MONTHLY ENERGY WATCH – April 2026
Texas emerges as data center hot spot
Developers have set their sights on Texas as the next potential hot spot for data center buildouts, even as the state’s grid manager is still figuring out how to serve an expected surge in power demand. Texas’ mostly isolated power grid, combined with the state’s business-friendly ways and a lack of jurisdictional federal oversight from the Federal Energy Regulatory Commission (FERC), have made it stand out to investors.
The Electric Reliability Council of Texas (ERCOT), the state’s main power grid operator, saw a spike in applications last year from data centers and other large loads asking to draw 75 megawatts or more from the grid. The nonprofit grid manager received 225 requests to interconnect in 2025, compared with 152 from the fourth quarter of 2022 to the fourth quarter of 2024.
Texas Governor Greg Abbott has been working to sell Texas to data center developers, pointing to the state’s business-friendly ethos and relatively inexpensive power. By 2030, Texas could top Virginia as the world’s biggest data center market. Google officials held a joint press conference with Governor Abbott this past November to announce a $40 billion investment in Texas, the largest artificial intelligence investment the company has made in any state.
The data center interest in Texas comes as ERCOT is hammering out details of a plan to more systematically study which data center projects to bring on, how to do it, and where to locate them. The grid operator recently rolled out proposed requirements that large-load developers would have to meet to be considered for the first tranche of projects that will be studied under a new process. ERCOT’s territory is limited to Texas, so it doesn’t answer to FERC; therefore, projects only need the approval of a single state regulator, which is very appealing to developers.
Department of Interior proposes rolling back bonding requirements for offshore oil and gas
The Department of Interior recently proposed rolling back a Biden administration rule that increased the amount of money offshore oil and gas producers must put up in bonds for the cost of decommissioning their rigs. The rollback is intended to lower costs for offshore drillers as President Trump seeks to further boost US oil production.
The Biden-era rule, finalized in 2024, had divided the oil and gas industry, with some major producers throwing their support behind it. Larger producers who have moved to deeper waters in the Gulf of Mexico supported it, while smaller independent producers who tend to drill closer to shore had adamantly opposed it and several Gulf states sued to block it. The independent producers claim that the Biden rule would put small and mid-size independent oil and gas companies out of business by making the financial burden required of offshore producers so exorbitant it is no longer feasible to operate. The Department of Interior stated that $6 billion of the $6.2 billion cost burden for the Biden administration’s rule would have fallen on small businesses.
Interior announced plans to roll back the financial assurance. Companies must put up a certain amount of money in bonds to cover the cost of cleanup after production ends in order to avoid those costs being borne by taxpayers if the company goes bankrupt.
The proposal would modernize how the Bureau of Ocean Energy Management (BOEM) evaluates financial risks and lower the amounts companies must set aside for future decommissioning.
Department of Interior raises $163 million in record Alaskan oil and gas lease sale
The Trump administration recently saw strong interest from the oil and gas sector in expanding drilling in Alaska. The first lease sale in seven years in the National Petroleum Reserve-Alaska (NPR-A) drew more than $163 million in winning bids.
Eleven companies submitted bids on 187 tracts of the reserve totaling around 1.3 million acres, according to the Interior Department’s Bureau of Land Management (BLM), which had offered more than 5.5 million acres for lease. That marks the highest-revenue sale ever in an NPR-A lease sale and the second-most acreage sold in a single auction. The “exceptionally competitive” results “tell us a lot about the bright future of the NPR-A,” said Kevin Pendergast, BLM’s state director for Alaska. “Interest has been incredibly high.”
The sale, which was mandated by the One Big Beautiful Bill Act, was held under 2020 rules issued by the first Trump administration that opened much of the 23-million-acre petroleum reserve to drilling. The budget law requires Interior to hold at least four more lease sales in the NPR-A over the next 10 years.
Industry interest in drilling in Alaska has waned in recent years as companies pursued cheaper and easier targets in the Lower 48. Many of the tracts offered in the recent sale were snapped up by the majors that have stayed in Alaska, such as ConocoPhillips Alaska, ExxonMobil Alaska, and a consortium of the European energy giants Repsol and Shell.
Planned release of strategic reserve would put US supplies at lowest levels in 44 years
The Strategic Petroleum Reserve was created in 1975 under the Energy Policy and Conservation Act in response to the 1970s energy crisis. The Trump administration recently ordered the release of 172 million barrels of oil from the US Strategic Petroleum Reserve, making it the second-largest release from the reserve in its history. The largest release was former President Joe Biden’s 2022 withdrawal of 180 million barrels to combat record-high gasoline prices and supply shortages caused by Russia’s invasion of Ukraine.
The move by President Trump was meant to stem oil prices, which have recently hovered over $100 a barrel amid the war with Iran. The release of oil, which recently started and will roll out over 120 days, would bring the nation’s oil reserves to roughly 243 million barrels, down 41% from its current 415 million barrels. That would leave the strategic stockpile at its lowest levels since 1982, according to data from the Department of Energy.
“The United States has arranged to more than replace these strategic reserves with approximately 200 million barrels within the next year,” US Secretary of Energy Chris Wright said in a recent statement.
Gas tax holiday
President Donald Trump floated the possibility of a federal gasoline tax holiday during a recent Cabinet meeting, referring to it as “something we have in our pocket if we think it’s necessary.”
Gas prices have soared since the beginning of the war with Iran, spurring Democratic members of Congress to propose suspending the federal excise tax of 18.4 cents for gasoline and 24.4 cents for diesel.
In 2022, when gas prices shot up following the Russian invasion of Ukraine, President Joe Biden proposed a three-month gas tax holiday, but did not get the necessary support from Congress. While there has never been a federal gas tax holiday, it has occurred on the state level. Georgia Governor Brian Kemp signed a bill earlier this month suspending the state’s gas tax for 60 days.
The Committee for a Responsible Federal Budget estimated that a one-month tax holiday for both gasoline and diesel would cost the federal government $3.5 billion in revenue.
