Just as Q2 2024 came to a close, the U.S. Supreme Court issued a decision in Loper Bright v. Raimondo that overturned the longstanding precedent of deference to agency rulemaking under Chevron v. NRDC. The decision is extremely consequential, with the potential to reshape modern American regulatory action, including regulations impacting the energy industry. It could impact everything from federal oil and gas leasing, implementation of environmental statutes, and Securities and Exchange Commission rulemakings such as the disclosure of greenhouse gas emissions.
At the same time, energy policy is playing a significant role in the upcoming U.S. presidential and congressional elections, with Republicans and Democrats quite divided over support for traditional fossil energy production, climate change regulations, and incentives for renewable energy. A global populist wave, as recently evidenced by a significant change in the European Parliament that was partially a reaction to Europe’s energy and climate policies, could also have reverberations in the United States and will most certainly impact trade policy.
Forecasts for massive increases in electricity demand, spurred in part by the proliferation of artificial intelligence and data centers, has companies, politicians, regulators, and financial institutions seeking solutions in terms of additional dispatchable electricity generation and needed infrastructure. For many entities, incentives included in the Inflation Reduction Act (IRA) offer a critical pathway to successfully decarbonizing and addressing surging demand load. The rollout, management, and disbursement of the IRA funds has proved to be difficult given the sheer volume of dollars and initiatives in the program and manpower constraints at the Department of Energy and other federal agencies. Some IRA programs could face cuts or significant changes under a potential Trump administration, particularly if Republicans were to hold the House and take the Senate.
Challenges continue to include the administration’s “pause” on LNG permits, although a federal judge in Louisiana recently issued a stay on the pause. While the stay is considered a win for the 16 states that were plaintiffs in the case, it will not likely result in any export licenses being issued prior to the November elections. Like many issues, it will likely not truly be resolved until after the election.
