It is very clear that our new president has little tolerance for “red tape” as he’s stated on multiple occasions. In fact, just yesterday he signed an executive order proclaiming that, “The total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the Director of the Office of Management and Budget.”
Trump’s Views on the Environment:
Mr. Trump has often said that environmental regulations are “out of control.” Speaking to automobile industry leaders last week, he complained that, “Our friends that wanna build in the United States, they go many, many years and then they can’t get the environmental permit over something that nobody ever heard of before,” he said. “And it’s absolutely crazy. I am, to a large extent, an environmentalist. I believe in it. But it’s out of control.” He promised to restore manufacturing jobs, slash taxes, and curb “unnecessary” regulations. “Were going to either give you your permits or we’re not gonna give you your permits,” he said. “But you’re gonna know very quickly. And generally speaking, we’re gonna be giving you your permits. So we’re gonna be very friendly.”
The five executive actions taken last Tuesday take direct aim at President Barack Obama’s environmental policies by advancing two very controversial pipelines and streamlining regulations on domestic manufacturing and infrastructure projects. President Obama made climate change and protection of our national resources high priorities. Not so with this president.
First is the Presidential Memorandum Regarding Construction of the Dakota Access Pipeline, which would extend from the Dakotas to Illinois. According to the Memo, this action “represents a substantial, multi-billion-dollar private investment in our Nation's energy infrastructure. This approximately 1,100-mile pipeline is designed to carry approximately 500,000 barrels per day of crude oil from the Bakken and Three Forks oil production areas in North Dakota to oil markets in the United States. At this time, the DAPL is more than 90 percent complete across its entire route. Only a limited portion remains to be constructed.” The Standing Rock Sioux Tribe, whose reservation is within a mile of the pipeline, has bigly opposed the project. The tribe has been worried about water contamination, and the U.S. Army Corps of Engineers recently had previously agreed to look into less intrusive alternatives.
Next is the Presidential Memorandum Regarding Construction of the Keystone XL Pipeline, which would carry crude from Alberta, Canada to the Gulf of Mexico. President Obama put a stop to it because, in his view, the environmental cost was too much for a relatively modest supply of oil, and would have been at odds with this nation’s commitment to join a global pact to reduce greenhouse gases. Trump has invited TransCanada to resubmit its application for the pipeline. Another Presidential Memo the same day specifies that all new and repaired pipelines be built with American steel.
Finally, there’s the “Executive Order Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects” and the “Presidential Memorandum Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing.” The infrastructure order calls for a streamlined and expedited environmental review of all high priority infrastructure projects. The manufacturing memo calls for reduced regulatory burdens affecting domestic manufacturing. This memo calls for the Secretary of Commerce to “coordinate” with the EPA and other agencies to streamline permitting and reduce regulatory burdens for domestic manufacturers.
If those actions did not make it clear where Mr. Trump stands regarding environmental regulations, then his other set of actions will. Not only has he frozen the EPA’s budget and barred it from awarding any new contracts or grants, he has ordered a total media blackout at the Agency. EPA employees are not allowed to post to social media, respond to journalists’ questions, interact with members of Congress, or send out press releases. This is all part of a move to kill or at least delay some thirty or more environmental rules finalized in the closing months of President Obama’s term.
Trump’s Team on the Environment:
We know how Mr. Trump feels about the environment, but what are the views of his team members?
Trump’s EPA transition director, Myron Ebell, a climate-change skeptic, just yesterday suggested cutting the EPA workforce by 66% over the next four years and slicing the Agency’s budget by half. According to Ebell, “The global warming fad is waning.” Mr. Ebell was among the first of Trump’s transition team agency leaders to be announced, and he had even been discussed as a possible EPA director.
Trump's pick for EPA director, Oklahoma Attorney General Scott Pruitt’s actions in court suggests the same views. Mr. Pruitt, who has sued the EPA a total of 14 times as Oklahoma’s attorney general, does not believe human activity is the primary cause of climate change. However, NASA and the National Oceanic and Atmospheric Administration announced recently that 2016 was the hottest year in recorded history, and said human activity is to blame. Environmental leaders say that Pruitt, if confirmed by the full Senate, would be the most hostile EPA chief in the history of the agency, which was created in 1970 by former President Richard Nixon to protect human health and the environment. Since being elected Oklahoma attorney general in 2010, Pruitt sued the EPA over its Clean Power Plan, which aimed to reduce emissions from coal-fired plants that contribute to climate change; he also sued the EPA over regulations to reduce methane emissions from the oil and gas industry; he questioned whether toxic mercury pollution is hazardous to public health; he shut down his office’s Environmental Protection Unit; and he launched a new “Federalism Unit” devoted to filing legal challenges against the EPA—at least 14 of them.
According to Time, “While Pruitt was busy trying to kill national mercury rules, the number of Oklahoma lakes listed for mercury contamination was climbing. This year, the state lists 40 lakes with fish consumption advisories due to mercury levels—up from 19 listed in 2010. Eight lakes were added just this year…Pruitt also attacks limits on ground-level ozone—better known as smog—despite the fact that ozone problems are acute and worsening in Oklahoma. The latest American Lung Association report gave all Oklahoma counties surveyed an “F” for ozone problems and found that the number of high ozone days had increased in most counties as compared to 2010-'12.”
Clearly these developments do not bode well for a company whose primary source of revenue comes from helping companies preserve and protect the environment. Indeed, on pages 3-4 of the company’s most recent annual report, the company states that demand for its products and services will continue to be driven by specific factors (which we see as being in jeopardy for the next 4-8 years). See excerpt below.