March 17, 2025

By Walker Livingston and Charlotte Jenkins, Capstone Energy Analysts

Above, where seated in his tower,
I saw Conquest depicted in his power
There was a sharpened sword above his head
That hung there by the thinnest simple thread.

– Chaucer, Canterbury Tales

Lee Zeldin’s arrival as Administrator of the Environmental Protection Agency (EPA) has been a sea change from the relatively staid regulatory postures of the first Trump Administration’s EPA Administrators, Scott Pruitt and Andrew Wheeler. Zeldin has presided over the “Biggest Deregulatory Action in U.S. History” as well as setting the outlook for the future of the agency via his “Powering the Great American Comeback” Initiative. These two actions, combined with a general scale-back of agency enforcement procedures have transformed the posture of the agency in a few short months. However, the same push to radically reimagine agency rules for industry combined with a plan to deeply cut staff and budget lays the question clear: can the EPA actually accomplish this within the four remaining years of Trump’s term?

The Logistics of the New EPA

Under Zeldin’s deregulatory policy directive, the EPA is weighing 31 different actions across industry to “roll back trillions in regulatory costs” with a focus on climate policy. In any administration, the breadth of the policy focus would be considered substantial, especially when certain “actions” actually implicate several additional rulemakings, such as the “Reconsideration of multiple National Emission Standards for Hazardous Air Pollutants for American energy and manufacturing sectors (NESHAPs)” action, which covers eight different regulatory regimes.

There are relatively few “quick fixes” that the EPA could pursue for these regulations, and if Zeldin wants to enshrine the agency’s current policy posture for the future, the Administrative Procedure Act (APA) reigns supreme. The rulemaking process is long, as agencies must issue an official notice of proposed rulemaking and provide adequate time for public comment on the proposal, followed by consideration of the comments and development and publication of the final rule. A “short” rulemaking timeframe at the EPA can still be on the order of years, rather than months. Almost every rule targeted by the directive would also need to go through additional review at the Office of Information and Regulatory Affairs under the Office of Management and Budget, where each review can add an additional 90 days onto the time it takes to go through the rulemaking process. In a sense, EPA’s primary issue is time: there is no shortcut around the APA that could lead to a faster implementation that would not also expose the agency to liability.

Time is by no means the only issue that the agency faces: agency capacity to conduct the rulemaking process also rears its head with the Trump administration’s focus on cutting the federal government’s budget, and the EPA’s own goal of a 65% reduction in agency spending (though the 65% covers all agency spending rather than just the agency’s core budget, implying a lesser impact on agency staffing). However, cuts to funding or staffing will likely leave the agency with reduced resources to issue rules on a timely basis – the Biden administration experienced this often with its agency staffing, where it would consistently have to delay the planned release date of important administration rules.

However, the focus of the Trump EPA is clearly on deregulation, and specifically deregulation and streamlining compliance in the energy sector. Here, if the lion’s share of agency attention will be focused on hustling out rules, the agency may achieve a portion of its goals. However, it is more likely that it will need to compromise on the breadth of the agenda to not run afoul of the next hurdle: the courts.

A Critical Judiciary

The agency’s finalized rules will be challenged in the federal courts, which provides a separate challenge for the EPA: how will the agency properly argue that its swing of policy is still consistent with mammoth environmental statutes like the Clean Air and Water Acts in the wake of Loper Bright Enterprises v. Raimondo and the death of Chevron deference? Although the agency’s primary argument will likely be that they are “returning to the plain language of the statute,” a court unhindered by Chevron is much more likely to take a critical view of agency decisions (see our previous insight, The Rise of Loper Bright: The Coming Political Tug of War Amid the Death of Agency Deference, January 13, 2025).

The EPA also needs to tread carefully in how it presents the process that it used to reconsider and roll back any final rule, as the traditional remedy for a court that finds error is for the court to vacate the entire rule and send it back to the agency. Here, the pitfalls of shortcuts in the rulemaking process can seriously damage agency policy – a rule that takes only a year to propose and finalize, but contravenes the APA, would likely be fully vacated, sending the agency back to square one. In the tight timeline for rulemaking in the second Trump administration, it may pay dividends for the agency’s rulemaking process to be cautious, as opposed to the more ebullient and freewheeling process of the Department of Government Efficiency’s “burn it down” approach to reducing the government’s size.

The final issue for the agency in the face of the judiciary is familiar: time. The DC Circuit, the court where most of the EPA challenges will be heard, takes an average of 11 months from the filing of a case to render a final decision. An appeal to the Supreme Court will take at least another year, as certain aspects of the deregulatory directive, such as the agency’s reconsideration of the endangerment finding, are almost certain to be decided by the high court.

Implications for Industry and Where the Agency Goes from Here

Despite the pronouncement that this will reduce costs for consumers and regulatory burden on industry, the deregulatory direct also introduces a significant amount of uncertainty into the future of environmental policy at the agency, and particularly how durable the directive’s policies will be in the next decade. A turn away from longstanding agency policy like the endangerment finding will lead to concern in industry on whether deploying capital to meet old standards is necessary, particularly if there is doubt from industry on the durability of the new rules in the courts or in a future administration after 2028. Although companies may not be as concerned with immediate enforcement actions against their businesses, rolling back capital expenditures focused on emissions or wastewater discharges could also merely kick the can down the road on the spending, with concerns of a future regulatory about-face by the EPA acting as a sword of Damocles over companies’ heads.

As the EPA’s sweeping declaration of deregulation quickly runs into the cold logistics of agency rulemaking and the federal courts, the remaining four years of Trump’s second term become a much shorter time frame than many would expect. To effectively achieve the Trump administration’s goals, the agency will need to be regimented in its work and not stray from the well-worn road of agency rulemaking, there are few shortcuts in policy and rule development that will not come back to bite the agency in the long run. If Zeldin seeks to build a mountain of policy on which to plant the flag of his environmental legacy, he will need to be careful.

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Read more from Walker and Charlotte:
Trump, the Endangerment Finding, and the Potential Cascading Chaos for Climate Regulations
Shifting Gears in Environmental Policy: Federal Slowdown, State Action
The Rise of Loper Bright: The Coming Political Tug of War Amid the Death of Agency Deference