President Donald Trump’s wave of executive orders issued just after he took office have already generated plenty of headlines, but on their own, they will not solve the biggest issue facing the power industry — the need to meet rising demand — sources told RTO Insider on Jan. 21.

“If we truly want to win the AI race against China, I think that merits a declaration of national emergency, but we can’t possibly build enough oil and gas infrastructure in the next couple of years to do it with fossil fuels alone,” former FERC Chair Neil Chatterjee (R) said in an interview. “What we should be focusing on is making it easier through this emergency declaration to get every available electron.”

In addition to expanding fossil generation, that would include renewable energy, storage and the transmission needed to connect new supplies and loads to the grid, he said.

Electric transmission was not mentioned in the “Unleashing American Energy” executive order, and it only came up in the “Declaring a National Energy Emergency” order as part of generation. It could benefit from Trump’s executive action, Grid Strategies President Rob Gramlich said.

The major tech firms backing AI, many of whose CEOs were in the Capitol rotunda when Trump took office Jan. 20, are going to want to expedite transmission buildout to help meet that demand, Gramlich said in an interview.

Part of the reason that transmission was largely absent from the executive orders is that it became politicized in the past few years, as Democrats came to support its expansion as necessary to deliver on the goals of the Inflation Reduction Act.

“That has created this notion that transmission policy is having red states subsidize blue state policy, and it is going to take some education and experience to overcome that,” Chatterjee said.

Republicans are going to get through as many of their policy preferences as they can on their own now that they control the White House and both houses of Congress, Gramlich said. He expects that they will push energy policy through budget reconciliation, a legislative procedure tying bills to budget measures in order to avoid the Senate filibuster. Democrats used this to pass the IRA itself without any Republican support in 2022. (See Senate Passes Inflation Reduction Act.)

“I think most permitting reform will need to go through Congress, and I think only a tiny bit could be done through reconciliation, leaving most of it for what would need to be a bipartisan bill,” Gramlich said.

He warned not to expect negotiations on permitting reform to pick up immediately where they left off last session because Republicans are going to need to take some time pushing through whatever policies they can without Democrats’ votes. Either later this year or next year, momentum could pick up for another attempt at a bipartisan permitting bill. (See Lame Duck Permitting Push Fails; Manchin Blames House GOP Leaders.)

The big issue facing infrastructure advancement is bipartisan: Americans of all political persuasions can exhibit “NIMBYism” when it comes to infrastructure, whether it is a pipeline for natural gas or a transmission line for clean energy, Chatterjee said. But the country will need all the electrons possible to meet the rising demand and maintain reliability.

Neither party has wrapped its mind around the surge in demand the electric industry is facing and how important serving it is to win the AI race, which is a national security issue, he said.

“When everyone gets situated, and we start to recognize that electric power is essential to winning the AI race, some of the political obstacles of the last decade and a half, in my view, will start to wear away,” Chatterjee said. “And you’ll see Democrats recognizing we cannot possibly win the AI race without fossil fuels. And you’ll see Republicans recognizing that we cannot possibly win the AI race with fossil fuels alone.”

Gramlich agreed with that assessment, adding that many policymakers are stuck on where the grid was a few years ago when the expansion of renewables was the main driver for its expansion.

“But now there’s a lot of other generation, and there’s a lot of different types of loads, including manufacturing and data centers that are also trying to connect to the grid,” Gramlich said. “So, the interests in support of grid expansion have expanded dramatically, and I think we’ll see, over the course of this year, the politics come around and incorporate that fact.”

Mark Brownstein, the Environmental Defense Fund’s senior vice president for the energy transition, took issue with the idea of an “energy emergency” altogether, saying in a statement that the U.S. is already the largest oil and gas producer, with export capacity on pace to double.

“The first-day wave of executive orders does nothing to lower energy costs or improve reliability,” Brownstein said. “Instead of rolling back cost-effective, common-sense safeguards that have broad public support, a forward-looking administration would be focused on modernizing our aging electricity grid to meet the growing demand from AI data centers and an increasingly digital economy, prioritizing efficiency and clean electricity.”

Erasing Biden’s EV Targets

While the industry is dealing with the growth of data center demand now, Trump’s executive orders will have some impact on longer-term demand trends, such as for electric vehicles.

Trump’s “Unleashing” order states that “it is the policy of the United States … to eliminate the ‘electric vehicle mandate’ and promote true consumer choice.” There is not any law or rule requiring consumers to purchase EVs, but Republicans branded former President Joe Biden’s policies to encourage EV adoption as such.

The order lists several “regulatory barriers” to be removed, such as state emissions waivers and “unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses and government entities alike by rendering other types of vehicles unaffordable.”

R Street Resident Senior Fellow Josiah Neeley said that the order could wind up being a blessing in disguise for the industry.

“It seemed unlikely based on the ability of the [Biden] administration to build out necessary accompanying infrastructure, like charging stations,” that getting EVs to 50% of national sales by 2030 “was going to be feasible,” Neeley said in an interview. “And, so, I think realistically, the administration had set itself on a collision course where it was going to have to do something to alter” its goal.

EVs are going to make up a growing share of new vehicles going forward, but it will be driven by customer demand and that will help turn down the political back and forth around them.

“I think unfortunately in America, everything tends to get very easily politicized, where if one party tries to push EVs, that makes EVs seem uncool,” Neeley said. “By contrast, you have [Tesla CEO] Elon [Musk] endorse Trump, and suddenly a bunch of people who used to like Tesla don’t like Tesla anymore.”