Trump Executive Orders

Trump Executive Orders

January 22, 2025 | By Keith Martin in Washington, DC

The executive orders that President Trump signed this week have a number of potential effects on the project finance market.

Onshore Wind

There are two effects on onshore wind projects.

First, the President directed federal agencies not to “issue new or renewed approvals, rights of way, permits, leases, or loans for onshore or offshore wind projects pending the completion of a comprehensive assessment and review of Federal wind leasing and permitting practices.”

Second, he asked the Department of Interior to “assess the environmental impact and cost to surrounding communities of defunct and idle windmills and deliver a report to the President, through the Assistant to the President for Economic Policy, with their findings and recommended authorities to require the removal of such windmills.”

Most wind farms are on private land. Most permitting for such projects is state and local, according to Drew Skroback, an environmental lawyer in our New York office.

Bob Greenslade, an environmental lawyer in Denver, provided the following list of federal permits or approvals that might be required for particular projects.

Leases or rights of way may be required for transmission lines or access roads crossing federal lands.

Any danger to federally protected species may require “incidental take” permits from the US Fish & Wildlife Service.

Some projects affect wetlands or other “waters of the United States” and need section 404 permits under the Clean Water Act from the US Army Corps of Engineers.However, if the effects are low enough, the project can rely on a pre-approved nationwide permit. Larger effects may trigger a pre-construction notice that the project is relying on a nationwide permit (and the Army Corps will have to issue an approval) or may require a site-specific permit.

Major federal actions trigger environmental impact statements under the National Environmental Policy Act. Such studies are not “approvals.”  

Projects that are on “prime farmland” may need approval from the US Department of Agriculture.

Projects with foreign investors or that reach a certain scale may require review by the Committee on Foreign Investment in the United States or Hart-Scott-Rodino clearances from the Federal Trade Commission and Department of Justice.

It is unclear whether a determination of no hazard by the Federal Aviation Administration is an "approval” or “permit.” The FAA is required by statute to review proposed construction of new structures to assess whether they present a danger to aviation. The statute does not give the agency authority to withhold its conclusion under a general policy to block wind farms.

Wind farm owners must often file for market-based rate authority, approval for changes in control and exempt whole generator status with the Federal Energy Regulatory Commission. The Trump order is directed to the departments of Interior, Agriculture and Energy, the US Environmental Protection Agency and the “heads of all other relevant agencies.” FERC is an independent agency within the Department of Energy with a five-person commission. Kat Gamache in Houston said she does not think the order applies to these FERC filings because they relate to “public utilities” rather than projects and to wholesale power markets rather than the siting and construction of green energy projects. Brian Plunkett in Washington added that FERC orders generally relate to the filing party, rather than project, and the criteria for qualification or approval are set by statutes or regulations. Certain filings are also subject to statutory action deadlines.

The hold on federal actions is temporary. It is unclear when it might lift and what more permanent policies might be adopted.

Offshore Wind

Trump is halting any more new offshore wind leases and renewals of existing leases. He has asked the Department of Interior to review the “ecological, environmental and economic necessity of terminating or amending” existing leases and to try to find a legal basis for any such action with help from the Department of Justice.

Offshore wind projects require more extensive federal involvement. Many of the backers of the US offshore wind projects are large foreign-owned utilities and oil companies that have spent tens to hundreds of millions of dollars on the projects. If such projects were ultimately cancelled, some could have claims under bilateral investment treaties.

Freeze on Disbursements

Section 7 of an executive order on “Unleashing American Energy” directs federal agencies to pause “disbursements” of all funds appropriated under the bi-lateral infrastructure law and the Inflation Reduction Act. This led to an immediate backlash from backers of road, bridge and other infrastructure projects.

The Office of Management and Budget issued a clarification Wednesday morning that the pause only applies to funds supporting the “Green New Deal.” The pause is expected to last at least 90 days.

Some affected loan guarantees, grants and federal contracts may have been in place for a significant time and support projects that are already well under construction.

Incoming administrations historically have honored government contracts. There was a rush at the tail end of the Biden administration to issue legally binding commitments for use of remaining funds. The pause could be an effort to identify any commitments that were hastily entered into for projects that are not far advanced.

Tax Credits

Many people have been asking whether the freeze on disbursements affects tax credits under the Inflation Reduction Act. It does not. Tax credits are allowed by statute. They cannot be rescinded or denied by executive order. Any rollback would require action by Congress.

Double Taxes

Trump directed the US Treasury to investigate whether other countries subject US citizens or companies to discriminatory or extraterritorial taxes. If the Treasury finds evidence of any such taxes, the President can invoke section 891 of the US tax code to double the US income and withholding taxes on citizens and companies from those countries. Presidents have had this authority since 1934, but it has never been used.

Loan agreements require borrowers to indemnify lenders for withholding taxes that were not imposed when the loans closed.

Energy Emergency

Trump declared a national energy emergency and directed federal agencies to use federal eminent domain power under the Defense Production Act and other emergency powers to “facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources.” “Energy resources” are defined for this purpose as “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.” 

Bulk-Power System Order

Many people have asked whether the bulk-power-system order issued by President Trump in May 2020 has sprung back to life after Trump rescinded 67 executive orders and 11 Presidential memoranda this week that Biden issued during his term in office. (One of the rescinded Biden orders in January 2021 suspended the Trump bulk-power system order.)  We believe the answer is no.

The bulk-power-system order barred power companies from buying, using or transferring any equipment supplied by foreign adversary companies that could be used to harm the US power grid.

The US Department of Energy issued a follow-on order in December 2020 prohibiting any “responsible utility” from acquiring, importing, transferring or installing certain Chinese equipment that comes in contact with parts of the US utility grid that serve critical defense facilities. The department sent notices to the affected utilities.

The affected equipment was utility transformers with low-side voltages of 69 KV and generator step-up transformers with high-side voltages of 69 KV and associated control and protective equipment such as load tap changers, cooling systems and sudden pressure relays, circuit breakers operating at 69 KV or higher, reactors and capacitors at 69 KV or higher and associated software. The prohibition order applied to any transaction initiated on or after January 16, 2021.

Biden suspended both the Trump executive order and the DOE prohibition order in January 2021 for 90 days. He then let them expire in April 2021.

By law, declarations of emergency can only remain in effect for a year unless continued by a notice in the Federal Register within 90 days before the declaration expires.