Potential market shocks: Data centers, nuclear energy, and Venezuelan oil fields will face comprehensive scrutiny if the Republican Party loses the midterm elections.

Potential market shocks: Data centers, nuclear energy, and Venezuelan oil fields will face comprehensive scrutiny if the Republican Party loses the midterm elections.

With two months to go before the US midterm elections on November 3, polls show that the Democrats are poised to regain a majority in the House of Representatives. If this happens, the Trump administration's policies in the energy and technology sectors will face systemic congressional scrutiny, and the regulatory environment for these industries may tighten significantly.

According to a recent report by Politico, lobbyists have begun preparing for potential congressional investigations or subpoenas for industry executives. Democrats have publicly stated their positions on issues such as the Venezuelan oil deal, data center regulation, and the independence of the nuclear energy agency, sending clear policy signals.

Bank of America strategist Michael Hartnett previously warned that a full Democratic sweep would trigger a significant market sell-off. This rising expectation of such policy action is providing investors with a window to assess potential risk exposure in advance.

Venezuelan oil deal: Congressional investigation imminent

The Trump administration recently brokered a U.S.-led agreement involving 17 Venezuelan oil fields with proven reserves of up to 65 billion barrels. According to a White House statement, the agreement will be a partnership with private oil producer North American Blue Energy Partners, granting the U.S. government a right of first refusal to purchase 20% of the company's Venezuelan production, with an option to purchase the remaining 80%.

A particularly sensitive aspect of the agreement is that the U.S. Department of Defense's Strategic Capital Office will hold a 35% stake in the non-U.S. oil company. This arrangement has already sparked strong backlash from Democrats. Senator Chris Van Hollen (D-MD) stated bluntly on social media: "Let's be clear: this is not a victory."

Representative Debbie Wasserman Schultz (D-FL), after winning the primary in August, pledged to help Democrats block the deal if elected. Regaining control of the House means Democrats will have control of committee agenda-setting and subpoena powers, making related energy transactions—especially those involving government ownership—a central focus of the investigation.

Nuclear regulation: The tension between supporting capacity expansion and institutional independence

Rapidly growing electricity demand is driving the Democratic Party toward supporting increased nuclear power capacity. Illinois Governor JB Pritzker signed an executive order earlier this year to expand the state's nuclear power capacity, and New Jersey Governor Mikie Sherrill signed a bill requiring an increase in the proportion of nuclear power by 2028. Several other nuclear energy bills have also received bipartisan support.

However, the Trump administration's series of reforms to the Nuclear Regulatory Commission (NRC) have become potential points of political friction. The White House's dismissal of then-Democratic Commissioner Christopher Hanson in 2025 sparked strong criticism from Democrats regarding the NRC's independence. Furthermore, the administration's proposals to issue licenses for non-commercial reactors through the Department of Energy and the Department of Defense, and to establish an NRC steering committee to give the White House greater influence, have both been questioned by Democratic lawmakers.

Rep. Frank Pallone (D-NJ), who is expected to become chairman of the House Energy and Commerce Committee, publicly commented on the independence of the NRC earlier this year. If Democrats gain control of the House, congressional hearings on the NRC's regulatory framework will likely be on the agenda, potentially disrupting the pace of nuclear energy licensing approvals.

Data Centers: Tightening Pressures from Both Environmental Protection Measures and Power Grid Costs

Democrats have not reached a unified stance in support of halting data center construction, but if they regain control of the House, they are expected to pressure the administration to establish stricter environmental and regulatory safeguards. According to The New York Times, former President Obama urged House Minority Leader Hakeem Jeffries to build a clear framework for public discussion on artificial intelligence policy and suggested that 2028 presidential candidates make AI a core issue.

At the legislative level, the Electricity Payer Protection Act (HR 9340) has been unanimously passed by the House Energy and Commerce Committee. This bill requires states to consider establishing federal standards to ensure that data centers bear the costs of grid upgrades required for their facilities. However, some Democrats, including Pallone, believe the bill is insufficient. During his committee hearing on September 3, Pallone reiterated his call for "real, substantial barriers" to limit environmental impact and supported halting new data center construction in the absence of such safeguards, but has not yet submitted relevant legislation.

Rep. Alexandria Ocasio-Cortez (D-NY) introduced House Bill HR 9442 in June, echoing Senate Bill S. 4214 sponsored by Senator Bernie Sanders (I-VT), but neither bill currently has any Republican co-sponsors. Data center operators and related infrastructure investors need to closely monitor the potential impact of the election results on the direction of these legislations.

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