In the latest episode of Energized by 麻豆直播, Deanna Reitman sits down with Rod Hutchinson for an inside look at one of the most essential 鈥� and least understood 鈥� forces behind the energy industry: structured commodity finance. From crude and LNG to refined products, Rod explains how these financing structures help move energy from the wellhead to the end user, making global supply chains possible.

This episode pulls back the curtain on the financial frameworks that keep energy markets functioning and shows how lenders balance opportunity with risk in a constantly shifting landscape. If you want a smarter understanding of what really keeps the energy economy moving beyond production and infrastructure, this is a conversation worth listening to.

Key Takeaways

• Energy commodity traders help balance markets by moving barrels to where they are needed most and responding quickly when supply disruptions hit.
• Physical and financial trading are closely connected, and traders use real-time supply, logistics, and pricing data to make decisions.
• In today鈥檚 volatile market, disciplined risk management, smaller position sizing, and patience matter as much as market conviction.
• When people hear the phrase 鈥渃ommodity trading,鈥� they often think of fast-moving screens, price swings, and speculation. That is part of the story, but it is not the whole story.

Energy trading also involves real barrels, real logistics, and real-world decisions about where supply should go, when it should move, and how risk should be managed along the way. Behind every headline about oil prices, diesel shortages, or natural gas volatility, traders are helping keep markets functioning.

In a recent episode of Energized by 麻豆直播, partner Deanna Reitman spoke with Steven Hollerbach, principal at Alcazar Trading, about how energy commodity trading actually works. Their conversation covered the role traders play in balancing markets, how physical and financial trading connect, and why market discipline is especially important right now.

Here are five questions that capture the heart of their discussion.

1. What do energy commodity traders actually do?

Energy commodity traders do more than bet on price direction. At a basic level, they help balance supply and demand.

That can mean moving crude oil, gasoline, or diesel from a market with excess supply to a market that needs it more. It can mean blending products, using storage, finding arbitrage opportunities between regions, or supplying end users. It also can mean trading futures and other financial instruments tied to those same commodities.

As Hollerbach explained, traders serve two important functions:

1. First, they optimize the market. If one location has too much product and another has too little, traders help close that gap.
   
   
2. Second, they respond to disruption. During events such as hurricanes, refinery outages, or shipping bottlenecks, traders are often the first to move barrels, ships, and storage capacity to where they are needed.

That is why commodity trading matters. It is not just about price discovery. It is also about keeping energy moving.

2. What is the difference between physical and financial energy trading?

Physical trading involves actual barrels. Financial trading involves trading futures contracts tied to those barrels that are typically financially settled based on price but the traders have the option to take the physical delivery or sale of the underlying commodity.

In the physical market, traders may buy and sell crude oil or refined products, move supply from one region to another, store product, blend it, or market it to end users. In the financial market, traders often use futures, swaps, and options contracts to manage risk, express a market view, or position around projected price moves.

Hollerbach explained that one of the unique features of commodity futures is that the market prices each delivery month separately. Unlike a stock, which has one current price, a commodity has a forward curve. Gasoline may be priced differently in July than in January because demand shifts with the season. Heating oil behaves differently for the same reason.

At Alcazar Energy Trading, the model combines both physical and financial trading. The firm understands logistics, market balances, and real-world supply, allowing the firm to understand how best to position itself in its trading in the physical and financial markets.

That connection is one reason physical market knowledge can be such a strong edge.

3. How does an energy commodity trade work from start to finish?

A commodity trade can be highly technical, but the basic structure is straightforward.

Hollerbach used Colonial Pipeline as one example. Colonial moves refined products from the Gulf Coast to New York Harbor on a set cycle schedule. Buyers and sellers line up volumes within those cycles, negotiate price versus a benchmark such as NYMEX, and schedule barrels to move through the system.

A buyer may need diesel in a specific location and month. The trade is often priced as a differential to a futures contract, with that differential reflecting factors such as location, timing, transportation cost, and product grade.

This is where 鈥渂asis鈥� becomes important. Basis is the difference between the benchmark futures price and the actual local market value of the product.

To calculate that, traders look at:

• Location
• Timing
• Transportation cost
• Local inventories
• Refining margins
• Competing supply sources
• Open or closed arbitrage routes

If a pipeline arbitrage  opens up economically, local prices may move quickly. If a market becomes more isolated, pricing may widen just as fast. Those shifts are often what traders are watching in real time.

4. How do traders manage risk in today鈥檚 market?

Carefully.

Hollerbach was clear that today鈥檚 market is unusually volatile. In his view, the last few months have brought more volatility than much of the rest of his career combined. Geopolitical headlines are moving markets sharply, and that changes how traders size positions and manage exposure.

When volatility rises, traders often reduce position size. That is partly because the absolute downside on a trade grows larger.

Hollerbach used spread markets as an example. In a normal market, a trader might buy a spread with a relatively limited downside. In a more volatile environment, that same spread may already be priced at a much wider level, which means the trade can still move sharply against you even if the broader thesis remains intact.

That is why position sizing matters. If downside risk doubles or triples, the position should shrink accordingly.

Risk management also means knowing when not to trade. One of Hollerbach鈥檚 strongest points in his conversation with Reitman was that the best trade is sometimes no trade at all. If the market is irrational, illiquid, or moving on headlines rather than fundamentals, patience can be a better strategy than conviction.

For traders, being right is not enough. You also have to stay in the game.

5. Why are commodity traders so important to energy markets right now?

Because energy markets still depend on fast, informed responses to physical and financial disruption.

Hollerbach pushed back a bit on the idea that traders are simply the 鈥渘ervous system鈥� of the market. In his view, they are often doing something even more direct: physically moving supply.

That matters in normal times, when traders help equilibrate pricing between regions. It matters even more in stressed markets, when a refinery outage, shipping disruption, or geopolitical shock suddenly changes the map.

Traders are often the ones recalculating arbitrage routes, finding replacement supply, and pricing scarcity into the market fast enough to attract barrels where they are needed. That pricing signal can be uncomfortable, but it serves a purpose. If supply drops sharply and price does not move, markets are more likely to see hoarding, shortages, and inefficient allocation.

That is one reason Hollerbach told Reitman that public understanding of energy markets still has a long way to go. In his view, people often underestimate how much modern life depends on abundant, affordable energy and on market systems that can respond when supply changes.

Cheap energy is not just an industry issue. It shapes manufacturing, household budgets, industrial competitiveness, and everyday quality of life.

The takeaway

Energy commodity trading may seem opaque from the outside, but its role is practical and immediate.

Traders help balance markets, move supply, respond to disruption, and translate real-world logistics into price signals. They operate across physical and financial markets, and they do it in an environment where discipline matters as much as speed.

For companies across the energy sector, the lesson is clear: market fundamentals, logistics, and risk management still drive the business. And in a period of elevated volatility, understanding how traders think is more valuable than ever.

On July 28, 2026, the Federal Communication Commission (FCC) continued its push to address supply chain and national security risks on a categorical basis by adding power inverters and 鈥渁dvanced robotic devices鈥� produced in foreign countries to its Covered List.聽Based on a White House-convened interagency determination that such products pose an unacceptable risk to the national security of the United States, new models of devices that meet the definition of 鈥渇oreign-produced鈥� will not be authorized for importation or marketing within the United States.聽This action comes on the heels of the FCC鈥檚 addition of foreign-produced uncrewed aircraft systems (UAS) and critical components and foreign-produced routers to the Covered List within the past year.

FCC Covered List

The FCC primarily draws its authority to add covered communications equipment or services to the Covered List from the Secure and Trusted Communications Network Act of 2019.  The FCC can add items to the Covered List following government determinations that the equipment or services pose an unacceptable risk to the national security of the United States or the security and safety of United States persons. The national security-related determinations made as to power inverters and advanced robotics devices both focused on supply chain vulnerabilities and cybersecurity risks that threatened the critical infrastructure of the United States.  Equipment added to the list can no longer receive authorization from the FCC to be imported, marketed, or operating within the United States.  Following the Covered List鈥檚 inception, additions at first were limited to telecommunications and video surveillance equipment produced by specific foreign-based companies.  However, recent additions have expanded beyond any particular company and have included wide classes of products, signaling a broader approach by the FCC to use the Covered List as a dynamic compliance mechanism.

Foreign-Produced

Specifically, as to power inverters and advanced robotics devices, the definition of 鈥渇oreign-produced鈥� draws from the Buy American statute and includes any article that does not qualify as a 鈥渄omestic end product鈥� as defined in 48 C.F.R. 搂 25.101(a).  鈥淔oreign-produced鈥� articles are generally those that are not manufactured in the United States or do not exceed the applicable domestic content threshold.

New Models vs. Previously Authorized Models

Importantly, this update to the Covered List will not apply to any existing models of power inverters and advanced robotic devices that the FCC previously authorized, absent significant modifications or updates.聽The prohibitions will only apply to new models that will not receive FCC authorization to be imported, marketed or sold in the United States.聽The FCC generally has two authorization procedures that can be relied on for existing models of covered equipment:

• FCC Certification 鈥� Equipment authorization issued by an FCC-recognized Telecommunication Certification Body (TCB) based on an evaluation of the supporting documentation and test data submitted by the responsible party (i.e. the manufacturer or importer) to the TCB.
• Supplier鈥檚 Declaration of Conformity (SDoC) 鈥� A procedure that requires the party responsible for compliance to ensure that the equipment complies with the appropriate technical standards, which requires a test report and other information demonstrating compliance with the rules upon request by the FCC.

Conditional Approval

For new models that have not been previously authorized by the FCC for importation or marketing within the United States, companies may still request Conditional Approvals that would except the devices from the Covered List and allow the devices in question to receive new FCC equipment authorizations.  Similar to the Conditional Approval process for foreign-produced UAS, UAS components and routers, the process involves an evaluation as to whether an entity鈥檚 devices pose unacceptable risks to national security.  Conditional approval submissions for power inverters will be evaluated by the Department of War (DoW) and Department of Homeland Security (DHS), while submissions for advanced robotics devices will only be evaluated by DoW.  Information requested for such evaluations as to both categories of devices generally falls within three overarching categories:

1. Corporate Structure
2. Manufacturing and Supply Chain Disclosure
3. U.S. Manufacturing and Onshoring Plan

Applicants must submit Conditional Approval applications for both foreign-produced power inverters and advanced robotics devices by January 1, 2028, to be evaluated.

Impact

Power inverters are a key component of renewable energy and energy storage projects, and most of inverters available in the market for such projects are manufactured overseas through a largely foreign supply chain. Consequently, any change in law that impacts the importation, purchase and use of foreign-made power inverters has the potential to impact the renewable energy and energy storage industry. Because the FCC鈥檚 action is not expected to have a significant effect on already-approved power inverters and advanced robotic devices, the immediate impact on the US energy market may be minimal, particularly for projects already designed to utilize existing models of FCC-approved power inverters already for sale in the US.

Nonetheless, longer-term impacts of the FCC鈥檚 action may stymie the renewable energy industry by preventing the use of new and more advanced inverter models that might otherwise be available in the US, at least until manufacturers are able to shift manufacturing to the United States. Going forward, project developers should consider whether to include representations, warranties and other provisions in their inverter procurement agreements ensuring clearly that vendors bear the risk and responsibility for obtaining and maintaining FCC authorization for their products.

If you have questions or concerns about the issues raised in this article, please reach out to any of the authors or your 麻豆直播 & Lardner attorney.

On August 3, 2026, Governor Greg Abbott issued a directive to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) mandating a 鈥渃omprehensive verification and audit鈥� of all data center projects currently advancing through the ERCOT interconnection process. This action effectively imposes an immediate pause on approvals, requiring that this audit be completed before any additional data center projects are permitted to move forward.

The Governor鈥檚 directive is a response to unprecedented load growth鈥攚ith data centers representing approximately 90 percent of the 474 gigawatts of new power requests鈥攁nd aims to protect grid reliability, water resources, and community interests. Projects that fail to comply with the audit鈥檚 transparency requirements or state law will be denied connection to the primary Texas grid.

What Data Center Developers Need To Know:

Broad Application: The directive applies to all data centers in the ERCOT queue, regardless of their specific type (e.g., AI processing, crypto-mining, or cloud storage) or load size.

鈥淏atch Zero鈥� Postponement: ERCOT has announced through a spokesperson that it will halt its 鈥渂atch zero鈥� transmission planning study until the verification and audit is fully completed, halting the first phase of the new large-load approval process. ERCOT鈥檚 contemplated batching process is designed to more orderly and expeditiously review interconnection requests of 75MW or more.

Mandatory Audit Disclosures: To pass the audit, developers must be prepared to provide detailed information on:

• Financial Assistance: Including all state and local tax incentives, grants, or abatements received;
• Power & Water Usage: Projected peak/annual consumption and details on cooling technologies (e.g., air-cooled vs. water-efficient closed-loop systems);
• Power Generation: The contemplated source of power, including whether on-site power will be constructed in order to reduce grid demand;
• Community Impact: Mitigation plans for noise, light, and traffic; and
• Ownership: Clear documentation of all ownership and controlling interests.

Potential Exceptions: Projects located in the approximately 50 Texas counties outside the ERCOT region (such as El Paso, portions of the Panhandle, and Far East Texas) or those utilizing purely 鈥渂ehind the meter鈥� on-site generation and not interconnecting through ERCOT may not be subject to this specific directive.

Refunds for Withdrawing Projects: For developers considering dropping out of the delayed 鈥渂atch zero鈥� process:

• Current Draft Rules: Under proposed PUC rules for large loads (75MW+), a withdrawing project must pay all incurred utility costs and is currently only eligible for a refund of 20% of the remaining 鈥減er megawatt鈥� financial security balance; the other 80% is retained to benefit ratepayers.
• Anticipated Revisions: There has been significant legislative and stakeholder pushback on this 20% refund cap. Given the state鈥檚 goal to pare down the interconnection queue, the PUC may revise these rules to allow for more substantial refunds for exiting projects.
• Lenders and Investors: No one knows how long the audits will take. Lenders should underwrite the possibility of open-ended approval delays and focus on audit status, contingencies, cost-overrun protection, funding conditions tied to key milestones, and step-in rights in project contracts.
• Considerations for Other Stakeholders:
  • Landowners: A queue position does not guarantee development. Landowners should focus on exclusivity duration, development milestones, the full project footprint (including generation, substations, and easements), community impacts, and compensation for disruption and lost opportunities.
  • Equipment Manufacturers: Equipment packages may help demonstrate a project can secure capacity. Suppliers should expect diligence on emissions, performance in Texas conditions, permit pathways, delivery milestones, warranties, and Texas service support.

Next Steps: Because formal rulemaking could significantly delay the audit process, stakeholders should engage now to advocate for a streamlined verification process that avoids further open-ended delays.

About 麻豆直播’s Data Center Team

麻豆直播’s Data Center team advises developers, operators, investors, lenders, power providers, and other stakeholders on all aspects of data center development and operations. Leveraging experience across real estate, construction, energy, finance, regulatory, tax, and environmental matters, the team helps clients navigate the complex challenges and opportunities shaping the future of digital infrastructure.

About 麻豆直播鈥檚 Texas Government Solutions Group

麻豆直播鈥檚 Texas Government Solutions team provides clients with unparalleled legal and legislative representation and counseling. The attorneys and lobbyists manage legislative and regulatory proposals at the Texas Capitol and before state agencies. The group counsels clients regarding key governmental processes and areas of law based upon decades of collective legal or governmental experience. Our Austin office is also home to a unique federal, state, and local government enforcement defense and investigations (GEDI) and litigation defense team, as well as several members of 麻豆直播鈥檚 national State Attorneys General practice.

About 麻豆直播’s Energy & Infrastructure Sector

麻豆直播’s Energy & Infrastructure team provides clients with strategic legal counsel across the traditional and renewable power, oil & gas, infrastructure, and energy transition sectors. The team advises on the development, financing, acquisition, operation, and regulation of energy and infrastructure projects, helping clients navigate an evolving energy landscape and capitalize on emerging opportunities.

Background and Recent Developments

The prospect of 24/7 trading and clearing of regulated derivatives has attracted significant attention this year. Over the past several months, the Commodity Futures Trading Commission (鈥淐FTC鈥� or the 鈥淐ommission鈥�) has taken a series of actions that collectively frame the regulatory landscape under the Commodity Exchange Act (鈥淐EA鈥�) for market participants considering continuous operations. This alert summarizes the key developments and the issues they raise.

Staff Advisory (May 29, 2026). The CFTC鈥檚 Division of Clearing and Risk, Division of Market Oversight, and Market Participants Division jointly issued Staff Letter No. 26-16, addressed to derivatives clearing organizations (鈥淒COs鈥�), designated contract markets (鈥淒CMs鈥�), swap execution facilities (鈥淪EFs鈥�), and futures commission merchants (鈥淔CMs鈥�). The advisory articulates staff鈥檚 views on areas of focus for entities considering a move to 24/7 trading and clearing operations. It expressly states that it creates no new legal obligations, but encourages entities exploring continuous operations to engage with CFTC staff early.

Request for Comment (June 22, 2026). The CFTC issued a formal request for comment (鈥淩FC鈥�) seeking public input on two related developments in the energy derivatives markets: (1) the extension of standard futures contracts to 24/7 trading without changes to their fixed expiration, delivery, or settlement terms; and (2) the potential listing of perpetual contracts that reference physically delivered or storable energy commodities, such as crude oil. The RFC was published in the Federal Register on June 25, 2026 (91 FR 38334).

DCM Product Filings and CFTC Stay (July 2026). Thus far, one DCM submitted a product filing to the CFTC for 24/7 trading of crude oil futures, both via self-certification and for CFTC approval, and another DCM submitted product filings for CFTC approval for 24/7 trading of perpetual contracts on precious metals. On July 9, 2026, the CFTC, citing authority under 17 C.F.R. 搂 40.2(c), stayed the listing of 24/7 crude oil futures contract pursuant to the self-certification filing, citing the ongoing public comment period and the need to examine whether such trading is consistent with DCM Core Principles. The CFTC indicated it would conduct a thorough review under its 40.3 approval authorities.

Comment Period Extension (July 23, 2026). The CFTC extended the comment deadline by 30 days to August 26, 2026, based on requests from commenters and the addition of supplemental questions, including questions relating to the stayed crude oil contract.

Key Issues Identified in the Staff Advisory

Trading Platforms (DCMs and SEFs). The advisory states that staff believes DCMs and SEFs should avoid offering contracts that settle during illiquid overnight or weekend windows, given the view that off-peak settlement raises manipulation and pricing-distortion risk. Staff also expresses the expectation that exchanges maintain continuous real-time surveillance for abusive practices like front-running and wash trading, noting that thinly traded 24/7 markets may be more prone to wider bid/ask spreads and manipulation.

Clearinghouses (DCOs). The advisory outlines three collateral-call models for extended hours: weekday-only (the current norm), optional weekend posting, and mandatory weekend posting, each with distinct margin, liquidity, and default-management implications. Staff notes that mandatory weekend clearing may not suit all markets (e.g., agriculture), and identifies technology risk, incident notification, and staffing/vendor coverage as additional areas DCOs should address for continuous operations.

Intermediaries (FCMs). Under the CEA and CFTC regulations, FCMs are required to segregate customer funds from their own at all times. The advisory notes that extending trading to a 24/7 basis without weekend or holiday settlement could cause an FCM to fall out of segregation, and potentially capital, compliance if the market experiences significant weekend volatility. To address this, staff expects FCMs to reassess and, as needed, increase the residual interest (the FCM鈥檚 own funds held in segregation to cover customers鈥� undermargined amounts) they maintain under Regulation 1.11, and to consider options like customer prefunding of 24/7-trading accounts. The advisory also encourages FCMs to update their written risk management programs under Regulation 1.11 to address the segregation, operational, and capital risks specific to extended-hours trading.

Issues Raised by the RFC and Practical Considerations

The RFC poses detailed questions across several dimensions on which the CFTC is soliciting feedback, including: the reliability and manipulation-resistance of reference prices formed during off-peak hours; market surveillance and operational readiness for continuous trading; the application of the federal speculative position-limits regime; margin, clearing, and settlement design; customer protection; and effects on underlying physical markets and the commercial participants that rely on them. The Commission has emphasized that it does not take a 鈥渙ne-size-fits-all鈥� approach to 24/7 trading, and that different asset classes raise distinct considerations.

For market participants considering 24/7 operations, the advisory and RFC together identify several areas the CFTC believes warrant analysis, including: confirming whether a specific product or market is suited to continuous trading (crypto-linked products may be a natural fit given existing 24/7 spot markets, while regionally concentrated markets like agriculture may present different challenges); evaluating which of the three collateral-call models is appropriate and what that choice means for margin and guarantee-fund calibration; and, for FCMs, assessing residual interest targets and the adequacy of risk management programs under Regulation 1.11, particularly with respect to auto-liquidation protocols and customer disclosures.

The comment period on the RFC remains open through August 26, 2026. These developments remain in flux, and different market participants, including DCMs, DCOs, FCMs, and end users, may have varying perspectives on the appropriate framework for 24/7 trading depending on the products and asset classes involved. 麻豆直播 & Lardner LLP is monitoring these developments closely and is prepared to help clients assess the implications for their businesses and navigate the evolving regulatory landscape.

An executive order signed in the middle of a legislative standoff makes New York the first state with a statewide data center permitting freeze on discretionary environmental approvals, and it landed on projects that hadn’t yet finished their paperwork.

Governor Kathy Hochul signed Executive Order No. 62 on July 14, immediately pausing discretionary state environmental permits issued by the Department of Environmental Conservation for any data center capable of using 50 megawatts of electricity or more. The pause runs until the Department of Public Service completes a Generic Environmental Impact Statement examining the industry’s effects on the grid, water supply, air quality, and host communities, a process Hochul has characterized as lasting approximately one year, though the order itself contains no fixed deadline. New York is the first state to impose a moratorium of this kind statewide.

The order exempts data centers primarily used for manufacturing, medical care, education, or specified research, and it does not touch any application the Department of Environmental Conservation had already deemed complete before July 14. It also does not apply to permits, approvals, or licenses issued by local governments. Projects proceeding solely through local zoning, building permits, or other municipal approvals without discretionary DEC authorization are not affected. Everything else with a pending, incomplete DEC application is now on hold.

Why an Executive Order Instead of the Bill Already on Her Desk

The legislature had already passed its own version months earlier. The Responsible Data Center Development Act sets a lower threshold, 20 megawatts rather than 50, and would create new electric and water rate classes specifically for large data center customers along with a public hearing requirement before any future permit approval. Hochul has not signed it.

Her executive order raises the threshold to 50 megawatts, more than doubling the electrical demand a project can have before it triggers the pause. A Hochul administration staffer described the legislation as complicated and said the executive order was the fastest way to act while negotiations with the legislature continue. Attorneys tracking the rollout have compared the approach to how Hochul modified New York’s congestion pricing program in 2024, adjusting a legislature-passed policy through her own executive action rather than signing or vetoing it outright.

What the Order Actually Requires

The order itself states the policy rationale directly: the cost of electric system upgrades required to serve large loads should not fall on everyday New Yorkers. It cites nearly 12 gigawatts of data center load requests sitting in the New York Independent System Operator’s interconnection queue as of May 2026, with more than 8 gigawatts of that entering the queue in 2025 alone.

Beyond the permit pause itself, the order directs Empire State Development to produce a Community Investment Framework within 60 days, providing guidance for local governments negotiating community benefit agreements with data center developers, covering things like infrastructure improvements, child care investment, or direct financial support to host communities. The Generic Environmental Impact Statement process will follow the state’s standard environmental review procedures, including a public hearing requirement.

What Happens to Projects Already in the Pipeline

More than 130 data centers already operate in New York, and the state has several large-scale projects proposed or under construction. Whether a given project is affected depends on two factors: whether the project requires discretionary DEC approval, and paperwork timing. If the Department of Environmental Conservation had marked an application complete before July 14, that project proceeds under the old rules. If the application was still incomplete on that date, it now waits for the environmental review process to run its course. Projects that do not require discretionary DEC permits, those proceeding only through local approvals, may continue regardless.

Developers with projects sitting just below the 50-megawatt threshold face a different set of questions. The legislature’s pending bill would have captured projects at 20 megawatts, and that bill remains alive even though Hochul has not acted on it. A project designed to fall under 50 megawatts today could still face a future 20-megawatt threshold if the legislature and governor eventually reach a compromise, which makes the pause less of a fixed deadline and more of a placeholder while the underlying policy question stays open.

Why This Extends Past New York

New York’s order is the first statewide action of its kind, but it will not be the only one. Attorneys tracking state and local responses to data center growth describe a widening pattern of governments stepping in to dictate where and how these facilities get sited and connected to the grid, in the absence of a federal framework governing the industry’s growth. Cost allocation, who pays for the grid upgrades a large new customer requires, sits at the center of nearly every version of this fight, whether it plays out through a Public Service Commission rulemaking, a state legislature, or, as in New York, a governor’s executive order issued while a legislative bill sits unsigned.

The Department of Public Service’s environmental review is now underway, with community benefit guidance due from Empire State Development within 60 days of the order and the broader impact statement process still to unfold over the coming months. Developers with incomplete DEC applications, and businesses that depend on new data center capacity coming online in New York, are watching the same open question: whether the pause becomes the final policy or a bridge to whatever the legislature and the governor’s office eventually agree to sign.

On July 9, 2026, the Department of Energy (DOE) its direct final rule that would have implemented, starting July 13, 2026, 鈥渮ero-based regulating鈥� sunset provisions across a range of DOE regulations. DOE did so after receiving adverse comments during the public comment period on the direct final rule, as it committed to do when it issued the rule on May 29, 2026. However, DOE issued the direct final rule alongside a companion notice of proposed rulemaking (NOPR) with the same goal, meaning that the DOE may still act to sunset the relevant regulations sometime in the future.

What is Zero-Based Regulating?

DOE鈥檚 direct final rule was designed to implement Executive Order 14270, 鈥淶ero-Based Regulatory Budgeting to Unleash American Energy,鈥� issued April 9, 2025. The executive order directed DOE, along with the Environmental Protection Agency, the Federal Energy Regulatory Commission, and the Nuclear Regulatory Commission, to insert 鈥渟unset provisions鈥� into regulations issued under specified energy statutes. For DOE specifically, the order applies to regulations issued under the Atomic Energy Act of 1954, the National Appliance Energy Conservation Act of 1987, the Energy Policy Act of 1992, the Energy Policy Act of 2005, and the Energy Independence and Security Act of 2007.

鈥淶ero-based regulating鈥� is a system where each regulation must be affirmatively justified on a recurring basis rather than assumed to continue simply because it existed in a prior period. The executive order requires covered agencies to build a 鈥淐onditional Sunset Date鈥� into each covered regulation, defined as the date on which the regulation will cease to be effective and be removed from the Code of Federal Regulations unless the issuing agency affirmatively extends it. Before allowing a regulation to expire, the agency must offer the public an opportunity to comment on the costs and benefits of the regulation, and it may extend the sunset date only after finding that an extension is warranted. The stated goal of this framework is to compel agencies to reexamine their regulations periodically, on the theory that some regulations otherwise persist for decades without renewed scrutiny and may, over time, become unnecessary, unduly burdensome, or contrary to policy.

DOE鈥檚 direct final rule would have amended 21 parts[1] in Title 10 of the Code of Federal Regulations affecting areas as varied as greenhouse gas reporting guidelines, access to DOE computers, contractor legal management, and the domestic uranium program, adding a sunset provision stating that each identified part would automatically expire one year from the rule鈥檚 effective date unless extended, rescinded, or otherwise addressed before that date.[2] The rule also would have added a new general sunset provision, codified at 10 C.F.R. part 1061, applicable to covered regulations more broadly, providing that DOE could extend a conditional sunset date by written determination of the Secretary of Energy for periods not exceeding five years, but that amendments to an existing regulation would not themselves extend its sunset date.

Virtually Identical Sunsetting Provisions in the NOPR

DOE elected to use the direct final rule procedure because it did not anticipate significant public comment and considered the action non-controversial, with an effective date of July 13, 2026. Consistent with that procedure, DOE provided a comment period running through June 29, 2026, and stated that if it received significant adverse comments by that date, it would publish a timely withdrawal and instead address the comments through a final rule responding to the companion NOPR published the same day.

DOE did, in fact, receive adverse comments on the direct final rule. Commenters raised concerns that the sunset process bypasses meaningful public input and fails to adequately assess whether the sunsets are consistent with underlying statutory mandates or serve the public interest. For example, one commenter argued that DOE鈥檚 rule offered little analysis or explanation for why the identified regulations should sunset, and that the proposed amendments would allow the targeted rules to expire automatically even if DOE failed to provide the promised future comment periods or to announce decisions on the regulations鈥� fate, rendering the rule arbitrary and capricious under the Administrative Procedure Act.

As a contingency, DOE published the NOPR on the same day.[3] The proposed rule is, by DOE鈥檚 own description, substantively identical to the direct final rule: the NOPR鈥檚 summary states that it 鈥減roposes regulatory revisions identical to those set forth in a direct final rule published elsewhere in this issue of the Federal Register.鈥� DOE鈥檚 procedural and regulatory review analyses for the NOPR likewise mirror those conducted for the direct final rule, with the NOPR expressly incorporating the direct final rule鈥檚 analysis by reference. DOE has confirmed it will respond to the timely comments on the direct final rule and the NOPR as part of any final action taken on the proposed rule.

Rulemaking Timeline and Next Steps

With the direct final rule now off the table, the proposed rule remains pending before DOE. The agency鈥檚 stated next step is to review and respond to the comments submitted by June 29, 2026, and to issue a final rule addressing those comments in connection with the proposed rulemaking. DOE has not announced a specific timeline for issuing that final rule. Given the adverse comments received, including arguments that the sunset framework lacks adequate reasoned explanation and risks automatic expiration of regulations without the promised comment opportunities, DOE鈥檚 final rule may include additional analysis of or modifications responsive to those concerns, or even an additional public notice period if significant modifications are made.

The 麻豆直播 energy team will continue to track developments in this area and welcomes questions on these issues.

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[1] For context, there are over 150 parts contained in Title 10. Chapter I alone has 54 active parts.

[2] See , Voluntary Greenhouse Gas Reporting Program: General Guidelines; , Epidemiology and Other Health Studies Financial Assistance Program; , The Office of Science Financial Assistance Program; , Security Policies and Practices Relating to Labor-Management Relations; , DOE Contractor Employee Protection Program; , Contractor Legal Management Requirements; , Consent for Access to Information on Department of Energy Computers; , Allegations of Research Misconduct; , Domestic Uranium Program; , Uranium Enrichment Decontamination and Decommissioning Fund; Procedures for Special Assessment of Domestic Utilities; , Claims for Patent and Copyright Infringement; , Waiver of Patent Rights; , Patent Waiver Regulation; , Procedural Rules for the Assessment of Civil Penalties for Classified Information Security Violations; , Extraordinary Nuclear Occurrences; , Control of Traffic at Nevada Test Site; , Standby Support for Certain Nuclear Plant Delays; , General Guidelines for the Preliminary Screening of Potential Sites for a Nuclear Waste Repository; , Yucca Mountain Site Suitability Guidelines; , General Policy for Pricing and Charging for Materials and Services Sold by DOE; and , Collection of Claims Owed the United States. (All parts are in Title 10 of the Code of Federal Regulations.)

[3] This paired direct-final-rule-and-proposed-rule structure is consistent with the approach other agencies have taken to implement Executive Order 14270. For example, FERC used the same dual-track procedure for its own sunset rule, published October 21, 2025, which became effective on December 5, 2025, that FERC later rescinded after receiving an adverse comment on that provision. The Nuclear Regulatory Commission followed a similar approach for its , with a portion of that rule ultimately subject to after adverse comment on a specific provision.

Cushing crude inventories remained below 20 million barrels from the week ending June 19 through the week ending July 10, the lowest levels seen since 2014.

Crude oil inventories at Cushing, Oklahoma fell below 20 million barrels during the week ending June 19 and stayed there through the week ending July 10, according to the EIA’s weekly petroleum status report. Stocks bottomed out at 20.04 million barrels, roughly 26 percent of the hub’s 76 million barrel working storage capacity. That is the lowest Cushing has run since October 2014.

Cushing is not just another storage site. It is the physical delivery point for West Texas Intermediate futures, the most actively traded oil contract in the world, and the number that shows up whenever anyone quotes the U.S. oil price. When the tanks at Cushing run low, the effects show up in the futures market before most traders even see the inventory report.

Why the Tanks Emptied

The drawdown coincided with disruptions to Middle East oil flows following the Strait of Hormuz crisis, which increased demand for U.S. crude exports. As global buyers turned toward American barrels, Cushing stocks fell for eight straight weeks by mid-June, dropping from roughly 29 million barrels in early May at a pace of about 800,000 barrels a week. Nationally, total U.S. commercial crude inventories sat at roughly 409.7 million barrels as of mid-July, about 4 percent below the five-year average.

The math is straightforward: global demand for U.S. barrels went up sharply, and the physical buffer that normally absorbs swings in supply and demand got drawn down to answer it.

What a Tank Bottom Actually Means

The EIA published a public explainer on July 16 addressing a technical point that suddenly mattered: storage tanks cannot be emptied to zero under normal operating conditions. Every tank requires a minimum volume, called a tank bottom, to keep pump suction effective and pipeline connections functioning. Below that minimum, a tank can still show barrels on the books that are not actually available to move to market. The EIA drew a specific distinction between reported inventory and deliverable supply, and said it is reviewing pilot study results aimed at pinning down the actual minimum working levels at individual storage facilities.

That distinction matters for anyone reading the weekly inventory numbers as a straightforward gauge of available supply. If a meaningful share of the reported barrels at Cushing are effectively stuck at the bottom of a tank, the headline figure overstates how much crude could actually respond to a sudden supply disruption.

The Price Signal Nobody Had Seen Since 2022

The clearest sign of stress showed up in the spread between Brent and WTI. Under ordinary conditions, WTI trades at a discount to Brent because Cushing is landlocked and moving crude from the mid-continent to the coast for export costs money. That discount briefly disappeared. The five-day rolling average of the Brent-WTI spread turned negative from June 18 to June 24, and again from July 2 to July 8, meaning WTI at Cushing was trading above Brent. That was the narrowest the spread had been since January 2022.

A landlocked benchmark trading above the seaborne one is not the normal order of things. It reflects buyers competing hard for crude sitting at a hub that increasingly could not spare it.

What Recovers and What Doesn’t

Inventories at Cushing remained near multi-year lows. The week ending July 17 brought national commercial crude inventories up 2.0 million barrels to 411.7 million, a headline build that traders read as bearish. Cushing itself told a different story: stocks at the hub fell another 700,000 barrels that same week, to roughly 19.4 million barrels, meaning the national build happened entirely elsewhere in the system while the delivery point for WTI kept draining.

Whether Cushing rebuilds a meaningful cushion depends largely on how quickly global crude flows normalize and inventory balances stabilize. Market participants expect the adjustment process to take time, particularly if demand for U.S. crude remains elevated.

For anyone with contracts, hedges, or storage arrangements priced off WTI at Cushing, the inventory report is no longer a routine weekly data point. A hub running near tank-bottom levels behaves differently than one with a normal cushion, and the EIA’s own decision to publish a standalone explainer on the mechanics is itself a signal of how unusual the current situation is.

In this episode of Energized by 麻豆直播, host Deanna Reitman sits down with Jason Dodier, Chief Business Development Officer at Commerce Rhode Island, for a compelling conversation about why Rhode Island is emerging as a major force at the crossroads of energy, defense, innovation, and economic development. From its history as home to the nation鈥檚 first offshore wind farm to its strategic assets like Naval Station Newport, the Naval Undersea Warfare Center, and the growing Port of Davisville, Rhode Island is positioning itself as far more than a small state with a big coastline. As Jason puts it, Rhode Island is 鈥渨here the ocean economy meets the energy transition,鈥� and this episode makes a strong case for why business leaders, investors, and energy professionals should be paying attention.

But this conversation is about more than policy and projects, it is about vision. Jason shares how his global background in energy and infrastructure shaped his return to his home state, and why he believes Rhode Island doesn鈥檛 need to be bigger, it needs to be 鈥渦ndeniable鈥� in the sectors where it already wins. The episode also offers thoughtful advice for young people looking to build careers in the energy transition: embrace discomfort, think in terms of compounding growth, and become fluent across technology, capital, and operations. If you want a fresh take on the future of the U.S. energy economy through the lens of one of its most strategic states, this is an episode worth listening to.

Three years of E&P mega-mergers have consolidated the buyer side of the oil patch. The service companies that supplied the acquired operators are finding out how little say they had in the outcome.

ExxonMobil closed its acquisition of Pioneer Natural Resources on May 3, 2024; the transaction had been announced as a $59.5 billion all-stock deal, or approximately $64.5 billion including net debt. Chevron closed its $53 billion all-stock acquisition of Hess on July 18, 2025, after prevailing in an arbitration dispute over Hess’s Guyana asset that had delayed closing for more than a year. ConocoPhillips closed its $22.5 billion acquisition of Marathon Oil on November 22, 2024, taking on approximately $5.4 billion of Marathon’s net debt in the process. Three major independent producers with significant U.S. shale positions stopped trading as standalone companies within roughly eighteen months of each other.

Each deal made sense for the buyer. ConocoPhillips initially cited at least $500 million of run-rate cost and capital savings within the first full year and later stated that it expected more than $1 billion of run-rate synergies in the twelve months following closing. ExxonMobil’s Pioneer deal doubled its Permian production to approximately 1.3 million barrels of oil equivalent per day at close, with a target of roughly 2 million barrels per day by 2027, and combined more than 1.4 million net acres in the Delaware and Midland basins. None of that logic required the acquiring company to keep every vendor contract Pioneer, Hess, or Marathon had in place before the deal closed.

What Happens to the Vendor Relationship

An E&P company does not need three completions crews, three trucking contracts, and three separate procurement teams once it owns three companies’ worth of acreage. The standard move after a merger closes is a review of inherited service agreements, followed by consolidation, renegotiation, or replacement where overlapping vendors exist.

Deloitte’s 2025 oil and gas outlook, as reported by Reuters, flagged the pressure this creates for oilfield services companies: upstream consolidation has shrunk and concentrated the customer base, particularly in U.S. shale. That does not automatically terminate the target company’s vendor contracts, but it does make those contracts vulnerable to post-closing procurement review, consolidation, and renegotiation.

For a service company that built a relationship with Pioneer’s completions team over a decade, the acquisition does not necessarily end the relationship on day one. It ends the certainty. Whether the contract survives depends on what the agreement actually says about assignment, change of control, and termination rights, as well as whether the acquiring company’s existing vendor relationships already cover the same work in the same basin.

The Contract Language That Decides This

Most master service agreements address what happens on a change of control, but the specifics vary enormously, and the difference between one draft and another can be the difference between a contract that survives an acquisition and one that does not.

Some agreements allow a party to assign the contract freely to a successor by merger, acquisition, or sale of substantially all assets without obtaining consent from the counterparty. Others require the service company’s written consent before assignment, creating leverage to renegotiate terms before the relationship continues under new ownership. Still others treat a change of control itself as a triggering event that gives one or both parties the right to terminate on notice.

A third category ties termination rights directly to a merger or acquisition. In those agreements, either party may have the ability to walk away following a qualifying transaction regardless of performance.

If an MSA does not address assignment and change of control explicitly, the outcome can turn on governing law, transaction structure, and general assignment principles鈥攑recisely the kind of uncertainty that careful drafting is intended to avoid. Whether consent is required often depends on the exact wording of the anti-assignment clause and the form of the transaction itself.

What This Means While the Wave Continues

The three deals above are not necessarily the end of the consolidation cycle. Industry observers continue to point to consolidation as a significant feature of the upstream market, even as the population of large acquisition targets shrinks. Deloitte’s merger-and-acquisition analysis continues to identify scale, portfolio quality, and operational efficiencies as key drivers of transactions across the sector.

Every new deal announcement is a signal to check the assignment, change-of-control, and termination language in any MSA with exposure to the companies involved鈥攂efore the deal closes rather than after.

The practical takeaway for a service company with a concentrated customer base is straightforward: know which of your key customers could plausibly become acquisition targets, know exactly what your contracts say about assignment and change of control, and treat a merger announcement involving a major customer as a trigger for immediate contract review, not just another item of industry news.