Baker Botts' 39th Annual Environmental Seminar featured two breakout sessions covering the latest environmental, safety and incident response developments and trends. 

Key takeaways from breakout session 2 are outlined below:

Topic 1: Environmental Enforcement in Transition
Speakers: Partners Kent Mayo and Matt Morrison and Associate Indya Woodfolk

Key Takeaways

1. Federal enforcement priorities are shifting toward compliance assistance. Recent policy direction signals a move away from traditional, penalty-driven enforcement and toward outreach, training, and encouraging facilities to self-identify and correct issues. Regulators are emphasizing the most defensible interpretations of rules and showing greater caution in pursuing aggressive legal theories, especially where requirements are ambiguous. 
    
2. States and NGOs are expected to play a larger role. As federal oversight narrows, state agencies and non-governmental organizations are increasingly positioned to drive environmental enforcement and policy initiatives. This creates a more varied landscape, where expectations and enforcement intensity may differ significantly by jurisdiction. Companies operating across multiple states should be prepared for uneven regulatory pressure. 
    
3. National enforcement initiatives are being reconsidered. Broad, centrally directed enforcement campaigns are giving way to more targeted efforts and case-by-case decision-making. Some long-standing regulatory programs and legal approaches are under review, with a focus on providing regulatory relief and recalibrating how remedies and penalties are pursued. This does not eliminate risk but changes how and where it may arise. 
    
4. Legal interpretation and remedy strategies are evolving. Internal guidance has highlighted the importance of relying on clear statutory and regulatory language and exercising restraint when rules are unclear. This shift affects how violations are characterized, how penalties are calculated, and when matters are escalated. Regulated entities may see more opportunities to resolve issues through dialogue, but should not assume that enforcement exposure has disappeared. 

Environmental enforcement is entering a period of transition marked by a recalibration of federal priorities. Policymakers are emphasizing compliance assistance and cooperative problem-solving over traditional, high-penalty enforcement actions. At the same time, internal guidance encourages regulators to rely on the clearest and most defensible readings of statutes and regulations, particularly where ambiguity exists. For the industry, this can translate into more room for discussion and negotiated solutions, especially when companies demonstrate good faith efforts to comply.

However, a pullback in centralized federal initiatives does not equate to reduced overall scrutiny. Many states and non-governmental actors are increasing their role, leading to a more fragmented enforcement environment. Companies may face different expectations depending on location and sector, and legacy rules and programs remain in place even as enforcement strategies evolve. The most effective compliance strategies will combine strong internal programs with close monitoring of both federal policy shifts and state level enforcement trends to anticipate where risk is most likely to emerge.

Topic 2: NEPA and Infrastructure Permitting
Speakers: Partner Chris Thiele, Special Counsel Tom Jackson and Associate Katie Windle

Key Takeaways

1. Federal agencies are under strong direction to accelerate energy infrastructure permitting. Executive directives are pushing agencies to shorten timelines, streamline interagency consultation, and use emergency style procedures for certain energy related projects. This includes compressed environmental review schedules and greater reliance on agency discretion. At the same time, these actions are drawing legal challenges, meaning faster reviews may come with elevated litigation risk.
    
2. NEPA practice is being reshaped around speed, limits, and deference. Agencies are revising or rescinding prior procedures, imposing stricter page and time limits, and narrowing when draft documents are circulated for comment. Applicants may play a larger role in preparing NEPA documents, subject to agency oversight. Recent U.S. Supreme Court case law emphasizing judicial deference to agency decisions may help defend these faster reviews, but open questions remain around how courts will treat cumulative impact analyses and other contested issues.
    
3. Clean Water Act and wildlife rules are narrowing the regulatory footprint. With the U.S. Army Corps of Engineers having recently proposed a revised rule intended to align with the Sackett decision, federal jurisdiction over wetlands is expected to contract significantly, with regulators focusing on relatively permanent waters and wetlands that have a continuous surface connection to those waters. At the same time, changes to endangered species regulations and interpretations of other wildlife laws are aimed at limiting when habitat modification or incidental impacts trigger federal liability. These shifts could reduce permitting burdens for some projects but are likely to be heavily litigated.
    
4. Renewable projects face a more complex federal landscape. While energy development is broadly favored, renewable projects are encountering new procedural hurdles on federal lands and in wildlife consultations. Policy memoranda, permitting pauses, and shifting interpretations have created substantial barriers for wind and solar, even as traditional energy infrastructure receives expedited attention. Careful site selection and early screening for water and species issues are becoming even more important.

During this session we discussed how federal permitting for major infrastructure is in a period of rapid change, with a clear emphasis on speed and reduced procedural burdens for energy-related projects. Agencies are adopting streamlined environmental review processes, relying more heavily on emergency procedures, and narrowing the scope of analysis in some contexts. Recent court decisions reinforcing deference to agency expertise may bolster these efforts, but the aggressive pace of reform has already triggered multiple legal challenges. Project sponsors should expect a dynamic environment where shorter review timelines are possible, but legal durability is not guaranteed.

At the same time, underlying environmental statutes are being reinterpreted in ways that may shrink federal jurisdiction over wetlands and recalibrate how species impacts are assessed. These developments can open new siting and permitting pathways, particularly for linear and conventional energy infrastructure. However, renewable projects face greater hurdles, intended to slow or stop them, especially on federal lands and in wildlife contexts. In this evolving landscape, early strategy, careful site selection, and proactive use of tools such as categorical exclusions, programmatic permits, and coordinated federal review processes will be central to managing both opportunity and risk.

Topic 3: Data Centers, Energy Expansion, and Reliability
Speakers: Partners Derek McDonald, Juliana Sersen and Ryan Norfolk

Key Takeaways

1. Large load growth from data centers is reshaping grid policy nationwide. Modern data centers, especially those supporting AI, are arriving at a scale far beyond what grid planners historically anticipated. Individual facilities can require power equivalent to tens of thousands of homes, and clusters of projects are driving unprecedented demand. This surge has elevated large load interconnection from a regional planning issue to a national energy and security priority. 
    
2. Federal regulators are moving toward a more centralized approach to interconnection. Policymakers are exploring whether federal jurisdiction should expand to cover interconnection of very large loads, an area traditionally handled by states. Proposed reforms aim to ensure that transmission systems can accommodate these facilities more quickly and predictably. At the same time, regional grid operators are being directed to revisit their procedures, with some already ordered to create pathways such as provisional interconnection service that allow large loads to connect using surplus capacity. These changes are likely to face legal challenges, but the momentum toward reform is strong.
    
3. Regional grid operators are struggling with planning at this new scale. In markets like Texas, where the grid operates largely within one state and historically allowed fast “connect and manage” load additions, the volume of proposed data center demand now far exceeds current system peak usage. This creates major uncertainty for transmission planning, as operators must decide how much of the queued demand is realistic and how to size long term infrastructure investments. Efforts to revise interconnection rules quickly are running into procedural and legal constraints, highlighting the tension between urgency and due process.
    
4. Reliability, permitting, and environmental review are increasingly intertwined. Emergency federal authorities have recently been used to ensure that known large loads are factored into reliability planning, even before facilities are fully online. At the same time, the rapid pace of data center development is colliding with fragmented environmental review processes and transmission siting challenges. The need to power AI and advanced computing is placing speed, reliability, and regulatory coordination at the center of national energy policy discussions.

The explosive growth of data centers is creating a pivotal moment for U.S. energy and infrastructure policy. Facilities supporting artificial intelligence and advanced computing are demanding power at a scale that strains existing interconnection and transmission planning frameworks. In response, federal policymakers and grid regulators are moving to modernize how large loads connect to the system, including potential shifts in jurisdiction and new mechanisms to speed interconnection. These efforts reflect a broader recognition that computing capacity is now tied to economic competitiveness and national security.

For developers, utilities, and large energy users, this environment presents both opportunity and complexity. Regions with historically flexible interconnection processes are now grappling with demand projections that far exceed current peak loads, forcing a rapid rethinking of transmission buildout and reliability standards. Meanwhile, the legal durability of new federal and regional policies is not assured, and environmental and citing reviews remain potential bottlenecks. Success in this space will depend on early coordination with grid operators, realistic load forecasting, and a permitting strategy that aligns energy supply, transmission access, and regulatory compliance from the outset.