Election 2024’s Impacts on the U.S. Energy Sector

After several months (years in fact) of at times brutal, bruising campaigning, Decision Day 2024 is here. While we await the results of this consequential Federal election, the U.S. energy sector faces a pivotal moment with considerable implications for its trajectory. Given its importance to every other market sector, under either Harris or Trump, the energy industry is poised for growth and transformation, yet the direction and specific policies shaping this growth could vary significantly based on the election's outcome. Here’s a look at how energy policy could evolve under different administrations and what it means for the sector.

Continued Growth with Divergent Approaches

Harris Administration: Expanded Support of the Clean Energy Transition

• Should the electors choose Vice President Harris, her administration is expected to continue and potentially expand the path of the Inflation Reduction Act (IRA), an ambitious policy framework offering tax credits for renewable energy projects and incentives for clean energy technologies. This would include extending support for projects in solar, wind, and other renewable resources, alongside infrastructure for electric vehicles (EVs) and energy-efficient technologies.
• A Harris administration would likely aim to further incentivizing clean energy investments, accelerating the adoption of renewables, and promoting innovations in energy storage, which is key to integrating intermittent resources like wind and solar. This vision emphasizes reducing greenhouse gas emissions and positioning the U.S. to lead in a global green economy.

‍Trump Administration: Boosting Oil and Natural Gas Production

• If former President Trump is elected, he would likely prioritize increasing domestic energy production, focusing on expanding oil and natural gas extraction and refining capabilities. His administration may reduce regulatory restrictions, streamline permits for energy development projects, and promote initiatives to boost fossil fuel production.
• This approach would be more focused on energy independence through traditional resources and could involve enhancing the export potential of U.S. natural gas, providing economic benefits to the domestic energy sector while aiming to meet both domestic and international demand. This would be coupled with expanded tariffs to encourage greater domestic production of both energy and critical emerging energy technologies.

Common Ground: Grid Modernization and Stability

Regardless of administration, grid modernization remains an essential priority. The U.S. grid system (both transmission and distribution) faces unprecedented demands as the country adds more renewable generation assets and sees growing electricity needs due to EVs, heat pumps, data centers, and other electrification initiatives. Both a Harris and Trump administration would likely support initiatives to modernize the aging U.S. power grid, focusing on integrating diverse energy sources and enhancing reliability.

Grid resilience is also a critical aspect, both in terms of safeguarding national security and ensuring stable energy prices. A modern grid must be resilient against extreme weather events—forest fires, hurricanes, and other natural disasters that can disrupt power supplies. Grid resilience and modernization are essential not only for energy policy success but also for reducing economic risks associated with power disruptions.

Federal and State Roles in Energy Policy

While federal policy plays a pivotal role, it’s essential to recognize that state governments also have significant influence over energy policy decisions. State-level policies have become increasingly proactive in advancing energy goals, with many states enacting mandates for renewable energy targets and emissions reduction independently of federal direction. This autonomy provides stability within the sector, as certain initiatives will progress at the state level even if federal policy shifts.

For instance, states like California and New York will continue pursuing aggressive renewable energy mandates, regardless of the federal administration. This aspect of the U.S. energy landscape offers companies continuity in an otherwise politically dynamic field, blunting some of the impacts of federal elections on energy policy.

Industry Outlook: Opportunities Across the Spectrum

With either administration, companies across the energy sector are presented with significant opportunities. The ongoing energy transition and global demand for sustainable energy solutions mean there is room for growth in both fossil fuel development and renewable energy technologies.

• A Harris administration may open opportunities for companies focused on renewables, energy storage, and clean technology infrastructure.
• Conversely, a Trump administration might stimulate growth opportunities for oil and natural gas producers while also driving advancements in infrastructure necessary for domestic energy independence and security.

In conclusion, while the specific policy prescriptions may differ depending on the election outcome, the U.S. energy sector is set for growth. As technology advances and market demands evolve, companies that can adapt to either policy landscape—prioritizing resilience, innovation, and sustainability—are poised to thrive in the coming years.

‍