The Trump Presidency: Outlook For Energy And Environmental Industries

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Contentious energy and environmental issues are almost guaranteed to make headlines during the Trump transition and the early days of the new administration. At this writing, exactly what course the president-elect will chart on energy and environment policy remains unclear, but green advocates are urging followers to prepare for the worst.

This much is certain: whatever energy and environmental policies Donald Trump embraces will be sharply different from those of his predecessor. Regulatory regimes governing coal and other fossil fuels are sure to be scaled back and possibly even overhauled. The reach and authority of the federal Environmental Protection Agency (EPA) is almost certain to be curtailed. And the president-elect has already made it abundantly clear that he remains a skeptic about climate change and efforts to combat it.

Still, as pointed out by William L. Thomas, the head of Willkie Farr & Gallagher’s Environment, Health, and Safety practice, the outlook for environmental advocates may not be all doom and gloom. If Trump abides by his promises on infrastructure investment – no easy task given the anti-government spending proclivities of the GOP majority on both sides of Capitol Hill – the quality of drinking water may improve, especially in cash-strapped urban areas.

Moreover, Thomas says, Trump’s expansive “all energy options on the table” philosophy bodes well for innovators across the sector, from fossil fuels to renewables. It also figures to test enterprise definitions of “sustainability” and “green” for firms in carbon-intensive supply chains.

Christopher H. Marraro, an environmental and tort litigator at Baker Hostetler, agrees that profound changes are afoot. “Trump has promised a significant rollback in environmental and energy regulatory activity at the federal level. Astute companies should not be looking for the short term or quick fix but should be pursuing strategies that can deliver real structural changes that would lead to more rational and efficient regulation and agency decision-making,” Marraro says.

As an example, Marraro points out that the courts’ recent tendency to defer to the substantive judgments of administrative agencies in rulemaking – or in reviewing an agency’s interpretation of its own regulations – could well be reexamined. Rules exceeding a certain level of impact might require legislative oversight before becoming effective and cost-effectiveness analysis might become a required component of all major rules.

“These types of structural changes would help promote more predictability within the business community, which is a driving force in unleashing capital,” Marraro says.

Whether or not America quits the Paris climate accord, as the president-elect has vowed, the 2016 campaign revealed yet again how meaningful progress on climate change and other environmental and energy issues will remain elusive until the two political parties – and the various constituency groups beholden to them – start listening to one another.

As Willkie Farr’s Thomas puts it, “For the foreseeable future, perhaps more than ever, the most effective enterprises will be those with strategies that account for sustainability factors at the core of the business, and the capacity to measure and communicate performance on the merits.”

The contrast between the Obama and Trump administrations will be pronounced in virtually every area of policy. But the coming debate on energy and environmental issues looks to be hotter than ever.


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