In a recent CLE event hosted by The Texas Lawbook and the Houston chapter of the Association of Corporate Counsel, lawyers from Bracewell, Talen Energy and Vopak gathered to discuss various topics related to the different areas they are keeping a keen eye on as the change of presidential administrations inches closer to the Jan. 20 inauguration date.
Moderated by Lawbook founder Mark Curriden, a group of lawyers discussed various topics related to how the new administration might impact several sectors. The panelists specifically examined potential changes in labor, employment, and policies and expectations for M&A. Additionally, they shared insights on how they are preparing themselves and their clients for these possible changes.
In-House Perspective
Hugo Testé, general counsel and VP of legal at Vopak, and Andrew Wright, Chief Administrative Officer of Talen Energy, started the event by discussing issues the duo is examining from the in-house attorney perspective.
Testé shared that the key areas he is watching are the administration’s effect on the energy and infrastructure spaces.
“The general sentiment in our boardroom is that it will be positive, but once you dig into the details, I think there’s a fair bit of color that still needs to be added,” Testé said, adding he’s curious about the effect the administration will have on the IRA.
Additionally, he added that he’s been watching the administration’s proposed tariffs and their possible effect on energy infrastructure projects and the energy sector itself, noting some “rumblings” he’d heard regarding Canada possibly taking retaliatory actions against these tariffs.
Wright highlighted that the most critical aspect he and his firm are pondering is figuring out what changes the new administration will bring. Furthermore, Wright touched on the importance of knowing what’s happening at the federal, state and local levels for his firm’s significant capital projects and corporate citizenship.
“We’re hopeful that the new administration focuses on policy and not the culture wars,” Wright said.
Energy, Environment and Infrastructure
Scott Segal, co-chair of the policy resolution group at Bracewell, then joined the event to give an overview of how the political landscape following the Republican party’s “trifecta” win during November’s election and how it will affect the energy, environment and infrastructure market areas.
Segal specifically highlighted the recent appointments of conservatives to key positions in the energy and environment space, including new Energy Committee Chairs Sen. Mike Lee (R-Utah) and Sen. Shelley Moore Capito (R-West Virginia) and Rep. Brett Guthrie (R-Ky.), who was just named the new head of the House’s Energy and Commerce Committee.
Segal highlights how these politicians support fossil fuels and infrastructure-focused projects; however, he noted that all three don’t support repealing the IRA.
“All these folks are quite supportive of fossil fuels and quite supportive of infrastructure projects, but here’s the point: they are all three political conservatives, and all three of them have said they don’t support a repeal of the Inflation Reduction Act,” Segal said, noting that this is due to a majority of the money coming from the IRA typically being placed in red states or jurisdictions.
Segal also highlights several other policy, personnel and regulatory changes, including discussing the DOGE committee and the recent uptick in the Biden administration’s spending on the IRA.
Tax Credits
Patrick Johnson, co-chair of Bracewell’s energy transition practice, then joined the conversation to discuss some of the projects he has been working on, mainly in the carbon capture and clean fuels space and how critical tax credits are to these projects.
“These are projects that really need the tax credits as part of the strategy for recovering costs and generating revenue,” Johnson said.
Segal then rejoined the conversation to discuss nuclear energy, noting that the President-elect and Congress seem to support both nuclear energy and SMRs. He also shared potential tax implications for those in these fields.
“I believe there is a tremendous amount of support within Congress to maintain, and I would even say ‘expand’ if I were being really bullish, but I would just go ahead and say ‘maintain,’ favorable tax treatment for nuclear as well as potential loan program support,”‘ Segal said.
Johnson then closed the conversation by discussing how he’s seen an uptick in interest from his clients in SMRs. He also touched on the green hydrogen versus gray hydrogen conversation and the uptick in interest in data centers.
M&A in the Energy Sector
Austin Lee, an M&A-focused partner at Bracewell, then joined the conversation to discuss what to expect regarding M&A in the energy sector once the new administration takes over.
He first highlighted the significant expectation that a new Republican administration, particularly a new Trump administration, will see an uptick in the “drill baby drill” philosophy and loosen the floodgates for deal opportunities in the oil, gas and energy sectors.
However, Lee pointed out that just because a new president is elected doesn’t necessarily mean deals will begin happening. He mentioned several other key factors that could prevent these from occurring when a new candidate is elected.
“It’s not really directly related to the policies so much of the different presidents, but it’s how do those policies, and how does that general demeanor of the administration interact with the overwhelming macro influences that are going on in the business,” Lee said, noting that despite this, there are several actions the new administration can take to encourage drilling and alleviate inflationary pressures.
Lee also highlighted that capital discipline and returning money to shareholders remain priorities for most, particularly within upstream and midstream businesses. He then delves into several other policies and events that could affect the deal-making space under the new administration.
Labor & Employment
Kelly Robreno Koster, a labor and employment law-focused partner at Bracewell, joined the conversation to highlight some changes companies should keep their eyes on in the labor and employment space when the new administration takes over.
“Labor and unemployment are very subject to change in political wins no matter who the administration is, and a lot of that is because a lot of labor and employment falls under the purview of agencies and other regulatory bodies,” Koster said, noting she expects to see a lot of rollbacks.
She highlighted specific expected changes in regulatory bodies such as OSHA, NLRB and EOC, as well as in immigration and non-compete agreement policies.
She also addressed several other issues and discussed the general expectation for a decrease in regulatory enforcement under the Trump administration, which aims to allow businesses to operate more freely. The conversation also included insights on the anticipated shift in litigation that had been primarily within Houston’s Fifth Circuit, beginning to move away from Texas.
The event concluded with a comprehensive discussion and Q&A session featuring all participating panelists addressing other key economic, regulatory and political issues of concern as Jan. 20 approaches.
The full video from The Texas Lawbook is available below. The Lawbook is proud to partner with ACC-Houston, Bracewell, Talen Energy and Vopak to produce this CLE event.