Federal Agency Actions

On 22 May 2025, the U.S. Department of Justice (DOJ) and the Federal Trade Commission filed a statement of interest in the U.S. District Court for the Eastern District of Texas in a lawsuit by several Republican states against asset managers that allegedly used energy holdings to reduce coal output and increase the price of coal under the guise of ESG concerns. In the statement of interest, both federal agencies expressed concerns about the impact of anticompetitive behavior that allegedly reduces the production of domestic energy and results in higher prices. The asset managers argue that the investments fall under an exemption because they were passive minority investments that cannot violate antitrust law, while both federal agencies assert that the exemption being used by the asset managers does not apply if initially passive investments are used to hurt competition.

On 20 May 2025, the U.S. Department of Energy (DOE) announced the first step in its largest deregulatory effort in its history by proposing the weakening or eliminating of 47 regulations, including energy conservation standards for both household appliances and buildings and various diversity, equity, and inclusion (DEI) requirements for DOE grant recipients. These actions seek to lower costs, increase consumer freedom, and promote American energy dominance in accordance with the executive order President Trump issued on 24 April 2025 titled “Unleashing America's Offshore Critical Minerals and Resources”.

On 19 May 2025, the U.S. Department of the Interior (DOI) lifted its stop-work order on the Empire Wind 1 offshore wind energy project, located south of Long Island, New York, allowing construction to resume after a month-long freeze initiated by Secretary of the Interior Doug Burgum on 16 April 2025 for further review of project approvals. The freeze was prompted by concerns over whether the Biden administration conducted sufficient analysis or consultation with relevant federal agencies before issuing the project’s approvals. Equinor ASA, the sponsor of the project, announced that in light of the reversal, it plans to still have the project reach its planned commercial operation date in 2027 and will work with suppliers and regulatory bodies to reduce the impact of the stop work order.

On 16 May 2025, DOE announced emergency actions to address Puerto Rico’s ongoing energy crisis and strengthen its fragile power grid following a recent island-wide blackout. U.S. Secretary of Energy Chris Wright authorized two emergency orders under the Federal Power Act Section 202(c), enabling immediate measures to improve grid security and resiliency and perform vegetation management activities. These actions are supported by $365 million from the Puerto Rico Energy Resilience Fund and taken in accordance with the executive order President Trump issued on 20 January 2025 titled “Declaring a National Energy Emergency”.

On 14 May 2025, the U.S. Environmental Protection Agency (EPA) announced it will roll back much of the nationwide drinking water standard introduced under the Biden administration to address toxic "forever chemicals" per- and polyfluoroalkyl substances (PFAS), but will uphold existing limits for two specific PFAS chemicals – perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS). The original rule set limits for six PFAS chemicals and required public water systems to monitor and reduce their presence by 2029. Under the new proposal from the Trump administration, the EPA will rescind and reconsider the drinking water limits for four of the regulated PFAS substances and the timeline for addressing PFOA and PFOS will be extended, giving water systems until 2031 to comply.

On 12 May 2025, the U.S. Department of Agriculture (USDA) announced that it would restore climate change-related webpages that had been removed since President Trump’s inauguration. This action followed a lawsuit filed in February by farm and environmental groups. The webpages included materials on climate-friendly funding and loans, investments under the Inflation Reduction Act (IRA), and policy documents. The lawsuit alleged these were removed after a directive on 30 January 2025 to delete climate-focused content, aligning with the Trump administration's priorities. USDA announced it would complete the webpage restoration within two weeks.

On 7 May 2025, 16 states and the District of Columbia filed suit in the U.S. District Court for the Western District of Washington against several federal agencies for withholding funds under the Infrastructure Investment and Jobs Act’s National Electric Vehicle Infrastructure Formula Program. These congressionally approved funds were to be disbursed to states to develop electric vehicle infrastructure. In their complaint, the state plaintiffs allege that the federal government’s actions of revoking State Electric Vehicle Infrastructure Deployment Plan approvals and withholding approved funds were unlawful and constituted final agency action exceeding the scope of the agencies’ statutory authority in violation of the Administrative Procedure Act. The plaintiffs seek preliminary injunctive relief.

On 5 May 2025, the Supreme Court of the United States (SCOTUS) declined to review challenges from commercial fishing groups against approvals by the Bureau of Ocean Energy Management and other federal agencies of the Vineyard Wind offshore wind energy project off the Massachusetts coast, which they argued jeopardizes the fishing industry. The groups claimed the Biden administration improperly applied the Outer Continental Shelf Lands Act and ignored risks to fisheries, safety, and the environment. The fishing groups also criticized the First Circuit's interpretation of statutory obligations and invoked a recent ruling in Loper Bright Enterprises et al. v. Raimondo, which eliminated Chevron deference. Chevron deference gave federal agencies broad authority to interpret laws and determine how best to apply them. For additional information on the Loper decision, see our August 2024 U.S. Energy and Infrastructure Update here.

Presidential Actions

On 23 May 2025, President Trump issued an executive order titled “Restoring Gold Standard Science” (the Gold Standard Science Order) that requires the Director of the Office of Science and Technology Policy (OSTP Director) to “issue guidance for agencies on implementation of ‘Gold Standard Science’ in the conduct and management of their respective scientific activities” within 30 days of the Gold Standard Science Order. The Gold Standard Science Order directs the head of each federal agency to update agency policies and processes relating to the use of scientific or technological information to implement the guidance and ensure that scientific activities by the federal agency are conducted in accordance with the Gold Standard Science Order. Federal agency heads are also required to report to the OSTP Director within 60 days of the Gold Standard Science Order with the actions taken to implement the same at their respective federal agencies. Further, the Gold Standard Science Order provides a list of stringent rules governing the use, interpretation, and communication of scientific data that federal agency heads and employees are directed to adhere to within 30 days of the Gold Standard Science Order. Federal agency heads are also required to return to policies regarding scientific integrity that were in place when President Trump left office in January 2021 and to review all applicable regulations issued during the Biden administration.

On the same day, President Trump issued four separate executive orders to address domestic nuclear energy production. Collectively, the executive orders aim to ramp up domestic nuclear energy production, distribution, and use:

“Reinvigorating the Nuclear Industrial Base” orders the DOE, in coordination with other federal agencies, to issue a report that includes recommendations for national policy to support the management of spent nuclear fuel, efficient uses for the uranium, plutonium, and other recycled and reprocessed products, and disposal of wastes. Further, it requires the Secretary of Energy to prioritize certain activities that support nuclear energy, including restarting, completing, uprating, or constructing nuclear power plants.
“Reforming Nuclear Reactor Testing at the Department of Energy” instructs the Secretary of Energy to revise DOE regulations, guidance, procedures, and practices in order to “significantly expedite the review, approval, and deployment of advanced reactors under the [DOE]’s jurisdiction.” Further, it establishes a pilot program for reactor construction and operation and directs the Secretary of Energy to take action to streamline environmental reviews for any and all authorizations, permits, approvals, etc. for such reactors, including reforming rules governing compliance with the National Environmental Policy Act.
“Ordering the Reform of the Nuclear Regulatory Commission” reduces and reorganizes the workforce at the Nuclear Regulatory Commission (NRC). Further, it instructs the NRC, in collaboration with other federal agencies, to review and revise its regulations and guidance documents, and issue notice(s) of proposed rulemaking(s) implementing the proposed revisions within nine months of the date of the executive order.
“Deploying Advanced Nuclear Reactor Technologies for National Security” calls for the Secretary of Defense to establish a program to utilize nuclear energy for both installation and operational energy and to start operation of a nuclear reactor at a domestic military base by 30 September 2028. Further, among other things, it directs the Secretary of State to take various actions to promote nuclear exports.

On 9 May 2025, a federal judge in the U.S. District Court for the Northern District of California granted a two-week restraining order blocking the Trump administration’s efforts to lay off employees and restructure federal agencies. The decision came after a group of labor unions, non-profit organizations, and local governments sued to halt federal agencies and the Department of Government Efficiency from enforcing an Executive Order directing large-scale reductions in workforce. The judge noted that to “make large-scale overhauls of federal agencies, any president must enlist the help of his co-equal branch and partner, the Congress,” and found that neither the legislative branch nor plaintiffs were informed of the President’s decision.

On the same day, President Trump issued a presidential memorandum titled “Rescission of Useless Water Pressure Standards,” further deregulating America’s energy sector. The presidential memorandum directs DOE to stop enforcing water conservation standards for home appliances including bathtubs, faucets, and showerheads. This is one of many recent actions by President Trump directing federal agencies to halt the enforcement of rules and implementation of programs that do not align with the Trump administration’s policies, with other Executive Orders affecting DOL, DOJ, and EPA.

On 2 May 2025, the Office of Management and Budget (OMB) released its budget request for fiscal year 2026, making steep cuts to various non-defense programs. Among the cuts, EPA would lose more than half of its funding compared to 2025, with proposed cuts to drinking water infrastructure grants for states amounting to $2.4 billion and funding for the agency’s categorical grant programs—which fund various water, air, waste, pesticide, and toxic substances programs—facing a $1 billion reduction. The proposed cuts would eliminate all environmental justice programs and include a $231 million cut to the Office of Research and Development. The OMB stated that these programs have become “a crutch for States at the expense of taxpayers—many of whom receive no benefit from these grants."

Congressional actions

On 22 May 2025, the U.S. House of Representatives’ (the House) passed a bill, recently coined as the “One Big Beautiful Bill” (the Bill) which, if ultimately enacted into law, would impose significant changes to clean energy tax credits established by the IRA. The provisions of the Bill would, for example, effectively terminate both the investment tax credit (ITC) and production tax credit (PTC) for projects that do not both (1) begin construction within 60 days after the Bill is enacted and (2) are not also treated as having been placed in service for tax purposes by January 1, 2028. Additionally, the Bill would terminate the $7,500 tax credits under the IRA for the purchase of electric vehicles as well as tax credits for businesses purchasing or leasing certain electronic vehicles. Thirdly, the Bill would repeal a 10-year incentive for clean hydrogen, block wind energy components from being eligible for the Advanced Manufacturing Production tax credit, and impose new and burdensome “foreign entity of concern” rules designed to prevent components and investors with respect to eligible projects from being sourced to China, among other jurisdictions. The Bill is already receiving widespread criticism from the renewables industry due to expectations that if passed, developers and investors alike would stand to lose hundreds of millions of dollars in sunk costs with respect to early-stage projects that will no longer be eligible to qualify for PTCs and ITCs, thereby becoming uneconomical. In order to become law, the Bill would need to also be approved by the Senate before being signed by President Trump. Notwithstanding the state of alarm the Bill has created for many in the renewables industry, many renewable energy pundits are finding some comfort in the fact that the Senate appears to be unwilling to pass the Bill in its current form. Such proponents are fiercely advocating that future amendments to the Bill will save the PTC and ITC, thereby preserving the economics of numerous solar, wind and battery energy storage system projects.

On 30 April 2025, the House passed two Congressional Review Act (CRA) resolutions that could change Biden-era clean vehicle laws in California. The first resolution would reverse EPA’s waiver that allows California to mandate the sale of zero-emissions trucks, while the second resolution would repeal EPA’s waiver that allows California to implement emissions standards for nitrogen oxides. On 1 May 2025, the House passed a third resolution that would undo EPA’s waiver allowing California to ban the sale of gas-powered vehicles by 2035 under the Clean Air Act (CAA). However, all three resolutions face uncertainty in the Senate, as the Senate Parliamentarian has generally ruled that these types of waivers are not eligible for revocation under the CRA.

Climate change litigation

On 19 May 2025, the U.S. District Court for the Northern District of Illinois ordered that the City of Chicago’s lawsuit against several major oil producers must be litigated in state court. The plaintiff’s complaint argues that for decades the defendants deceived the public about fossil fuel consumption, including through misleading advertisements allegedly portraying themselves as “climate-friendly energy companies.” The judge remanded the case back to state court, finding the district court lacked subject-matter jurisdiction.

On 16 May 2025, a Pennsylvania trial court dismissed a lawsuit filed by a local county against various oil and gas companies alleging they engaged in a decades-long climate disinformation campaign to deceive the public about the climate change impacts of fossil fuels. The court determined that it lacked subject matter jurisdiction over the claims, because the alleged causes of action were intertwined with emissions, which are solely within the province of the federal government. The court’s decision follows a trend of rulings dismissing claims against oil companies because of federal preemption, with states courts in New Jersey and Maryland dismissing similar claims. However, other courts have permitted such cases to move forward, including claims in Vermont, Colorado (see below), and the District of Columbia.

On 12 May 2025, the Colorado Supreme Court issued an opinion affirming the lower court’s ruling which found that federal law does not preempt a Colorado municipality and county from filing tort claims against two large fossil fuel companies for allegedly misleading the public about climate and human health-related risks of the use of their fossil fuel products. In the complaint, the plaintiffs seek monetary damages and remediation and/or abatement of the hazards resulting from the companies’ allegedly unlawful activity.

DEI developments and litigation

On 27 May 2025, the U.S. District Court for the District of Columbia permanently enjoined federal government from enactment of President Trump’s 27 March 2025 executive order targeting a major law firm. The court held that the executive order violated the firm’s First, Fifth, and Sixth Amendment rights, and ordered the federal government to issue guidance instructing all agencies to disregard the executive order. The executive order had directed federal agencies to suspend security clearances for the firm’s employees, restrict their access to federal buildings, and review all contracts both with the firm and with other contractors who do business with the firm.

Similarly, on 23 May 2025, the same court permanently blocked the targeting of a major law firm by an executive order issued by President Trump on 25 March 2025. The District Court ruled that the executive order violated the firm’s First Amendment rights by suspending security clearances of firm employees, restricting access to federal buildings, and directing federal agencies to review and potentially terminate contracts with the firm in retaliation for the firm’s work and its clients. To date, three law firms (including the two detailed herein) have obtained injunctions permanently blocking President Trump’s executive orders targeting them.

On 16 May 2025, the Federal Communications Commission (FCC) cleared a major telecommunications company’s $20 billion acquisition after the company agreed to terminate its DEI policies in a letter on 15 May 2025 to the FCC, promising to remove DEI from employee training guides, take down its DEI website, do away with its corporate DEI goals, eliminate supplier DEI goals, and stop binding executive bonuses to DEI metrics. The letter came after pressure from the FCC to stall the acquisition, which had been pending for eight months. Similarly, the FCC cleared another major telecommunication company’s merger in April after that company also agreed to eliminate its DEI policies.

On 14 May 2025, the U.S. District Court for the Northern District of Texas ordered an American nonprofit to accept $0.01 in damages to end a lawsuit against a major U.S. airline alleging that a now-discontinued program providing free flights to Hispanic college students was discriminatory. The order comes after the airline unconditionally and irrevocably eliminated the program and agreed to let the court enter a judgement for complete relief in favor of the nonprofit-plaintiff. The court determined that granting an “obstinate plaintiff total victory upon the defendant’s unconditional surrender is a reasonable response to the problems and needs confronting the court’s fair administration of justice.”

On 12 May 2025, 44 of the nation’s largest law firms were the subject of a complaint filed with the Equal Employment Opportunity Commission (EEOC) alleging that the firms use an outside staffing agency and joint employer to hire pre-law fellows based on race. The complaint was filed by an American nonprofit group on behalf of several members who were rejected from a fellowship program despite allegedly meeting or exceeding all academic and professional qualifications, in violation of “traditional, merit-based hiring practices.” As we covered in our April 2025 ESG newsletter, the EEOC previously sent letters to 20 “representative large, influential, or industry leading” law firms, stating concerns over their employment and hiring practices and requesting data on the firms’ participation in the fellowship program at issue.

EPA litigation

On 16 May 2025, a three-judge panel for the Fifth Circuit ruled that EPA erred in designating portions of two counties in Texas as failing to meet air quality standards for sulfur dioxide, siding with Texas and a Texas-based power generation company. The panel reversed its 2024 decision, invoking SCOTUS's ruling in Loper Bright Enterprises v. Raimondo, which allowed federal courts to interpret statutes without deferring to agency expertise. The panel found that EPA violated the CAA by relying on modelling data submitted by an environmental nonprofit, which had acknowledged limitations, instead of properly considering air quality monitoring data showing sulfur dioxide levels below federal standards. The panel ruled that EPA should have classified the areas as "unclassifiable" if the evidence was inconclusive and remanded the decision for further review. While the panel rejected some claims, it ultimately concluded that EPA acted arbitrarily by disregarding more reliable data and forcing a conclusion based on questionable evidence.

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