President Trump signed on April 9, 2025 an executive order titled Zero-Based Regulatory Budgeting to Unleash American Energy that seeks to deregulate the energy industry by directing various governmental agencies–the Environmental Protection Agency, Department of Energy, Federal Energy Regulatory Commission (FERC), Nuclear Regulatory Commission, five subcomponents of the Department of Interior, and the U.S. Army Corps of Engineers–to incorporate sunset provisions into their regulations governing energy production. The order’s effect, however, may create regulatory uncertainty that could discourage new capital investments in needed energy infrastructure.
The executive order lists the respective statutes from the past hundred years that have vested authority in the respective agencies to promulgate regulations around specific functions. Those covered regulations include ones pertaining to the Federal Power Act, Natural Gas Act, Atomic Energy Act, Energy Policy Act (1992 and 2005), among others. For existing regulations, agencies must issue a sunset rule by September 30, 2025 that makes the covered regulations expire after one year if not extended before the expiration date (e.g., September 30, 2026). For new regulations, agencies must include a sunset date no more than five years in the future; this will require agencies to revisit regulations every five years and offer a public opportunity to comment on the costs and benefits of each regulation. If the agency determines a regulation is still in the best interest of the public, then they may extend it up to another five years for an indefinite number of times. Otherwise, the regulation will expire on its sunset date. The Office of Management and Budget may exempt a new regulation from the sunset orders if it deems that it has a net deregulatory effect.
The executive order also provides an exemption for “permitting regimes” with the aim to ensure certainty for long-term development projects. It is unclear which regulations would be deemed as permitting regimes and therefore exempt from the sunset rule, given that many regulations may include provisions for permitting along with other topics. While the order will likely succeed in expiring outdated and redundant regulations, it will create an extra regulatory burden for many agencies that are already facing a downsizing in staff. This may lead to the accidental expiration of some important energy regulations that the agencies lack the bandwidth to extend before their sunset date.
The effect of this order on FERC may be on the margins. FERC has issued many regulations pursuant to the Federal Power Act and Natural Gas Act. These include detailed regulations governing utility accounting, utility rates, and open-access, non-discriminatory electric transmission and gas transportation services. Despite a requirement for periodic review, these foundational agency regulations are unlikely to be repealed. Furthermore, the order does not require FERC to sunset and review its regulations under the Public Utility Regulatory Policies Act (PURPA), which FERC recently undertook in Order No. 872 in 2020. The permitting exception would appear to leave untouched FERC regulations governing its review of proposals to build new natural gas pipelines, natural gas and storage facilities, and liquefied natural gas terminals, or its licensing of non-federal hydropower projects.
Below is the list of covered agencies and regulations. If you have questions about how this executive order may impact your business, please contact the authors of this Alert or your McCarter lawyer.
| Covered Agency / Subcomponent | Covered Regulations (Pursuant to Relevant Statutes and their Amendments) |
| Agencies | |
| Department of Energy (DOE) | Atomic Energy Act of 1954 National Appliance Energy Conservation Act of 1987 Energy Policy Act of 1992 Energy Policy Act of 2005 Energy Independence and Security Act of 2007 |
| Federal Energy Regulatory Commission (FERC) | Federal Power Act of 1935 Natural Gas Act of 1938 Power Plant and Industrial Fuel Use Act of 1978 |
| Nuclear Regulatory Commission (NRC) | Atomic Energy Act of 1954 Energy Reorganization Act of 1974 Nuclear Waste Policy Act of 1982 |
| Environmental Protection Agency (EPA) | Within 30 days of this order, Administrator of EPA shall provide OMB Director a list of statutes vesting EPA with regulatory authority that shall be subject to the order |
| Department of Interior Subcomponents | |
| Office of Surface Mining Reclamation and Enforcement (OSMRE) | Surface Mining Control and Reclamation Act of 1977 |
| Bureau of Land Management (BLM) | Mining Act of 1872 Federal Land Policy and Management Act of 1976 Energy Policy Act of 2005 |
| Bureau of Ocean Energy Management (BOEM) | Outer Continental Shelf Act of 1953 Energy Policy Act of 2005 |
| Bureau of Safety and Environmental Enforcement (BSEE) | Outer Continental Shelf Act of 1953 |
| United States Fish and Wildlife Service (FWS) | Bald and Golden Eagle Protection Act Migratory Bird Treaty Act of 1918 Fish and Wildlife Coordination Act of 1934 Anadromous Fish Conservation Act of 1965 Marine Mammal Protection Act of 1972* Endangered Species Act of 1973 Magnuson-Stevens Fishery Conservation and Management Act of 1976** Coastal Barrier Resources Act of 1982 |
| United States Army | |
| United States Army Corps of Engineers (ACE) | Within 30 days of this order, Secretary of the Army shall provide OMB Direct a list of statutes vesting ACE with regulatory authority that shall be subject to the order |
* Ryan Madsen, a law clerk at McCarter & English not yet admitted to the bar, contributed to this alert.