“Navigating the Future: Balancing Fossil Fuel Extraction with Clean Energy Solutions and Environmental Protections” | JD Supra

On January 20, 2025, the new administration launched a series of executive actions aimed at reshaping energy and environmental policies in the United States.

“Unleashing American Energy” (Executive Order 14154) emphasizes the goal of promoting energy exploration on federal lands and taking a lead in nonfuel minerals. However, it also pauses the allocation of funds from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) for a review of compliance with legal and policy standards.

After this order, the Office of Management and Budget (OMB) briefly issued a memo to halt a wider range of activities linked to federal funding programs, but this was later retracted due to litigation. The pause on IRA and IIJA funding remains, causing potential delays for agencies that want to disburse funds. They must now seek prior approval from OMB and the National Economic Council (NEC).

This order raises key questions for investors in energy and infrastructure:

• How will the funding pause impact existing contracts and projects that are in motion?
• What will the review and approval process look like? Will all projects need individual approvals?
• How will agencies take on the mandated reviews to align their programs with the new order?
• Will agencies continue working on loan and grant applications that had been paused under the now-rescinded memo?

In addition to the pause on funding, the order influences energy markets and environmental rules significantly. It calls for a review of federal actions that may hinder domestic energy resources and revives approvals for liquefied natural gas exports. Furthermore, it mandates a reassessment of the National Environmental Policy Act (NEPA) guidelines, which involve assessing the environmental impacts of federal projects.

The order also suggests eliminating the electric vehicle (EV) mandate, which includes pulling back on subsidies and funding for EV initiatives.

“Declaring a National Energy Emergency” (Executive Order 14156) empowers agencies to expedite the leasing, production, and transportation of domestic energy resources. This can involve speeding up approvals for energy projects and bypassing some environmental reviews.

“Unleashing Alaska’s Extraordinary Resource Potential” (Executive Order 14153) encourages federal agencies to maximize natural resource development in Alaska and to speed up the permitting process for energy projects there, including liquefied natural gas development.

On the other hand, “Temporary Withdrawal of All Areas on the Outer Continental Shelf From Offshore Wind Leasing” halts all offshore wind leasing. While it still allows for oil and gas extraction, it mandates a review of the necessity of existing wind leases and pauses new ones, which could significantly impact current wind projects.

“Putting America First in International Environmental Agreements” (Executive Order 14162) officially withdraws the U.S. from the Paris Agreement, which aimed to combat climate change. It also calls for the cancellation of related climate financing plans.

These changes signal a considerable shift in the U.S. energy landscape, with implications for investors, energy markets, and environmental protections.

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