Energy Update: Week of January 5th

Friends,

Welcome to 2026!!  I hope you had a chance to get your rest and enjoy your time with family and friends.  We start this year knowing it is America250. Over the holidays, I was just thinking back to 1976 (I was in first grade 50 years ago dressing up like a revolutionary soldier). Thank goodness we didn’t have Facebook or Phones with cameras back then. We are in for a great year.

Before we can really roll into 2026, we must talk about Venezuela. While the military action was swift and efficient, it is clearly becoming a partisan, political football. As National Journal Jeff Dufour put it: “To say the situation is fluid does a disservice to fluidity.” The real concern for Energy Update readers is the impact on energy/oil markets, infrastructure and future industry decision-making. We have some folks who have been on the ground there over the years who can provide some historical/background context for infrastructure needs and challenges. Columbia’s Center on Global Energy Policy published Q&A on this weekend's developments, which shares their experts’ thoughts on the energy-related implications of the development. ClearView’s Kevin Book is always a great resource as is Paul Sankey (who also has already written something that I could forward). Anas Alhajji, an economist who specializes in oil and gas industries, also has a good impact analysis on his Energy Outlook Advisors Substack. Our friend/oil industry expert Stephen Brown worked at one time for PdVSA US subsidiary Citgo, so he is also likely a good resource. Finally, my colleague Scott Segal has done some thinking on similar situations in the past, including post-WWII actions standing up governments in Germany and Japan. We are happy to discuss all of this.  

As we do each year, we are highlighting Six Key Energy Issues for 2026 with the calendar kicking into gear right away with permit reform.  A key date to watch as a measure for action will be mid-March in Houston when we all head to CERA Week. One important takeaway over the next year when considering complex energy policy issues: most politicians miss the complexities when discussing energy issues and stick to partisan talking points. So beware and remember to ask us if have questions. Finally, in 2026, can we try not to talk about 2028, no matter what JD Vance, Glenn Youngkin, Gavin Newsom, Kamala Harris and whomever else tries to jump in? We will have plenty of time for that conversation after November 2026 when we actually will get a temperature check from voters. Anything before that is a parlor game and not worth any serious discussion.

Senate is in today while the House returns tomorrow with the SHOWER Act, which would redefine the definition of a showerhead to permit greater waterflow, and a measure to nullify the Biden administration’s final efficiency standards for manufactured housing and remove DOE’s authority to set those standards. Both headed to Rules tomorrow evening and an expected vote by week’s end.

There are two big events on Wednesday this week: 1) The House Energy & Commerce’s Subcommittee on Energy holds a hearing to discuss the licensing, deployment and implementation of recently enacted federal laws and administration policies in nuclear energy. 2) The Chamber of Commerce will hold its Permit America to Build Legislative Day of Action on Capitol Hill in the Dirksen Senate Office Building. The event will feature a forum, press event and visits to House and Senate offices. 

Finally, we are hearing DOE uranium awards are coming out. More on this as we hear. Less than a month to the 2026 Winter Olympics in Italy. Keep your eye on the US Women’s hockey team. Not only have they been waxing Canada in the most-recent Rivalry Series, the starting US goalie, Aryn Frankel, is my good friend Geoff Hahn’s niece. More on things to watch over the next few weeks.

Call with any questions.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

Six Key Energy Issues for 2026

1. Data center, AI, Consumer Demand Questions and Infrastructure Actions – We (Bracewell) have been talking about energy infrastructure for more than two years now, but in 2026, the rapid expansion of data centers, AI deployment and electrified consumer demand is colliding with infrastructure realities that policymakers and markets can no longer ignore. Hyperscale data centers are emerging as among the fastest-growing sources of load in the U.S., raising urgent questions about who pays for new generation, transmission, and gas infrastructure—and how quickly it can be permitted and built. At the same time, AI-driven demand growth is challenging long-held assumptions about efficiency gains, forcing utilities, regulators and states to rethink integrated resource planning, cost allocation and reliability standards. Consumers are feeling the effects through higher bills, rate design debates and concerns over whether grid investments are keeping pace with economic growth. This year the focus will shift from forecasting demand to pushing infrastructure solutions: accelerating transmission buildout, enabling firm power additions, expanding natural gas pipelines and storage and aligning interconnection/permitting reforms with real-world timelines. The policy debate will center on whether government actions can keep infrastructure development synchronized with growth – or whether delays and regulatory friction will turn America’s AI advantage into an energy liability.
2. Nuclear Power’s Time – Heading into 2026, nuclear power is poised to move from renewed interest to measurable advancement – but timing will be everything. Large-scale reactors and small modular reactors (SMRs) are progressing along parallel tracks: utilities and developers must turn federal support, licensing reforms and offtake agreements into final investment decisions, while proving that new builds can meet cost and schedule discipline. SMRs, in particular, need tangible construction milestones, standardized designs, and clearer customer commitments to validate their promise beyond demonstration projects. Across the full supply chain, fuel availability remains a gating issue. Uranium mining, conversion and domestic production must scale rapidly to support both advanced reactors and life-extension of the existing fleet, with geopolitical risks sharpening the urgency of domestic and allied supply. At the same time, reactor restarts may offer the fastest near-term gains, but regulatory pathways and market signals are still unclear. In 2026, the question for nuclear will be less about ambition and more about execution: whether policy, capital, and supply chains can move in sync to turn momentum into durable capacity growth.
3. Energy Politics – As 2026 unfolds, energy policy is shaping up to be a defining fault line in the midterm elections—one that will influence how Republicans position themselves heading into the next presidential cycle and whether they meaningfully recalibrate away from some of President Trump’s less serious, backward-looking energy instincts. Voters are confronting a reality of rising power demand, grid reliability risks and global competition that makes all-of-the-above energy policy less ideological and more pragmatic. That dynamic is forcing Republicans to reconcile traditional fossil energy strength with the need for permitting reform, domestic supply chains, and firm power—including nuclear and natural gas—while navigating growing skepticism toward renewables, offshore wind and other projects perceived as costly or unreliable. Pushback on renewables needs to create space for mainstream GOP/Dems to argue for energy realism over symbolism. 2026 will test whether both these mainstream energy politicos can articulate a forward-looking energy agenda rooted in affordability, security and competitiveness—or remain tethered to each’s grievance-driven policies that fail to address the system-wide challenges voters increasingly feel.
4. The Role of Energy Costs – We will see a shift this year from the traditional energy costs that we always have in our face - gasoline prices - to a more difficult challenge - electricity prices. They are always much more difficult to follow. Hell, I have been working with electric and natgas utilities for 25 years and I can’t even understand my power bill. How this plays out will matter in substance, but I can tell you, both parties slinging around "affordability" claims will only drive more confusion and politicize the issue. And we need to be clear: there is a massive amount of nuance around energy costs and it is not completely accurate that some potential solutions are less costly than extending the life of current infrastructure. My point: there is a lot of non-substantive, messaging jujitsu going on in this debate because voters are paying attention.  I encourage you to look closely, before take the bait.
5. Permit Reform is Key – Permit reform is the answer to almost every question.  Reliability, affordability, safety, cost, national security, infrastructure, protecting renewables, advancing traditional energy, decarbonization - all of it.  After the House passage of permitting legislation led by Reps. Bruce Westerman and Jared Golden after some controversies. Now, can the Senate move the House effort forward to improve the effort and help make it even more bipartisan. What happens in the first quarter (before CERA Week) will be a key indicator.
6. Who Can Survive Trump Policy Attacks – A key question for 2026 will be can energy sectors and industries withstand policy and political attacks from the Trump Administration.  Clearly, Offshore Wind is against the ropes but legal, practical, business and reliability issues are likely to undercut the Administration’s effort to stop all projects.  Those under construction will likely finish – including several in 2026. It is also not likely to impact longer-term planning for projects they may help after Trump leaves office. The tougher question is, has the Trump effort to step on the OSW pipeline undermined mid-term projects they were starting to move now but have been sidelined. Other sectors or industries to watch for similar targeting include ethanol and biofuels, which are always under some pressure because their results have decarbonization goals. Land-based renewables (both solar and wind) will also continue to face pressure but they are definitely built out and in many cases already baked in to utility planning. And energy storage and hydrogen – which both are supported by energy sectors the President likes – will also remain under pressure both economics, tax credits and project development. The last question: will Congress step up and support projects they know are helping locally with reliability, affordability, economic development and job creation?

FRANKLY SPOKEN

“We are telling policy makers the warning lights are on. It’s like you’re driving your car, the check engine light is on, and you just don’t want to take it into the shop. You’re like, I’m going to keep pushing this and no one’s going to pay attention until it breaks down. I’m telling you on that hottest day or that coldest day, you might have a supply crunch and people are going to suffer. You have to fix it now.”

Exelon CEO Calvin Butler in Fortune about permitting and energy infrastructure.

ON THE PODCAST

Casten Highlights 2026 Energy Issues – On this week’s Columbia Energy Exchange podcast, they revisit a conversation that SIPA Director Jason Bordoff had back in September with Illinois Congressman Sean Casten. They discussed the state of clean energy deployment in the US, permitting and climate politics.

Volts Talks Energy with Sen. Schatz – In this week’s episode of the Volts podcast, Hawaii Senator Brian Schatz joins host Dave Roberts to discuss the energy policy landscape facing Democrats and how they should respond. We touch on the shift in messaging from “climate” to “affordability,” current Congressional Republican efforts on permitting reform in light of Trump’s anti-renewables crusade, the role of green groups in climate politics, and much more.

FUN OPINIONS

Higher Energy Prices Are Centered in Blue States – In an opinion piece in the Washington Post, experts Alex Stevens and Samuel Peterson write AI data centers are being blamed for price spikes manufactured in statehouses and D.C. The authors argue the real issue strangling America’s electric grid is that building energy infrastructure in the United States today is less an engineering challenge than a bureaucratic endurance test.

RNG Can Reduce Trucking Costs, Improve Affordability – In an op-ed in Agri-Pulse, OPAL Fuels CEO Adam Comora writes Americans are facing higher costs across the board, and practical, innovative energy solutions are urgently needed. He adds, leveraging America’s most strategic and low-cost energy asset – domestically produced natural gas and renewable natural gas (RNG) produced from existing waste — as a low-cost fuel for heavy duty trucking will lower the cost of transporting goods and will result in lower prices for consumer goods across the board, including food on grocery store shelves and toys during Christmas. This move increases affordability for all Americans.

FROG BLOG

New Moment for Nuclear – In a new opinion post in RealClearEnergy, US Nuclear Industry Council head Todd Abrajano, Energy Innovation Reform Project President Sam Thernstrom and former State Department energy official Paul Saunders write as America’s electric grid faces an unprecedent strain, nuclear power has never been more promising nor more important. Nuclear energy provides clean, reliable power that is vital to our economy and national security. American companies are pioneering some of the most promising advanced reactor designs in the world, but they will not succeed without effective government support for nuclear energy. As electricity demand rises and global competitors accelerate their own nuclear programs, restoring U.S. leadership in nuclear energy is essential to ensuring reliable, affordable, and resilient power for decades ahead.

PJM Capacity Auction Message is a Warning – In an opinion blog in RealClearEnergy, Terry L. Headley writes the latest PJM capacity auction cleared at the maximum allowed price—$333 per megawatt-day—and still came up short. Even at the price cap, the market could not buy enough power to meet PJM’s own reliability standard. Capacity auctions exist for one reason: to make sure the lights stay on when the system is under real stress. Not on a mild spring afternoon. On the worst day of the year—when demand peaks, equipment is strained and weather is working against you. This auction tested that standard and found the system wanting. Political rhetoric about protecting working families collapses when electricity becomes scarcer and more expensive. Power prices respond to physics and infrastructure, not slogans. Shrinking reserve margins and fewer dependable plants mean higher costs. Ratepayers pay them every time.

FUN FACTS

Venezuela Context: The recent conflict between the United States and Venezuela remains uncertain, but it is only one part of the larger story of global oil dynamics. Our friends at the American Energy Society says consider a broader view of geopolitics among the top 10 countries with the largest proven reserves.

• United States (9^th) has deposed Venezuela’s leader (1^st).
• Russia (8^th) is under significant levels of sanctions.
• Iran (3^rd) is also under sanctions (led by the US) and some of its refineries were being destroyed (by Israel).
• Saudi Arabia (2^nd) and UAE (6^th) are in conflict.
• Iraq (5^th) struggles with rivaling militias, stalled politics and a strained economy.
• Libya (10^th) is a perpetual mess.

IN THE NEWS

Revolution Wind Files Suit Against Admin – Orsted launched legal action against the  Trump administration over the suspension of its $5 billion Revolution Wind Project off the coast of Rhode Island and Connecticut. The project was 87% complete at the time of suspension, and Orsted expected it to start generating power as early as January 2026. Revolution Wind is in advanced stages of construction and is expected to be ready to deliver reliable, affordable power to American homes in 2026. The Project, now approximately 87% complete, has already installed all offshore foundations and 58 of 65 wind turbines. Export cable installation is complete, and both offshore substations have been installed. At the time of the lease suspension order, the Project was expected to begin generating power as soon as January 2026.

Empire Also Files to Overturn Stop Work Order – Empire Wind also filed its own civil suit in the U.S. District Court for DC challenging the order. Empire  is seeking a preliminary injunction to allow construction to continue while the litigation proceeds. The Equinor project is more than 60% complete off the coast of New York. The developer also said that it is willing to work with the administration, but that the order is unlawful and threatens the progress of ongoing work with significant implications for the project.

Masdar to Develop SE Asia’s Largest Floating Solar Plant – Abu Dhabi Future Energy Company, Masdar, announced its first project in Malaysia to develop a 200-megawatt (MW) floating solar photovoltaic (PV) project at the Chereh Dam in Pahang State. The project will be developed by a consortium led by Masdar, together with Malaysian partners Citaglobal and Tiza Global. The Power Purchase Agreement was signed with Tenaga Nasional Berhad, Malaysia’s national utility company. Once operational, the 200MW Chereh Dam plant will become the largest floating solar project in Southeast Asia. Occupying approximately 950 acres, the Chereh Dam plant will have a generation capacity of more than 300MWp (200MWac), enough to power the equivalent of over 100,000 homes. The project value is estimated at more than RM850 million (US$208 million). The investment reinforces Masdar’s position as a key partner in accelerating Malaysia’s energy transformation. Malaysia has targeted increasing the share of renewables in its national energy mix to 35 percent by 2030, and floating solar is expected to play a key role in achieving these goals.

DOE Issues Colorado Emergency Run Order – A new DOE emergency order directs Tri-State Generation and Transmission Association, Platte River Power Authority, Salt River Project, PacifiCorp and Xcel Energy to take all measures necessary to ensure that Unit 1 at the Craig Station in Colorado is available to operate. The order is in effect until March 30, although the administration could extend it further. Since 2016, Unit 1 has been scheduled for retirement by Dec. 31, 2025, for economic reasons, and to comply with numerous state and federal requirements. This retirement decision has informed operational and maintenance decisions, and Tri-State has planned for adequate resources to maintain reliability on its system following the unit’s retirement.  Separately, Unit 1 went into an outage on Dec. 19, 2025, due to a mechanical failure of a valve, and Tri-State and the other co-owners will need to take the necessary steps to repair the valve in a timely manner.

“Tri-State has a policy of 100% compliance, and we will work with Unit 1 co-owners, and federal and state governments to determine the most cost-effective path to that end,” said Duane Highley, Tri-State CEO. “We are continuing to review the order to determine what this means for Craig Station employees and operations, and the financial impacts. As a not-for-profit cooperative, our membership will bear the costs of compliance with this order unless we can identify a method to share costs with those in the region. There is not a clear path for doing so, but we will continue to evaluate our options."

As a result of the order, retaining Unit 1 will likely require additional investments in operations, repairs, maintenance and, potentially, fuel supply, all factors increasing costs. Tri-State is continuing to review the order to determine how best to comply while limiting the costs to its members, and the impacts to its employees and operations.

ON THE SCHEDULE THIS WEEK

Chamber Permitting Forum, Hill Day Reset – With the House passage of permitting legislation in the books, the Chamber of Commerce will hold its Permit America to Build Legislative Day of Action on Wednesday January 7^th on Capitol Hill in the Dirksen Senate Office Building. The event will feature a forum, press event and visits to House and Senate offices.  The event will build on the momentum of House passage and push for broader Senate action to pass bipartisan, comprehensive permitting reform—so America can meet rising energy demand, build resilient infrastructure, and unleash innovation.

House Energy Looks at Nuclear – The House Energy & Commerce’s Subcommittee on Energy holds a hearing on Wednesday at 10:15 a.m. to discuss the licensing, deployment and implementation of recently enacted federal laws and administration policies in nuclear energy.

Forum Looks at EV Market Data – On Wednesday at 3:00 p.m., the SAFE-organized Electrification Coalition holds the second installment of its new quarterly webinar series hosted in collaboration with Cox Automotive. In this webinar, EC Executive Director Ben Prochazka and Cox Automotive Director of Industry Insights Stephanie Valdez Streaty will once again discuss the latest electric vehicle (EV) market data. The event features critical insights into how the EV market is changing following the expiration of the federal tax credits and how industry experts predict it will develop in the new

House Resources Looks at Forests Act – The House Natural Resources Water, Wildlife and Fisheries Subcommittee holds a hearing on Thursday at 10:00 a.m. to discussion Chairman Westerman’s Fix Our Forests Act.  The hearing will address affordable and reliable water and power supplies.

House Science Looks at New Chemicals – The House Science Committee will hold a hearing on Thursday at 10:00 a.m. to examine how federal rules affect research and development of new chemicals, ahead of potential changes to major regulations. Witnesses include American Chemistry Council’s Charlotte Bertrand, Boeing’s Gwen Gross and Keith Corkwell of Lubrizol.

CSIS Looks at Asia-Pacific Energy Outlook – The Center for Strategic and International Studies holds a discussion on Thursday at 2:00 p.m. on energy trends across APEC.  The forum will look at insights from Asia Pacific Energy Research Center (APERC's) 9^th Energy Outlook in a discussion and presentation with lead author Glen Sweetnam.

IN THE FUTURE

API Holds State of Energy Event – The American Petroleum Institute holds its annual 2026 State of American Energy forum on Tuesday January 13, 2026 at The Anthem starting at 8:00 a.m.

Detroit Auto Show Set – The North American International Auto Show will be held on January 14^th to 25^th, bringing together a full slate of major automotive brands, immersive indoor tracks, the debut of the Michigan Overland Adventure and Visit Detroit Interactive Experience, and the return of The Gallery with ultra-luxury vehicles. International superstar and multi-platinum recording artist Robin Thicke headlines Charity Preview on Friday, Jan. 16, 2026, with guest performances by Detroit’s-own Trick Trick, DJ Rimarkable, and master of ceremonies Jalen Rose. Benefiting six children’s charities in Southeast Michigan, the preeminent black-tie annual Motor City gala will be held at Huntington Place in Detroit.

AEI Holds Key Electricity Demand Event – The American Enterprise Institute holds an all-day forum on Wednesday January 14^th on powering prosperity in the new electricity economy. This conference with experts from academia, government, and industry will seek answers, addressing issues such as the role of renewable energy in meeting demand, distributed solutions that bring power closer to customers, and new ways to finance the trillions in capital investment required to build the new electricity economy. Among the speakers include our friends Rob Gramlich of Grid Strategies, Christi Tezak  of ClearView Energy and NRG’s Travis Kavulla.

RFF Hosts Former OMB Head – Resources for the Future (RFF) on Wednesday, January 14^th for Big Decisions, its annual keystone event analyzing anticipated federal and state actions. The event will begin with a fireside chat between RFF President and CEO Billy Pizer and Lazard CEO and Chairman Peter Orszag, former director of the US Office of Management and Budget. The fireside chat will be followed by a panel of experts discussing key drivers of the policy conversation, such as energy affordability and demand growth, as well as looming decisions on regulations and the endangerment finding by the Trump administration, legislative discussions on permitting, and more. Questions from the audience for the panel may be submitted in advance.

Senate Commerce Hosts Autos to Discuss Affordability – The Senate Commerce Committee will hold a hearing on Wednesday January 14^th at 10:00 a.m. Committee Chairman Ted Cruz has invited the heads of Ford Motor Co., General Motors Co. and Chrysler parent company Stellantis NV to testify. If the leaders attend, it would mark the first joint testimony of Detroit Three CEOs on Capitol Hill since late 2008 amid the global financial meltdown. But according to reporting from our friend Grant Schwab of the Detroit News, the companies are balking at attending, especially after Cruz only invited technical experts from Texas-based Tesla.

FCHEA Hosts Event on MLPs – FCHEA will hold a forum on Wednesday January 14^th at 2:00 p.m. on the role of Master Limited Partnership (MLP) and hydrogen. The recently passed One Big Beautiful Bill Act made many sweeping changes to America's energy system.  One of these changes was an expansion of MLPs to now include hydrogen. 

Chamber Sets State of American Business – The US Chamber holds Its annual State of American Business event on Thursday January 15^th at the Chamber HQ.  Chamber CEO Suzanne Clark hosts key leaders from different sectors and certainly energy is likely to a major topic. 

AGA Talks 2026 NatGas Outlook –The American Gas Assn holds its 2026 State of American Natural Gas Policy Outlook at it DC office on Thursday January 15^th at 11:00 a.m. In addition to the year outlook, AGA will introduce its new Chair.

USEA Hosts State of Energy Industry – The US Energy Assn hold its flagship forum State of the Energy Industry on Thursday January 15^th at 1:00 p.m. in the Ronald Reagan Trade Center. The event brings together CEOs from Washington's leading energy trade associations to collaboratively outline their current policy objectives and priorities for the upcoming year.

Dominion OSW Lawsuit Set – A judge has scheduled a hearing on Friday January 16^th in Dominion Energy’s lawsuit against the federal government after the Trump administration ordered a 90-day pause on five major offshore wind projects along the East Coast. The update comes after Dominion sought a temporary restraining order and the government filed briefs saying it can provide classified information for the court’s review. Dominion estimated the project would begin generating electricity in early 2026, with enough energy to power approximately 660,000 residences. In its lawsuit filed, the utility described the administration’s stop-work order as “arbitrary and capricious.”

Power Conference Set  for Texas – POWERGEN 2026 is set for Tuesday January 20^th to Thursday the 22^nd at the Henry Gonzales Convention Center in San Antonio, TX. The event will look at powering the data center boom. Load growth has become the defining challenge for the power generation industry. From utilities and IPPs to EPCs and OEMs, every stakeholder is racing to deliver new capacity and POWERGEN will be where all aspects are discussed.

Washington Auto Show Features Policy Day Focus – The Washington, D.C. Auto Show is renowned as the nation’s premier “Public Policy Show,” offering a one-of-a-kind opportunity to connect with the key figures driving the future of the automotive industry. This 10-day consumer event kicks off on January 22^nd with an exclusive gathering of automotive leaders, government officials, and media representatives, where they come together to discuss the current state of the U.S. auto sector and its future initiatives. Public Policy Day serves as a vital platform for engaging in discussions on the most pressing issues facing the automotive industry, including cutting-edge technology, environmental regulations, and innovative mobility solutions.  The full show runs from January 23^rd to February 1^st.