The results are in…
The US midterm elections have been historic by any measure. At the federal level, swings in the House of Representatives that rival what has transpired this year happened in 1994 and 2010. Notably, those were also midterm elections. In 1994, Republicans moved from a minority party in the House at 176 seats to a majority at 230. In 2010, the climb was even greater for Republicans, moving from 178 to 242. With the recent midterms, Democrats will move from a small minority at 215 seats to a substantial majority of at least 256 seats, flipping control of, at most recent count, 45 seats.
The Senate has also seen a significant shift, with Democrats moving from a minority position of 47 seats to at least 54 seats. A similar track has unfolded at the state level, with Democrats flipping governor seats in 5 states, at last count.
Perhaps the most astonishing result at the state level has been the shift in government control in Texas, where a Democrat also won the statewide election for the US Senate. The Texas state government has been Republican led since 1994, but after November 3, Democrats now control the state House, and the seats of governor, lieutenant governor, and attorney general. The blue wave that swept through Texas, the oil and gas capital of the world, was unexpected, but Republican control of the state Senate presents an interesting wrinkle.
What does it mean for energy? Let’s begin with the states. Texas as an example.
Since Texas produces 42% of the nation’s crude oil, 30% of the nation’s natural gas, accounts for 34% of the nation’s refining capacity, 65% of nationwide exports of natural gas via pipeline, and 38% of the nation’s LNG export capacity, it is useful to open with the energy implications of the midterms for Texas. Notably, Texas is also #1 in wind capacity, #2 in solar capacity and #2 in battery capacity in the US. So, it has an abundance of energy, and its business climate has made it an attractive place to invest.
Energy abundance coupled with a friendly business climate has been a foundation stone of Texas for the last 32 years while the state has been governed by Republican leadership. But that does not mean the newly elected Democratic leadership will unwind it all because that foundation stone has been at the core of industrial growth, economic opportunity, and the tax base that allows the state government to lean into different priorities. Since the Democratic message during the midterms was centered on affordability, it is difficult to envision any policy direction that would disable the engine of the Texas economy. Not only would it have ripple effects for the constituent base; it would also threaten the tax revenues that the new Texas government can use to advance other initiatives, such as teacher raises and other education-focused goals. Moreover, the Texas Senate is still Republican-controlled, which sets up a split government that will create guardrails and make compromise across party lines a critical feature of advancing legislative initiatives.
Shifts in political leadership in other states also changed. Data centers, of course, will be a point of focus everywhere, with electricity prices as the rallying cry, but don’t expect outcomes to be homogenous because the underlying fundamentals are very different across the country. In general, state level energy policy will depend on the assessed benefits and costs of any new direction. In states like Texas, where the comparative advantage sits with oil and gas, it is likely that new policy will not be overly burdensome for that industry. In other states, however, where the economic backbone is linked to other industries, it is possible to see legislative initiatives aimed at expanding other forms of energy. Time will tell, but outcomes will be centered on the economic engine of each region, not whether it is blue or red.
What about national energy policy?
Extending to the national level, the narrative begins with the Trump Administration’s dramatic shift in energy policy after coming into office for a second term. With Republican control of the House and Senate, legislative efforts and executive orders have weakened government support for some energy technologies—such as wind, solar and hydrogen—but strengthened support for others—such as carbon capture, geothermal, and advanced nuclear. So, it has been a mix with varied impacts, perhaps most notably negative for offshore wind. In any case, some have viewed the 2026 midterm election as an opportunity to reinstate or reinforce energy legislation aimed at advancing specific clean energy technologies. But Congressional action that pushes in that direction is unlikely to succeed.
To begin, climate has moved out of the policy spotlight in the US, with affordability taking top billing. That is not to say that the public does not care about climate; rather, it is simply not at the top of the priority list. There will almost certainly be efforts from some in the Democratic party to bring new climate-focused energy legislation forward, but the headwinds they face may not solely be from the Republican party. The Democratic party itself is quite fractured, and not everyone on the Democratic side of the aisle will prioritize climate legislation because their constituents demand different actions, such as addressing the cost-of-living. Since all energy costs are linked to international supply chains at some level, it is likely that federal policy discussions will engage infrastructure, supply chain development, and strategic stocks.
In addition, the election results are largely a disapproval of Trump, not an endorsement of the Democratic party. Many Democrats understand this, and they are looking for an opportunity to constructively address concerns expressed by voters. This is where different priorities within the Democratic party may get exposed. In the state of Texas, for example, the evidence of down ballot voting is strong because the percentages across candidates are remarkably similar for all statewide positions. So, pushing more ambitious legislation could happen, but within-party agreement is far from certain.
On top of all of this, Trump still has veto power over any legislation that reaches his desk. The Democrats do not have enough votes to override a veto. On the affordability front, Democrats in Congress can find some Republicans who are willing to work with them. This should drive efforts to address things like the costs of energy, healthcare, and other items in bipartisan fashion.
On another front, there are open questions about how legislation, such as the Bipartisan American Affordability and Jobs Act (BAAJA), will fare in a new political setting. It may be that the best opportunity to pass broad permitting reform, such as BAAJA, will be during the lame duck session before new members take office in January. Once committee chairs change, the enticement of the power of the legislative pen could derail BAAJA in the House, even though it already passed the Republican-controlled Senate prior to the election.
So, what can be expected?
Democrats are organizing around affordability as a key policy objective once they take office in January. This will, however, require negotiation with Trump because any legislation Democrats pass will still be subject to veto by Trump. Given there is also already discussion about hearings and investigations, there is a risk that the next two years become a stalemate that devolves into pure political theater. If this happens, Trump will continue to rule by executive order through government agencies.
Congress will be able to hold impeachment proceedings, block various nominations, subpoena agency heads, call for testimony from energy company CEOs, and wield the power of the purse by stymying budget approvals in attempt to shape what Trump can do. While this makes for great reporting, it is pure theater, and none of it would tangibly change anything. There is an old saying, “The more things change, the more they stay the same.” However, a divided government, such as the US has now, will require parties to negotiate toward common ground to build constructive solutions. Will the adults stand up?
Kenneth B. Medlock, III is the James A. Baker, III and Susan G. Baker Fellow in Energy and Natural Resources, and Senior Director of the Center for Energy Studies at Rice University’s Baker Institute for Public Policy. He is also the co-director of the Masters of Energy Economics in the department of economics at Rice University.
