Three Takeaways from the Trump Administration’s Latest Push for Shifts in Domestic Energy Production

On April 8, 2025, President Trump issued three executive orders[1] reflecting the Administration’s push for increased domestic coal production. The orders point to the surge in electricity demand from data centers and other infrastructure required to support Trump Administration goals, including becoming a leader in artificial intelligence (AI), as a key rationale. Here are three takeaways from these orders:

1. The Administration Is Seeking to Use the President’s Executive Order Authority to Support Coal Production.

The orders align with the Administration’s goal to expand American energy development. It seeks to advance that effort by attempting to remove federal barriers to coal production, respond to new and growing domestic energy demands by increasing reliance on coal-fired power, and eliminate state and local climate laws that “undermine Federalism by projecting the regulatory preferences of a few States into all States.”[2]

Support leasing and development of coal resources on federal land. First, the Department of the Interior and Department of Agriculture are required to prioritize and expedite leasing of federal lands with coal resources.[3] Such acceleration would be supported by expanding categorical exclusions under the National Environmental Policy Act (NEPA) that may speed up the permitting process for new coal mining projects. This order also seeks to reclassify coal as a “mineral” in order to increase potential subsidies and other financial incentives, as well as fast track permitting. President Trump also granted certain coal power plants a two-year exemption from Biden-era Clean Air Act rules that require reductions in air emissions of mercury, benzene, and other toxic chemicals. On April 14, 2025, the U.S. Environmental Protection Agency (EPA) posted a list of the almost 50 coal power plants that received the exemption.

Preserve existing coal-fired generating units. Further, the orders direct the Department of Energy (DOE) to develop a process for assessing “critical” generation resources, which may include those that provide larger loads, such as coal plants. The goal is to require such resources to remain in operation to the extent allowed under applicable law.[4] For example, the process is meant to “prevent … an identified generation resource in excess of 50 megawatts of nameplate capacity from leaving the bulk-power system or converting the source of fuel of such generation resource if such conversion would result in a net reduction in accredited generating capacity.”[5]

Identify state and local laws that burden U.S. energy production. Finally, state and local climate laws and policies that may support coal-fired power’s competitors, including wind and solar energy, will be examined by the federal government.[6] The President has directed the Attorney General to “take action” against state and local laws and policies that “burden the use of domestic energy resources and that are unconstitutional, preempted by federal law, or otherwise unenforceable.”[7] Priority focus will be given to those laws and policies addressing “climate change,” “environmental, social, and governance” initiatives, “environmental justice,” and “carbon” or “greenhouse gas” emissions. Examples of such programs called out in the order are funds to collect climate penalties, carbon taxes, and cap-and-trade programs.

2. Expect Federal Efforts to Challenge State and Local Laws, But the Immediate Practical Impact May Be Limited.

In first Trump Administration, some states supported the federal government’s shift in climate change policy—such as changes in EPA greenhouse gas (GHG) emission regulations or the withdrawal from the Paris Agreement, an international climate change treaty. However, other states and localities opposed those changes and responded by continuing to advance and develop their own laws and programs.

State and local climate laws have largely been sustained in court challenges. To date, state and local climate laws and programs have had considerable staying power and withstood legal challenges. For example, California’s cap-and-trade program, designed to compel GHG emission reductions, survived constitutional challenges brought during the first Trump Administration. Likewise, courts rejected constitutional challenges under the dormant Commerce Clause to state-level Renewable Portfolio Standards (RPS) mandating that a defined percentage of a utility’s electricity be from renewable energy sources. Moreover, the federal government’s ability to preempt state and local laws and programs may be impeded by limited federal jurisdiction over electricity generation that is generally governed at the regional or local level. Hence, any attempts by the federal government to re-litigate RPS laws or challenge recently enacted climate change programs explicitly called out in the orders, such as New York’s Climate Change Superfund Act, may face an uphill legal battle. How that may play out remains uncertain, however, as at this juncture, it is not clear which laws may be identified for review and what legal challenges may be brought.

Federal actions could potentially discourage new state and local efforts. Even if a legal challenge is not successful, a focus by the federal government or a U.S. Department of Justice (DOJ) challenge to state laws could discourage and state and local governments from continuing to pursue climate-related initiatives. Moreover, outside of court action, the Administration could also seek to use other tools to influence state and local actors, such as to condition or freeze federal funding. A fact sheet accompanying these three energy-related orders cites to a prior executive order by President Trump that threatened to revoke federal funding from sanctuary states and cities that refuse to comply with federal immigration law.

3. Interested Stakeholders Should Monitor Federal Agencies’ Next Steps Directed by the Orders.

While the executive orders themselves do not have immediate legal effect, they do set deadlines for agencies to assess certain existing federal, state, and local programs and submit reports to the Administration. The key requirements and deadlines include:

• CEQ to identify potential NEPA exclusions by May 8. By May 8, federal agencies must identify to the Council on Environmental Quality any potential categorical exclusions pursuant to NEPA that could further the production and export of coal.[8]
• DOJ to identify laws by June 7 that burden domestic energy resources. The Attorney General must submit a report to the President by June 7 detailing actions taken against state laws and policies that burden the use of domestic energy resources and additional recommendations for the executive and/or legislative branches.[9]
• Agencies to propose policies by June 7 that enhance mining of coal on federal lands. The Secretary of the Interior, Secretary of Agriculture, and Secretary of Energy must submit a report to the President by June 7 identifying coal resources and reserves on federal lands and proposing policies to enable the mining of such coal resources.[10]
• EPA and other agencies to consider in 60 days ways to revise or rescind restrictions that discourage coal-fired power. By June 7, the EPA Administrator, Secretary of Transportation, Secretary of the Interior, Secretary of Energy, Secretary of Labor, and Secretary of the Treasury must consider revising or rescinding any guidance, regulations, programs, and policies that seek a transition away from “coal production and electricity generation.”[11]
• Interior and other agencies to report by June 7 on how coal can help power AI data centers. The Secretary of the Interior, Secretary of Commerce, and Secretary of Energy must submit a report to the President by June 7 identifying regions where coal-powered infrastructure is available for supporting AI data centers and assessing the potential for expanding coal-based infrastructure to power such data centers.[12]
• DOE to submit plan by July 7 to support coal-fired power. The Secretary of Energy must submit a detailed action plan to the President outlining the funding and policy actions taken to accelerate coal technology deployment.[13]
• DOE to also publish a reserve margin methodology by June 7. The Secretary of Energy must publish on DOE’s website a “uniform methodology” for analyzing reserve margins regulated by the Federal Energy Regulatory Commission and identify regions with reserve margins below acceptable thresholds.[14]

Stakeholders should closely monitor announcements by these multiple agencies as these reports and other actions are taken.

[1] See White House, Executive Order, Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241 (Apr. 8, 2025) (hereinafter “Reinvigorating Coal Order”); White House, Executive Order, Strengthening the Reliability and Security of the United States Electric Grid (Apr. 8, 2025) (hereinafter “Strengthening Grid Order”); White House, Executive Order, Protecting American Energy From State Overreach (Apr. 8, 2025) (hereinafter “State Overreach Order”).

[2] State Overreach Order.

[3] See Reinvigorating Coal Order.

[4] See Strengthening Grid Order.

[5] Id.

[6] See State Overreach Order.

[7] Id.

[8] Reinvigorating Coal Order.

[9] State Overreach Order.

[10] Reinvigorating Coal Order.

[11] Id.

[12] Id.

[13] Id.

[14] Strengthening Grid Order.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.