Democrats' midterm win puts them in charge of the House and the Senate, and that could reshape U.S. energy policy. Investigations into White House oil deals are likely to top the agenda, and Democrats are likely to try to restore some clean energy tax credits. A Senate permitting bill offers the first test of compromise.
Democrats' midterm win puts them in charge of the House and the Senate, and the shift could reshape U.S. energy policy. Democratic control of both chambers and key committees, Democratic governors in data-center states such as Ohio, Georgia and Texas, a Democrat on Georgia's utilities regulator and the first Democrat on the Texas oil regulator since 1990 would seek to stymie the Trump Administration's pro-fossil fuel and unchecked data center expansion.
Investigations and tax credits head the agenda
Investigations into oil deals involving the White House are likely to be top of the agenda. They include the Venezuela oil deal and a deal on diesel with Russia's Vladimir Putin on the eve of the elections.
Massachusetts Senator Ed Markey, who sits on the environment and public works committee, said on election night that investigations are coming. According to Markey, they are going to need to "plant new forests for all of the subpoenas we'll be printing".
Democrats are also likely to attempt to bring back some clean energy tax credits, while President Donald Trump has vowed to become Mr Veto. However, a Democratic-majority Congress needs Republican support to overcome a veto, so energy policy changes are unlikely to be radical and more likely a compromise.
Data centers and the Texas regulator
A Democratic-controlled Congress could push for regulation of AI. Governors from Texas to Ohio could halt expansion plans amid concerns about how soaring power demand from AI would hit household bills.
In Texas, oil and gas engineer Jon Rosenthal won the open seat on the three-member Texas Railroad Commission, the first Democrat on the commission since 1990. He will be in the minority, but could influence issues including data center permitting and wastewater disposal from oil and gas production.
Iran war and a Senate permitting vote
The war in Iran is the biggest international issue Congress will face, and it will influence international oil prices and U.S. fuel prices in the coming months. Analysts still believe a U.S. escalation is more likely than de-escalation, but the Democratic Congress could pressure Trump into a deal as of January 1.
Rystad Energy analysts said the administration faces greater institutional pressure to pursue a Hormuz deal rather than a further round of strikes.
The first sign of whether compromise can work comes as early as November 9, when a proposed bipartisan permitting bill faces a procedural vote in the Senate. Analysts at TD Cowen have lowered the odds of the bill passing Congress to about 25%, from a 40% chance before the election.
Wood Mackenzie analysts, however, said permitting reform has a path that other Democratic priorities do not.
Source: Oilprice.com
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