New Executive Order Aims to Accelerate Development of Data Centers

The White House has issued an executive order dated July 23, 2025, aimed at accelerating the federal permitting process for data center infrastructure. This latest directive from the US administration is intended to facilitate the rapid and efficient buildout of data centers and their necessary infrastructure, including infrastructure necessary to power data centers.

KEY ELEMENTS OF THE EXECUTIVE ORDER

The executive order (EO) outlines several key initiatives designed to facilitate the development of data centers, including the following:

• Encouraging Qualifying Projects: The EO mandates that the US secretary of commerce, in collaboration with other relevant federal agencies and officials, launch an initiative to provide financial support to “Qualifying Projects,” which the EO defines as either (1) a data center project that requires more than 100 megawatts of energy to power artificial intelligence (AI)-related services or synthetic data generation or (2) infrastructure projects that need to be built in order to build or power data centers. The financial support provided by the government to the applicable projects can be in the form of loans, grants, tax incentives, or offtake agreements.
• Expediting Environmental Reviews: The EO directs relevant federal agencies to work with the Council on Environmental Quality to determine existing and new categorical exclusions under the National Environmental Policy Act that can be utilized by the agencies to encourage development of Qualifying Projects. The federal agencies have 10 days from the issuance of the EO to begin this process.
• Efficiencies in Permitting Processes: The Environmental Protection Agency administrator is directed to develop or modify environmental regulations (such as those under the Clean Air Act, Clean Water Act, and Endangered Species Act) to expedite the permitting processes on both federal and non-federal lands that Qualifying Projects must complete prior to and during their development. The EO also directs the US secretary of the Army to determine, within 180 days, whether an activity-specific nationwide permit is needed to best expedite permitting processes related to Qualifying Projects.
• Enhancing Use of Federal Lands: The EO mandates that the US Departments of Energy, Interior, and Commerce work together to determine select certain Qualifying Projects for development on federal lands. It also directs the US secretary of defense to competitively lease suitable sites on military installations to Qualifying Projects to support the US Department of Defense’s energy and security needs.

IMPLICATIONS OF THE EO

This EO is the latest in a series of US administration issuances targeted to enhance the United States’ ability to facilitate data center development, including an AI action plan that was also issued on July 23, 2025, and summarized in our recent LawFlash and recent EOs designed to expand and accelerate the development of US nuclear energy, described here.

It is expected that natural gas will play a significant role as a feedstock to power new generation facilities tied to data center development. This EO supports that expectation and is consistent with other directives from the US administration requiring the reduction of regulations that may hamper the production and consumption of energy from fossil fuels (see our previous LawFlash).

As a result, the Federal Energy Regulatory Commission (FERC) has recently taken steps to streamline the permitting and construction process associated with new natural gas pipeline infrastructure by temporarily waiving and initiating a process for permanently repealing Order No. 871, which had been criticized for delaying projects by precluding construction activities while rehearing requests were pending. FERC has also increased the cost limits for new natural gas pipeline projects that can be automatically approved or approved with limited review under the pipeline’s existing “blanket certificate.”

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