July 5, 2020

Volume X, Number 187

July 03, 2020

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COVID-19 Economic Recovery and Relief from Environmental Regulation May Go Hand in Glove

On May 19, the President issued an Executive Order on Regulatory Relief to Support Economic Recovery (“EO”) in the wake of the lifting of COVID-19 shelter-in-place orders across the country. The EO directs all federal agencies to “rollback” regulations that are inhibiting economic recovery. The EO is open-ended on the timing so it could be in place for an extended period. It will undoubtedly have widespread impacts on how businesses plan and conduct operations and what their regulatory obligations will be going forward. For companies facing burdensome regulations or seeking a permit amid plummeting revenues, the EO may prove to be beneficial by providing them with an outlet for getting some regulatory relief or an expedited permit approval. For others, the EO may arrive as unwelcomed news due to the uncertainty and potential for litigation that it carries with it. In either case, our K&L Gates regulatory and policy teams can advise stakeholders on the opportunities and landmines they may face as the EO is implemented.

The EO calls on federal agencies to identify regulatory standards that “may inhibit economic recovery” and to consider taking measures to temporarily or permanently rescind, modify or waive those standards, or to exempt entities or persons from them, consistent with applicable law, and to consider exercising temporary enforcement discretion.[1] The EO also directs agencies to review those standards that are temporarily suspended, rescinded, modified or waived in response to this EO and determine which of those would further promote economic recovery if made permanent, and report such conclusions to the Administration.[2] 

In the environmental context, it is not yet clear how the EO will affect regulatory or permit requirements, compliance benchmarks, or application review processes, although opportunities for modification exist under a variety of federal statutes such as the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, the Clean Water Act, the Endangered Species Act, and the National Environmental Policy Act, to name a few.  

So what’s next? If the Trump Administration’s previous regulatory reform effort is a guide, EPA and other agencies will quickly get thousands of requests under the EO for regulatory relief. To help sort through the requests we expect guidance on how agencies intend to implement the EO, including the process for determining where and how regulatory and enforcement discretion may apply.[3] 

In the meantime, there are a number of actions that stakeholders could request be made by agencies with authority over environmental matters to implement the EO and provide the desired regulatory relief, such as:

  • Replacing individual permit requirements with general permits and otherwise streamlining permit approvals

  • Reducing the frequency of testing and monitoring requirements 

  • Extending regulatory deadlines

  • Applying presumptive waivers and variances 

  • Temporarily suspending regulatory restrictions and obligations 

  • Applying enforcement discretion

Environmental advocates are likely to challenge these types of agency actions, particularly on grounds that they are not “consistent with applicable law and with protection of the public health and safety” as stated in the EO. Agencies, of course, must act within the scope of their statutory authority and in compliance with statutory directives. What changes are and are not “consistent with applicable law” will be a central point of argument in litigation over modifications made pursuant to the EO.

The EO offers a potential for significant gains to the regulated community where agencies shorten or simplify permitting and approval processes. However, the devil will be in the details. And we anticipate that some of those agency reforms will likely encounter direct legal challenges or leave permittees exposed to legal challenge on an as-applied basis. Despite these limitations, the EO may open the door for distressed projects looking for temporary, and perhaps permanent regulatory relief to move forward during these difficult times triggered by the COVID-19 pandemic. We at K&L Gates stand ready to help identify the opportunities afforded by the EO while minimizing the potential downside legal risks. 


NOTES

[1] EO, § 4, https://www.whitehouse.gov/presidential-actions/executive-order-regulatory-relief-support-economic-recovery/

[2] Id. § 7.

[3] The EO states that guidance on implementing the directive from the Office of Management and Budget may be forthcoming, which may provide a road map to how the EO will be interpreted and applied.

Copyright 2020 K & L GatesNational Law Review, Volume X, Number 147

TRENDING LEGAL ANALYSIS


About this Author

Tim Peckinpaugh, KL Gates Law Firm, Energy and Environment Attorney
Partner

Tim Peckinpaugh’s practice focuses on energy, environmental, and natural resource legislative and funding issues.

Mr. Peckinpaugh has represented clients for thirty years in all aspects of energy policy, including nuclear, hydroelectric, coal, oil and natural gas, electricity, as well as a variety of clean technology and energy efficiency issues. He also represents major international corporations and local communities on Department of Energy nuclear cleanup, nuclear security, and contracting issues. In addition, Mr. Peckinpaugh represents...

202-661-6265
Cliff L. Rothenstein, KL Gates Law Firm, Public Policy Attorney
Government Affairs Advisor

Cliff Rothenstein has more than 30 years of congressional and federal executive experience. Prior to joining K&L Gates, he served as Director of Legislative Affairs for the Federal Highway Administration (FHWA). In this capacity, Mr. Rothenstein worked on a daily basis with the FHWA Administrator, Deputy Administrator, and Deputy Secretary of the U.S. Department of Transportation (DOT). During Mr. Rothenstein’s tenure at FHWA, he led the development and advocacy efforts on legislation to reauthorize the nation’s surface transportation law where he played a significant role in developing and recommending to the FHWA Administrator and to other DOT executives proposed changes to the law to streamline project delivery and expand investments in highways, bridges, and multimodal transportation projects. Mr. Rothenstein also coordinated FHWA’s discretionary grant programs that fund highway and bridge improvement projects and managed FHWA’s relationships with Congress on highway-specific projects and issues. In addition to his tenure at FHWA, Mr. Rothenstein served as a senior advisor on the Senate Environment and Public Works Committee which has jurisdiction over environment and surface transportation issues.

202-778-9381
Ankur K. Tohan, KL Gates Law Firm, Environmental Law Attorney
Partner

Ankur Tohan works with the firm's Environmental, Land and Natural Resources practice. His practice focuses on energy infrastructure, natural resource development, compliance counseling, and defense of governmental and citizen enforcement actions.

Ankur helps clients navigate complex regulatory, permitting, and enforcement matters under a range of environmental statutes, including the Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle Protection Act (BGEPA), Endangered Species Act (ESA), Clean Water Act (CWA), Safe Drinking Water Act (SDWA...

206-370-7658
Molly K. Barker Environment, Land and Natural Resources K&L Gates Seattle, WA
Associate

Molly Barker is an associate at the firm’s Seattle office. She is a member of the environment, land and natural resources practice group.

Professional Background

Prior to joining the firm, Ms. Barker served as an associate at an environmental and energy law firm where she focused her practice on environmental, real estate, energy, natural resources and land use law. She worked with public and private clients to conduct due diligence for permitting energy projects, obtain regulatory closure for contaminated sites, bring business operations into environmental regulatory...

206.370.7653