What energy investors should watch

Yes, it’s entirely possible that one or both houses of Congress will shift to Democratic control. That’s not my opinion. It’s what many of the research reports, polls, and prediction markets are suggesting as of this writing.

For argument’s sake, let’s say that this time the polls are correct. The election ends with a “blue trickle,” and Democrats win out with a slight edge in the House, Senate, or both. It won’t be enough to meaningfully change, well, anything. If the election ends with just a slight lean to the Democratic side, it won’t be enough for a veto-proof majority. Candidates can specify policies — like halting the growth of data centers — all they want, but there’s a chasm between being elected and passing new laws.

Research I’ve read and conversations we’ve had on CNBC suggest that the next two years in Washington, D.C., will be flush with finger-pointing, investigations into the president and his family, and posturing ahead of the far-more-important 2028 presidential election.

S&P Global doesn’t exactly agree with me, saying that Democratic control of either chamber would bring “tougher oversight of agency decisions” and could impact things such as tax incentives and “other policies underpinning long-term energy investments.”

A Democratic Congress could be good for offshore wind, an energy source the president seems to hate with the white-hot passion of the sun. Speaking of the sun, a shift blue could also be positive for the continued growth of solar, perhaps via new tax incentives. Though both are growing rapidly.

If the Republicans maintain control over one or both houses, we keep doing more of the same, albeit with more urgency. S&P Global adds that “a continued Republican majority would give the administration more room to pursue expanded domestic production, faster permitting and environmental deregulation, though narrow margins could limit major legislation.”

Any change in control of Congress is also unlikely to make a big difference around the Iran conflict. Once any new Congress begins in January, things will have either ramped up, stayed the same, or cooled down. A new Congress could try to use its authority under the War Powers Act. The team at Piper Sandler agrees, writing that “elections matter, but will likely not change the direction of things” as Trump focuses more on his own legacy. That’s a polite way of saying that the President is going to do largely what he wants, Congress be darned.

On the state level, the midterms may matter a little bit more, particularly as they relate to energy-hungry data centers. In Texas, a change in the statehouse could bring a change in sentiment around data centers. Candidate Gina Hinojosa has a policy to “end data center madness” and supports a moratorium on new builds. Amy Acton also supports a…