On the first day of the new Trump Administration, Chief of Staff Reince Priebus issued a Memorandum to the heads of all Executive Departments and Agencies, requesting that all federal agencies suspend transmittal of any new proposed or final rules to the Office of the Federal Register (OFR) until the new Administration’s Agency appointees have an opportunity to review such proposals. The Memo also asks all agencies to “immediately withdraw” any proposed or final regulations that have been sent to the OFR but not yet published in the Federal Register (there is always at least a several day delay between the time that new rules are sent to OFR and then published in the Federal Register). In addition, the Memo requests that Agencies postpone the effective date (by at least 60 days) of any rules that have been published in the Federal Register but have not yet become effective.
This request is not unprecedented. A similar memo was issued by Chief of Staff Rahm Emmanuel at the beginning of the first term of the Obama Administration. The intent of such requests is to allow a new Administration the opportunity to get its administrative appointees in place, and for those new Department or Agency heads to review pending or recent rulemakings before they have the effect of law. Note that these ‘requests’ are just that; they are not Executive Orders and they are not self enforcing, and they leave considerable discretion to all federal agencies as to how to implement such stays or withdrawals. The Memo expressly states that any stays or withdrawals do not apply to “those regulations that affect critical health, safety, financial or national security reason,” or for any other matter that in the discretion of the agency official should be excluded. The Memo also notes that this regulatory freeze does not apply to any regulations subject to statutory or judicial deadlines.
There are two final rules recently issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA) that have been submitted to the OFR, but that were not yet been published in the Federal Register (FR) at the time that the freeze Memo was issued. A final rule regarding changes applicable to oil and gas regulations, including accident notification, special permit renewals, and cost recovery for design review, among other changes, was scheduled to be published in today’s FR, and it was published (without comment about the freeze). The hazardous liquid final rule — a rulemaking that has been in process since 2010 and which would finalize significant changes including periodic integrity assessments and leak detection for pipelines outside of high consequence areas — was scheduled to be published in the FR in the coming days. It is not yet clear whether or how PHMSA will respond to the freeze Memo in regard to this rulemaking. Both rules were prepared, at least in part, in response to statutory directives in both the 2011 and 2016 Amendments to the Pipeline Safety Act (PSA).
PHMSA also recently issued one Advanced Notice of Proposed Rulemaking (ANPRM) on the crude oil volatility standard, and it is unclear whether and how these rules may be impacted under a new administration. The two PHMSA Interim Final Rules (IFR) which were published in the FR late last year (and requested after the fact public comment to inform future rulemaking) may also be impacted by the regulatory freeze and shift in administrations, as PHMSA will be reviewing comments on the IFRs to finalize those rulemakings in the future. These include the IFR establishing emergency order authority for PHMSA (effective October 14, 2016 and for which there is a statutory deadline for a final rule of March 17, 2017) and another establishing minimum federal standards for underground natural gas storage facilities (effective January 18, 2017).
In recent years PHMSA has issued far more Advisories and guidance documents than it has issued rulemakings under the requirements of the Administrative Procedure Act. The Agency has been criticized for that, because such actions have not had the benefit of public notice and comment. Although such Advisories are not supposed to have the effect of law, the Agency has increasingly invoked them as injunctive relief in enforcement actions (e.g., using Corrective Action Orders and Compliance Orders to mandate compliance with Advisories that are not otherwise part of the applicable law).
Pipeline operators would be well advised to view this regulatory freeze with caution, because the major elements of the PHMSA rules at issue may yet become effective, and because their existence – even if suspended at present – arguably raises the standard of care that operators may be held to in civil actions.