What The Mid-Term Elections Mean For U.S. Energy

I’ve been waiting for election officials from the remaining prominent congressional districts to determine the winner before putting this article together to avoid unnecessary guesswork. However, given that officials in California and other competitive states seem in no rush to give up the media attention, time is running out for that goal.

The first thing that is very clear from the results of the Democratic Party maintaining a narrow majority in the U.S. Senate and flipping at least two governor’s offices (possibly three, depending on the final outcome in Arizona) is that voters seem satisfied with the state of energy in the U.S. . Conventional wisdom is that high oil prices, which have done so much damage to President Joe Biden’s public approval ratings, will translate into gains for Republicans in Congress, governors and state legislatures. None of these have materialized.

Biden’s decision to draw hundreds of millions of barrels of oil from the U.S. Strategic Petroleum Reserve to lower gas prices may have hurt America’s energy security, but his image of “doing something” to help gas consumers clearly helped Democrats in the vote Box. Likewise, while many energy and political observers scoffed at the Orwellian nature of the title chosen for Biden and Sen. Joe Manchin’s green energy and social spending bill — the “Inflation Reduction Act” (IRA) — it is clear that the Few voters had any similar reaction to that legislation.

Therefore, it would be unwise to expect any real change in the direction of domestic energy policy over the next two years, regardless of which side ends up with a narrow majority in the U.S. House of Representatives. Asked by reporters what he plans to change after the election, Mr Biden replied “nothing” and that he should keep his word.

What this means for American consumers, given the inextricable interrelationship between energy and government policy. Wind and solar power will continue to expand, at an accelerated pace thanks to the IRA and a slew of new incentives and subsidies included in last year’s bipartisan Infrastructure Act (BIL).

This expansion will happen no matter how instability in the national grid increases, as grid managers are forced to consolidate and try to incorporate more and more intermittent energy into their daily mix. Warnings like the Western Electricity Coordination Council (WECC) last week about the growing instability of grid managers will fall on deaf ears as public officials continue to prioritize demonstrating their merits in meeting climate change goals rather than delivering affordable and reliable electricity. provide electricity to their constituents.

“If nothing is done to mitigate the long-term risks to the Western Interconnect, by 2025, we expect the reliability and security of the interconnect to be at serious risk,” the WECC said in its annual review. But concerns about policymaking for the next re-election campaign Investors will look at the outcome of these midterm elections and simply advise grid managers to handle it as best they can.

For the domestic oil and gas industry, these midterm elections will almost certainly mean that presidents will have more courage to act on the most radical impulses their business sector is concerned about. For example, expect a more concerted effort to implement a new windfall tax, especially if Democrats manage to maintain their majority in the House.

The White House said last week that the president would like to see some form of licensing bill touted by Senator Manchin incorporated into the upcoming National Defense Authorization Act. But oil and gas lobbyists should expect any such language to be significantly revised from the version seen in September, including strict sidebars that limit any interest in oil and gas projects, especially any new pipelines. Biden has repeatedly made clear that he wants “no more drilling” — as he told an audience in New York on Saturday — and has consistently made clear that when he makes promises to limit oil and gas, he should keep his word . worried.

If the GOP somehow manages to get 218 seats in the House, then Biden may have to put his legislative agenda on hold until 2024. But that will bring little comfort to America’s fossil fuel producers. Biden’s regulatory agenda is in full swing, and the hundreds of billions in incentives and subsidies included in the IRA and BIL will work to ensure that the enormous advantages of energy-related capital continue to flow from fossil fuels to new green energy projects.

Since at least 2009, leaders and executives in the coal, oil and gas sectors have had to take on the thankless role of managing the industry’s recession. This decline can be expected to accelerate from here.

Source

Also Read :  GLOBAL MARKETS-World stocks stuck as U.S. midterms too close to call

Leave a Reply

Your email address will not be published.

Related Articles

Back to top button