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Spotlight

How Trump’s Speed-to-Power Push for Data Centers Could Backfire

Will moving fast and breaking air permits exacerbate tensions with locals?

Donald Trump and Rick Perry.
Heatmap Illustration/Getty Images

The Trump administration is trying to ease data centers’ power permitting burden. It’s likely to speed things up. Whether it’ll kick up more dust for the industry is literally up in the air.

On Tuesday, the EPA proposed a rule change that would let developers of all stripes start certain kinds of construction before getting a historically necessary permit under the Clean Air Act. Right now this document known as a New Source Review has long been required before you can start building anything that will release significant levels of air pollutants – from factories to natural gas plants. If EPA finalizes this rule, it will mean companies can do lots of work before the actual emitting object (say, a gas turbine) is installed, down to pouring concrete for cement pads.

The EPA’s rule change itself doesn’t mention AI data centers. However, the impetus was apparent in press materials as the agency cited President Trump’s executive order to cut red tape around the sector. Industry attorneys and environmental litigants alike told me this change will do just that, cutting months to years from project construction timelines, and put pressure on state regulators to issue air permits by allowing serious construction to start that officials are usually reluctant to disrupt.

“I think the intended result is also what will happen. Developers will be able to move more quickly, without additional delay,” said Jeff Holmstead, a D.C.-based attorney with Bracewell who served as EPA assistant administrator for air and radiation under George H.W. Bush. “It will almost certainly save some time for permitting and construction of new infrastructure.”

Air permitting is often a snag that will hold up a major construction project. Doubly so for gas-powered generation. Before this proposal, the EPA historically was wary to let companies invest in what any layperson would consider actual construction work. The race for more AI infrastructure has changed the game, supercharging what was already an active debate over energy needs and our nation’s decades-old environmental laws.

Many environmental groups condemned the proposal upon its release, stating it would make gas-powered AI data centers more popular and diminish risks currently in place for using dirtier forms of electricity. Normally, they argue, this permitting process would give state and federal officials an early opportunity to gauge whether pollution control measures make sense and if a developer’s preferred design would unduly harm the surrounding community. This could include encouraging developers to consider alternate energy sources.

“Inevitably agencies have flexibility as to how much they ask, and what this allows them to do is pre-commit in ways that’ll force agencies to take stuff off the table. What’s taken off the table, it’s hard to know, but you’re constraining options to respond to public concerns or recognize air quality impacts,” said Sanjay Narayan, Sierra Club’s chief appellate counsel.

Herein lies the dilemma: will regulatory speed for power sacrifice opportunities for input that could quell local concerns?

We’re seeing this dilemma play out in real time with Project Matador, a large data center proposal being developed in Amarillo, Texas, by the Rick Perry-backed startup Fermi Americas. Project Matador is purportedly going to be massive and Fermi claims its supposed to one day reach 11 GW, which would make it one of the biggest data centers in the world.

Fermi’s plans have focused on relying on nuclear power in the future. But the only place they’ve made real progress so far in getting permits is gas generation. In February, the Texas Commission on Environmental Quality gave Fermi its air permit for building and operating up to 6 gigawatts of gas power at Project Matador. At that time, Fermi was also rooting for relaxed New Source Review standards, applauding EPA in comments to media for signaling it would take this step. The company’s former CEO Toby Neugebauer also told investors on their first earnings call that Trump officials personally intervened to help get them gas turbines from overseas. (There’s scant public evidence to date of this claim and Neugebauer was fired by Fermi’s board last month.)

But now Fermi’s permit is also being threatened in court. In April, a citizens group Panhandle Taxpayers for Transparency filed a lawsuit against TCEQ challenging the validity of the permit. The case centers around whether the commission was right to deny a request for a contested case hearing brought by members of the group who lived and worked close to Project Matador. “Once these decisions are made, they don’t get reversed,” Michael Ford, Panhandle Taxpayers for Transparency’s founder, said in a fundraising video.

This is also a financial David vs. Goliath, as Ford admits in the fundraising video they have less than $2,000 to spend on the case – a paltry sum they admit barely covers legal bills. We’re also talking about a state that culturally and legally sides often with developers and fossil fuel firms.

At the same time, this lawsuit couldn’t come at a more difficult time as Fermi is struggling with other larger problems (see: Neugebauer’s ouster). Eric Allman, one of the attorneys representing Panhandle Taxpayers for Transparency, told me they’re still waiting on a judge assignment and estimated it’ll take about one year to get a ruling. Allman told me legally Fermi can continue construction during the legal challenge but there are real risks. “Applicants on many occasions will pause activity while there is an appeal pending,” he told me, “because if the suit is successful, they won’t have an authorization.”

Aerial photos reported by independent journalist Michael Thomas purportedly show Fermi hasn’t done significant construction since obtaining its air permit. Fermi did not respond to multiple requests for comment on the lawsuit.

Industry attorneys I spoke to who wished to remain anonymous told me it was too early to say whether EPA’s rulemaking would exacerbate local conflicts by making things move faster. “A lot of times the environmental community likes to litigate things in the hope delays will kill a project, so in that regard, this strategy may be harder for them to implement now,” one lawyer told me. “But just because a plant gets a permit doesn’t mean they can build.”

Environmental lawyers, meanwhile, clearly see more potential for social friction in a faster process. Keri Powell of the Southern Environmental Law Center compared this EPA action to xAI’s rapid buildout in Tennessee and Mississippi where the Al company’s construction of gas turbines before it received its permits has only added to local controversy. This new rule would not make what xAI did permissible; this is a different matter. Yet there are thematic similarities between what the company is doing and the new permitting regime, with natural gas generation expanding faster when companies are allowed to start forms of site work before an air permit is issued.

“By the time a permit is issued, the company will be very, very far along in constructing a facility. All they’ll need to do is bring in the emitting unit, and oftentimes that doesn’t entail very much,” she said. “Imagine you’re a state or local permitting agency – your ability to choose something different than what the company already decided to do is going to be limited.”


It’s worth noting EPA insists nothing in this proposal should be construed as giving room for companies to pressure regulators into issuing permits. The agency did not respond to a request for additional comment.
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Spotlight

Meta’s Bacterial Mystery Could Poison the Data Center Well

Water pollution in Wyoming has big implications for the future of data center development.

A data center and water pollution.
Heatmap Illustration/Getty Images

Did a Meta data center introduce a rare, dangerous bacteria into the sewers system of Wyoming’s capitol city? It’s an environmental pollution mystery with an answer that could decide the future of American AI infrastructure development.

Our drama begins in Cheyenne, Wyoming, where the city’s board of public utilities just wrapped up a lengthy investigation into the presence of Cupriavidus gilardii, a potentially lethal bacteria resistant to heavy metals, in the city’s wastewater treatment systems. Apparently, in February, board staff detected the contamination and shut off public access to the city’s water reuse system, a supply of treated non-potable water fed with treated wastewater and used for lawns, athletic fields, and other green spaces. Officials were worried that spraying this water could release into the environment a bacteria found to cause fatal health outcomes in immunocompromised or elderly people who are infected by it.

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Q&A

How Big of a Problem Is Data Center Noise?

A conversation with Ross Marchard of the Taxpayers Protection Alliance

The Q&A subject.
Heatmap Illustration

This week’s conversation is with Ross Marchard, executive director for the Taxpayers Protection Alliance, a center-right advocacy group that focuses on what it sees are onerous policies potentially hindering responsible collection and use of tax dollars. TPA’s position on AI clearly skews pro-free market, as they’ve recently defended Anthropic from Trump administration attacks. TPA also recently took on the mantle of defending data centers from noise complaints, publishing a paper on Tuesday “debunking myths about data centers being excessively noisy.” The paper references various analyses of data centers by state legislators and local regulators to argue that claims the sector is generally noisy are false.

I asked TPA’s executive director to chat with me about why and how the organization will try to quell these fears. The conversation was really interesting so I decided to share it with you in full, sans light editing for clarity and consistency.

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Hotspots

The Electro-Magnetic Freakout on the Cape

And more of the week’s news around project development.

The United States.
Heatmap Illustration/Getty Images

1. Barnstable County, Massachusetts – I have a whopper of an update on the Vineyard Wind project, which might be in operation but risks becoming fodder in the fight against offshore wind.

  • Like all offshore wind projects, Vineyard Wind has to send power to the coastline via cable. One of the three sites where these giant power lines land is Barnstable, a small shore community, where longtime residents for years have voiced concerns about electromagnetic fields or EMF.
  • Concerns about EMF are comparable to those about infrasound from data centers. We do not know whether these concerns are really rooted in legitimate health impacts, as I have written, but regardless this remains a common concern raised around large high-voltage power lines, including those for offshore wind projects.
  • On June 30, the town’s board of health heard from a group of Barnstable residents who claim to have measured EMF from the town’s wind cable. The same group, Save Greater Downes Beach, had unsuccessfully sought to stop the cables through litigation and public pressure.
  • This board of health meeting was controversial: Ahead of the meeting, the director of Sierra Club’s Massachusetts chapter wrote the board of health requesting their testimony be limited and no action be taken on the findings. “Concerns being raised about electromagnetic field exposure associated with Vineyard Wind 1’s underground export cables are not only invalid but outside of the Board of Health’s jurisdiction,” wrote chapter director Vick Mohanka, according to a copy of the letter posted to Facebook by anti-wind activist Susanne Conley.
  • This Sierra Club chapter was right to be concerned about how this meeting would affect Vineyard Wind. I watched the lengthy testimony before the board of health. Activists presented a case that the town should implore regulators with authority to deeply study the wind farm cables. They asked the board of health to back a state study on EMF and put the question before the Massachusetts permitting regulator, the Energy Facility Siting Board.
  • “We’re not asking the board to place any restrictions or limitations on the project at this time,” Gary Peters, a local medical professional and member of Save Greater Dowses Beach, told the board. “We’re asking you to put that ball in the court of EFSB.”
  • The board was receptive to this request. Board chair F.P. Lee told the group he would “take this under advisement” and said he’d talk to their legal department about it. Daniel Luczkow, the board’s vice chair, said he agreed with activists’ feelings that Barnstable residents were “guinea pigs.”
  • “It sounds like the contention is that these levels we’re measuring are much, much higher than the information given when the project was started,” Luczkow said. “We’re the only place on the planet, maybe, that actually runs these [cables] through a populated area and we have no idea what type of damage they’re causing?”
  • Should Barnstable strenuously take this issue up, I would predict it only be a matter of time before it’s also raised by organs of the federal government. Health and Human Services Secretary Robert F. Kennedy Jr. last year asked the Centers for Disease Control to study negative health impacts from precisely this infrastructure. This kind of hyperlocal squabble is often what manifests as conversation in anti-wind opposition circles, and Vineyard Wind was already causing PR headaches for the energy transition.

2. Prince William County, Virginia – Northern Virginia is officially hostile territory for data center developers, and I learned about it through a call from my mom.

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