Market Commentary: Permit Reform Could Be an Energy Catalyst
“Pass the frickin’ bill so we can start building things again.” — U.S. Oil & Gas Association
The Bipartisan American Affordability and Jobs Act of 2026 (BAAJA), a sweeping energy and infrastructure permitting reform bill, was introduced in the U.S. Senate on September 30. If enacted, we believe it could be a significant catalyst for midstream energy, utilities, clean energy, and infrastructure companies, including many of our holdings.
The bill aims to get infrastructure built faster and at lower cost, in an environmentally responsible way, while meeting fast-growing power demand, modernizing the grid, supporting U.S. energy exports, and helping lower customer bills. Not surprisingly, it has drawn support from a broad coalition of energy producers, manufacturers, labor unions, and nonprofits.
Liz Bowman of Williams Cos. (WMB-NYSE) made the case well in a recent op-ed: “From 2010-2024, the U.S. saw 5% electricity demand growth, but from 2025-2034 the U.S. is expecting at least 52% growth.” She also notes that global LNG demand is expected to climb from 57 bcf/d in 2025 to 90 bcf/d in 2035. Lengthy reviews and repeated legal challenges delay (and sometimes kill) projects and drive up costs. The Senate bill takes aim at both.
Meeting that demand will take natural gas, nuclear, renewables, storage, and more transmission. While passage is by no means certain, we sense growing optimism. In our view, the provisions for litigation reform and permit certainty are the most important. Frivolous legal challenges and the revocation of previously approved projects have ruined many a good project through delays and cost overruns. The bill greatly reduces those risks, and its passage would have positive implications for our portfolio holdings.
WHAT WOULD THE BILL DO?
Faster reviews. Sets deadlines of one year for environmental assessments and two years for full environmental impact statements under the National Environmental Policy Act. It also limits Clean Water Act reviews to water quality and shortens Endangered Species Act consultations.
Fewer, faster lawsuits. Challenges must generally be filed within 150 days, and only on issues raised during public comment. If a court finds a flaw, the permit typically stays in effect while the agency fixes it.
Permit certainty. Agencies could not revoke or suspend valid permits (those in effect on or after September 16, 2026) except on narrow grounds, and developers could seek damages if a project type is singled out for unfair treatment.
More transmission. Expands federal authority to approve interstate power lines of 230 kV and above when states fail to act within a year, requires regional grid planning, and fast-tracks routine upgrades on existing rights-of-way.
Data centers pay their way. Large computing loads of 20 MW or more must bear the cost of the grid upgrades needed to serve them and provide financial guarantees, so other customers are not left paying for stranded assets.
" Unfortunately, outdated federal bureaucracy continues to delay critical energy and infrastructure projects and drive-up costs for hardworking families at a time when speed and efficiency matter most.” - 22 Governors, in a Joint Statement
WHAT HAPPENS NEXT
BAAJA was introduced by the leaders of the two Senate committees with jurisdiction: Shelley Moore Capito (R-W.Va.), Mike Lee (R-Utah), Sheldon Whitehouse (D-R.I.), and Martin Heinrich (D-N.M.). A procedural cloture vote is expected on November 9, when the Senate returns after the midterm elections; it will need 60 votes. If the bill clears the Senate, it must still pass the House, where it may face changes, before reaching the president’s desk.
Supporters see faster decisions, lower costs, and greater reliability. Opponents worry that narrower reviews and tighter litigation limits could weaken environmental oversight and communities’ ability to challenge harmful projects; tribal organizations have also raised consultation and sacred-site concerns. We favor timely decisions with meaningful safeguards and the same rules for all energy sources. In our view, reform would improve the development framework.
WHERE WE SEE THE INVESTMENT OPPORTUNITY
Companies with interstate pipelines should be clear beneficiaries. More takeaway capacity would connect low-cost natural gas to power plants serving data centers and utilities, and to LNG export terminals. Our largest holdings include DT Midstream (DTM-NYSE), Energy Transfer (ET-NYSE), and Williams Cos. (WMB-NYSE). We believe the biggest upside could come in Appalachia and along the East Coast, where permitting fights have constrained pipeline development. We see Williams and Kinder Morgan (KMI-NYSE), another holding, as likely beneficiaries.
EQT (EQT-NYSE), also a holding, is a direct Appalachian play. Better market access would support growth in its natural gas production, while its ownership of the Mountain Valley Pipeline (MVP)—the poster child for permit reform—provides that access. MVP entered service in June 2024, about six years behind its original schedule, at a cost of roughly $7.85 billion, more than double the original $3.5 billion estimate.
EQT is now advancing two expansions: MVP Boost, which would add compression to raise capacity by 0.6 bcf/d to as much as 2.6 bcf/d, and MVP Southgate, an extension into North Carolina. The bill would also speed expansions such as MVP Boost within existing pipeline corridors.
Mountain Valley Pipeline Route
Source: Mountain Valley Pipeline, LLC / EQT Corporation. MVP runs about 303 miles from northern West Virginia to the Transco pipeline in southern Virginia (42-inch; 2.0 bcf/d). The Southgate extension into North Carolina is not shown.
Williams has also had its share of East Coast pipeline battles. Its Atlantic Sunrise expansion faced environmental opposition and legal challenges before entering service in 2018. The Constitution Pipeline, designed to carry 0.65 bcf/d from Pennsylvania to New York, was abandoned in 2020 after New York denied a key water-quality permit and years of litigation followed.
In April, Williams broke ground on its once-canceled Northeast Supply Enhancement (NESE) project. Targeted for late 2027, NESE would add 400,000 Dth/d of supply for New York City and Long Island. Even so, a federal appeals court vacated NESE’s New Jersey water-quality certification in September—a reminder that litigation risk persists. The bill would raise the bar for such state vetoes of interstate pipelines, requiring states to justify a denial with clear and convincing evidence and decide within nine months.
The irony is that New York has more homes heated primarily with fuel oil than any other state: about 1.25 million, or 17% of households and roughly a quarter of the U.S. total. That is a dirtier-burning fuel that cleaner-burning natural gas, if available, could displace. We hope opponents of pipeline projects weigh that trade-off.
CLEAN ENERGY COULD ALSO BENEFIT FROM PERMIT REFORM
The administration’s preference for fossil fuels, the EPA’s rollback of clean air rules, and President Trump’s statements on wind power should not cause investors to overlook clean energy. Policy swings cut both ways: the Obama administration rejected the Keystone XL pipeline in 2015, and after President Trump revived it, the Biden administration revoked its permit in 2021 and paused new LNG export approvals in 2024. That history helps explain why some Democrats want stronger protection for permits already granted.
Consider Revolution Wind, an offshore wind farm south of Rhode Island that is already delivering power to New England. On October 9, the federal government asked a court to send the project’s approval back to the Interior Department for reconsideration. Operations continue, but the uncertainty is real. The bill’s permit-certainty provisions would make such reversals far harder for either party.
Policy matters, but so does the need for more electricity. The EIA’s October Short-Term Energy Outlook projects about 91 GW of net solar and wind additions between year-end 2025 and 2027, compared with about 13 GW for natural gas. Battery capacity more than doubles, while nuclear grows modestly from a large base. Solar is the clear growth leader, while natural gas remains essential as demand grows and the grid needs flexible generation.
EIA October Outlook: U.S. Electric Power Sector Capacity
Capacity is not the same as electricity production. Wind and solar depend on weather and daylight; nuclear runs around the clock; and natural gas plants can ramp up and down to meet demand. Batteries shift electricity to when it is needed; they do not generate it. More generation also requires more transmission, which is why the bill’s grid provisions and permit protections matter to clean energy as much as to natural gas.
HOW WE INVEST IN THESE THEMES
We invest in these themes through NextEra Energy (NEE-NYSE), Constellation Energy (CEG-NYSE), Vistra (VST-NYSE), and Clearway Energy (CWEN-NYSE). NEE, CEG, and VST own nuclear plants. NEE combines regulated utilities with renewable and storage development; CEG and VST pair nuclear with diversified generation; and CWEN owns contracted wind, solar, storage, and flexible generation.
Selected Company Capacity: Latest Disclosures (October 2026)
SEPTEMBER: ENERGY UNDERPERFORMS AS TREASURY YIELDS RISE
The rundown:
The 10-year Treasury yield rose 54 basis points in September to 5.29%. In our experience, the speed of a move in yields matters more for stock performance than the level itself.
In September, SAM’s Infrastructure Income Portfolio produced a return (net of fees) of -7.5%, compared with -0.3% for the S&P 500 and -6.5% for its customized benchmark. Performance relative to the benchmark reflects our overweight in midstream and lower weights in the utilities and clean energy sectors.
In September, SAM’s Energy Transition Portfolio generated a return (net of fees) of -5.3%, compared with -4.7% for its customized benchmark and -0.3% for the S&P 500.
September’s negative performance primarily reflected a broad selloff in midstream energy and utilities. Our substantial midstream exposure weighed on both portfolios. The Energy Transition Portfolio benefited from positive contributions from GE Vernova, Shell, and Vistra, which partially offset those losses.
Midstream underperformed the overall market in September, with a total return of -8.2% as measured by the Alerian Midstream Energy Index (AMNAX). It also trailed the S&P 500 Energy sector, which was led by producers and refiners levered to higher oil prices, consistent with the lower commodity exposure of fee-based midstream business models.
The clean energy sector also underperformed the overall market, with a total return of -1.7% as measured by the S&P Global Clean Energy Index (SPGTCLTR). Utilities returned -6.2% as measured by the Philadelphia Stock Exchange Utility Index (XUTY).
Information Technology was the only S&P 500 sector with a positive return in September; Materials was the worst performer. S&P 500 Energy returned -2.7%. At month-end, West Texas Intermediate crude oil and Henry Hub natural gas were $97.18 per barrel and $3.02 per MMBtu, up approximately 12% and 4%, respectively, from August.
YTD 2026 Total Return
Source: Bloomberg, NASDAQ and S&P Global
RESULTS: SINCE INCEPTION & ONE YEAR
SAM’s Infrastructure Income Portfolio produced a return (net of fees) of 184.6% and 18.4% for the periods since 11/10/20 inception and 1-year, respectively. This compares to a total return of 172.9% and 12.4%, respectively, for its customized benchmark and 134.9% and 15.7%, respectively, for the S&P 500 as of 9/30/26.
SAM’s Energy Transition Portfolio generated a return (net of fees) of 48.1% and 14.8% for the periods since 4/29/21 inception and 1-year, respectively. This compares to a total return of 54.7% and 11.7%, respectively, for its customized benchmark and 96.3% and 15.7%, respectively, for the S&P 500 as of 9/30/26.
Siegel Asset Management Partners’ Infrastructure Income and Energy Transition Strategies seek to provide sustainable income and growth with capital preservation. We pursue this objective through concentrated portfolios of high-quality midstream energy companies, utilities and clean energy companies positioned to participate in the transition to a net-zero carbon future. In our view, diversification across these sectors can improve risk-adjusted returns. The Infrastructure Income Strategy offers investors a current yield of approximately 4% and growth potential of 5%-7%, while the Energy Transition Strategy—more heavily weighted toward clean energy stocks and aligned with favorable ESG ratings—offers a current yield of approximately 3.5%. In a world searching for yield, we believe these Strategies offer a compelling value proposition.
IMPORTANT DISCLOSURES
Siegel Asset Management Partners is a registered investment advisor located in Plainview, New York. The views expressed are those of Siegel Asset Management Partners and are not intended as investment advice or recommendation. This material is presented solely for informational purposes, and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness, or reliability. All information is current as of the date of this material and is subject to change without notice. Third-party economic, market or security estimates or forecasts discussed herein may or may not be realized and no opinion or representation is being given regarding such estimates or forecasts. Certain products and services may not be available in all jurisdictions or to all client types. Unless otherwise indicated, Siegel Asset Management Partners' returns reflect reinvestment of dividends and distributions. Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
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