You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
In a word: chaos.

A moment of profound uncertainty for many of America’s environmental laws has just become even more uncertain-er. This week, as President-elect Donald Trump considers how to revise or repeal the country’s bedrock climate laws, one of the country’s oldest environmental laws has been thrown into jeopardy.
A three-judge panel on the D.C. Circuit Court of Appeals ruled earlier this week that key rules governing the National Environmental Policy Act, which requires the federal government to study the environmental impact of its actions, do not carry the force of law. The ruling might — might — lay the groundwork for a massive revolution in the country’s environmental permitting regime. But for the time being, they guarantee a lot of chaos.
Whenever the federal government wants to build a new piece of infrastructure — and to some degree, whenever it wants to do anything significant — it has to go through NEPA. That sounds great in theory, but NEPA studies — which were originally meant to be just a few pages long — have now swelled in length, running into the thousands of pages and taking years to complete. They have become the subject of criticism from conservatives and some liberals.
That’s because NEPA doesn’t actually require the government to take the most environmentally friendly action. It only mandates that the government study the alternatives and arrive at a decision. Many critics, including progressives, now argue that NEPA has become a great bulwark of the status quo — a way for wealthy NIMBYs to slow down and block virtually any project they don’t like, including the large-scale solar, wind, and transmission projects necessary for the energy transition.
Other progressives argue that NEPA still serves a purpose — that it’s the only way environmental groups can provide a check on factory farms, new federal construction projects, or other big pieces of infrastructure. They say Congress should reform NEPA by affirmatively expanding parts of the permitting regime, adding new requirements to the process. The NEPA process is so time-consuming today not because it has become unwieldy, they say, but because the federal government does not employ enough civil servants to conduct the required studies on time. (NEPA’s critics reply to this, in essence: Sure, but why does NEPA require all those studies in the first place?)
At the heart of the case is a small federal agency called the Council on Environmental Quality. Since its creation in 1970, the Council on Environmental Quality has issued guidelines about how federal agencies should comply with NEPA. These rules have been treated as legally binding — that is, quasi-law on the same tier as federal regulation — since at least 1977.
In the ensuing decades, presidents from both parties have acted under the impression that the Council on Environmental Quality’s NEPA rules are binding. That’s why the first Trump administration went through the hassle of rewriting the council’s rules, subjecting them to the same notice-and-comment process other federal regulations must go through before they can be changed. The Biden administration later replaced the Trump administration’s rules with its own version.
But that actually isn’t the case, the judges ruled. The Council on Environmental Quality was never allowed to issue binding regulations about NEPA in the first place, they decided.
The Council on Environmental Quality can issue guidelines about how agencies should follow NEPA, the judges said. But these will have the same legal authority as executive orders, which can guide agency decisionmaking but provide no outside legal recourse. Executive orders are sort of like internal corporate policies for the government: They’re supposed to be followed by employees, but nobody can appeal to a court that a company got them wrong. What the council cannot do, the court said, is issue rules, quasi-laws that outside groups can appeal to and claim aren’t being obeyed in court.
If upheld, the ruling would throw virtually the entire body of law around NEPA into question — hundreds of cases, thousands of pages of rules, and hundreds of thousands of analyses all premised on the idea that the Center on Environmental Quality is the final NEPA arbiter. It could also vastly weaken NEPA, allowing the government to build projects quickly while giving Americans and nonprofit groups little recourse to stop them.
“It’s a very big deal,” James Coleman, an energy law professor at the University of Minnesota, told me. “NEPA by itself is a very limited piece of text. When it was adopted, no one imagined that it would lead to this comprehensive permitting system where it would take five years to get a permit.”
Over time, court cases and White House regulations have turned NEPA into the juggernaut that it is today. But now that’s exactly what is up in the air — potentially. “If a judge thinks that the decades of cases we’ve had are misconceived, then they don’t have to follow it any more,” Coleman said.
What’s odd about the case is that neither side intended to get this ruling in the first place. Neither the Federal Aviation Administration nor the Marin Audubon Society, a San Francisco-area birding group, set out to strike down the entire body of NEPA regulations. The FAA had relied on the Council on Environmental Quality’s rules when it approved a plan for tourism flights over national parks, saying that the regulations didn’t require it to conduct a NEPA study. The Marin Audubon Society argued that the air tours didn’t fall under an exemption created by the rules.
Two Republican-appointed judges on the panel then essentially took the case into their own hands, using the dispute as an opportunity to throw modern NEPA procedure into question. In fact, they said, the Council on Environmental Quality never had the authority to issue rules in the first place — so the claimed exemption didn’t matter. (Judge Sri Srinivasan, who dissented from part of the ruling, criticized the judges for opening such big legal questions when they didn’t need to do so.)
The outcome doesn’t mean that the federal government will immediately move faster to approve infrastructure projects — in some cases, it might move slower. As part of its rules, the Council on Environmental Quality has approved a list of “categorical exclusions,” federal actions that do not require a NEPA review. These can include activities like holding a small meeting or taking out a federal farm loan. The judges have now rejected the council’s ability to create categorical exclusions altogether, meaning that many more federal actions may — at least at first — be subject to NEPA oversight. (Congress has also told agencies to create some categorical exclusions — including for oil and gas drilling — and those are not affected by the case.)
For that reason, some environmental lawyers are doubtful that the argument will change NEPA in the way its opponents hope. “What the ruling does is deeply complicate things for both sides,” Sam Sankhar, the senior vice president at Earthjustice, an environmental legal group, told me. “The NEPA regulations are a body of law that has developed over years to guide the way that people do the NEPA process. The absence of those regulations does not mean the absence of NEPA — it means the absence of any guidelines about how to implement NEPA in the future.”
If the NEPA regulations get tossed out, he said, then it will “really be up to each individual judge to wing it” when interpreting the law, he added.
Nicholas Bagley, a University of Michigan law professor who has written critically about NEPA and other liberal laws that focus on procedure, tends to agree with that view. “When you go to court, agencies and challengers both would look at these regulations as a sword or a shield,” he said. Challengers used the White House rules as a weapon, asserting that the government needed to look at some question but failed to do so. But the federal government used those same rules “as a shield,” he said, showing that it faithfully followed the rules, and therefore that judges didn’t need to get involved.
If the rules are gone, then each side has lost a tool — and judges will have much more power. That means federal agencies, which are hesitant to run afoul of the courts, may now become even more timid in their decision-making, Bagley said. What’s more, the White House’s regulations would still act as executive orders, binding agency action. “They just won’t be enforceable in court,” he said. (The Trump administration could also respond by chucking out the White House regulations altogether, he said.)
It’s unclear what happens next. If the FAA appeals, the D.C. Circuit could choose to hear the case again en banc, meaning the full panel of judges — a majority of whom were appointed by Democrats — would consider the questions. But eventually a higher court may weigh in. “I would not be surprised at all to find this eventually find its way to the Supreme Court,” Coleman told me. In the past, the Supreme Court has ruled that the Council on Environmental Quality’s regulations carry the force of law. But the new, arch-conservative court — and the incoming Trump administration — might push for a different approach.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
1. Suffolk County, New York – Rarely do I get to say battery fire fears can be quelched but we have a very good example brewing in the Empire State.
2. Loudon County, Virginia – I can’t believe it: Data Center Alley is going to enact a moratorium.
3. Pulaski County, Arkansas – Entergy has dropped the lawsuit it filed against an Arkansas newspaper over the publication of a power deal with Google.
4. Darlington County, South Carolina – We conclude this week’s Hotspots with a focus on a GOP-leaning county rejecting a renewables moratorium.
A conversation with Sam Lyman of the Bitcoin Policy Institute.
This week’s conversation is with Sam Lyman, head of research at the Bitcoin Policy Institute. Originally focused on cryptocurrency, Lyman’s organization has expanded to policy and messaging development around data centers, most notably providing research many AI boosters cite to claim foreign influence is driving opposition to new hyperscale projects. Last week, the think tank released a new report calling for a novel solution to the data center permitting bottleneck: direct cash payments from data center projects to individuals involved with building them, as well as residents nearby facilities once they’re operating.
I reached out to BPI and asked for a chat with Lyman about the data center dividend proposal. I also tried to get to the bottom of where this increasingly relevant think tank stands on the general idea of a national data center law. The conversation was immensely informative. So here it is, in a lightly abridged and edited format.
Let’s start with the data center dividend proposal. Walk my readers through it.
Data center dividends came from the idea that, ideally in the AI revolution, we want all Americans to benefit. Especially rural Americans. You look at the landscape today, the majority of AI data centers are being built in rural America. It’s critical they’ll benefit from the massive wealth AI will unlock.
There’s lots of ways to make that happen. People point to the jobs AI data centers will build out, for example. But with data center dividends, we take the logic of the Alaska Permanent Fund and we apply it to America’s rural counties, which are sitting on a proverbial gold mine right now but lack any kind of public mechanism allowing them to benefit from that in a maximal way.
If you look at the tax revenue these data centers create, which is astronomical, how do we distribute this tax revenue in a way where it has the most tangible impact on the families living there? We believe data center dividends are the best way to do that – after allocating money for schools, public safety, and infrastructure, it allows these counties with tens of millions of dollars left over to distribute them as they see fit. They should distribute that money to the men and women who make those data centers happen in the first place.
The most effective form of a dividend would take a direct payment: a cash payment, a physical check, a direct deposit. Or the form of credits paying back property taxes, utility bills, an endowment for scholarships. There’s a number of different forms this can take.
Hopefully this gets the conversation going about how we can make these work for everybody.
Who do you want to see set up this dividend mechanism? How’s your approach to implementation?
The report is addressed to county commissioners. I’m thinking of commissioners who represent both sides of the political spectrum facing this huge backlash. Many of them want to do good by their communities and their voters, even if it means doing a data center, in places where it’s difficult to explain right now. Dividends make this indisputably clear.
I tried to put myself in the shoes of an enterprising county commissioner who sees the merits in the data center buildout and wants to break out of the political storm. It’s important to note data centers can be a huge economic boon for communities, in ways that can impact lives positively.
Have any communities – counties, as you noted – taken this idea up yet? Are there any models for this proposal?
The best analogue is West Feliciana, Louisiana, which is the case study we feature. West Feliciana made an agreement with a data center developer where in lieu of taxes, they make direct payments of about $90 million a year to the parish. That triples the community’s tax budget every year. It leaves ample room not only for essential services but dividends afterwards. Louisiana then passed a law – Act 434 – that allowed West Feliciana to remit some of those payments to residents as a tax credit. This bill first provided the opportunity for the parish to even remit those payments as cash, but it was changed in the legislature to make it a credit. That’s the closest we’ve gotten so far.
As far as reaching out to individual counties, we’re a think tank. We put ideas into the universe. We haven’t had anyone reach out to us since the publication of the report so far but we’re hoping they will.
Your report does lay out how there’s a bottleneck in development and this could help with easing it. Do you see an impetus to put ideas like the dividend out there right now, in light of the increased data center scrutiny in this year’s midterms?
Our publication is irrespective of the midterms. But it is tied to the fact that a bottleneck facing the data center buildout includes it becoming a politicized issue. We’re of the belief these projects shouldn't be political at all. One way to break through the noise is by showing how they can benefit those involved in construction and residents who live there. Data centers are critical infrastructure; other forms of critical infrastructure aren’t being politicized. Our efforts are to demonstrate how these shouldn’t be political.
When it comes to the future of AI data center regulation, this proposal is obviously geared towards incentivizing a resolution to the bottleneck through using resources produced from data centers – namely, new investment.
Where does your organization stand on the increased push for environmental or siting regulation on AI data centers?
I’m not familiar with what you might be referring to there.
I mean, there’s all kinds of proposals at the federal level and in states for everything from being required to pay for infrastructure upgrades to being required to use closed-loop cooling to siting restrictions, like temporary moratoria.
What I’m asking is, what else do you as an organization believe when it comes to regulating AI data center development at the federal level? State level?
We believe data centers should work for the communities where they’re being built. That’s important. So the concept of BYOP – Bring Your Own Power – we very much support that idea. We think the Ratepayer Protection Pledge is a great proposal because ultimately we want data centers, with them being critical infrastructure, to not only strengthen our national security but strengthen the communities where they’re being built.
Some states are rejecting data centers. We think that’s a mistake because it's something that’ll ultimately short-change the people who live there. For the states that do decide to build data centers, it's up to them what regulations make data centers more sustainable over time.
There’s increased public discussion for policy on AI development – as an organization, do you see any role in the federal government making policy here with a national data center law?
We think AI will be key to America’s prosperity over the long-term. We have concerns about the regulation of open-source artificial intelligence; bitcoin is a form of open-source software and open-source money. We believe intelligence should be something available to all Americans. That’s our concern with talk about regulating AI right now, it feels like a ploy for regulatory capture.
But what about national policy on AI data centers? Does your think tank support the national legislature doing a federal data center bill or is that something best for localities or states?
It depends on the bill. Are you talking about Sen. Bernie Sanders’ national moratorium?
With a permitting deal seemingly on the horizon, Republican Gabe Evans and Democrat Scott Peters may be about to see their partnership pay off.
The fate of permitting reform legislation that could smooth the way to all kinds of new and improved energy infrastructure — including transmission lines and renewables — is currently hostage to opaque discussions between Senate committee chairs. Rhode Island Senator Sheldon Whitehouse, the Democratic ranking member of the Senate Environment and Public Works Committee, told a Rhode Island business group earlier this week that “we’re actually in a pretty good place on permitting reform,” and that there was “maybe another week of negotiations.” Whitehouse’s Republican counterpart on the EPW committee, West Virginia Senator Shelly Moore-Capito, told Semafor on Friday that any bill has “got to pop out of here in the next 48 hours.”
If that’s going to happen, it will be because Republicans and Democrats have decided it’s worth it to get along. Any deal will eventually have to be voted on by the House, which has already produced several bills on a bipartisan basis, and even passed one — the SPEED Act — late last year.
Two of the busier House members on this issue are Scott Peters, a Democratic former environmental lawyer from San Diego, and Gabe Evans, a first term Colorado Republican representing a suburban and rural district north of Denver that includes wind farms and crude oil production. “The district that I represent truly is an all of the above energy district,” Evans told me.
Their latest effort is a bill aimed at smoothing out permitting for transmission development, especially interregional transmission. Last week, the two congressmen unveiled the CLEAR Act, seeking to apply a stricter set of standards for lawsuits against transmission projects that aligned with how natural gas and hydropower projects are treated under the Federal Power Act (it’s much harder to sue to stop these projects). Earlier this year, the two also sponsored the CERTAIN Act, a more comprehensive streamlining of federal permitting for energy infrastructure projects.
“We’re proud to have a lot of our work as the foundation for this, and I think if they send us over something that includes this, it’s got a really good chance of passing in the House,” Peters told me. Evans added that bringing forward bipartisan bills “gives a little bit more impetus to the Senate to know that the House is looking for these things.”
While the Senate’s deal will be up to the senators, Peters told me he envisions a broad permitting package that could include reforms to the National Environmental Policy Act to shorten permitting timelines, preventing the president from nixing individual projects, and reform Section 401 of the Clean Water Act which effectively devolves power to tribes and states to block a variety of interstate projects. “I think it’s coming together pretty well,” Peters said. “Obviously, we’re waiting for white smoke from the Senate.”
A permitting reform package may be one of the last major bills several bipartisan-minded House members get to vote on.
Election day is about six weeks off, and while Peters will likely have an easy time getting reelected for this eighth term, Evans is in a tough race. His purple-hued district is a target for the House Democratic campaign arm, which is hoping to flip it to former Colorado House of Representatives member Manny Rutinel, who worked as a lawyer at the environmental group Earthjustice. The Cook Political Report rates the race as toss-up, and Nate Silver gives Rutinel a roughly 75% to win.
But Rutinel won’t be getting any campaign help from Peters.
When I asked Peters about the timing of releasing a bill that could boost an endangered Republican’s bipartisan bona fides less than two months before an election, Peters told me that he and Evans had been working on it “for a while,” and that “my colleagues know that I’ve worked with Republicans to get problems solved.”
He said he wasn’t “participating in Gabe’s election” and wasn’t giving any money to his campaign, but also that he wouldn’t campaign Evans’ challenger, despite the opportunity to bolster his own caucus.
Peters is not shy about praising Evans. “What I appreciate about Gabe is that it takes a little bit of initiative to separate yourself from the majority — particularly when you’re in the trifecta — and do your own thing. He’s been a good partner in helping find ways to reduce process and make things go faster,” he told me.
Evans told me that he and Peters met early in this Congress, as Evans was getting settled into his new office in the Longworth building. “We’ve built the relationship over the last two years with a lot of the different areas that we’ve collaborated on.”
“I always try to meet the members of my committee and find out who will work with me. And I was fortunate to find Gabe,” Peters said.
“I do want to win the majority in the next Congress,” Peters went on, but “the norm should be that we figure out ways to work together to solve problems, and, you know, we’ll let the voters of Colorado 8 decide who to send me.”
Evans, for his part, told me that he had to work with Democrats to get anything passed as a member of a minuscule Republican minority in the Colorado statehouse, and that the 40-plus members of the bipartisan Problem Solvers Caucus have agreed not to campaign against each other. “There’s 385 other members that you can go pick fights with,” he said.