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With control of US Congress up in air, energy sector still sees path for action

A closer-than-expected battle over party control of the U.S. Congress has yet to be settled following the Nov. 8 midterm elections. But even with a potentially divided Congress or a Republican-majority legislature with a Democrat in the White House, energy and climate policy moves could still be possible over the next two years, according to policy experts.

"Simply because we will have or we are likely to have divided government ... does not mean that we should put all considerations of energy issues back on the shelf," Scott Segal, a partner with Bracewell LLP and co-chair of the firm's Policy Resolution Group, said Nov. 9 during a post-election webinar.

With many races still undecided as of about 3 p.m. ET on Nov. 9, Republicans looked likely to reclaim a majority in the U.S. House of Representatives, posing a potential speed bump for President Joe Biden's climate and energy agenda.

But the GOP's House lead looks to be narrower than anticipated heading into the midterms. The fate of U.S. Senate control was also up in the air as of midday Nov. 9, with the Senate race in Georgia projected to go to a December runoff.

Even if Republicans take back both chambers, they are unlikely to have the veto-proof majorities needed to pass legislation that Biden opposes. That dynamic could force the GOP to focus on oversight of Biden's climate policies and work mainly on legislation that even Democrats will support.

SNL Image

As of early afternoon Nov. 9, the outlook for party control of Congress after the U.S. midterm elections was still in question.
Source: Andrey Denisyuk/Moment via Getty Images

Looking ahead

In a split federal government, "bipartisanship is going to be essential," Jeremy Harrell, chief strategy officer for conservative clean energy advocacy group ClearPath, said during a recent event hosted by Energy Dynamo Hub. Making the federal permitting process for energy projects easier is one area of possible collaboration.

Next Congress, "permitting reform needs to be a priority," said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute.

During the Bracewell webinar, Macchiarola said Congress could take up permitting reform during the "lame duck" session after the elections, but chances would be lower if Republicans reclaim a majority in either or both chambers.

"When you have a change in majority control, it's very hard to get much done in a lame duck session," Macchiarola said. "Obviously, the party coming into power has different ideas and different priorities."

The heads of three major U.S. investor-owned utilities suggested the final election results will not have a significant impact on the industry and its energy transition.

"Our industry is one that provides a product that is nonpartisan," Edison International President and CEO Pedro Pizarro said Nov. 9 during a webinar hosted by S&P Global Ratings. Pizarro also said there is a "common core of agreement" in both parties about the need for a clean energy transition.

American Electric Power Co. Inc. Chairman and CEO Nicholas Akins echoed those comments. "There is no question our investors, our stakeholders expect us to move to a clean energy economy," Akins said.

"The landscape for new renewable development and energy infrastructure really has never been better," NextEra Energy Inc. Chairman, President and CEO John Ketchum added. "We have always been very successful as an industry and as a company of dealing with both sides of the aisle."

Key races for energy

Although key congressional races had yet to be called as of midafternoon Nov. 9, results were in for some contests.

In the House, Republicans easily defended seats held by their party's energy leaders.

U.S. Rep. Cathy McMorris Rodgers, R-Wash., the top Republican on the House Energy and Commerce Committee, defended her grip on Washington's 5th Congressional District. McMorris Rodgers would be the presumptive head of the House energy committee if Republicans regain a House majority.

Rep. Bruce Westerman won another term representing Arkansas' 4th Congressional District. Westerman is the ranking member of the House Committee on Natural Resources.

Current House energy committee chair Rep. Frank Pallone Jr., D-N.J., sailed to victory in his race, as did Rep. Raúl Grijalva, D-Ariz., who leads the House natural resources committee.

Turning to tighter races, Rep. Marcy Kaptur of Ohio fended off Republican challenger J.R. Majewski. Kaptur is now chair of the House Committee on Appropriations' energy subcommittee, which helps determine agency budgets and is key in distributing federal money for energy and climate policies.

In the Senate, Democrat John Fetterman defeated GOP contender Mehmet Oz for the Pennsylvania seat now held by retiring Republican Sen. Pat Toomey. Both candidates expressed the desire to lower regulatory barriers for the state's coal and natural gas industries. But Fetterman, Pennsylvania's lieutenant governor, has called climate change an "existential threat" and championed a quick transition to cleaner energy.

Heading into the election, Fetterman was joined on the campaign trail by Biden, who has promoted a shift to a carbon-free power sector by 2035.

Democrats also prevailed in a close race in Colorado between incumbent Sen. Michael Bennet and Republican challenger Joe O'Dea. As chair of the Senate Finance Committee's energy subcommittee, Bennet helped shepherd the inclusion of substantial clean energy tax credits in the Inflation Reduction Act signed in August.

But Republicans held onto other key Senate seats. J.D. Vance maintained a Republican hold of the Ohio seat held by outgoing Sen. Rob Portman. Vance defeated Democratic rival Tim Ryan, a U.S. House member. Incumbent Marco Rubio of Florida bested Democratic Rep. Val Demings in Florida's Senate race.

Several other Senate races were still undecided. In Georgia, Democratic Sen. Raphael Warnock was neck-and-neck with Republican candidate Herschel Walker. With neither candidate appearing to get at least 50% of the state's vote, they are expected to head to a December runoff race.

Results were also up in the air in the race between incumbent Sen. Catherine Cortez Masto, a Democrat, and Republican Adam Laxalt for the Nevada Senate race. In Arizona, Democratic Sen. Mark Kelly held more than 51% of votes counted, though as of about 3 p.m. ET on Nov. 9, 68% of votes had been tallied.

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