BiGS Actionable Intelligence:
BOSTON — America’s shifting energy landscape presents many high-tech challenges, from embracing renewables to improving climate science. Yet one of the biggest obstacles is an old-world problem: permitting.
A surge in electricity demand, fueled by the rapid growth of artificial intelligence and data centers, is colliding with a creaky and fragmented regulatory, permitting, and legal system that is stifling critical infrastructure development. This deadlock not only threatens a swift green energy transition but also the stability of the grid in different regions and America’s global competitiveness.
“The permitting process can be complex and open-ended,” said Harvard government professor Stephen Ansolabehere, co-author of Crossed Wires, a study by the Harvard Salata Institute and the Roosevelt Project about the development of long-distance transmission lines in the United States. “Businesses face huge uncertainty.”
While regulatory complexity is not new, the challenge is compounded by the fact that after nearly a decade of stagnant growth, U.S. energy demand is expected to grow between 2% and 3% annually through 2030 — a level of growth not seen in more than half a century. The grid is facing a surge in demand, driven in part by data centers, which are estimated to have consumed 4.4% of total U.S. electricity in 2023 and projected to consume between as much as 12% by 2028, according to Lawrence Berkeley National Laboratory.
This rising demand coincides with a critical infrastructure gap. The U.S. is currently building only about 3,000 miles of transmission lines per year, a fraction of the 8,000 miles built annually during the 1960s and 1970s. To meet future needs, the National Renewable Energy Laboratory estimates the U.S. must double its electric power lines over the next 25 years.
Permitting challenges are a widespread issue for energy projects, impacting everything from new power plants to delivering fuel or power from distant sources. Urgently needed infrastructure is tangled in a web of regulatory reviews, legal challenges, and political inertia. In some cases, a project's visual impact is the obstacle. In others, it is legal requirements for environmental reviews or the extensive process of dealing with multiple local communities affected by lines that cross vast distances.
“Whether it is a natural gas pipeline or a transmission line for renewables, you face a myriad of permitting requirements at the federal, state, and local levels,” said Dena Wiggins, president and CEO of the Natural Gas Supply Association. “The process can be incredibly long and expensive, and the uncertainty makes it very difficult to plan and invest.”
Losing competitive advantage
Ansolabehere points to difficulties for developers in securing power purchase commitments from electric utilities fearful of projects with any hint of a long runway. Financiers almost always require new plants to have an advance buyer to take power, stalling projects before they can begin. The result is a critical chokepoint at a moment when speed matters most.
Wiggins notes that natural gas—which currently makes up 43% of U.S. electricity generation—requires transport across vast territory to reach consumers or be transformed into electricity. Meanwhile, the Crossed Wires report points out that decarbonizing the grid requires connecting the country's most potent renewable resources—wind in the Plains states, solar in the Southwest, and hydropower from Canada—to the urban and industrial centers where demand is highest. These factors necessitate a massive buildout of long-distance pipelines and high-voltage transmission lines.
David Young, a senior advisor at Boston Consulting Group, said the bottlenecks prevent the U.S. from accelerating its “ability to grasp this period of economic transformation.” He noted that the time spent navigating a fragmented regulatory landscape is a loss of “future and current competitive advantage.”
Political gridlock and ‘NIMBY’
While there is a growing consensus in Washington that the system is broken, the path to reform is fraught with partisan divisions, creating a bottleneck that could have profound consequences for American competitiveness and its energy security.
In the contentious debate over U.S. energy policy, a central tension is the partisan divide on project priorities. Republicans, often aligned with the Trump administration, are generally inclined to favor streamlined approval processes for fossil fuel projects. Meanwhile, a cross-party coalition has advocated for technology-neutral reforms that include renewable energy, which has seen significant expansion.
The legislative landscape is partially shaped by powerful interests. Some, like the American Petroleum Institute, have been vocal advocates for permitting reform. They have a massive sign on the highway headed into Capitol Hill in Washington DC (see photo). Other organizations worry that any changes could dismantle environmental safeguards established in the 1970s.
Another factor that can complicate and delay infrastructure development is the powerful, non-partisan force of “Not in My Backyard” (NIMBY) opposition. This dynamic allows local residents to leverage the complex regulatory process to their advantage, often derailing high-profile energy projects at nearly any stage of development.
It all adds up to political gridlock that has stalled legislative solutions aimed at limiting the time for regulatory or public reviews and litigation.
‘Not a functioning system’
The primary federal hurdle to project development is the National Environmental Policy Act (NEPA), a bedrock environmental law that requires federal agencies to assess the environmental impacts of their proposed actions. While essential for environmental protection, the NEPA review process has become a significant source of delay.
Research from Resources for the Future, a Washington-based research organization, paints a stark picture of the resulting legal morass. A 2025 report called Taking Green Energy Projects to Court found that nearly a third of solar projects and half of wind projects that completed NEPA’s most rigorous environmental impact statement reviews subsequently faced court challenges. These legal battles are most often filed after federal agencies have already issued their final permitting decisions, adding years of uncertainty and cost to projects.
One venture capital investor in renewable energy sector lamented, “Our inability to build quickly is a major problem. When NEPA reviews have a three-to-four-year time horizon, it’s impossible to invest with any kind of certainty. It’s not a functioning system.”
The regulatory snags are already having real-world consequences. In 2022, for example, Dominion Energy was forced to temporarily halt new data center connections in Virginia—a state that has become a national hub for data center expansion—to plan for the necessary transmission capacity upgrades. The specter of additional capacity hitches loom across the U.S. In 2025, warnings of interconnection delays and even blackouts have been experienced across the Mid-Atlantic, New York, Texas, and the Pacific Northwest as utilities struggle to meet a surge in electricity demand.
Lessons from Texas and Oklahoma
While NEPA is the most visible federal process, it is only one piece of the puzzle. Developers must also navigate a complex patchwork of state and local regulations, which can vary dramatically from one jurisdiction to the next.
“There are at least six or seven permits that you have to get at the federal level, and then at the state level you have a whole other process,” Ansolabehere said. “Then there is the local level, which is a whole other story. It’s a very complicated, multi-layered system.”
Gunnar Trumbull, a professor at Harvard Business School, said there are likely lessons to be gleaned from the states where rapid energy expansion is occurring.
“Texas and Oklahoma are at the heart of solar and wind development,” he said. In Texas, projects are being developed largely on state land, while in Oklahoma, the focus is on private land. Trumbull said this approach suggests successful renewable energy development is occurring fastest when it circumvents federal red tape, although NIMBY objections can still slow local permitting.
A new blueprint for power
The disconnect highlights a fundamental flaw in the U.S.'s traditional, top-down approach to grid planning, Ansolabehere said. He argues that the primary obstacles to building new infrastructure are political, not technological, and that a “bottom-up” approach is needed to overcome them. This model would empower local communities and utility commissions, engaging with citizens and community leaders early in the development process.
The strategy is rooted in a keen understanding of public opinion. Ansolabehere's research shows that Americans are often more concerned with tangible, local environmental issues, such as smog and toxic waste, than with the abstract, global threat of climate change. This focus on immediate, local harms has fueled a public preference for “cleaner” energy sources like wind and solar, which are increasingly cost competitive. By leveraging consumer-driven demand and clearly articulating local benefits, a bottom-up model may be able to build the public support for new infrastructure.
The success of this approach is already evident in Texas, where local governments often invite multiple proposals for new projects. Public hearings are a common practice, with some communities considering 20 or more options before any one project proceeds. This process may drive outcomes that are better aligned with local concerns and priorities.
As Ansolabehere put it, “Successful projects changed the dialogue between firms and the states and communities.”