The State of Play

The world is about to need more energy than it ever has before. 

Emerging technologies, including artificial intelligence, are already straining power grids as they demand unprecedented levels of energy. 

The electrification of much of the auto industry, a potential manufacturing revival and the growing use of robots in the economy are also driving up energy needs. 

All this comes as the Trump administration pushes for more domestic manufacturing. 

House Energy and Commerce Committee Chair Brett Guthrie (R-Ky.) said the U.S. needs to build more data centers as it also shores its manufacturing sector. That will certainly drive up energy demand. 

“We have to take this seriously or we’re going to lose the battle with China.”

Global energy needs grew faster than the normal pace in 2024, rising by 2.2% last year compared to the 1.3% annual average for the previous decade, according to the International Energy Agency. 

However, the growing appetite for energy poses a challenge to efforts to reduce carbon emissions and their impact on the environment. Those competing currents will drive many of the policy decisions for decades as governments around the world push for decarbonization and move away from fossil fuels. 

In this segment, we explore how energy production is quickly evolving. We’ll examine how policymakers are working with the industry to fulfill growing needs while accommodating divergent views on how to produce power in the 21st century. 

Those efforts will, in part, entail breaking the impasse on permitting reform, an overhaul people from both sides agree is necessary.

AI revolution: AI doesn’t live in an imaginary cloud; it’s a product of hard infrastructure and requires a massive amount of computing power. That means space, water and energy. 

Because of this, experts and policymakers say AI will be the biggest driver of power demand in the coming decades. 

Meanwhile, the U.S. is in a race against China for the development of AI. Tech and energy companies say the U.S. can’t win that race without massively upgrading its energy production capacities.  

Congress is attuned to these challenges. Key members and committees with jurisdiction over technology have focused on the intersection of energy and AI. 

Permitting reform: Meanwhile, Congress is also making efforts to reform the complicated and protracted permitting process, which will require bipartisan agreement.

Both Democrats and Republicans acknowledge that Congress should tackle permitting reform to ease energy production, albeit there are disagreements over what sources we should favor. 

“It’s important that we win the war against China for AI,” Guthrie said. “’I’m trying to build a bipartisan coalition for [permitting reform] and be sensitive.”

Transportation electrification: It’s not just AI data centers that would benefit from permitting reform. The growing electrification of the transportation industry, with electric cars, trucks, bikes and scooters, will put strain on power grids. 

That will potentially require new power plants to come online as well as approval of new energy projects, all of which industry and policymakers say would need a less complicated permitting process. 

Those electric vehicles run on batteries built with critical minerals. That’s another area where lawmakers in both parties want to make progress. 

The House China committee is pushing for bipartisan legislation to shore up the American mineral industry and reduce the country’s reliance on Chinese-sourced materials. 

Sens. Mark Kelly (D-Ariz.) and Mike Lee (R-Utah) also have a bill to align the critical minerals list from the Department of Energy and the U.S. Geological Survey to ensure “all vital resources are treated equally.”  

While the House and Senate are eager to address these energy policy issues, Washington has been overwhelmed by the GOP reconciliation package that has taken up much of the first half of the year. 

Republicans are pushing for many energy provisions in the bill, including expanding oil, gas, coal and geothermal leasing as well as repealing many green energy tax credits. While they argue these moves will boost energy production, Democrats argue it would hinder the United States’ decarbonization efforts.

For now, the energy battles on Capitol Hill will fall along party lines. However, later in the year, when much of the reconciliation dust has settled, lawmakers will likely make an effort to clinch some bipartisan energy wins, especially as the Trump administration pushes for more production. 

— Diego Areas Munhoz