Year-End Conclusions on the Hill and in the White House
The twilight hours of the Biden administration and the 118th Congress have been marked by intense legislative and regulatory activity, underscored by President-elect Trump’s derailment of last-minute congressional budget talks, and stalled progress on energy permitting reforms. Despite bipartisan agreement on the need for streamlining project approvals, negotiations led by Sen. Joe Manchin and Rep. Bruce Westerman failed due to partisan disagreements over fossil fuel and clean energy priorities. Simultaneously, after securing the administration’s higher-priority regulations in the spring, shielding them from repeal under the Congressional Review Act, the Biden administration is working to complete several unfinalized regulations from their energy and climate agenda. The remaining priorities, which include appliance efficiency standards, carbon pipeline safety rules and offshore carbon storage initiatives, face an increased risk of reversal by the incoming Trump administration and through the Congressional Review Act. Nevertheless, these unfinalized regulations have received late attention seemingly by design given moderate Republican support for issues like carbon capture and energy efficiency.
California Automobile Emissions Standards
In parallel, California's authority to enforce stringent vehicle emissions standards has been fortified by two Biden administration waivers under the Clean Air Act, enabling the state to exceed federal pollution regulations. The Environmental Protection Agency (EPA) issued approvals for Advanced Clean Cars (II), and Low-NOxregulations for heavy duty and offroad vehicles. Together, these updated regulations will address smog-forming emissions and move the state toward 100% sales of zero-emission vehicles by 2035. Simultaneously, the Supreme Court rejected a constitutional challenge from Republican-led states to California’s waiver program; however, the court agreed to hear a related procedural issue regarding the standing of fossil fuel producers over Biden’s reauthorization of waivers that were rescinded by the Trump administration in his first term. This further foreshadows uncertainties about the durability of these recent EPA waivers under a Trump administration.
DOE Liquid Natural Gas Export Terminal Study
The Department of Energy (DOE) released its long-awaited 2024 Energy, Economic, and Environmental Assessment of U.S. Liquid Natural Gas (LNG) Exports, which evaluates the public interest under the Natural Gas Act (NGA). The offers a neutral to negative look at the impacts of varying LNG export levels on the economy, global markets, greenhouse gas (GHG) emissions and communities using 14 scenarios and four analytical models. Stopping short of finding additional LNG export approvals to be definitively against the public interest, the study forecasts that under current policies, unconstrained U.S. LNG export supply will raise wholesale energy prices by 30% and household prices by 4%, significantly impact frontline communities and lead to a 0.05% increase in global emissions. In the context of economic security, the 2024 study points to China, as opposed to traditional U.S. allies in Europe and Asia, as being a primary beneficiary of unfettered LNG export authorization. Meanwhile, the Biden administration requested a federal court to freeze litigation over its pause on new LNG export authorizations, anticipating that President-elect Trump will lift the ban after taking office. If approved, the court will likely halt proceedings until after the inauguration.
International Climate Policy
As part of its final policy push, the Biden administration announced its new climate target under the Paris Agreement. The recently published Nationally Determined Contribution calls on the U.S. to reduce GHG emissions by 61-66% by 2035. However, experts caution that achieving these goals without federal alignment will be an uphill battle, especially given the potential revocation of California’s emissions regulations waivers under a Trump EPA. Meanwhile, on the global stage, U.N. Secretary-General António Guterres has called on wealthy nations to honor their $300 billion annual climate finance commitments, highlighting urgent needs in Africa amid worsening droughts and water shortages. In Europe, tensions have arisen between pro-nuclear countries and the European Union’s (EU) new energy chief, Dan Jørgensen, over his proposed 2040 renewable energy target. Critics argue that prioritizing renewables undermines nuclear power’s role in achieving a balanced clean energy strategy, reflecting broader divisions within international energy policy frameworks.
