Shifting energy priorities
Much of the remaining U.S. Inflation Reduction Act grant money targeted toward climate-related projects was halted immediately after January 20, 2025, as the new administration aimed to prioritize fossil fuel production. As of February 27, the U.S. Environmental Protection Agency released the funds for use, but it is unclear if the freeze will be reinstated in the future.
Renewable energy producers are capitalizing on the grant release and viewing it as a positive sign. Renewable energy projects that were delayed or canceled due to the halt will be positively impacted, generating an increase in shipping at some point, with timing remaining uncertain.
The new U.S. administration has also temporarily halted federal approvals, permits, and loans for wind projects both onshore and offshore, limiting incremental logistics needs for the foreseeable future.
Public utilities
Pricing pressures
New U.S. tariffs on imports from Canada and Mexico are impacting fuel prices that regional utilities need for energy production. These measures have already increased wholesale gasoline prices, particularly in the Northeast, which heavily relies on Canadian shipments of gasoline, heating oil, and diesel. Analysts believe that prolonged tariffs on Mexico and Canada, which are currently 25% on all imports and 10% on Canadian energy imports, could cause U.S. energy production and retail gasoline prices to rise.
Impact of tariffs
The U.S. administration's tariffs on steel, and aluminum, and potential tariffs on copper could add strain to the supply chain for critical power system components such as transformers. This could lead to higher costs and potential delays in power projects, impacting utility bills nationwide.
Infrastructure investments
As tech companies invest in large, regional data centers, it is causing an impact on local energy production. One specific example of this is in Indiana, where $15 billion in data center investment has been announced. This surge has prompted concerns over potential increases in energy bills for residents. Proposed legislation aims to require tech firms to cover 80% of the costs for necessary energy infrastructure, including new power plants and transmission lines.
Oil & gas industry
Industry shifts focus
The oil and gas industry is implementing various cost-saving and financial performance measures, including reducing investments in renewable energy projects, divesting non-core assets, and focusing on core fossil fuel operations to enhance profitability and shareholder value. This comes at the same time as a broader trend among energy companies to reassess their commitment to sustainability initiatives.
One large oil and gas company recently announced a pivot, ending its renewable energy targets to focus on increasing oil and gas production. The company plans to boost annual spending on fossil fuels to $10 billion, while reducing investment in renewables to between $1.5 billion and $2 billion per year.
Mining industry
Industry trends
- The mining sector is increasingly focused on profitability, sustainability, and digitalization. Companies are adopting advanced technologies to optimize operations, enhance safety, and reduce environmental impact.
- Artificial intelligence (AI) and digital technologies are revolutionizing the mining industry by improving efficiency, safety, and environmental performance. AI-driven analytics, autonomous vehicles, and real-time monitoring systems are being integrated to optimize production and exploration processes.
- In a trend different from oil and gas, mining companies are intensifying their focus on considerations such as climate resilience, natural capital management, and value chain accountability. The adoption of AI is also aiding in enhancing environmental and social sustainability within the sector.