Posted on July 15, 2026
By Nick Zenkin
On March 20, Energy Secretary Chris Wright broke ground on a stretch of federal land in Piketon, Ohio, once home to the Portsmouth Gaseous Diffusion Plant, which spent the Cold War enriching uranium for nuclear weapons.
That site, leased by Softbank subsidiary SB Energy, is now part of what the Department of Energy calls the largest data center and power complex in the world: a 10-gigawatt AI data center powered by 9.2 GW of new natural gas generation, known as the PORTS Technology Campus. Commerce Secretary Howard Lutnick called the new project, “the largest bet on a construction facility ever made in history.”
None of it is built yet, though. Four months after the groundbreaking, site work consists of demolishing the remnants of the old uranium enrichment buildings and laying foundational infrastructure for the project’s first phase, an 800-megawatt data center that would account for less than a tenth of the eventual 10-GW target and isn’t expected online until 2028. OpenAI is slated to lease the full 10-GW campus from SB Energy under a reported 20-year deal, with the 800-megawatt first phase as its initial delivery, though the company hasn’t actually signed the deal yet.
Most data centers sit on land companies own outright or lease from private landlords. This one sits on both private and federal land; the federal land is on a lease that the government still legally owns. Historically, that wouldn’t have been much of a risk. But since March, the Interior Department has paid a string of offshore wind developers billions of dollars to give up their own federal leases, using a legal mechanism that state attorneys general and members of Congress alike say the agency had no real authority to use.
If courts ultimately allow this for offshore wind, the same mechanism could be turned on a data center — or any other project sitting on a federal lease.
Building on federal lands makes sense
The logic behind putting a data center on federal land isn’t hard to follow.
DOE has spent more than a decade cleaning up Portsmouth’s nuclear waste. That work left the site with most of what a hyperscaler would otherwise spend years building from scratch: power lines already running through the area and water available on site. On top of that, the developer gets a federal landlord willing to fast-track permitting.
SB Energy’s lease was designated the first project in the high-performance computing sector to receive so-called FAST-41 status, a new federal approach that forces every permitting agency involved onto the same timeline. (They often run back-to-back, which can make permitting a years-long process.)
Portsmouth is part of a broader federal land program that started with a Biden-era executive order in January 2025, directing agencies to identify sites for exactly this purpose. The Trump administration kept the program and has since expanded it to 16 identified sites. Portsmouth is the one that’s moved fastest.
Low cost to the government and fast execution are the strongest arguments for leasing federal land to build data centers, instead of waiting years for private developers to find and permit sites of their own. But that stops mattering the moment a future administration decides it wants the land back.
Offshore wind buyouts may be a playbook
In four months, the Interior Department has paid four groups of offshore wind developers roughly $2.7 billion combined to walk away from nine lease areas, framing the payouts as investment redirected toward oil, gas, and other conventional energy.
It started in March, when TotalEnergies took $928 million to walk away from two leases. By April, Bluepoint Wind and Golden State Wind had added another $885 million. In June, Invenergy took $765 million for four more leases, one of which the company had already abandoned on its own the previous November. And just a few weeks ago, Duke Energy collected $129 million for the last of its Carolina Long Bay leases; those funds are now earmarked for grid infrastructure in the Carolinas rather than for fossil fuel.
That number is only the settlement cost, not the value of what the companies are actually leaving behind. The nine lease areas represented roughly $100 billion in offshore wind capacity, if we’re looking at full project value, that will now never get built.
The money for these buyouts comes from the Judgment Fund, a permanent Treasury account meant to pay judgments and settlements in cases where the government faces an actual or imminent legal claim.
Technically speaking, the Judgment Fund can only pay out to settle a real legal claim, one where the government and a company genuinely disagree about whether money is owed, or how much.
TotalEnergies never had that kind of claim. Its lease’s terms, in fact, said the government couldn’t cancel it unless regulators first ordered the company to formally halt work, a “suspension of operations,” and kept that suspension in place for five years straight. That never happened. No suspension was ever ordered, so nothing had occurred that would have entitled TotalEnergies to anything.
The reinvestment requirement looks just as thin. Reporting on the settlement terms found TotalEnergies didn’t even have to make new investments to collect, only submit receipts for oil and gas spending it was already making.
Seven states led by New York sued in June, arguing the payments violate the Judgment Fund Act, the Antideficiency Act, and the Outer Continental Shelf Lands Act. The Antideficiency Act bars agencies from spending money Congress hasn’t given them, while the Outer Continental Shelf Lands Act specifies its own formula for compensating a cancelled lease. The states argue the Judgment Fund payment duplicates a process Congress already wrote down.
Congressional Democrats have made the same case in a string of oversight letters. One of those letters surfaced a clause in the settlement agreements stating that a court can never rule on whether the deal was legal. That kind of clause suggests the administration’s own lawyers weren’t confident the deals would survive a court’s scrutiny.
None of this has been resolved. The case is pending in federal court in Washington with no ruling yet.
Data centers have less cover, not more
Offshore wind and offshore oil leases run through that same 1953 statute, the Outer Continental Shelf Lands Act, the one whose compensation formula is exactly why the wind buyouts are vulnerable in the first place.
DOE’s data center leases don’t face the same legal complexity, because they aren’t subject to the same protections as offshore wind (and for that matter, offshore oil drilling). The department’s authority to lease sites like Portsmouth comes from a section of the Atomic Energy Act written for an entirely different purpose, paired with general federal real-property leasing law. Neither is a dedicated regime built around leasing, cancellation, and compensation the way the offshore leasing law is. There’s no equivalent formula for what a company is owed if DOE decides to take a site back.
Former Interior solicitor Tony Irish, one of the sharper critics of the wind buyouts, has been explicit about the risks they create even for Trump’s chosen industries: Nothing stops a future administration hostile to a different industry, he said, from doing the same thing to a fossil fuel project — or a data center.
A future administration that wanted its own reasons to cancel a data center lease wouldn’t have to get around a statute that already says what a company is entitled to. There isn’t one.
What’s actually stacking up in Pike County
Portsmouth isn’t just SB Energy’s bet. The site has become the designation for a pile-up of federal energy leases from other companies as well, all relying on the same land.
Small nuclear company Oklo bought land on the site for a 1.2-gigawatt nuclear campus, backed by a prepayment deal with Meta; the reactors are meant to power Meta’s own data centers once the first units come online, no earlier than 2030. Centrus Energy is expanding uranium fuel production at the site specifically to supply the reactors Oklo plans to build there — a deal that DOE’s inspector general found was awarded without competitive bidding.
Separately, Newpoint Gas is investing $1.5 billion in a hydrogen facility on the same land.
Of course, none of that counts as part of the SB Energy deal itself: $33 billion for the gas plant, plus $4.2 billion more that AEP Ohio is putting into new transmission lines.
Add it up and Pike County is on track to host a natural gas megaplant, a 10-GW data center, a hydrogen facility, and two nuclear reactors, all on federal land the department has not finished remediating from its uranium enrichment days, all resting on a data center lease that is not yet signed.
That is, if the projects actually manage to get built.
Local opposition to this scale of build-out isn’t hypothetical; it’s already happening at another DOE site in this same federal land program. Residents near Idaho National Laboratory have raised concerns in public comments about the aquifer beneath their own proposed site, and DOE’s own solicitation for that site tells applicants they’ll need to buy water rights on the open market, because the department isn’t offering its own.
The bigger potential barrier, however, is the fact that none of the companies signing these leases have had to reckon with what the wind developers are learning now: A federal lease is a policy decision with a signature on it, not a permanent right.
The Judgment Fund gave an administration hostile to offshore wind a way to undo years of contracts without touching Congress. Whoever is hostile to the next thing now has a demonstrated tool sitting on the shelf, tested, litigated, and reused four times already. Water-intensive AI campuses on contaminated federal land make as plausible a target as any. The only open question is whether a court closes that door before someone reaches for it again.
