Energy policy reform is necessary for the AI revolution, here’s how we make it happe

Our economy is growing, mainly driven by the explosion in AI development and the construction of high-tech data centers across the country. Given this, it’s clear why energy demand is soaring. 

In fact, U.S. electricity demand is expected to grow more than 2 percent annually this year, with the fastest growth occurring in  Texas and Virginia, states featuring large investments in data center projects.  

These projects offer new job opportunities and prosperity for the regions that build them, but only if we act soon to cut the burdensome red tape. If we don’t act, however, the short-term consequences of increased strain on the energy grid will needlessly outweigh the benefits.  

The challenge isn’t AI itself — rather it’s our failure to adapt. Instead of trying to regulate AI, we should reform energy policy to unlock its full potential and drive economic growth for everyone  

We cannot afford to miss this opportunity  

New technologies often become scapegoats for society’s challenges. From radio and television to video games, concerns about safety, isolation, and violence continue to emerge. While these technologies were undeniably disruptive, they didn’t lead to disaster. Instead, they sparked surges in high-paying jobs and significantly improved living standards across the board. 

One only needs to look at the natural experiment that occurred when Europe expanded its regulation on the internet and technology while the U.S. did not.  

In 2000, Europe had 41 companies in the global top 100 by market cap — more than the U.S. at 39. Today in 2025, the U.S. dominates with 63, while Europe has only 17. America’s top firms are collectively worth over $22 trillion — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Broadcom, and Tesla — are all tech giants. 

This is proof that we cannot let the economic opportunity of AI pass us by.  

How red tape slows down energy production and innovation  

Given this information, how do we make sure that we are able to harness the power of AI, without losing energy affordability in the process?  

The key is addressing the bottleneck of the current federal permitting process, as it delays the development of energy infrastructure. To support AI growth, the nation needs a policy of energy abundance, which means accelerating the construction of all types of energy projects to reduce energy costs without sacrificing the transformative potential of AI. 

This means enacting policy changes like the following: 

Reforming the permitting process 

• Mandatory multi-agency reviews create multiple choke points that extend the time needed to approve the construction of an energy project. At the federal level alone, and depending on the scope of the project, permits can include getting permission from the Environmental Protection Agency (EPA), Bureau of Land Management, National Park Service, Bureau of Indian Affairs, Federal Emergency Management Agency (FEMA), and/or the National Oceanic and Atmospheric Administration (NOAA).​ The median time, from the initial submission of an environmental impact to final approval, is almost 3 years.  

Building more critical energy infrastructure 

• Energy abundance requires us to build new pipelines, export terminals, and delivery systems that allow us easier and more efficient energy transmission across the country and even across global markets.  

Strengthening the electric grid 

• To meet growing demand, the electrical grid must be backstopped with reliable and consistent power generation to ensure areas experiencing rapid expansion of data centers and other kinds of increased electrification do not suffer from spikes in rates or rolling blackouts.  

Only by making these important policy changes will we be able to meet the challenge of harnessing the full economic and prosperity creating potential of AI technology.