Trump signs his first significant bill — killing a transparency rule for oil companies

President Donald Trump signed his first significant piece of legislation on Tuesday, repealing an Obama-era rule that forced energy and mining companies to disclose any payments they made abroad.

“This is a big signing,” Trump said, “a very important signing.”

That part’s... debatable. Outside of a few firms like Exxon Mobil — which once lobbied against the rule and whose former CEO Rex Tillerson is now Trump’s secretary of state — it’s hard to find too many people overjoyed that this regulation is dead. The real significance here is that this marks the start of a big push by the Trump administration to roll back a wider array of federal regulations.

Why one of Trump’s first acts was to kill an obscure transparency rule

Since early February, Republicans in Congress have been using a tool called the Congressional Review Act to target a bunch of regulations that were finalized in the waning days of the Obama presidency. Because of how the CRA works, the GOP can basically kill any federal regulation published after June 13, 2016, with a simple majority vote in the House and Senate — as long as Trump agrees.

There are dozens of Obama-era rules that are vulnerable to CRA repeal; Republicans have focused on eight so far, including:

A rule restricting coal companies from dumping mining waste into streams

A rule curtailing methane waste from oil and gas drilling on public lands

A rule that requires publicly traded oil, gas, and mining companies to disclose any payments they made to foreign governments, including taxes and royalties

This last rule originated with the 2010 Dodd-Frank Act — when senators from both parties included a provision requiring greater disclosure from mining and drilling companies working abroad. The hope was to cut down on corruption in resource-rich developing countries by increasing transparency.

At the time, as Michael Grunwald reports for Politico, Rex Tillerson was Exxon Mobil’s CEO and flew to Washington, DC, to lobby against this provision, arguing that it would put his company at a competitive disadvantage and make it harder to do business in places like Russia.

Tillerson lost that battle, and Congress passed Dodd-Frank with the provision intact. Over the next six years, the Securities and Exchange Commission worked to craft a rule that would give the legislation teeth. But the SEC’s first attempt at regulation was struck down by the courts in 2012, and crafting a replacement was a long, tangled process. The rule didn’t actually get finished until June 27, 2016 — a fateful delay that made it ripe for repeal via the Congressional Review Act.

Pretty good day for Exxon.

Photo by Spencer Platt/Getty Images

The American Petroleum Institute has argued that the disclosure rule is unnecessary — after all, it’s already illegal for oil and gas companies to bribe governments under the Foreign Corrupt Practices Act. These new requirements would simply add extra costs and make it harder for US mining and drilling companies to operate overseas. Publicly traded oil companies like Exxon Mobil were also concerned that the disclosure forms would reveal valuable information about individual projects, giving their state-owned and privately held competitors an unfair advantage.

Anti-corruption groups and other supporters of the rule, for their part, argued that the provision wasn’t substantially different from similar requirements in Canada and Europe. Foreign companies like BP and Royal Dutch Shell now regularly report taxes, bonuses, and other payments to foreign governments. Why shouldn’t American oil majors like Chevron and Exxon Mobil?

“The US had been at the forefront on the transparency issue, with more than 30 countries following in its footsteps to pass similar legislation,” said Isabel Munilla of Oxfam International in a statement after the House initially voted to kill the rule. “State-owned companies from Brazil, China, and Russia are all now required to disclose their payments. If the Senate follows suit in overturning this rule, the US will go from a leader into a laggard.”

But the oil industry won this fight. The House and Senate GOP both voted to disapprove of the rule, and Trump just signed their bill. The regulation is now null and void. That said, there is one lingering issue: Under the Congressional Review Act, the SEC is barred from crafting a new rule that has “substantially the same form” as the repealed regulation. But Dodd-Frank also technically still requires the SEC to come up with a transparency rule. The CRA has only been used once before, so it’s unclear how this might play out in future litigation.

This is only the beginning of Trump’s deregulation agenda

These Congressional Review Act repeals are low-hanging fruit — something the House and Senate can do very quickly to roll back certain Obama-era rules. So far, they’ve voted to repeal eight such regulations, and dozens more could be on the chopping block in the weeks ahead.

But Trump is planning much, much more. As Juliet Eilperin reported recently for the Washington Post, his administration is contemplating the most aggressive rollback of federal regulations since Ronald Reagan.

On January 30, Trump signed an executive order that required federal agencies to repeal two regulations for every new one that gets issued. This order is likely to prove messy and in some cases unworkable, but experts think it will at minimum deter federal agencies from being quite so assertive on the regulatory front as they have in the past. The White House has also delayed a number of smaller regulations in the works, such as postponing a move to list the bumblebee as an endangered species.

Some of Trump’s cabinet officials are likely to go even further once they get confirmed. Scott Pruitt, the nominee to head the Environmental Protection Agency, is widely expected to try to scale back Obama-era climate policies like the Clean Power Plan, which aimed to reduce carbon-dioxide emissions from power plants. While rewriting agency rules is a complicated and fraught process — it’s much, much harder than using the CRA — Pruitt has a fair bit of leeway here.

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