Many project the November election will be won by tight margins in the legislative and executive branches. On March 20, the Economist cited a difference in the polls of just 1 percent. The house and the senate are both very close flips. A five-seat change would flip the house, and a one or two seat change would flip the Senate, depending on the vice president, who would be the tiebreaker in a 50/50 Senate. There are 34 senators who are up for re-election.
And the spotlight is shining brighter on energy and energy policy than it has in the past. Regulations around methane, various elements and incentives in the Inflation Reduction Act, severe weather events, and geopolitics have all brought the need for adequate and reliable energy to the forefront. Whoever wins the presidential and congressional elections will play a big role.
At February’s NAPE 2024 Business Summit--hosted by the American Association of Petroleum Landmen, American Association of Petroleum Geologists, the Independent Petroleum Association of America, and the Society of Exploration Geophysicists--Anne Bradbury, president and CEO of the American Exploration & Production Council, shared insights around how potential election results could impact the energy sector.
“It will come as no surprise to you that the single most important thing on voters mind by a wide margin is the economy,” she said. “Interestingly, the second most important, is foreign policy. And I think this is really significant, because energy is so fundamental to both of those issues.”
Here’s how Bradbury says energy policy may be affected in each possible election outcome:
Scenario 1: Unified Republican Control
In this scenario, a Republican president is elected, the house maintains a Republican majority, and the Senate flips to a Republican majority. Under this, we might see:
- Relief from the large amount of regulatory measures passed under the Biden Administration. Bradbury notes this would take time, as it would for any president, and uses the example of methane control tackled by the Biden administration, which was promised from the first day he took office and took three years to complete.
- Republicans could use the “reconciliation process,” which enables Senate Republicans to eliminate the threat of a filibuster to pass tax and spending bills. This is how the Democrats passed the Inflation Reduction Act in 2022.
- Via reconciliation processes, Republicans may opt to repeal sections of the IRA. This might include the methane tax.
- There would be a shift away from bully pulpit tactics in how the administration would speak on energy and energy policy.
- There may be a shift in leaders involved in international relations. For example, the U.S. representatives at COP 29 might not be for phasing out fossil fuels.
Scenario 2: Unified Democratic Control
Here’s what Bradbury says to expect if Biden is re-elected, the Senate stays Democrat, and the House chamber flips to a Democrat majority:
- Continued regulatory action and executive orders, and the only way to challenge any of these new policies would be via the courts system
- Democrats could use the reconciliation process to advance tax and spending policy, which could be used to impose a stock buyback tax or increase taxes and fees on public lands and production
Scenario 3: Divided Government
If there is not unified control across the legislative and executive branches, that could mean:
- Under a Democrat president, there may be continued regulatory actions and executive orders, many of which would be fought in courts
- Under a Republican president, there may be an international leadership and regulatory shift, but this would take time
- Everything from government funding to permitting reform would need to be bipartisan for it to come across the president’s desk under either a Democrat or Republican president
In closing, Bradbury emphasized the importance of energy professionals exercising their right to vote. “It's really important that we collectively make our voices heard at the ballot box, town halls, through conversations with policymakers and elected representatives, and through our larger network of American energy workers,” she said.