The US administration issued the executive order “Protecting American Energy from State Overreach” on April 8, 2025, directing the US Attorney General to identify and challenge state- and local-level energy and climate policies and actions that may conflict with federal authority. The order targets state energy reforms, addressing greenhouse gas emissions, climate change, and other environmental issues, that the administration view as barriers to domestic energy production.
The executive order (EO), which was issued alongside two related actions bolstering coal-fired electricity and two subsequent actions that seek to eliminate federal regulation that interferes with energy policy objectives, outlines the administration’s position that a stable and affordable domestic energy supply is essential to national security and economic competitiveness.
It also asserts that certain state and local laws and civil actions—particularly those addressing climate change or emissions—may exceed constitutional limits or conflict with federal policy by restricting the development, production, or use of domestic energy resources. For example, the EO provides that states’ lawsuits against energy companies for “supposed ‘climate change’ harm under nuisance or other tort regimes . . . could result in crippling damages.”
State attorneys general, particularly those from Blue states, can be expected to push back and contest any federal effort to preempt state law. Disputes over preemption could delay any action under the EO while challenges wend their way through the courts.
While the EO is broadly targeted at all state and local policies, it specifically references recent state actions in New York, Vermont, and California:
- New York’s law seeking to impose retroactive financial liabilities on energy companies for their historical greenhouse gas emissions “not only in New York, but also anywhere in the United States and the world”
- Vermont’s similar approach targeting companies for alleged past environmental impacts “anywhere in the United States or the globe”
- California’s emissions caps and carbon credit trading system, which the order describes as effectively penalizing companies for carbon use
According to the EO, these and similar state laws and policies, as well as civil actions, may create barriers to interstate commerce, raise energy costs nationally, and interfere with the federal government’s energy agenda. As noted, we anticipate that state attorneys general, including the attorneys general of these three states, will challenge and contest preemption efforts.
FEDERAL LEGAL REVIEW AND ENFORCEMENT
The EO directs the US Attorney General to, in consultation with the heads of appropriate executive departments and agencies, identify state and local laws, regulations, causes of action, policies, and practices burdening the identification, development, siting, production, or use of domestic energy resources that are or may be unconstitutional, preempted by federal law, or “otherwise unenforceable.”
Particular attention is to be given to laws and actions related to climate change, carbon emissions, environmental, social, and governance (ESG) initiatives, and related regulatory frameworks.
The Attorney General is instructed to then take appropriate legal action to stop the enforcement of the identified state and local laws. A report detailing the actions taken and potential recommendations for further executive or legislative measures is due to the president within 60 days, i.e., June 7, 2025. The legal actions the Attorney General may recommend remain to be seen, and those recommended legal actions could prompt actions by the affected states, including declaratory judgment actions seeking a determination that the affected state laws are not preempted or unlawful.
FEDERALISM AND POLICY IMPLICATIONS
The EO raises key questions about the scope of state and local authority in shaping environmental and energy policy and will likely reignite legal debates over the balance of state and federal power in energy and environmental regulation. The EO also advances a broad view of the ability of state and local policies and actions to interfere with interstate commerce and frustrate national energy objectives. Litigation and policy responses from states are expected.
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