Unleashing American Energy

Key provisions concerning states in this order reduce subsidies that had unduly distorted states’ markets and governmental budgets, require federal agencies to review whether their policies and practices have suppressed energy development in the states, and order a review of public lands withdrawals. This last is especially important in states where large swaths of land are controlled by federal agencies.

 What to watch: The order’s directive to terminate “state emissions waivers that function to limit sales of gasoline-powered automobiles” re-opens a long-running dispute about whether Clean Air Act (CAA) provisions enabling California to enact more stringent air-quality regulations—and for other states to subsequently adopt those measures—extend beyond meeting the needs of the state’s “compelling and extraordinary conditions” to the broader goal of reducing greenhouse gas emissions. Federal agencies will have to proceed with caution to ensure that in terminating certain waivers, they don’t overstep Congress’s intention, in crafting CAA, to allow California and other states flexibility and autonomy to pursue more stringent standards. The best outcome, from the standpoint of both clarity and maintaining a proper state-federal balance, would be for Congress to determine whether CAA’s waivers extend to global-warming mediation, as well as to set a boundary for how much impact such waivers are allowed to have on other states and affected industries.

Unleashing American Energy – The White House

January 20, 2025