The Democratic Party’s decisive victory in the U.S. midterm elections has been widely called bad news for Trump policies, but now, it could interfere with legislation that previously drew support from both parties in Congress—and the GOP’s ambitions for energy independence and dominance.
The bill in question, the Bipartisan American Affordability and Jobs Act, got broad support from the previous Senate in early October, but voting on it was scheduled for after the midterm elections. It was meant to speed up permitting for new energy projects, including both oil, gas, and coal projects, and alternative energy installations such as wind and solar. The bill, according to West Virginia Senator Shelley Moore Capito, was “a major step toward making it faster and more efficient and easier to build infrastructure projects.”
Following the midterms, Senate advanced the bill, voting on Monday 73-25 to formally take it up, which likely quenched concerns that the Democrats might turn on the bill in light of their energy transition agenda. It did not sit well with environmentalist organizations, however, which were instrumental in the formulation of the Democrats’ energy transition agenda and vocal opponents of any new oil, gas, or coal projects in the United States.
Even for the most transition-minded Democrat, however, the situation is delicate. A number of the legislators who joined Congress after the midterm elections ran on platforms featuring a rein-in of data centers and assurances they would be made to pay for their own electricity. Texas is a case in point: the state with the most data centers under construction just got a Democratic Senator and a Democratic Governor, both of whom ran on data center-heavy platforms. Related: China’s Coal Buyers Resist Waiver Demands in New Indonesian Deals
Yet these platforms do not mean Democratic legislators are against data centers on principle. Indeed, as Robert Bryce pointed out in a recent report on data center rejections and Democrat legislators’ statements about the topic, what they want is tighter regulatory control—and energy security without raising people’s electricity bills.
Under the Bipartisan American Affordability and Jobs Act, data center operators will be made to pay a bigger portion of the grid upgrades that would be necessary to secure enough electricity for a growing pool of demand sources, Reuters noted in a report on this week’s vote. Transmission upgrades are a new focal point for energy investment worldwide, after the buildout in alternative energy installations failed to lead to more affordable electricity because of the lack of transmission capacity to carry the low-carbon electricity to demand centers when they need it.
Apparently, for some Democrats in Congress, the bill is also a starting point for more climate action in the legislative sphere. “This bill is the floor, not the ceiling, of our climate and environmental aspirations,” Senator Sheldon Whitehouse said at a news conference following the vote, as quoted by Reuters. “We look forward to working to accomplish big things with our big Democratic majorities.”
This is what is worrying some observers of U.S. energy policies: after Trump prioritized all energy, but above all baseload energy from hydrocarbons, now the Democrats could undermine that priority by pushing their own energy transition agenda, which focuses on alternative energy. Of course, there are also those in the environmentalist world who see the vote as the Democrats playing to Trump’s tune.
“The Democrats supporting this bill are sleepwalking into catastrophe by handing Trump virtually unlimited power to further entrench fossil fuels and enrich data center tech oligarchs in the last two years of his presidency,” the Center for Biological Diversity’s director for government affairs said in a statement as quoted by Reuters. While it is a fact of life that one cannot make everyone else happy, especially if one is in politics, environmentalists were a major pro-Democrat voter base in previous elections. It could be argued, however, that the midterms suggest they are no longer as key for the party, with other pressing issues taking over concern for the climate in voting decisions.
By Irina Slav for Oilprice.com