CERAWEEK: Panelists say AI race could speed up US passage of permitting reform

The urgency for the US to enhance its AI capabilities could lead to Congress enacting legislation aimed at streamlining the permitting process for energy-related infrastructure, according to speakers at S&P Global’s CERAWeek energy conference. Some panelists emphasized the need for permitting reform, suggesting that the fear of falling behind in AI advancements could catalyze such changes. 

Industry experts highlighted that reforming permitting is crucial for increasing domestic energy production to meet the rising electricity demand from datacenters, which are projected to account for up to 12% of national electricity consumption by 2028. Previous bipartisan efforts to pass broad permitting legislation collapsed toward the end of the Biden administration, but there are indications that the Trump administration is focused on expediting the permitting process for energy projects. 

Learn more about AI’s role in the US energy industry at S&P Global Market Intelligence’s upcoming webinar, Talk to the Specialists: An AI-fueled resurgence story – US datacenters and nuclear energy outlook.

Private Credit vs. Public Debt and Traditional Financing

The private credit market has grown substantially and become an integral part of the global financial system, particularly as traditional banks have tightened their lending practices due to increased regulatory scrutiny and risk aversion following the 2008 global financial crisis. The expansion of private credit can be attributed to factors such as institutional investors seeking higher yields, increased market sophistication and a growing awareness of the unique characteristics of the asset class. The market encompasses various debt strategies, including senior debt, subordinated capital and credit opportunities, each catering to different financing needs and risk profiles.

There are key differences between private credit and public debt in terms of liquidity, accessibility and transparency. Private credit investments are typically illiquid and not publicly traded, which can lead to higher yields but requires longer investment horizons. In contrast, public debt, such as corporate bonds and government securities, offers greater liquidity and accessibility for investors but lower yields due to increased competition. Transparency is another distinction; public debt adheres to stringent regulatory requirements, while private credit lacks uniform reporting standards, necessitating a strong reliance on borrower relationships and fund manager expertise to assess credit risk.