GTL North America 2014
The Obama Administration's Ability to Use
Executive Orders (EOs) to Change Energy,
Economic Policy
April 5, 2014
Barry M. Hartman
K&L Gates LLP
1601 K Street, N.W.
Washington, DC 20006
202.778.9188
Barry.Hartman@klgates.com
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Executive Orders
and Energy Policy
MY PERSPECTIVE: “ALL OF THE ABOVE”
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1977- Coal (Surface Mining Act)
1978 – Nuclear (TMI)
1989 – OIL (Exxon Valdez)
2007 - Ocean Current
2010 - Wind (Bird kills)
2013 - LNG (Maritime Industry)
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Executive Orders
and Energy Policy
WHY DOES IT MATTER IF A PRESIDENT USES
EXECUTIVE ORDERS TO CHANGE ENERGY POLICY?
Three Reasons
1. Certainty and predictability for investment
decisions
2. Certainty and predictability for investment
decisions
3. All of the above
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Executive Orders
and Energy Policy
What do we mean by “President”?
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Executive Orders
and Energy Policy
AGENCY INVOLVEMENT IN ENERGY POLICY
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Department of Agriculture
Department of Energy
Department of Commerce
Department of Defense
Department of the Interior
Department of the Treasury
Department of Transportation
Department of State
Environmental Protection Agency
Office of Management and Budget
Federal Energy Regulatory Commission
Commodities Future Trading Corporation
Nuclear Regulatory Commission
Securities and Exchange Commission
Housing and Urban Development
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Executive Orders
and Energy Policy
CURRENT WHITE HOUSE
ENERGY-RELATED ENTITIES
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Council of Economic Advisors
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National Security Council
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Council on Environmental Quality
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Office of Science and Technology Policy
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National Economic Council
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Domestic Policy Council
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White House Office of Energy and Climate Change Policy
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National Economic Council
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Domestic Policy Council
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White House Office of Energy and Climate Change Policy
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Executive Orders
and Energy Policy
SOURCE OF PRESIDENTIAL AUTHORITY
Authority: Article II of Constitution
The President shall be commander in chief of the Army and Navy of the United States, and of the
militia of the several states, when called into the actual service of the United States; he may require
the opinion, in writing, of the principal officer in each of the executive departments, upon any
subject relating to the duties of their respective offices, and he shall have power to grant
reprieves and pardons for offenses against the United States, except in cases of impeachment.
He shall have power, by and with the advice and consent of the Senate, to make treaties, provided
two thirds of the Senators present concur; and he shall nominate, and by and with the advice and
consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the
Supreme Court, and all other officers of the United States, whose appointments are not herein
otherwise provided for, and which shall be established by law: but the Congress may by law vest the
appointment of such inferior officers, as they think proper, in the President alone, in the courts of law,
or in the heads of departments.
The President shall have power to fill up all vacancies that may happen during the recess of the
Senate, by granting commissions which shall expire at the end of their next session.
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Executive Orders
and Energy Policy
IMPLIED POWERS
 Scope of executive power shaped by the presidents through the use of
various policies and tools like unilateral presidential directives (UPDs)
 Executive Orders are used by the President “to direct or instruct the
actions of executive agencies or government officials, or to set policies
for the executive branch to follow.”
 Gives the President the power to bypass the legislative process in order
to achieve certain social, economic, or political goals.
 Binding on his officers but generally not legally enforceable by citizens
 Two general types of uses
 To carry out foreign policy – an express and most important power
 To manage the executive branch
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Executive Orders
and Energy Policy
HISTORY OF USE
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President Washington – Neutrality Proclamation
President Jefferson – Louisiana Purchase
President Lincoln – Suspending writ of habeas corpus
President Harding – Transferring government land to cabinet official through
executive order (Teapot Dome Scandal)
President Roosevelt – Detaining Japanese-Americans in internment camps/
intelligence gathering
President Truman – Authorizing Secretary of Commerce to take over nation’s steel
mills
President Clinton – Changing certain policies regarding abortion funding and access
President Bush – Imposing sanctions on those who commit, threaten to commit, or
support terrorism
President Obama – Imposing sustainability goals, increasing minimum wage for
government contractors, imposing sanctions on other countries
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Executive Orders
and Energy Policy
LEGAL AND POLITICAL LIMITATIONS
ON USE OF EXECUTIVE ORDERS
“When the president acts in the absence of either a
congressional grant or denial of authority, [the president]
can only rely upon his own independent powers, but there
is a zone of twilight in which he and Congress may have
concurrent authority . . . [i]n this area, any actual test of
power is likely to depend on the imperatives of events and
contemporary imponderables.”
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 637 (1952).
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Executive Orders
and Energy Policy
TYPES OF EXECUTIVE ORDERS
Domestic
Private Sector
Foreign
Teapot – Political Limitations
Youngstown – Constitutional Limitations
Public Sector
Reich (statutory limitations)
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Executive Orders
and Energy Policy
EXECUTIVE ORDERS AND OTHER PRESIDENTIAL
(NON-LEGISLATIVE) ACTIONS IMPACTING LNG
DEVELOPMENT
 Brief History
 Summary of Actions
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY SET
BY PRESIDENT
President Nixon – 1968 to 1974
Events:
Oil Embargo of 1973
Methods:
Energy Czars - Office of Energy Policy
Energy Emergency Action Group
Project Independence
Congress:
Clean Air Act
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President Ford – 1974 to 1976
Events:
Post-Watergate
Methods:
Federal Energy Administration
Reduce Oil Imports
Domestic Fuel technologies
Eliminate Price Controls/
Increasing nuclear and coal
Opening outer continental shelf for oil and gas
Support new oil refineries
Development of synthetic fuels
Congress:
No action except CAFÉ and Petroleum reserve
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President Carter – 1977 to 1980
Events:
Three Mile Island
Second Embargo
Hostage Crisis
Goals:
DOE Act/National Energy Plan
Reduce Energy Demand
Increase domestic energy production
Tax Incentives
Regulations mandating conservation
Federal Subsidies
Windfall Profits Tax
Congress:
DOE Organization Act
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President Reagan – 1980 to 1988
Events:
Goals:
Free Market Approaches
End Petroleum Price Controls
No rigid production and goals “dictated” by government
Decontrol natural gas prices
Ease nuclear plant licensing
Congress:
No major legislation
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President Bush – 1988 to 1992
Events:
Desert Storm/Exxon Valdez Oil Spill
Goals:
National Energy Strategy
Diversity of energy supplies
Promote efficiency
Expand renewable energy resources
Increase reliance on alternative transportation fuels
Reduce emissions of greenhouse gases
Improve air, land and water quality
Create jobs and growth
Lead R&D
Accelerate commercialization of new energy technologies through federalfunded research
Congress:
Energy Policy Act of 1992
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President Clinton – 1992 to 2000
Events:
Whitewater
Goals:
1998 National Energy Strategy -DOE
Reallocate funds from coal and nuclear to efficient,
renewables and alternative transportation fuels
Budgetary constraints/Congressional opposition
Balance affordability, adequate supply and the environment
Congress:
No major legislation
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President George W. Bush – 2000 to 2008
Events:
9/11
California blackouts/oil and gas shortage
Goals:
National Energy Policy Development Group - Vice President
100 recommendations
Increase supply/promote efficiency renewables and alternative
technologies
Energy and Security have a fundamental link
Congress:
Energy Policy Act of 2005/Energy Independence Act of 2007
Tax reductions for domestic production
Renewable Fuels Standards
Credits for holders of renewable energy bonds
National efficiency standards
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Executive Orders
and Energy Policy
HISTORY OF ENERGY/ENVIRONMENTAL POLICY (CONT’D)
President Obama – 2008 to Present
Events:
Recession
Goals:
March 2011 Blueprint for a Secure Energy Future
White House
Office of Climate Change Policy
Greenhouse gas regulation
Congress:
American Recovery and Reinvestment Act
$90 billion in tax credits and direct spending for clean energy
(No national energy plan legislation proposed)
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Executive Orders
and Energy Policy
OBSERVATIONS BY
“BIPARTISAN POLICY CENTER”
 “Goals often inconsistent, unrealistic, politically
motivated and overly focused on short-term
crises”
 Lack of coordination across agencies
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Executive Orders
and Energy Policy
EXECUTIVE ORDERS IMPACTING
ENERGY POLICY
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Executive Orders
and Energy Policy
SUMMARY
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May 18, 2001 – EO 13211 Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use
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May 18, 2001 – EO 13212 Actions To Expedite Energy-Related Projects
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September 18, 2002 – EO 13274 Environmental Stewardship and Transportation
Infrastructure Project Reviews
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April 18, 2003 – EO 13296 Amendments to Executive Order 13045, Protection of Children
From Environmental Health Risks and Safety Risks
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May 15, 2003 – EO 13302 Amending Executive Order 13212, Actions to Expedite EnergyRelated Projects
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April 30, 2004 – EO 13337 Issuance of Permits With Respect to Certain Energy-Related
Facilities and Land Transportation Crossings on the International Boundaries of the United
States
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Executive Orders
and Energy Policy
SUMMARY
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January 24, 2007 – EO 13423 Strengthening Federal Environmental, Energy, and
Transportation Management
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October 5, 2009 – EO 13514 Federal Leadership in Environmental, Energy, and Economic
Performance
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July 19, 2010 – EO 13547 Stewardship of the Ocean, Our Coasts, and the Great Lakes
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July 12, 2011 – EO 13580 Interagency Working Group on Coordination of Domestic Energy
Development and Permitting in Alaska
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April 13, 2012 – EO 13605 Supporting safe and responsible development of unconventional
domestic and natural gas resources
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August 30, 2012 – EO 13624 Accelerating Investment in Industrial Energy Efficiency
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December 5, 2013 – Memorandum for the Heads of Executive Departments and Agencies:
Federal Leadership on Energy Management (Expansion of EO 13514)
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Executive Orders
and Energy Policy
TYPES OF EXECUTIVE ORDERS IMPACTING
DEVELOPMENT OF PROJECTS
 Some directly impact project development
 Some create opportunities based on
government as a “market maker”
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Executive Orders
and Energy Policy
Executive Orders Directly Impacting
Private Sector
Project Development Process
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Executive Orders
and Energy Policy
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EO 13653
PREPARING THE U.S. FOR THE IMPACTS OF CLIMATE CHANGE
NOVEMBER 1, 2013
“identify and seek to remove or reform barriers that discourage investments or
other actions to increase the Nation's resilience to climate change while ensuring
continued protection of public health and the environment;”
“identify opportunities to support and encourage smarter, more climate-resilient
investments by States, local communities, and tribes, including by providing
incentives through agency guidance, grants, technical assistance, performance
measures, safety considerations, and other programs, including in the context of
infrastructure development as reflected in Executive Order 12893 of January 26,
1994 (Principles for Federal Infrastructure Investments), my memorandum of
August 31, 2011 (Speeding Infrastructure Development through More Efficient
and Effective Permitting and Environmental Review), Executive Order 13604 of
March 22, 2012 (Improving Performance of Federal Permitting and Review of
Infrastructure Projects), and my memorandum of May 17, 2013 (Modernizing
Federal Infrastructure Review and Permitting Regulations, Policies, and
Procedures);”
Can this be used to spur agencies to move forward on project review and approval?
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Executive Orders
and Energy Policy
EO 13605
SUPPORTING SAFE AND RESPONSIBLE DEVELOPMENT OF
UNCONVENTIONAL DOMESTIC AND NATURAL GAS RESOURCES
APRIL 13, 2012
 Created interagency working group of fourteen federal
agencies to coordinate federal activities
 “While natural gas production is carried out by private
firms, and States are the primary regulators of onshore
oil and gas activities, the Federal Government has an
important role to play…setting sensible, cost-effective
public health and environmental standards to
implement Federal law and augment State
safeguards.”
 Does this help or hurt development opportunities???
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Executive Orders
and Energy Policy
EO 13337
ISSUANCE OF PERMITS WITH RESPECT TO CERTAIN ENERGY-RELATED
FACILITIES AND LAND TRANSPORTATION CROSSINGS ON THE INTERNATIONAL
BOUNDARIES OF THE UNITED STATES
APRIL 30, 2004
 “to expedite reviews of permits as necessary to
accelerate the completion of energy
transmission projects …at the borders of the
United States….”
 Keystone Pipeline
 What does Nebraska’s decision under its laws
have to do with international relations?
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Executive Orders
and Energy Policy
EO 13423
STRENGTHENING FEDERAL ENVIRONMENTAL, ENERGY, AND TRANSPORTATION
MANAGEMENT
JANUARY 24, 2007
 improve energy efficiency and reduce greenhouse gas
emissions of the agency, through reduction of energy
intensity by
 (i) 3% annually through the end of fiscal year 2015, or
 (ii) 30% by the end of fiscal year 2015, relative to the
baseline of the agency’s energy use in fiscal year
2003
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Executive Orders
and Energy Policy
EO 13212/13302
ACTIONS TO EXPEDITE ENERGY-RELATED PROJECTS
MAY 18, 2001 / MAY 15, 2003
 shall take appropriate actions, to the extent consistent with
applicable law, to expedite projects that will increase the production,
transmission, or conservation of energy
 No data suggests, at a macro level that the permit process for
energy-related projects has actually shortened, and in fact additional
environmental and other requirements may have lengthened it.
 Developers reported that experience with offshore wind project
permitting was “fairly painful”, “extremely challenging”, “overly
arduous”, “relative easy because it’s in state waters”, “uncertain and
unnecessarily slow”, and “poorly defined resulting in unnecessarily
large investment risk because sites can’t be secured”.
(U.S. Department of Energy, 2010) tp://www.pnl.gov/main/publications/external/technical_reports/pnnl-20024.pdf
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Executive Orders
and Energy Policy
EO 13274
ENVIRONMENTAL STEWARDSHIP AND
TRANSPORTATION INFRASTRUCTURE PROJECT REVIEWS
SEPTEMBER 18, 2002
 “to promote environmental stewardship in the
Nation’s transportation system and expedite
environmental reviews of high-priority
transportation infrastructure projects”
 How has this impacted efforts to develop LNG
projects to serve the maritime industry?
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Executive Orders
and Energy Policy
Examples of Executive Orders where
the Government is the “Market
Maker”
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Executive Orders
and Energy Policy
EO 13211
ACTIONS CONCERNING REGULATIONS THAT SIGNIFICANTLY AFFECT ENERGY
SUPPLY, DISTRIBUTION, OR USE
MAY 18, 2001
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“I am requiring that agencies shall prepare a Statement of Energy Effects
when undertaking certain agency actions.”
 (b) A Statement of Energy Effects shall consist of a detailed statement
by the agency responsible for the significant energy action relating to:
 (i) any adverse effects on energy supply, distribution, or use
(including a shortfall in supply, price increases, and increased use of
foreign supplies) should the proposal be implemented, and
 (ii) reasonable alternatives to the action with adverse energy effects
and the expected effects of such alternatives on energy supply,
distribution, and use.
To what extent do permitting agencies follow this for energy project
permitting decisions?
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Executive Orders
and Energy Policy
EO 13514
FEDERAL LEADERSHIP IN ENVIRONMENTAL, ENERGY, AND ECONOMIC
PERFORMANCE
OCTOBER 5, 2009
 “pursuing opportunities with vendors and
contractors to address and incorporate
incentives to reduce greenhouse gas emissions
(such as changes to manufacturing, utility or
delivery services, modes of transportation used,
or other changes in supply chain activities);”
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Executive Orders
and Energy Policy
MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES:
FEDERAL LEADERSHIP ON ENERGY MANAGEMENT (EXPANSION OF EO 13514)
DECEMBER 5, 2013
 By 2020 federal agencies must use
renewables for 20% of consumption
 (The government is the largest user of electricity and fuel
in the country, accounting for roughly 1.5% of the
nation’s annual energy consumption)
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Executive Orders
and Energy Policy
WHERE WORLDS COLLIDE: FOREIGN INVESTMENT IN ENERGY PROJECTS
RALLS CORP. V. COMM. ON FOREIGN INV. IN THE UNITED STATES, NO. 1:12-CV01513-ABJ (D.D.C. FEB. 22, 2013)
 Committee on Foreign Investment in the United States
(CFIUS) – assesses effects of acquisitions of U.S.
businesses by foreign persons on national security
 Chinese-owned company acquired four wind farm
companies
 After the transaction was complete, CFIUS Ordered
Ralls Corp. “to sell off [four newly acquired] companies,
destroy what it had constructed, stay off its land, and
refrain from selling its own goods.”
 President Obama also issued an order prohibiting the
transaction on national security grounds
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Executive Orders
and Energy Policy
DOES THE USE OF EXECUTIVE ORDERS PROVIDE
MORE OR LESS CERTAINTY THAN LEGISLATION?
It depends how you look at it.
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Executive Orders
and Energy Policy
EXECUTIVE ORDERS SETTING ENERGY POLICY –
GOOD OR BAD
 Advantages
 Easier to establish to create opportunities
 Very few have been invalidated by courts
 Congress has seldom overridden EOs with legislation
 Politically supported ones can provide sufficient certainty to
make investment decisions
 Disadvantages
 Not legally binding or enforceable by private sector
 While not often invalidated, they are not always followed
 Congress can override them
 Next administration can easily rescind them
 Benefits to private sector are somewhat amorphous
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Executive Orders
and Energy Policy
IS LEGISLATION A BETTER WAY TO DO IT?
 Advantages
 Once enacted, they tend to be perceived as “set in stone” and
relied upon
 Tend to have greater perceived legitimacy and reliability
 Can be enforced by private sector
 Disadvantages
 Can be subject to legal challenges, which creates uncertainty
 Passing legislation is fine; funding the actions that are included
is another thing – does not take an Act of Congress to change it,
necessarily
 Example: Wind industry tax credits
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Executive Orders
and Energy Policy
THE BOTTOM LINE
 Executive Orders are a Fact of Life
 They do Impact Energy Policy
 They are not as ephemeral as they might seem
 They can be used to increase certainty
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Executive Orders
and Energy Policy
QUESTIONS
 Barry.hartman@klgates.com
 202.778.9338
 www.klgates.com
http://www.klgates.com/liquefied-natural-gaspractices/
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