Trump’s Executive Order Is A Gamechanger For Oil Shipping

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By Irina Slav

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President Donald Trump has signed an executive order seeking to limit states’ powers in the approval or rejection of new oil and gas pipeline projects.

CNBC reports the signing was scheduled for a trip to Texas yesterday, and expectations are that opponents of new oil and gas infrastructure will challenge it in court. Some lawyers have noted the states’ powers to grant or refuse permits for federal infrastructure projects are stipulated in federal law and a presidential order cannot trump this.

Energy independence and even dominance has been a top priority for the Trump administration, and the president has made no secret of his intention to stimulate more fossil fuel production and use. To this end, he has been rolling back earlier, more stringent regulation regarding fossil fuels and reversing decisions made by President Obama including the veto on the Keystone XL oil pipeline.

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Now, President Trump wants to clip states’ wings in the department of infrastructure project approvals. Under the Clean Water Act, states can refuse to approve and issue a permit for a pipeline project even if it is approved by the Federal Energy Regulatory Commission if the authorities suspect it could harm the quality of water in the state.

According to Republican legislators, governors have been abusing this power to block projects that will not have an adverse impact on water quality but would be beneficial for oil and gas production.

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The executive order Trump was supposed to sign yesterday would challenge the section of the Clean Water Act that gives states the powers to refuse permits for pipeline projects, Section 401. The order would have the Environmental Protection Agency review its guidance on this section and make sure that “states exercise their authority consistent with the intent of the statute and with existing case law,” CNBC reported, quoting a senior government official.

The order also extends to LNG export terminals and regulation that bans the transportation of the superchilled fuel by train.

By Irina Slav for Oilprice.com

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