The 2020 election cycle has the potential to reshape energy and environmental issues across the federal landscape and state lines. Much of the national discussion has focused on the presidential race between Donald Trump and Joe Biden, but voters will face a host of ballot choices that will influence the power, gas and oil markets for years to come.
At the federal level, control of the U.S. Congress is up for grabs. Democratic control could usher in a new era of clean energy policymaking, while a split could cement political gridlock and disrupt presidential ambitions.
At the state level, high-impact ballot measures face voter review on Nov. 3, including proposals to mandate a 50% renewable portfolio standard by 2030 in Nevada; to shake up the utility regulator in New Mexico by reducing commissioners, making them appointed positions and elongating their tenure; and to change energy tax-related issues in Alaska and Louisiana. Energy and environmental issues also play heavily into several high-profile races for governor, state legislatures and key state commissions.
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Hanging over it all will be the fundamentals of the U.S. economy and energy markets, already roiled by the coronavirus pandemic. An already volatile 2020 could temper regulatory policy pendulum swings, as policymakers and elected officials remain mindful of the damage already inflicted on the energy sector by the pandemic and associated economic downturn.
The following is an overview of key races and ballot measures:
Congressional balance of power
Overview: Republicans hold a three-seat majority in the Senate, which has given them control over nominees and chairmanships on committees vital to energy legislation. But if Democrats were to sweep at the federal level, it would have long-term implications for the energy sector should Congress pass climate and clean energy legislation.
Most polls predict: Toss-up for Senate; Democrats strongly favored to hold the House.
Energy impact: A blue Congress could eliminate the Senate's filibuster, which in turn could ensure more progressive legislation passes. Democrats running both chambers could use the Congressional Review Act to overturn some of the Trump administration's rulemakings. The left could also pack climate-focused provisions and clean energy funding into economic recovery legislation in the near- to mid-term, should Democrats maintain control of the House and retake the Senate.
While Biden has proposed to completely decarbonize the U.S. power sector by 2035, even a Democrat-led Congress would likely pass a more watered-down, though still "historically ambitious," version of that emissions-reduction plan given headwinds from congressional Republicans, states and market constraints, according to David Livingston, a senior analyst with the Eurasia Group.
"It's not unusual for a policy as ambitious as the power sector one to go through the congressional process ... and perhaps arrive at a compromise outcome," Livingston said.
But if a Democrat-led Congress deferred to the executive branch to govern through executive orders and regulations in the energy sector as has been the case in recent years those changes and policies may not be as long-lasting, according to Sasha Mackler, director of the Energy Project at the Bipartisan Policy Center. A Democratic majority may also include more moderate lawmakers from purple states, requiring climate policy to remain "pragmatic and bipartisan in nature," the director said.
Democratic Senators representing carbon-intensive states, such as Joe Manchin of West Virginia, might be more reluctant to support legislation providing incentives for clean energy over traditional fossil fuels, according to Matt Williams, emissions and clean energy analyst with S&P Global Platts Analytics.
Unlike when the White House changes hands between political parties, congressional power shifts are less likely to yield dramatic effects, according to William Yeatman, a research fellow with the Cato Institute. "Why would Congress lift a finger in this arena when the president can do it all for them, essentially?" Yeatman asked.
A possible Biden presidency with a divided Senate may resort to more executive action. But just as the Obama administration which relied on the Environmental Protection Agency's Clean Air Act authority to implement the Clean Power Plan found one of its major climate efforts stymied by a Supreme Court stay, a Biden administration could face similar obstacles without a strong Democratic majority in Congress, Williams noted.
Democrats' chances of retaking the Senate are unclear, and there are several toss-up races featuring significant energy issues including in Colorado, Iowa and Montana where a Republican incumbent faces a difficult reelection bid.
Republicans appear less likely to flip the House, but doing so would limit climate policy advancements, according to the Bipartisan Policy Center's Mackler. A split Congress would be unlikely to pass partisan energy or climate legislation, continuing the current political gridlock in the Capitol.
Overview: Democratic incumbent Gov. Jay Inslee holds a sizable lead in the polls against Republican Loren Culp, the current police chief for the city of Republic.
Polls predict: The latest poll shows Inslee leading 61% to 32%. During a primary that featured 36 candidates, Culp earned a spot in the general election by receiving 18% of the vote compared to Inslee's 51%.
Energy impact: Dubbed "the greenest governor in the country" when he won the governorship eight years ago, Inslee in 2019 signed legislation placing Washington on the path to have a carbon-neutral electrical grid by 2030 and 100% renewable energy by 2045. Culp has said little regarding energy policy for the state, but he generally favors less government regulation and supports free-market solutions. If elected, Culp has said he intends to immediately end coronavirus restrictions and fully reopen all schools and businesses.
Overview: Incumbent Chris Sununu serves as governor of one of only three states with Republican governors where the majority voted for Democrat Hilary Clinton in the 2016 presidential election.
Polls predict: Sununu won the general election in 2016 by a margin of 49% to 47% and in 2018 by 53% to 46%.
Energy impact: Sununu has opposed various renewable energy proposals from lawmakers. One of the leading primary Democratic candidates, state Sen. Dan Feltes, has pushed pro-solar and net metering legislation. The primary election is taking place Sept. 8.
Overview: Republican Gov. Eric Holcomb is running against Woody Myers, a millionaire venture capitalist and former Indiana health commissioner. If Myers wins, he would become the state's first Black governor.
Polls predict: Myers faces a difficult election as the latest polls have Holcomb leading by 43 points.
Energy impact: Holcomb supports the fossil fuel industry, while Myers has called for moving to renewables. Indiana is seventh among U.S. states in coal production and second in coal consumption. In 2019, more than 59% of Indiana's net power generation came from coal. Renewable energy accounted for under 7% of the state's generation in 2019.
Overview: Republican Gov. Doug Burgum, a former technology company investor, is seeking his second term against veterinarian Shelley Lenz, a Democrat, in a state whose economy is dominated by fossil fuel production and consumption.
Polls predict: Burgum holds a decisive edge in early polls, leading Lenz 62% to 32%.
Energy impact: Lenz's energy platform includes a North Dakota Energy Co-op and improving energy infrastructure for both the fossil fuel and renewable sectors. Burgum supported the Dakota Access Pipeline and said he is open to finding ways to keep a large coal-fired plant open even after operator Great River Energy announced plans to close it. Oil and gas production remains integral to North Dakota's economy. The state trails only Texas in crude production and proved U.S. crude oil reserves, and holds 2% of domestic natural gas reserves. Due to a lack of adequate gathering and processing facilities, producers flared more than 200 MMcf/d of associated natural gas produced in June. The state generates more than 60% of its power through coal.
Overview: Gov. Roy Cooper, a Democrat, is up for reelection in the state, where he has helped to transform the North Carolina Utilities Commission into a more proactive player when it comes to tackling clean energy goals.
Polls predict: Cooper leads in the polls 50% to 40% in a race that also features the state's Republican Lieutenant Gov. Dan Forest, along with libertarian Steven DiFiore and Constitutional Party candidate Al Pisano on the ballot.
Energy impact: State leadership could prove important for gas pipelines. After a controversy involving Cooper over a multimillion-dollar fund for the state related to Duke Energy Corp.'s and Dominion Energy Inc.'s now-canceled Atlantic Coast Pipeline project, the North Carolina Department of Environmental Quality recently denied a water quality certificate for Mountain Valley Pipeline Southgate.
Overview: Voters will decide whether to give a second and final approval to amending Nevada's constitution to include a 50%-by-2030 renewable portfolio standard.
Energy impact: NV Energy Inc., whose utility subsidiaries serve about 1.2 million electric customers in Nevada, is already pursuing large-scale transmission and solar-plus-storage projects to meet the state's green energy goals, which include a renewable portfolio standard of 50% by 2030. Gov. Steve Sisolak signed the requirement into law in 2019.
But Nevadans are being asked whether to approve Question 6 and amend the state constitution to include the standard, which would prevent a future legislature from changing the requirement without the say-so of voters. Amending the Nevada constitution requires two rounds of voter approval. Question 6 passed the first round in November 2018, getting nearly 60% of voters' approval and setting the measure up for a vote again in 2020.
Overview: New Mexicans will decide whether to change how the state Public Regulation Commission is set.
Energy Impact: Constitutional Amendment 1 would reduce the number of commissioners from five to three and bring an end to elections determining the makeup of the regulatory body.
The utility regulator currently has five commissioners, each representing a district of the state and serving staggered four-year terms. Under the measure, starting Jan. 1, 2023, the New Mexico governor would appoint three commissioners chosen from a list of nominees put together by a committee. The appointments for six-year terms would also need the consent by the Senate. Approval of the measure would make future gubernatorial elections more important for utility oversight, as governors would gain greater control over the regulating body.
Public Regulation Commission incumbent Cynthia Hall, a Democrat, is facing off against Republican Janice Arnold-Jones for the District 1 seat. Democrat Joseph Maestas and Libertarian Chris Luchini are vying for the District 3 seat now held by Democrat Valerie Espinoza. Term limits prevent her from running again.
Overview: Alaskans will vote on whether to increase taxes on certain oil production in the North Slope.
Energy Impact: The increase called for in Ballot Measure 1 would apply to North Slope fields that produced at least 40,000 barrels per day in the last calendar year and have a cumulative output of at least 400 million barrels of oil.
BP PLC, ConocoPhillips Alaska Inc. and Exxon Mobil Corp. are part of the OneAlaksa coalition urging voters to reject the measure, arguing it will increase taxes by at least 300% at $60/b oil prices and threaten oil development and jobs.
Vote Yes for Alaska's Fair Share, which is spearheading the initiative, said the increase would apply only to Alaska's largest and most profitable fields posing no threat to new development and would give the state more money to pay for things like education, healthcare and capital projects.
Overview: Voters in the Pelican State will decide whether to amend the state constitution to allow the presence or production of oil or gas to be taken into account when assessing the fair market value of an oil or gas well for ad valorem property tax purposes.
Energy Impact: Constitutional Amendment 2 was referred to voters in May, when both the state House of Representatives and Senate unanimously backed a related House bill. The measure has the support of the Louisiana Tax Committee, Louisiana Tax Assessor's Association, Louisiana Oil and Gas Association, and the Louisiana Mid-Continent Oil and Gas Association and is seen as putting the value of wells in the right place. Approval by voters would mean that when wells are more valuable, they will pay a little more tax and when less valuable, pay less tax, the Louisiana Oil and Gas Association said.
Overview: A long-standing conflict over oil and gas in the state, fought via ballot initiatives in the past, is on hold.
Energy impact: Protect Colorado, a pro-drilling group, had planned to put before voters a measure to prohibit local governments from banning gas infrastructure in new buildings.
But Governor Jared Polis in July reached a deal with industry and environmental groups that could keep oil and gas issues off the ballot through 2022. As part of the bargain, Protect Colorado dropped the measure, and environmentalists agreed to stop pursuing stricter setback requirements for oil and gas developments.
The deal is meant to give the state more time to implement Senate Bill 181, a law passed in 2019 that changed the mission of the Colorado Oil and Gas Conservation Commission and gave local governments a bigger say in drilling.
State commissions, legislatures
Texas Railroad Commission
Overview: One of three Texas Railroad Commission seats is in play in November, with three candidates in the running. The RRC regulates oil and gas drillers.
Energy Impact: Republican Jim Wright, owner of several South Texas oilfield services firms, opposes tighter restrictions on natural gas flaring, which surged in 2019 as oil producers wanted to keep producing but lacked access to pipelines to move associated gas volumes. He beat high-profile incumbent Ryan Sitton by more than 10 points in a primary runoff but has since come under fire from a Houston Chronicle investigation alleging his company, Dewitt Recyclable Products, violated commission rules more than 200 times.
Democrat Chrysta Castaeda, a Dallas energy lawyer, has promised to clamp down on flaring, which could limit future oil production. She also favors stricter water reclamation rules. "Texans deserve someone who will enforce the law and work for all of us. Let's stop wasting energy," she said in a campaign video. Castaeda supports the RRC retaining a supply coordinating role a function that came up during the spring oil price crash under a proposed proration policy.
Libertarian Matt Sterett also has come out against flaring but favors fracking generally. He wants to reduce oil and gas industry administrative burdens by cutting regulations and paperwork. The Railroad Commission "has the ability to restrict gas flaring by simply denying permits," he said in a 2020 Ballotpedia survey.
Arizona Corporation Commission
Overview: The Arizona utility regulator has three seats out of five up for election, with the field of candidates split between three Republicans and three Democrats.
Energy Impact: The outcome could affect utility Arizona Public Service Co.'s pathway to achieving its recently declared 100% clean energy goal and determining what resources are included. Multiple candidates from both parties are pushing clean energy targets, and incumbent Republican Lea Marquez Peterson and Democrat Shea Stanfield have said they are in favor of 100% clean power policies. Arizona ranks third in the U.S. in solar power capacity but generates most of its electricity from natural gas, nuclear and coal.
Overview: After more than dozen years in the minority in the state House of Representatives, Democrats are aiming to take back the chamber, where all 150 seats are up for grabs. Republicans hold 83 House seats to Democrats' 67. A total of 16 seats out of the Senate's 31 are up for election. Presently, Democrats hold 12 Senate seats and Republicans hold 19.
Energy Impact: Clean energy advocates say that a blue state House could alter energy conversation especially after years of playing defense on tax incentives for wind energy and create openings for bipartisan support for electric vehicles, distributed resources and energy storage. A Democratic majority could also draft legislation to address oil and gas industry methane leakage and flaring, but without support from the Senate and/or governor's office, the impacts may be limited.
Overview: The state House of Representatives could flip to Democratic control with all 110 seats up for election. Heading into the election, Republicans held 58 seats, while Democrats held 51.
Energy Impact: Democratic control of the House would potentially bolster initiatives Gov. Gretchen Whitmer has sought to pursue through the executive branch toward her goal of 100% clean energy. Michigan remains heavily coal-dependent for power generation, with more than 30% of the state's net generation in 2019 coming from coal. Still, renewable capacity grew to supply 8% of Michigan's power in 2019. A Democrat-controlled House could support additional renewable-energy-friendly policies.
Pennsylvania General Assembly
Overview: Both the state House and Senate look to be close races. All 203 seats up for election in the House where Republicans currently have control, 109 to 93. In the Senate, 25 seats out of the chamber's 50 are up for grabs. There, Republicans have control 28 to 21, with one Independent.
Energy Impact: The red House has put the brakes on some clean energy items, such as a bill on energy efficiency that advanced in the Senate, indicating that a shift to blue could enable more climate-friendly energy policy. Gov. Tom Wolf may also tighten gas industry regulations, and on the power side, efforts remain underway for Pennsylvania to join the Regional Greenhouse Gas Initiative, an emissions cap-and-trade program.
Overview: The Senate may flip to Democratic control in a tight race where all 67 seats are up for grabs; Republicans currently control the chamber 35 to 32. All 134 House seats are up for election, where Democrats control the majority 75 to 59.
Energy Impact: The state may be positioned to join states with 100% clean energy goals if the Senate goes blue. Governor Tim Walz strongly supported the measure in 2019, a year in which more than 30% of Minnesota's net generation came from coal. Minnesota is also among the nation's top-five ethanol producers, and about 30% of all U.S. crude oil imports flow through the state.
Jared Anderson and Brandon Evans are reporters for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.
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Host of energy issues hang in the balance in down-ticket races - S&P Global