Trump delivers parting gifts to oil sector

President Donald Trump is struggling to come to terms with defeat in this month's election, but a recent surge of action on "midnight" rules indicates the rest of his administration is fully aware that time to act is running out.

Lame duck US presidents routinely rush out most controversial actions through last-minute rules, and Trump is no exception. The upcoming regulations would make it harder to set climate rules, exempt refiners from needing to post clean-up bonds and encourage drilling in the arctic. If those rules are complete by 20 January, it could throw sand into the gears of the bureaucratic machinery that president-elect Joe Biden intends to use for his ambitious plans to address climate change.

Two pending rules are focused on boosting arctic drilling. The US Treasury this month proposed prohibiting banks from "discrimination" against entire business categories, such as arctic drilling and coal mining, after Citigroup and many other Wall Street banks publicly committed not to extend financing to those projects. Banks could decline financing based only on impartial, lender-specific criteria under new rules out for consultation until 4 January. And the US interior department proposes rolling back the stringent restrictions on offshore drilling in the arctic put in place under former president Barack Obama, although the measure was released too late to be completed while Trump is still in office.

The Environmental Protection Agency (EPA) will soon finalise a new rule seeking "consistency" in the economic studies it must prepare before issuing fresh limits on pollution and greenhouse gases. Critics say the move will make it much trickier to craft new regulations, by requiring difficult-to-complete studies and prohibiting the agency from taking into account certain health benefits when deciding whether stringent regulations are warranted. The EPA is also close to retaining existing federal air quality standards for ozone and soot, avoiding tougher rules that could cost industry billions of dollars.

The EPA finalised a rule this week that will exempt refineries from having to post bonds to cover environmental clean-up costs. The agency says facility owners are "overwhelmingly" acting responsibly and are at low risk of saddling taxpayers with clean-up costs. The EPA is also trying to throw out a lawsuit requiring it to regulate oil and gas-sector methane emissions, a Biden priority.

The president-elect is aware of the challenges to his environmental agenda.
"I do not for a minute underestimate the difficulties of meeting my bold commitments to fighting climate change," he says. He has appointed former secretary of state John Kerry to a cabinet-level position focused on climate change.

State resistance

Democratic-led states are not waiting for Biden to take office to pursue tougher oil and gas sector regulations. Colorado and New Mexico, with a combined output of 1.4mn b/d last year, are pursuing new rules that will prohibit "routine" flaring and increase minimum distances between wells and homes. Colorado's oil regulators have just finalised sweeping changes, including a requirement that new wells are located at least 600m from homes and schools, rather than 150m, and a prohibition on routine flaring and venting. And New Mexico is due to implementa law on 4 January that will require oil and gas facilities to capture 98pc of methane emissions by 2026.

Meanwhile, US automobile manufacturer GM is pulling out of a lawsuit in which it supported the Trump administration's push to block tough fuel-economy standards. It now says it wants to work with Biden, California and other automakers on moving to an "all-electric future".

By Chris Knight