President Bush issued
Executive Order No. 13211, "Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use," on
May 18, 2001 (66 Fed. Reg. 28355 (May 22, 2001)). In order to
ensure that agencies "appropriately weigh and consider the effects
of the Federal Government's regulations on the supply, distribution,
and use of energy," the President has directed agencies to prepare
and submit to OMB's Office of Information and Regulatory Affairs
(OIRA) a "Statement of Energy Effects" for their "significant
energy actions." This memorandum provides guidance on the implementation
of this Order.
1. What is the basic
purpose for having an agency prepare a Statement of Energy Effects?
The basic purpose
for having an agency prepare a Statement of Energy Effects is
to ensure that agencies "appropriately weigh and consider the
effects of the Federal Government's regulations on the supply,
distribution, and use of energy." As President Bush stated in
The Federal government
can significantly affect the supply, distribution, and use of
energy. Yet there is often too little information regarding the
effects that governmental regulatory action can have on energy
2. What agencies does the Order cover?
E.O. 13211 applies
to all Federal agencies, except for the independent regulatory
agencies (Sec. 4(c)). We encourage independent regulatory agencies
to comply voluntarily with the provisions of this Order, particularly
3. When does an agency
prepare a Statement of Energy Effects?
To the extent permitted
by law, an agency is obligated to prepare a Statement of Energy
Effects for those matters identified as a significant energy actions.
According to E.O. 13211, "significant energy action" means "any
action by an agency (normally published in the Federal Register)
that promulgates or is expected to lead to the promulgation of
a final rule or regulation, including notice of inquiry, advance
notice of proposed rulemaking, and notice of proposed rulemaking:
"(1)(i) that is
a significant regulatory action under Executive Order 12866 or
any successor order, and
"(ii) is likely
to have a significant adverse effect on the supply, distribution,
or use of energy ..." (Sec. 4(b))(1)
Based on this definition,
an agency should discuss with OIRA whether a regulatory action
is significant, and "is likely to have a significant adverse effect
on the supply, distribution or use of energy." If OIRA determines
that the regulatory action is a significant energy action, OIRA
will inform the agency, which shall then prepare a Statement of
Energy Effects (Sec. 4(b)(2)).
4. What is meant by
"a significant adverse effect?"
Adverse effects could
include any of the following outcomes compared to a world without
the regulatory action under consideration:
- Reductions in crude
oil supply in excess of 10,000 barrels per day;
- Reductions in fuel
production in excess of 4,000 barrels per day;
- Reductions in coal
production in excess of 5 million tons per year;
- Reductions in natural
gas production in excess of 25 million mcf per year;
- Reductions in electricity
production in excess of 1 billion kilowatt-hours per year or
in excess of 500 megawatts of installed capacity;
- Increases in energy
use required by the regulatory action that exceed any of the
- Increases in the
cost of energy production in excess of one percent;
- Increases in the
cost of energy distribution in excess of one percent; or
- Other similarly
A regulatory action
could also have significant adverse effects if it:
- Adversely affects
in a material way the productivity, competition, or prices in
the energy sector;
- Adversely affects
in a material way productivity, competition or prices within
- Creates a serious
inconsistency or otherwise interfere with an action taken or
planned by another agency regarding energy; or
- Raises novel legal
or policy issues adversely affecting the supply, distribution
or use of energy arising out of legal mandates, the President's
priorities, or the principles set forth in Executive Order Nos
12866 and 1321l.
- What does an agency
do with this Statement of Energy Effects?
First, and most important,
agencies are to utilize, to the extent permitted by law, the Statement
of Energy Effects in their decisionmaking to improve the quality
of agency actions affecting energy supply, distribution, or use.
Second, agencies are
to submit a Statement of Energy Effects to the Administrator of
the Office of Information and Regulatory Affairs (OIRA) whenever
they present a significant energy action for OIRA review under
E.O. 12866 (Sec. 3(a)).
Third, agencies are
to publish their Statements of Energy Effects, or a summary thereof,
in each related Notice of Proposed Rulemaking (NPRM) and in any
resulting Final Rule (Sec. 3(b)). On those occasions when an agency
publishes only a summary of a Statement of Energy Effects, the
agency shall also make the Statement of Energy Effects available
through an agency web site (and include the web site address in
the NPRM and/or Final Rule) and provide the public with notice
of whom to telephone to request, without cost, a paper copy of
the Statement of Energy Effects.
6. What is a Statement
of Energy Effects?
According to E.O.
13211, "A Statement of Energy Effects shall consist of a detailed
statement by the agency responsible for the significant energy
action relating to:
"(i) any adverse
effects on energy supply, distribution, or use (including a shortfall
in supply, price increases, and increased use of foreign supplies)
should the proposal be implemented, and
alternatives to the action with adverse energy effects and the
expected effects of such alternatives on energy supply, distribution,
and use" (Sec. 2(b)).
In preparing a Statement
of Energy Effects, agencies must follow the "Guidelines to Standardize
Measures of Costs and Benefits and the Format of Accounting Statements"
(OMB Memorandum M-00-08, March 22, 2000)(</omb/memoranda/m00-08.pdf>).
7. What is meant by
rely on incentives and offer increased flexibility are often more
cost-effective than more prescriptive approaches. Reasonable alternatives
may include any of the following.
- Informational Measures;
- Market-Based Approaches;
- Different Requirements
for Different Segments of the Regulated Population;
- Alternative Levels
- Alternative Effective
Dates of Compliance; or
- Alternative Methods
of Ensuring Compliance.
Within a command-and-control regulatory program, performance-based
standards may offer advantages over standards specifying design,
behavior, or manner of compliance.
8. How detailed should
the Statement of Energy Effects be?
As a general matter,
the Statement of Energy Effects should be prepared at the level
of detail appropriate and practicable for reasoned decisionmaking
on the matter involved, taking into consideration uncertainties,
the significance and complexity of the decision, and the need
to adequately inform the public. For example, if the significant
energy action has an economic impact that would require the agency
to prepare a Regulatory Impact Analysis (RIA) under Sections 3(f)(1)
and 6(a)(3)(C) of E.O. 12866, then the Statement of Energy Effects
should be prepared at the level of detail and analytic effort
commensurate with the RIA. If the significant energy action has
less economic impact, then the level of detail and analytic effort
should be commensurate therewith.
9. What happens in
emergency situations or in situations with short-term deadlines?
In emergency situations,
or when an agency is obligated by law to act more quickly than
normal rulemaking procedures allow, the agency shall notify OIRA
as soon as possible, and, to the extent practicable, comply with
E.O. 13211. For those regulatory actions that are governed by
a statutory or court-imposed deadline, the agency shall, to the
extent practicable, schedule rulemaking proceedings so as to permit
sufficient time to prepare any applicable Statement of Energy
Effects and to permit OIRA to conduct its regulatory review.
10. When did the Order
E.O. 13211 became
effective on May 18, 2001. It applies to any significant energy
action initiated by an agency after May 18, 2001. If an agency
has already published a Notice of Proposed Rulemaking that constitutes
a significant energy action, the agency shall prepare the Statement
of Energy Effects and submit it to OIRA as soon as practicable,
but no later than the agency submits the Final Rule to OIRA under
11. With whom should
we consult when we have questions concerning E.O. 13211?
If your staff have
questions concerning this Order, please contact Richard Theroux
in OIRA (202/395-3089 and mailto:email@example.com)..
"Regulation" and "rule" have the same meaning as they do in Executive
Order 12866 or any successor order (Sec. 4(a)).