President Trump signed another Executive Order (EO) on January 30, 2017, entitled Reducing Regulation and Controlling Regulatory Costs.  The new EO, applicable to the entire Executive Branch, including all federal administrative agencies, makes a straightforward directive: “…for every one new regulation issued, at least two prior regulations be identified for elimination.”  The Order goes on to state that the costs associated with any new regulations may not exceed the savings realized by repealing at least two prior regulations (“the total incremental cost of all new regulations…shall be no greater than zero.”).

This new Order exempts rules related to military, national security or foreign affairs obligations, and it is subject to existing “applicable law,” presumably allowing agencies to pursue rulemaking where directed to by Congress.  The Order reserves considerable discretion, however, to the Director of the Office of Management and Budget (OMB), requiring OMB to issue guidance to all agencies on how to implement the Order, and giving OMB sole discretion in making any exceptions to the “2 for 1” edict.  The recently appointed Director of the OMB is Mick Mulvaney, a Congressman from South Carolina, who is a strong fiscal conservative.

The 2 for 1 Executive Order interestingly defines “regulation” or “rule” to mean: “…an agency statement of general or particular applicability and future effect designed to implement, interpret or describe law or policy…”.  Such a broad definition could arguably encompass agency guidance.  PHMSA has increasingly relied on the issuance of guidance in lieu of regulations, and even though such guidance states that it does not have the force of law, it often shows up as binding requirements in Corrective Action Orders or Compliance Orders.  It remains unclear whether and how this Executive Order will impact PHMSA final regulations for liquid pipelines that were the subject of a pre-publication press release on January 13, 2017 (under the Obama administration) and appear to have been subject to the regulatory freeze issued on the Trump administration’s first day.