How The Supreme Court Cleared The Way For The Data Center Boom

By the time Krista Meredith learned last winter that an AI data center was coming to her community in the suburbs of Canton, Ohio, the site was already dotted with construction equipment.

A nurse practitioner who has lived in the area for two decades, Meredith is concerned about how the project could affect water and air quality around the Rust Belt city that was once defined by steel mills and now houses a mix of affluent and working-class neighborhoods.

But unbeknownst to her — one of hundreds who signed a petition against the data center — the only required federal permit was issued last August. And there was no chance for the public to weigh in.

As a tidal wave of sprawling energy- and water-guzzling data centers are proposed across the country, opponents are finding that one of their strongest levers for challenging projects has all but disappeared.

That’s thanks to a 2023 ruling from the Supreme Court that dramatically shrank the number of streams and wetlands protected by the Clean Water Act. Once one of the most important permits that virtually all construction projects needed, now everything from subdivisions to oil pipelines to data centers can be built without federal water pollution permits if the streams and wetlands they are filling in or contaminating fall outside the law’s scope.

Other projects that are still covered by the law, like the data center near Canton, are newly eligible for perfunctory approvals that the general public often doesn’t know about.

“I didn’t expect it to be a very reckless fast procedure to get this done,” said Meredith. “You should allow everyone to have a voice.”

Located where Canton’s suburban outskirts transition to open space and small farms, the Amazon-backed project is one of at least 26 data centers being built nationwide in sensitive streams and wetlands with streamlined water pollution permits, according to a POLITICO analysis of 95 Army Corps of Engineers documents and permit records from January 2024 to this past June.

Dozens more data centers are going up in states like Texas, Utah and West Virginia without a wetlands permit, the analysis found. In arid states, the Clean Water Act now covers so few waters that developers may not even be making contact with regulators at all, industry experts say.

Even just figuring out which water features required a federal permit used to “take an incredibly long time and then the determination of actually getting the permit is time consuming as well,” said Wayne D’Angelo, a partner at the law firm Kelley Drye whose clients include energy and manufacturing companies.

But thanks to the three-year-old court ruling, he said, “all that can likely be avoided by a number of projects just because of where they’re situated now outside of federal jurisdiction.”

The massive scale-back of the water permitting process has been a major enabler for the lightning-fast build-out of data centers across the country.

While hyperscale projects still have to navigate state and local regulations on everything from zoning to fire safety, the federal water permits were once seen as the most onerous part of the permitting process.

Now, data center projects are often flying through the environmental review process — and, at the same time, shrinking their vulnerability to lawsuits from community activists, green groups and federal pollution regulators.

The Trump administration is greasing the skids. After EPA last year told on-the-ground regulators to take an even narrower approach to the Supreme Court’s ruling, developers of a data center linked to the $500 billion Stargate venture withdrew their permit request. Located in rural Milam County, Texas, OpenAI, Oracle and SoftBank’s project site spans over 600 acres, but the developers concluded they didn’t need to seek a permit because wetlands on the site were no longer federally regulated, according to public records obtained by POLITICO.

A spokesperson for the project confirmed no permit was needed. In response to questions about the Canton project, Amazon spokesperson Brandon Scheller said the company tries to site projects in a way that avoids impacts to streams and wetlands. “We identify natural resources early and work intentionally to keep them undisturbed,” Scheller said in an email.

As the federal government relinquishes oversight of millions of acres of wetlands and streams, it’s also losing its ability to go after companies for damages from data center construction in those areas — leaving it to states to enact and enforce regulations.

But the trend has left community members feeling squeezed out at a time when concerns over quality of life, energy and water use and health impacts are turbocharging local opposition in communities from Wisconsin to Arizona.

"Part of getting a permit is you’re letting the public know that this activity is planned for this place," said Sara Gonzalez-Rothi, a law professor at Pace University who served as a senior water official under the Biden administration. "As you’re moving forward on completing infrastructure that’s going to be there pretty darn permanently — and the effects on the waters are pretty long-term and significant — there is no recourse.”

Streamlined — or avoided altogether

For the better part of the past half-century, federal regulators at the Army Corps of Engineers took a sweeping approach to water protections, requiring anything more than minor construction across the American landscape to seek a federal permit.

That process gave nearby residents, green groups and state environmental officials a window into developers’ plans for everything from strip malls and highway off-ramps to petrochemical facilities and coal mines – as well as a powerful tool for challenging them.

The Clean Water Act permits don’t relate to the amount of water a data center uses, which is the subject of state and local rules. Instead, they are aimed at minimizing harms to creeks, marshes and other features on the landscape and offsetting any damage that is done.

The process is especially salient for wetlands, which can absorb extraordinary amounts of water during floods and help filter pollutants out of drinking supplies, even though they may only look like a soggy spot in a grassy field.

Now, the booming data center industry is reaping the benefits of the Supreme Court’s shrunken approach to which waters get federal protection as well as the Trump administration’s efforts to further restrict it, according to POLITICO’s analysis. The administration is proposing to only regulate wetlands and streams that physically touch a larger waterbody — like a major lake or river — and are brimming with water for at least part of the year.

Some legal experts say that standard would go beyond what the high court required, but EPA officials say it’s legally sound.

Since the start of 2024, there have been at least 27 data center sites where Army Corps regulators found wetlands, streams or other water resources, but determined that no federal dredge-and-fill permit was needed because the waters fell outside the reach of the Clean Water Act.

The scale of those projects was hardly modest, ranging in size from 15 acres — more than 11 football fields — to nearly 2,000 acres, or roughly 3 square miles. And while some of those projects would have only a minimal impact on waterways, in other cases the waters affected are vast, according to the agency’s records.

For instance, federal regulators found 27 acres of streams on a nearly 2.5 square mile data center site outside Reno, Nevada, but because they usually only flow after rain events — as is the case for the overwhelming majority of waterways in the arid West — the Army Corps determined that none were subject to federal regulation. That meant the project didn’t need a Clean Water Act permit.

In northern Texas, near the Oklahoma panhandle, a planned data center and renewable energy campus was found to impact over 63 acres of streams, wetlands and other water features. It also didn’t need a permit because none were jurisdictional.

POLITICO found just three projects in the arid Southwest — two in Nevada and one in Utah — that had even asked the Army Corps for a review since early 2024. There were no records of any developers seeking reviews in Arizona, where more than 160 data centers have taken root around Phoenix and community pushback last month led the state’s Republican-led Legislature topass the country’s longest freeze on tax incentives for the industry in a budget deal with Democratic Gov. Katie Hobbs.

“From our experience in Arizona, I am not aware of any of the major data center projects we have supported having pursued Section 404 permits through the U.S. Army Corps of Engineers,” Steven Zylstra, president and CEO of the Arizona Technology Council, said in an email.

Through a public records request, POLITICO also identified 26 data centers since January 2024 that the agency said qualified for a streamlined permit, usually a nationwide permit that the public doesn’t learn about until after it’s issued, if they do at all. In fact, only 26 of the 95 projects POLITICO reviewed were required to obtain a more comprehensive permit, called an individual permit, which is posted publicly in advance so interested parties can weigh in before it is issued.

Army Corps spokesperson James Lalino defended the agency’s permitting decisions, saying that the Army Corps can’t require a permit if there are no federally protected waters on a site.

"If a jurisdictional determination determines there is no jurisdiction, USACE and any federal agency under the Clean Water Act has no authority to require a permit at all."

EPA spokesperson Jake Murphy, whose agency oversees the Army Corps’ Clean Water Act work, deferred to the Army Corps on the determinations.

Representatives for the data center industry say developers still aim to be environmentally protective, and POLITICO did identify a handful of projects that were able to move forward without a permit because developers chose sites that entirely avoided impacts to waterways.

“Our members generally try to avoid wetlands as much as possible,” said Cy McNeil, director of federal affairs for the Data Center Coalition, an industry trade group. “There are still lots of regulatory touchpoints for a data center development at the state and local level.”

The ability to avoid or streamline the federal water permitting process also has another big benefit for data center developers: The Clean Water Act is often the nexus to federal law that triggers review under the National Environmental Policy Act.

That foundational environmental law requires lengthy public analyses to ensure that the communities understand and have the chance to weigh in on potential impacts, and that federal officials take a hard look at a project’s consequences before acting on it. When developments on private lands no longer need the water permits, they can often avoid more time-consuming and detailed reviews under NEPA, too.

‘No better examples’

The effects of the sweeping regulatory rollback aren’t simply theoretical. Just ask Marsha Frame.

A longtime resident of Mason County, West Virginia, a rural area in historic coal country along the Ohio River, Frame saw the quiet stretch of open space, cornfields and trees behind her home transform into a construction site this year. By 2031, the site will host one of the nation’s largest data centers: Nscale’s 8-gigawatt Monarch Compute Campus.

Because the West Virginia Legislature passed a law stripping cities and counties of zoning authority over data centers, there had been no local approval process. Then, in May, after a week of rainy days, standing water began to build up on the construction site feet away from her home, according to videos and photos shared by Marsh and posted on social media.

The water eventually broke through a silt fence and flooded five yards in the neighborhood, including Frame’s, destroying her flower beds.

“It was knee-deep in our friends’ backyard and still under her house the next morning. It was horrible,” Frame said. “I’ve been here 42 years, not one time has there been water in their yard. Not once.”

A representative for Nscale said no living spaces flooded during the incident — only yards, crawl spaces and garages. The company says it paid to replace all damaged HVAC units and is currently installing a “ditch line” to collect water on its property in the event of future storms.

Nscale did go to the Army Corps this year to determine whether it would need a Clean Water Act permit. But although the agency’s review showed dozens of streams, ditches, wetlands, ephemeral waters and other features crisscrossing the 1,200-acre parcel, all were deemed exempt from the federal law based on the 2023 Supreme Court ruling.

While Nscale obtained a stormwater construction permit from the West Virginia environment department, it didn’t need any state permits for wetlands or water quality impacts either.

The high-court ruling has left it up to the states to determine what, if any, wetland and stream requirements should apply for large infrastructure like data centers. And while some states like Virginia — home to the largest concentration of data centers worldwide — have robust water regulations of their own, many more, including West Virginia, prohibit their agencies from regulating any more stringently than the federal government.

Chad Berginnis, a certified floodplain manager who directs the Association of State Floodplain Managers, said the Army Corps’ conclusion that no permit was needed at the Nscale site shows the far-reaching consequences of a narrower Clean Water Act.

There may be “no better examples” today than data centers to illustrate the gaps in wetland and stream coverage, he said.

“I look at the map of the overall site and see all these potential wetlands that I think would have been jurisdictional under a broader interpretation of [the law], and it just becomes so apparent what we are losing under the more constrained definition,” Berginnis said in an email. “And this loss of wetlands is something we don't get back.”

Streamlined permits or a 'rubber stamp'?

Even projects that do still require federal water permits are getting the rush treatment.

Less than one-third of the data centers that approached the Army Corps during the period POLITICO analyzed went through an individual, site-specific review that allowed public comment. Of those, the vast majority were located in Virginia.

Other projects requiring permits — more than two dozen since January 2024 — are going through a streamlined process.

The main process for accelerated review is the nationwide permitting program, which the Trump administration formally opened up to AI data centers early this year at the urging of the industry.

Recent recipients of nationwide permits for data centers include Meta, Google, Amazon, QTS and DAMAC Digital, a subsidiary of Dubai-based DAMAC Group. Meta’s largest data center in northern Louisiana received one of the streamlined permits in February 2025, and a QTS data center in Fayetteville, North Carolina got one in July 2024.

"Nationwide permits are a long‑established and regularly used part of the regulatory process for eligible projects and are subject to defined criteria," Ryan Hunter, chief operations officer at QTS, said in a statement.

Lalino, of the Army Corps, stressed that the permits are for projects with “minimal impacts” to federally protected waters.

But because they do not require public notice, the permits are sometimes issued before neighbors even know a data center is coming — frustrating project opponents who already feel that data center deals are shrouded in secrecy.

In rural, deep-red Adams County, Ohio, a group of residents was pushing for a local moratorium on new data centers at the same time as the Army Corps granted a nationwide permit for a 1.3-gigawatt Amazon project in February. News of the permit frustrated Nikki Gerber, a resident who runs a kayak rental service and worries how the project could affect wildlife and water quality in the Ohio River.

"It’s not even about data centers anymore at this point. It’s like, what’s happening to our democracy and what’s happening to our right to clean water and clean air," Gerber said.

The goal of nationwide permits is to more easily and quickly approve projects that are similar in nature. Instead of setting specific conditions on a case-by-case basis, the agency identifies common categories of activities and sets blanket conditions and requirements.

That usually allows the agency to process the permits more quickly. In 2024, the average processing time for a nationwide permit was 55 days, whereas an individual Clean Water Act permit took 253 days.

Industry representatives argue that the availability of nationwide permits incentivizes companies to avoid more significant impacts in order to qualify for a faster review and are urging the Army Corps to increase the scale of projects that can qualify.

“I think there’s an opportunity for examining whether the current threshold continues to be appropriate in view of the range and types of developments we have today, particularly data center developments that are critical in a lot of respects,” said Caleb Bowers, a partner at Sidley Austin whose clients include data center companies.

But environmentalists have long opposed nationwide permits. They argue that even if damage to streams and wetlands by one project is small, the overall harm across many projects is significant nationwide. The permits also don’t come with site-specific monitoring and reporting requirements to ensure companies are abiding by the requirements.

“In my experience, so long as the project is under that threshold, it is effectively rubber stamped,” said Patrick Hunter, a senior attorney at the Southern Environmental Law Center.