U.S. Supreme Court decision that carbon dioxide does present a human health hazard, which automatically triggers U.S. Clean Air Act regulation.

That was the legal authority under which Obama developed the power plant rule.

Undoing a regulation isn’t easy. If a regulation is being litigation and the court finds it has been done properly, the rule will have to be undone properly, meaning doing through a formal rulemaking, Doyle said.

There is one tool Congress can use with new rules enacted recently, he said. That is the Congressional Review Act, or CRA, which allows Congress to examine, and possibly nullify, regulations enacted in final form 60 to 90 days prior to an election.

Since those days are counted in certain ways, and are not calendar days, in practical terms this could include rules finalized in mid-summer. The OCS “Arctic rule” would fall under this, for example.

There are practical limits on how widely this can be used, however. One limit is that there must be a separate resolution introduced for each rule under the CRA and each resolution must be debated separately, Doyle said. “There is very limited floor time for debate in the Senate,” which means that just a handful of regulations can be dealt with under the CRA.

A few high-priority Alaskan issues might find their way on the agenda but many others will fall by the wayside.

Congress is busy with its own ideas for dismembering complex regulatory regimes and the U.S. House has passed a bill, the “Reins” act that requires Congress to make up or down votes on new regulations that have $100 million or more in economic impact.

Another bill, the “Midnight Rule Relief Act,” would allow new regulations to be bundled, or considered in group, rather than singly, under a Congressional Review Act resolution.

These bills must still pass the U.S. Senate, however, and that may be doubtful given the thin 52-48 majority that Republicans have in the body. Backers of the bills really need 60 votes to overcome an expected Democratic filibuster. To do that, eight Democrats must be persuaded to vote with the Republican majority. It’s possible, but difficult, Doyle said.

Alaska’s Sen. Dan Sullivan also has his “red tape” reduction bill that requires agencies to eliminate a regulation for every new one adopted. “British Columbia has had some success with this approach,” Doyle said.

Other ideas in proposal stage

There are other ideas still in the proposal stage, such as a bipartisan congressional regulatory review committee with the power to nullify rules.
An idea being championed by the U.S. Chamber of Commerce is a “regulatory accountability act” that requires formal proceedings for public notice and comment on all rules.

Agencies often adopt rules using streamlined procedures that weaken the public comment procedures. Formal rulemaking, while time-consuming, has built-in protections such as hearings, when disputes arise, by administrative law judges. “These are like trials in that evidence must be presented,” Doyle said, to justify a government action.

Agencies often don’t really respond to all comments but rather respond to groups of comments they deem similar, he said. That kind of informality allows issues to be swept under the rug.

Another improvement would be a requirement that agencies adopt the least-costly alternative in a regulation. Surprisingly, that isn’t now required.

In theory Congress has the ultimate power over the executive branch agencies because elected officials control the purse-strings. In practice, however, it’s not easy to single out agencies, Doyle said, because budgets are often approved in major omnibus bills that include budgets of several agencies.