04-15-2025

Zero-Based Regulatory Budgeting To Unleash American Energy

Executive OrderView the Original .pdf
View the Original .pdf

The 1-Minute Brief

What: Executive Order 14270 mandates that a wide range of federal regulations governing energy production be subject to automatic expiration, or "sunset," unless agencies proactively review and justify their continued necessity.

Money: The order does not have a formal Congressional Budget Office (CBO) score, as it is an executive action. Its financial impact is indirect, aiming to reduce the compliance costs of regulations on the energy industry. The White House has not provided a specific estimated cost or savings, but the intent is to produce a net deregulatory effect.

Your Impact: The order could lead to lower energy prices for consumers by reducing the regulatory burden on producers. However, it could also result in weakened environmental protections, potentially impacting public health and the environment in communities near energy production sites.

Status: Issued and published in the Federal Register on April 15, 2025.

What's Actually in the Bill

Executive Order 14270, titled "Zero-Based Regulatory Budgeting to Unleash American Energy," establishes a system requiring federal agencies to periodically re-evaluate existing energy-related regulations. The core function of the order is to force a regular assessment of these rules to ensure they are not an unnecessary drag on the economy. [Executive Order 14270, Sec. 1]

Core Provisions:

  • Sunset Requirement: The order compels "Covered Agencies" to implement a rule that assigns a "Conditional Sunset Date" to all "Covered Regulations." [Executive Order 14270, Sec. 4(a)]
  • Initial Expiration: Existing regulations covered by the order will expire 1 year after the agency implements its sunset rule, which must be done by September 30, 2025. [Executive Order 14270, Sec. 4(a), 4(b)]
  • New Regulations: Any new energy-related regulations must include a sunset date not more than 5 years in the future. [Executive Order 14270, Sec. 4(c)]
  • Renewal Process: Agencies can extend a regulation's sunset date for up to 5 years at a time, but only after a public comment period to assess the rule's costs and benefits. [Executive Order 14270, Sec. 4(d)]
  • Exemption from "Ten-for-One" Rule: The expiration or renewal of these regulations does not count toward the requirements of Executive Order 14192, which mandates eliminating ten regulations for every new one issued. [Executive Order 14270, Sec. 5(a)]

Stated Purpose (from the Sponsors):

The executive order states that its purpose is to counteract a vast regulatory structure that constrains liberty and innovation. [Executive Order 14270, Sec. 1] The administration claims that this governance-by-regulator has imposed severe costs on energy production and that by rescinding outdated regulations, the nation can stimulate innovation and prosperity. [Executive Order 14270, Sec. 1]

  1. To compel agencies to periodically reexamine their regulations to ensure they serve the public good.
  2. To stimulate innovation in the energy sector by removing outdated rules.
  3. To deliver prosperity to Americans by reducing the economic drag of excessive regulation. [Executive Order 14270, Sec. 1]

Key Facts:

  • Affected Sectors: Energy (Oil, Gas, Coal, Nuclear, Electric Utilities), Environmental Protection, and Wildlife Management.
  • Timeline: Agencies must issue their sunset rules by September 30, 2025. Existing regulations would then begin to expire one year later. [Executive Order 14270, Sec. 4(a), 4(b)]
  • Scope: The order applies to numerous regulations across the Environmental Protection Agency (EPA), Department of Energy (DoE), Federal Energy Regulatory Commission (FERC), Nuclear Regulatory Commission (NRC), and several bureaus within the Department of the Interior and the Army Corps of Engineers. [Executive Order 14270, Sec. 3]

The Backstory: How We Got Here

Timeline of Events:

The Environmental Decade (1970s):

The 1970s saw a surge in environmental awareness and bipartisan legislative action. In response to growing public concern, landmark laws like the National Environmental Policy Act (NEPA), the Clean Air Act, the Clean Water Act, and the Endangered Species Act were passed. This era established the foundation of modern environmental regulation, creating the EPA and empowering it to set and enforce standards to protect public health and the environment. During this time, the energy crises also led to the creation of the Department of Energy and new laws aimed at energy conservation and production.

The Deregulation Push (1980s-Present):

Beginning with the Reagan administration, a counter-movement focused on deregulation gained momentum, arguing that excessive government rules were stifling economic growth. President Reagan issued executive orders requiring agencies to conduct cost-benefit analyses for new regulations, aiming to ensure that the economic benefits outweighed the costs. This approach has been continued and adapted by subsequent administrations. The concept of "sunset" legislation, which automatically terminates laws or agencies unless explicitly renewed, also gained popularity at the state level during this period as a tool for reining in government bureaucracy.

Why Now? The Political Calculus:

  • Fulfilling a Campaign Promise: This executive order aligns with a core theme of the current administration: slashing regulations to boost the economy. It is a more targeted evolution of previous "one-in, two-out" or "ten-for-one" deregulation policies.
  • Energy Prices and Inflation: The order is framed as a direct response to high energy prices and inflation, with the argument that reducing regulatory costs for energy producers will translate to lower prices for consumers.
  • Consolidating Executive Power: The order directs agencies, including some that are traditionally independent, to adhere to a centrally dictated regulatory review process, consolidating policy control within the White House. This action is part of a broader effort to streamline government and ensure agency actions align with the administration's agenda.

Your Real-World Impact

The Direct Answer: This directly affects specific groups, namely the energy industry and communities impacted by energy production, but could have indirect effects on all Americans through energy prices and environmental quality.

What Could Change for You:

Potential Benefits:

  • Lower Energy Costs: By reducing compliance costs for energy companies, the order could lead to lower electricity bills and prices at the gas pump.
  • Increased Domestic Energy Production: The administration argues that easing regulations will unleash domestic energy resources, potentially increasing energy independence and creating jobs in the sector.
  • Elimination of Outdated Rules: The forced review process could eliminate genuinely obsolete or inefficient regulations that hinder innovation without providing significant benefits.

Possible Disruptions or Costs:

Short-term (1-3 years):

  • Regulatory Uncertainty: The process of reviewing and potentially eliminating a vast number of regulations could create uncertainty for businesses and environmental groups as they track which rules will remain in effect.
  • Legal Battles: Lawsuits challenging the legality of the executive order or the elimination of specific regulations are likely, which could delay implementation and create further uncertainty.

Long-term:

  • Weakened Environmental and Health Protections: The automatic expiration of rules could lead to the removal of important safeguards for air and water quality, wildlife, and public health, particularly if agencies lack the resources to conduct thorough reviews for all regulations.
  • Increased Environmental Externalities: The costs associated with pollution and environmental degradation, which regulations are designed to mitigate, could increase and be borne by the public.

Who's Most Affected:

  • Primary Groups: Energy companies (oil, gas, coal, nuclear), their employees, and communities located near energy extraction and production facilities.
  • Secondary Groups: Environmental advocacy organizations, manufacturing industries with high energy consumption, and the general public through changes in energy prices and environmental quality.
  • Regional Impact: States with significant energy production, such as Texas, North Dakota, Pennsylvania, and Wyoming, as well as regions with sensitive ecosystems or environmental justice concerns, are likely to be more affected.

Bottom Line: This executive order forces a trade-off: it aims for lower energy prices and economic growth by cutting regulations, but at the potential risk of reducing long-standing environmental and public health protections.

Where the Parties Stand

Republican Position: "Unleash American Energy, Cut Red Tape"

Core Stance: Republicans generally support the executive order's goal of reducing regulatory burdens to promote domestic energy production and lower costs.

Their Arguments:

  • ✓ The order will stimulate the economy and fight inflation by lowering energy prices.
  • ✓ It streamlines government and eliminates wasteful, outdated regulations that stifle innovation.
  • ✓ It returns power to the free market and reduces the influence of unelected bureaucrats.

Legislative Strategy: Supporting the executive order's implementation and defending it against legal and legislative challenges. They are likely to message this as a key part of their plan to make America "Energy Dominant."

Democratic Position: "Protecting Public Health and the Environment"

Core Stance: Democrats generally oppose broad, untargeted deregulation, arguing that it jeopardizes critical environmental and public health protections for corporate profit.

Their Arguments:

  • ✓ They support investments in clean energy and a transition away from fossil fuels.
  • ⚠️ They express concern that vital safeguards for clean air, clean water, and endangered species will be eliminated without proper scientific review.
  • ✗ The order prioritizes the interests of oil and gas companies over the well-being of communities and the environment, particularly vulnerable and frontline communities.

Legislative Strategy: Pushing back against the order's implementation through oversight hearings, potentially introducing legislation to counteract its effects, and supporting legal challenges from environmental groups.

Constitutional Check

The Verdict: ⚠️ Questionable

Basis of Authority:

The President is issuing this order based on the executive authority vested by the Constitution and the laws of the United States, specifically the power to oversee the executive branch and "take Care that the Laws be faithfully executed."

Relevant Portion of the Constitution (Article II, Section 3): "[The President] shall take Care that the Laws be faithfully executed..."

Constitutional Implications:

  • Separation of Powers: Critics argue that the order oversteps presidential authority by effectively rewriting or repealing laws that Congress has delegated to agencies to implement. An executive order cannot by itself override statutory mandates that require agencies to maintain certain regulations.
  • Nondelegation Doctrine: The order could be seen as a challenge to the way Congress delegates authority to agencies. While the nondelegation doctrine is rarely used to strike down legislation, some legal scholars argue that broad executive actions that fundamentally alter regulatory schemes could violate it.
  • Administrative Procedure Act (APA): The APA governs the process for federal rulemaking, generally requiring public notice and comment. Directing agencies to eliminate regulations without a thorough, individualized review and reasoned explanation could be seen as "arbitrary and capricious" under the APA, making the repeals vulnerable to legal challenges. Lawsuits challenging a previous "two-for-one" executive order were dismissed on standing grounds, but the merits of the arguments were not fully decided.

Potential Legal Challenges:

Environmental organizations, and potentially state attorneys general, are highly likely to file lawsuits to block the implementation of this executive order. They will likely argue that the order forces agencies to violate their statutory duties under various environmental laws and that it circumvents the proper rulemaking process required by the Administrative Procedure Act.

Your Action Options

TO SUPPORT THIS BILL

5-Minute Actions:

  • Call Your Rep/Senators: Capitol Switchboard: (202) 224-3121. "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to support Executive Order 14270 to lower energy costs."

30-Minute Deep Dive:

  • Write a Detailed Email: Contact members of the House Committee on Energy and Commerce and the Senate Committee on Energy and Natural Resources to express your support.
  • Join an Organization: Advocacy groups like the American Energy Alliance or the Competitive Enterprise Institute often support deregulation.

TO OPPOSE THIS BILL

5-Minute Actions:

  • Call Your Rep/Senators: Capitol Switchboard: (202) 224-3121. "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to oppose Executive Order 14270 to protect our environmental safeguards."

30-Minute Deep Dive:

  • Write a Letter to the Editor: Submit a letter to your local newspaper explaining your concerns about the potential impacts on public health and the environment.
  • Join an Organization: Groups like the Natural Resources Defense Council (NRDC), the Environmental Defense Fund (EDF), or the Sierra Club actively litigate and advocate against such policies.