Lawyers anticipate a significant increase in energy deals as the incoming Trump administration is likely to ease environmental regulations and antitrust scrutiny. This shift could accelerate the pace of oil and gas transactions, which already dominate the energy sector.
Practitioners believe that lighter antitrust oversight will facilitate faster deal-making. Hillary Holmes, co-chair of Gibson, Dunn & Crutcher’s capital markets practice group, stated, “We expect deal-making to become easier with regulations and personnel that are more supportive of consolidation and capital raising. This will make being a publicly traded company in the U.S. more attractive.” She added that these changes would foster growth across many sectors of the energy industry.
Gibson Dunn, which has an office in Houston, was the top legal adviser on global energy mergers and acquisitions (M&A) last year, according to Bloomberg data. Other leading firms in this area include Kirkland & Ellis, Wachtell Lipton Rosen & Katz, and Vinson & Elkins.
Lawyers expect the Federal Trade Commission (FTC) to issue fewer second requests for information during Trump’s second term. These requests can add months to deal timelines or even prevent transactions from closing. Lande Spottswood, a partner at Vinson & Elkins in Houston, noted, “The second requests we saw in the energy sector were not about substantive antitrust issues. They just slowed down deals and created significant costs while pending without identifying real antitrust concerns.”
The energy sector may also see an increase in public market exits. The broader capital markets have been sluggish, with a decade-low of $91.7 billion in IPOs last year and the fewest transactions since 2013, according to Bloomberg. Holmes predicts a resurgence in IPOs and increased confidence in evaluating M&A opportunities.
Christopher Cottrell, a partner at Seyfarth Shaw in Houston, anticipates a rise in demand for legal guidance in regulatory compliance, environmental issues, and corporate transactions related to asset sales. He also mentioned that contracts involving drilling, transportation, and service agreements could become more complex as parties navigate potential changes in tax structures and international trade policies.
While oil and gas activity may increase, there are concerns about a potential decline in clean energy projects. Green initiatives have attracted significant legal attention, particularly in M&A, and have led to the formation of large funds dedicated to energy transition efforts. These projects have benefited from tax incentives provided by the Inflation Reduction Act (IRA), resulting in a surge of activity from major private credit funds like Brookfield Asset Management, Blackstone, TPG, and KKR.
Zach Crowley, a partner at Clean Energy Counsel, noted that some prestigious law firms, which historically lacked strong energy practices, have attempted to shift focus toward renewables in the past year. However, Trump has referred to renewable energy as “the green new scam,” and speculation about deprioritizing climate-related policies has caused a decline in shares of renewable energy companies.
Lawyers are concerned that some tax incentives in the IRA may be at risk. If certain tax credits are repealed, the returns on renewable projects could diminish, leading some investors with high capital costs to exit the market, including large law firms. Crowley stated, “You may see more law firms moving away from renewables because they are more focused on profits than on the development of these projects.”
Despite these concerns, it may be premature to dismiss the future of renewable energy activity. If Republicans do not gain control of the House of Representatives, the IRA may remain secure. Michael Cannon, a Dallas-based tax partner at Gibson Dunn, emphasized that many IRA incentives are popular even in conservative states, which host numerous renewable projects and jobs.
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