You can best understand this confusion by starting on the Republican side, I think — and by comparing energy policies from the first and second Trump administrations. Both administrations seem to share a common framework: Both set a goal of “energy dominance,” both have tried to enact favorable policies for the oil and gas industry, and both have been characterized by an aggressive approach to environmental and climate deregulation — and by a sense that greenhouse gas pollution is not only a necessary evil but a positive good. But there the similarities stop.
The first Trump administration continued a long-running policy of benign neglect, and even of occasional encouragement, to wind and solar energy development — provided such energy development did not undermine fossil fuels. It was Interior Secretary Ryan Zinke who, in December 2018, auctioned off sites for offshore wind development in Massachusetts — and when these sites were snapped up for a record $405 million, promptly celebrated a “BIDDING BONANZA.”
“To anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest,” Zinke said at the time. “With bold leadership, faster, streamlined environmental reviews, and a lot of hard work with our states and fishermen, we’ve given the wind industry the confidence to think and bid big.”
The first Trump administration was by no means a climate champion. It tried to rescue the coal industry, in part through advancing an emergency rule at the Federal Energy Regulatory Commission that would have subsidized coal-fired and nuclear power plants through power markets. Its Environmental Protection Agency ended the Obama administration’s attempt to regulate greenhouse gas pollution from power plants, and it weakened restrictions on tailpipe pollution from cars and light-duty trucks. And of course, it attacked California’s ability to regulate vehicle emissions.
But it rarely seemed to want to destroy the renewables industry, and it distinguished between climate policy and renewables policy. Perhaps it remained favorable to wind energy in part because Republican senators from the interior are favorable to wind energy. On the whole, it acted in a manner that was often defensibly pro-electricity development of all types.
The second Trump administration, by contrast, has sought to hamper and obstruct renewables development out of principle. Gone are the days when Zinke told the wind industry to “think and bid big.” Instead, the second Trump administration has told the wind industry to drop dead. It has implemented a de facto moratorium on new wind and solar projects on federal lands; it has sought new ways to revoke permits from offshore wind projects or block them outright.
At the same time, it has continued its crusade against climate policy. It has defanged the Transportation Department’s fuel efficiency standards. It has attacked state pollution policy once more, including California’s clean car standard, as well as New York City’s congestion pricing. And it has even sought to unwind the EPA’s endangerment finding, the determination that carbon dioxide is a dangerous pollutant and should be regulated as such.
This war on new energy sources has come just as the Trump administration has tried to tell voters that it cares about the rising cost of living — and, particularly, rising electricity costs. And it has come as the Trump administration has embraced AI, the industry driving more electricity demand growth than any other this century.
This combination has put the Trump administration in the position that George Pollack, a senior policy analyst at Signum Global Advisors, has called an “energy trilemma.” Trump wants to preside over an AI boom, avoid the political costs of rising energy prices, and block renewables growth. He can only pick two of these — and as more constraints hold back U.S. energy development, he might only be able to pick one.
Let me add to this another conflict that the Trump administration faces. Trump officials want the United States to catch up to China’s industrial development because they fear losing military competitiveness. But China’s economic model depends on encouraging and subsidizing market formation of what they call the “new three industries” — batteries, solar panels, and electric vehicles. Yet the administration does not want subsidized price parity for EVs, nor a competitive market for solar panels or electric vehicles; it would prefer that, perhaps with the exception of Tesla, as few people buy EVs as possible.
You can see this conflict most concretely in their critical minerals policy. From the first day of his second term, Trump has declared that America’s lack of mineral mining and refining capacity is an “energy emergency.” His administration has intervened in mineral markets — lining up financing and establishing a price floor for rare earth production, for example, or taking a stake in a lithium mine — in order to guarantee sufficient domestic supply. But the industries that actually use these minerals are largely wind turbine, electric vehicle, and electronics makers. Military equipment makes up a relatively small share of mineral use. He wants minerals, but he doesn’t want the industries that will actually use those minerals.
The clearest energy policy has come in the One Big Beautiful Bill Act, which, as the product of a legislative process, represents the Republican Party’s energy views rather than the president’s regulatory policies.
I think the law reveals that congressional Republicans have more coherent energy views than their copartisans in the administration — or at least that the pressures on congressional Republicans sometimes tilt the party in the direction of quasi-coherence. The most pulchritudinous act was, to be clear, terrible for clean energy innovation and deployment: It repealed the wind and solar tax credits and it junked consumer and business incentives for buying or leasing a new or used electric vehicle. It also repealed programs meant to encourage zero-carbon industrial development, particularly around the hydrogen industry. It was terrible for blue-collar workers in the Sun Belt, Gulf Coast, and Appalachia, who stood to benefit from EV manufacturing and clean industrial investment.
Yet it, again, revealed areas of intriguing quasi-coherence. One of the biggest policy innovations of the Inflation Reduction Act was to replace the government’s piecemeal investment and production tax credits for various energy technologies — such as wind, or solar, or geothermal — with a single zero-carbon technology-neutral investment and production tax credit. With this new policy, Democrats in Congress essentially said: We welcome the addition of any price-competitive generation resource on the grid as long as it emits essentially no carbon pollution. In theory, this liberated Democratic lawmakers from the endless process of adding and subtracting specific technologies from the tax code, and it showed that the party was listening to critics who said the government shouldn’t be picking particular technological winners and losers.
Now, Republican energy officials — particularly Secretary of Energy Chris Wright — have criticized the intermittent nature of renewables. They claim that wind and solar — which cannot flex their production of electricity to meet the grid’s needs, and which do not, of course, reliably produce electricity 24 hours of the day — impose unacknowledged costs to the power grid through the transmission grid. The facts, I should add, don’t agree; a recent Lawrence Berkeley National Lab study does not find that transmission costs are rising significantly in the U.S. — most of the recent electricity rate hikes have come from the rising cost of the local distribution system, particularly from transformers, poles, wires, and undergrounding equipment.
The One Big Beautiful Bill Act’s changes to the zero-carbon technology-neutral tax credit cohere, at least, to Wright’s worldview. The GOP law leaves the technology-neutral tax credit intact, but excises wind and solar from it after 2027. This means that the law effectively preserves support for zero-carbon technologies that are flexible and do generate power 24/7 — such as, above all, batteries, but also advanced geothermal and nuclear fusion. And broadly, I would add that the Trump administration’s support for grid-scale batteries, which allow wind and solar electricity to spread out through the day; for advanced geothermal, which uses technology derived from fracking innovation to generate electricity; and for nuclear power of every stripe has been a rare spot where the administration has encouraged more low-carbon energy deployment.
Of course, any kindness there pales in comparison to how the administration has acted toward the oil and gas industry. Trump has lavished that industry with gifts: He opened vast new swaths of federal wilderness to drilling, including 1.5 million acres of Alaska’s Arctic National Wildlife Refuge, and he hopes to open another billion acres of U.S. coastal waters to drilling. He has rolled back rules restricting methane pollution from U.S. drilling operations, approved new liquified natural gas export terminals, and attacked any regulation meant to conserve or more efficiently deploy fossil fuels in the transportation sector. This friendliness has, so far, failed to help the oil and gas industry out of its ongoing doldrums; oil prices have remained stubbornly low through Trump’s second term, in part because of his tariffs and in part because of rising battery vehicle deployment.
So that’s Trump. What a mess.
Unlike Trump’s energy trilemma, Democrats are dealing with a much more classic energy dilemma. It is much closer to dilemmas faced by liberal policymakers around the world: On the one hand, Democrats want to reduce carbon emissions; on the other hand, they want to lower nominal energy costs for voters — or at least keep them flat. The party has dealt with this dilemma in different ways. During the Obama administration, the party took an “all of the above” approach to energy: It largely encouraged the buildout of the country’s natural gas system — working sometimes hand-in-glove with environmentalists to shut down coal plants and replace them with natural gas — while pursuing EPA rules that sought to improve energy efficiency and reduce emissions from vehicles and power plants.
The Biden administration dealt with the energy dilemma in a different way, when it dealt with it at all. It passed the Inflation Reduction Act, the country’s first comprehensive climate law. The IRA incentivized and tried to buy down the deployment costs of many types of zero-carbon energy technologies, and it sought to speed up learning curves so as to achieve durably lower costs for decarbonization technology. It largely did not, however, ease the permitting or process barriers to adding more energy to the grid.
At the same time, the Biden administration was more hostile to the fossil fuel energy industry than the Obama administration had been — during the campaign, Biden said that the industry would eventually have to shut down — while paying occasional but intense attention to its ability to impose politically salient costs on Americans. This could sometimes come across as confused: The Biden administration slow-walked oil and gas permitting on federal lands through the Department of the Interior, but he — in a burst of policy creativity — released oil from the Strategic Petroleum Reserve during the period of painfully high gasoline prices following Russia’s invasion of Ukraine.
Since January, Democrats haven’t really had to face this dilemma in the same way because they have been locked out of federal power. This has allowed the party to, for instance, largely side-step questions of how to balance the AI buildout with keeping electricity costs low.
But Democrats will soon begin to face pressures at the state level. That recent Lawrence Berkeley National Labs study finds that while renewables do not increase electricity prices, state-level policies that mandate renewable penetration, such as renewable portfolio standards, sometimes do. In New Jersey, the governor-elect Mikie Sherrill won in part by promising to freeze the state’s electricity rates for the next two years. That commitment may butt up against the state’s environmental goals. Electricity prices are highest in those states or regions where Democrats have the most power; the party faces a risk that this fact may hurt its ability to marshal an electricity affordability argument against the Trump administration.
The party, too, is suffering from something of a climate politics hangover. President Biden embraced climate as one of the four “existential” threats facing the country, and he moved climate to the center of his legislative agenda; the party broadly moved left on climate and environmental justice. They did so in part under the belief that it was the right thing to do — and in part under the belief that young voters and voters of color would reward them for the shift.
In return, Democrats saw their numbers crater with young people, voters of color, and environmental justice communities in the 2024 election — and even if that collapse was not about climate policy, per se, so much as the president’s unpopularity, it suggests that climate is not a special issue for these demographics. The climate voter, to the extent they exist, is likely already a Democrat.
That is where the parties find themselves. Before I continue, I want to highlight two more trends — outside of party politics — that will shape and constrain how energy policymakers go forward.
The first is the reinvigorated political and economic importance of the electricity system. As you may know, America’s era of flat electricity demand has ended, and load growth has returned to the system. We are even seeing load growth now in places that were, until recently, losing heavy industry, such as the Mid-Atlantic. And while the largest driver of load growth has been the data center boom, AI has not, so far, been responsible for most load growth. The return of manufacturing, the slow electrification of the vehicle fleet, and plain old economic and population growth is driving much of the rise in demand.
There is a bigger change here than just a return in demand growth, though. Electricity is becoming more structurally important to the U.S. economy’s frontier industries. After two decades that saw upheavals in America’s oil, gas, and chemical sectors, but that left electricity largely untouched but for shifts in the generation mix, we are seeing hints of a structural reformation of the power sector.
But there are perils here. Electricity rates have risen twice as fast as inflation over the past year. That is driven by a rise in distribution costs — the poles, wires, underground equipment, and transformers that get power the last mile from substations to homes and businesses. Transformers have been in short supply more or less since the pandemic. Natural disaster costs — from wildfires out West and extreme storms in the Southeast — have forced utilities to rebuild the entire distribution grid in some regions, raising costs and further shocking supplies. In an investor letter last year, Warren Buffett warned that costs are getting so high that the industry may no longer be viable as a private business. “Certain utilities might no longer attract the savings of American citizens and will be forced to adopt the public-power model,” he wrote.
I would be loath here not to mention a final trend: The American natural gas system is about to see a significant demand expansion, as well. Over the next four years, North America’s liquified natural gas export capacity is essentially going to double; some 27% of U.S. gas production could now theoretically be exported. Natural gas provides 43% of U.S. electricity generation needs and 38% of overall U.S. energy needs; if linking American gas markets to global gas markets brings domestic gas prices closer to their global equilibrium, we are in for a price shock. This outcome isn’t guaranteed — in the late 2010s, liquified natural gas capacity increased without a significant rise in domestic gas prices — but it is a risk.
So: Republicans face an energy trilemma. Democrats face an energy dilemma. And the electricity system is becoming increasingly important — and coming under increasing stress. What does this mean for policy?
In the near term, the big question driving most energy and climate policy across both parties is: How can we — in the broadest sense — get to yes? How can the United States build, permit, connect, and construct the energy infrastructure that the economy needs to grow or decarbonize? How can we overcome the local barriers to renewable construction — or the national obstacles to more nuclear construction?
For Republicans, this question reflects a traditional deregulatory view. But for Democrats, this question is the end result of a successful shift — which I would argue began with the Paris Agreement — to reformulate the problem of climate change as a problem of decarbonization, not emissions reduction; that is, a problem of addition, as well as subtraction; of building new energy sources, as well as energy efficiency or conservation.
And for both parties, it reflects the unignorable influence of China’s new energy economy. China, for reasons owing as much to its political economy and internal anxieties as any externally oriented environmentalism, has built a new kind of energy economy — one that can swallow hundreds of terawatt-hours of load growth every year, that can build 360 gigawatts of wind, solar, and batteries at the same time that it plans 100 gigawatts of new coal-fired power plants. It has constructed the unintuitive-to-American-ears feat of a coal, hydro, and solar-based grid with flat or declining emissions. Policymakers are aware that this abundant and at least facially cheap electricity helps the country’s AI and manufacturing industries.
This question and these anxieties point to a few policies in the near term: permitting reform and transmission construction.
Permitting reform is a catch-all term for policies that could cut down on the bureaucratic or local obstacles to building energy and infrastructure projects, clean and fossil alike. This is the third Congress in a row that has tried to do something about permitting, and while the last two did pass small pieces of legislation, a “grand bargain” on permitting has remained elusive. Questions about permitting reform tend to fall into three big buckets.
The first are what gates the permitting review process: What sets off the permitting review process? The National Environmental Policy Act applies to any “major federal action.” But what is a major federal action? When the government lends money, or grants it to a nonprofit, does that constitute a “major federal action”? Should it? Right now, the answer is usually yes — meaning that a federal loan to, say, a new EV factory essentially creates a federal nexus for that project and thus thousands of hours of paperwork requirements and litigation exposure. Should that change?
Are there some actions that never need a NEPA review? For the past two decades, Congress has said that the government didn’t need to review oil and gas drilling under NEPA if that drilling happened on a sub-five-acre footprint or on federal land which the government had already planned for oil or gas extraction. In just the first two years this exclusion was created, the BLM approved 6,100 permits under this rationale, according to the Government Accountability Office, so this policy is now likely responsible for tens of thousands of approved permits. Should other types of activity never face a NEPA review? For instance, advanced geothermal technology uses similar equipment to that used in fracking and it has a similar land footprint.
What often holds up a federal project is not the NEPA review itself, but the open-ended legislation that can follow such a review. We also know that one driver of very long NEPA reviews — reviews far in excess of what legislators envisioned when they wrote the law — is a fear that courts will reject it.
That brings us to the second question: When and how can the courts review a NEPA or permitting decision? Who can file a lawsuit? Are there remedies that don’t involve forcing an agency to redo an environmental review all over again? And finally, should courts take the position that a gap in the analysis does not presumptively invalidate an agency’s work?
Finally, how far does your analysis of a project’s environmental impact have to go to meet NEPA’s mandate? Does it have to extend just to the fenceline of a project, or to the county line? Or does it need to encompass the whole planet? Earlier this year, the Supreme Court ruled in the Seven County case that a NEPA review does not need to consider greenhouse gas emissions downstream of a project, such as those that would be released when a new railroad project opens up a new area for oil exploration. Should Congress extend that logic to the universe of NEPA reviews?
Those three questions dominate most permitting reform policy discussions around NEPA. But permitting reform, as I said earlier, is a catch-all — and each party has concerns that do not fall so elegantly in those categories. Progressives usually want permitting reform to include a commitment to expand agency staffing. They believe that NEPA reviews take so long to complete in many cases not because the law’s requirements are too onerous, but because the government lacks the labor hours to process the reviews that it has, in essence, assigned itself. Republicans, meanwhile, favor a fossil-friendly change: They want to see Congress alter the Clean Water Act so that state governments can no longer block new pipelines. This reform would not favor clean energy, but the oil and gas industry believes that it will only be politically feasible if it passed in a broader permitting reform package.
Lately, the parties have begun to agree on a new idea. The Trump administration’s successful efforts to block offshore wind, solar, and battery projects that have already been approved has raised concerns about executive interference. Democrats lament what Trump is doing, while Republicans fear a future Democrat could use those powers to block fossil fuel projects. The SPEED Act, which passed the House this month, includes a new provision meant to block presidents from interfering with already-approved energy projects. But the SPEED Act would not pass the Senate as written.
America struggles to build new long-distance transmission lines. This is an old problem, but it has deteriorated in the past decade: As recently as 2013, the country built thousands of miles of new transmission lines a year; in 2025, it is set to build about 400 miles. This problem’s opportunity cost has gotten worse over time: Because solar and especially wind resources are more abundant in some places than others, the country’s overall ability to access cheap and zero-carbon electricity is limited by its ability to build new power lines.
We already have signs that this bottleneck is slowing clean energy deployment. The U.S. hit a record for new wind capacity deployment in 2020 and 2021, but the industry’s deployment has slowed since then. This was not, until recently, due to any lack of support from the federal government — in fact, the Biden administration was quite solicitous of wind — but because we may have started to run out of windy places with ample transmission capacity in the United States.
This bottleneck has become politically urgent in the age of load growth and AI data centers, and policymakers have proposed a number of policies to deal with it. They have come up with four big ideas.
The first is to strengthen FERC’s ability to backstop new power lines. Under federal law, FERC has a limited authority to approve new transmission lines in designated high-priority areas, but a much broader “one-stop shop” ability to approve new interstate natural gas pipelines. As a consequence, it is much easier to move natural gas around the country than electricity. Perhaps FERC’s ability to approve and expedite new power lines could be made more similar to its pipeline authority.
The second is a transmission tax credit — likely an investment tax credit that could cover something like 30% of the cost of a new transmission line. This would be especially useful for merchant developers who believe it would be profitable to build a large-scale clean energy resource and connect it to a congested region of the grid.
Third, a way of standardizing who pays for and who benefits from new transmission lines. Right now, utilities and power producers must essentially divide up the costs and benefits of a new power line on an ad hoc basis. A standard calculation — backed by the federal government — could ease that negotiation and make it clear where new lines would make the most sense.
Finally, some policy to “force” a transmission buildout and solve siting issues. You could imagine this happening in at least two different ways. One way is a legislated minimum transfer requirement — a mandate that every grid be able to transfer a certain amount of load to its neighbors. That would essentially mandate the construction of new lines, which could then be built by utilities or merchant transmission developers. Another would be to establish a new interregional transmission planning authority. This presumably federal body would plan, contract, and build a new high-voltage, direct current “backbone” grid for the country — it would, essentially, treat electricity transmission infrastructure as a critical resource on par with the interstate highway system.
Although this approach might sound like central planning — and, admittedly, it is central planning — one of the country’s biggest and most laissez-faire power markets has found success by preemptively planning and building transmission infrastructure. In 2005, Texas passed a state law to build new high-voltage transmission lines to promising areas for new wind farms. This investment anticipated future wind investment, based partly on the idea that while wind farms take only a few years to construct, transmission lines could take five to seven years. (That number has since gotten worse.) Ultimately, that law is credited with bringing on more than 18 gigawatts of wind power to the Texas grid.
Once you move beyond these two big issues, you get to a series of problems which I would describe as more imminent areas of bipartisan interest, but with no clear policy solution yet.
The first is executive discretion. Is there some way for Congress to limit a POTUS’s ability to tamper with energy projects that had already been approved by the relevant executive agency, as Biden did with the Keystone XL pipeline and Trump has done with offshore wind farms? I should add that between writing this speech and delivering it, this might have found a bipartisan policy solution — the SPEED Act, which passed late last month out of the House Natural Resources Committee, contains text meant to constrain future legislators.
The second is trade. The Trump administration has shown it is far more willing to raise trade barriers than previous administrations, and Democrats have noticed. Could trade barriers be enacted in a more bipartisan way, and could they advance other economic or decarbonization goals? Namely, should the U.S. adopt a carbon border adjustment fee, as the European Union is doing? Should we integrate our “trading club” with Europe’s, for climate or security reasons? What would such a fee look like in the absence of a domestic carbon price?
The third is electricity. As I have discussed, after years of stagnation, the AI boom and electrification have turned the power grid into a far more interesting and dynamic energy system. I also mentioned that some owners of regulated utilities, such as Warren Buffett, are concerned about the utility sector’s future investability.
This is giving way to more profound questions. If you want to connect your data center to the grid, should all customers pay for that? Or should you bear the costs alone? Should we auction off the ability to connect to the power grid? Should the federal government take a more forceful role in financing and permitting new power plants — particularly nuclear power plants, which both parties can find a reason to appreciate at the moment? Is there a broader role for public power agencies, either through the Federal Power Act or at the state level? Is the deregulated electricity market model breaking down — and if so, what should follow it?
The fourth is industrial policy, advanced manufacturing, and the question of economic competitiveness with China. At this point, most observers have realized, I hope, that China has a far more competitive and innovative vehicle sector — not just an electric vehicle sector, but vehicle sector — than the United States does. As has happened in other East Asian developmental states, the country has moved up the value chain — progressing from making car parts to assembling foreign cars to designing and building their own domestic cars — and it weds its own subsidized but competitive markets with the largest internal one-country market that global capitalism has ever seen.
This innovation has given rise to several questions — some of which the Inflation Reduction Act tried to answer in policy that has since been repealed — and some of which have never been satisfactorily answered.
They include: What kinds of investments will stimulate EV manufacturing, or indeed any kind of advanced manufacturing? China has begun to build impressive and highly automated factories, in part by iterating on improvements purchased from the West. What kind of investments will encourage automation and dispersion of advanced robotics into manufacturing in the United States? What other industries should see policies like 45X?
Batteries are widely understood as a new general-purpose technology. Does the U.S. need to conduct a research program to catch up to Chinese-level understanding of battery chemistries? Do we need a CHIPS Act for batteries?
The Trump administration has experimented with new forms of public ownership and public support for industrial companies, from the golden share in U.S. Steel to the mineral production backstops with LP Materials. Which of those policies will be retained, and which should be expanded or innovated on? What can partial federal ownership do that traditional public markets cannot?
Finally, we have the next frontiers for both parties. Republicans are coming off a successful spate of aggressive environmental deregulation. They are increasingly willing and eager to weaken the National Historic Preservation and Endangered Species Acts. How will the public interpret those efforts? Will environmentalists mount a more effective resistance than they did for, say, the Inflation Reduction Act’s repeal?
Democrats, meanwhile, are left asking: What is the next step of climate policy? Which IRA-style tax credits could have the biggest emissions impact at the lowest cost to consumers? Is an economy-wide emissions cap worth trading away, say, the Clean Air Act’s section 111 rules on power plants? And how should policy benefit electric vehicles when, by the way, such policies are likely to benefit Tesla? How do self-driving cars like Waymo fit into any of this?
I began by saying that both parties, but especially Republicans in the second Trump administration, have become quite confused in their energy policies. This has had downsides for the American economy, as we have heard. But it also means that this is the most open moment for energy policy creativity in the United States in at least a decade. Democrats and Republicans each had their shot in government to remake the energy system — and neither has been particularly thrilled by what followed. People are hungry for new ideas, new approaches.
The parties’ long-standing energy coalitions have become destabilized, as well. The rise of China and the Biden administration’s unpopularity has destabilized climate policy in the Democratic coalition. At the same time, Republicans’ rejection of renewables and their embrace of the Big Tech has altered how that party looks to the public — and will change further if the economy slows or if the backlash to AI data centers grows. For the first time since 2012, you can see the outline of an energy realignment.
Or maybe not. If you are trying to tell the future of energy and climate policy in 2026, start here: Americans are going to need a lot more electricity in the years to come, as cheaply and cleanly as we can get it. Meeting that challenge will almost certainly require public investment and regulatory reform, meaning neither party’s radical flank will see its dearest visions come true. But everyone’s well-being depends on the grid: Republicans cannot achieve their economic objectives — nor Democrats their climate goals — without a grid buildout. Our choice is to grow the grid or watch the lights go out.
Robinson Meyer, Senator John Curtis, and Senator John Hickenlooper.Taylor Mickal Photography,
