What’s next for US energy policy after the midterm elections?

As the midterm elections in the United States concluded, Democratic Party gained control of both the US House of Representatives and the Senate. This shift in power marks a significant change from the previous administration led by Donald Trump. While the election results bring a potential for policy debates and disagreements between the Democratic-controlled Congress and the current White House, it does not necessarily guarantee sweeping changes in energy and climate policies.

The Congress, however, will likely challenge the White House on various issues during this period of divided government.

The two major pieces of legislation in recent years regarding climate and energy, the Inflation Reduction Act of 2022 and the One Big Beautiful Bill Act of 2025, both saw significant changes in the balance of power. The former encouraged clean energy development with substantial tax credits and financial support, while the latter reduced these incentives by half.

With the current divided government, the legislative scope for new climate measures may be limited, as a two-thirds majority in both chambers would be required to override a presidential veto. Nevertheless, bipartisan compromises could still be possible, such as the bipartisan American Affordability and Jobs Act, aimed at streamlining energy project approvals and potentially gaining support from both Democratic and Republican legislators.

One promising area of potential progress could be permitting reform, as a bipartisan bill has been introduced to expedite the review and approval process for new energy projects. While the White House has expressed support for this bill, it still requires passage through the Senate and securing the approval of President Trump. Democrats are expected to scrutinize Trump and his appointees in agencies with significant influence on energy and climate policies, potentially leading to investigations and possible policy shifts.

At the state and local levels, Democrats have also made significant gains, including control of Pennsylvania's local government and the Georgia Public Service Commission. These governance changes could result in more support for renewable energy and efforts to reduce greenhouse-gas emissions. In particular, the data center industry has faced overwhelming opposition from voters in local ballot questions, with nearly every measure aiming to restrict their development.

This trend indicates a strong desire among voters for change, and may lead to policy shifts in the upcoming years.

In conclusion, despite the midterm election results signaling a shift in political power, significant legislation changes in the energy and climate sectors are unlikely due to the divided government and the President's veto power. However, there are potential opportunities for bipartisan compromises, such as permitting reform, and local action could pave the way for more climate-friendly policies in the future.

The broader implications of these election results, particularly at the state and local levels, will undoubtedly have far-reaching effects on the data center industry and other sectors.