Nearly two months after a federal judge ruled that renewable energy developer Enel Green Power North America must deconstruct 48 onshore wind turbines because it failed to secure mineral rights on Osage Nation lands in northern Oklahoma, two attorneys of the energy sector advise the unit of an Italy-based company to negotiate with the tribe.
Lawyers told ENR the case was full of “yellow flags” and stressed the importance of following the requirements that apply to such projects. Jeffrey Porter, chairman of Mintz Levin’s environmental law practice in Boston, says companies need to “assess the risk that you’re getting these approvals up front because that can contribute to the viability of projects.”
Enel properly leased surface rights for the project more than a decade ago, failing to obtain leases from the tribe for underground land that was used for turbine foundations, each requiring a 10-foot underground foundation deep and 50 feet wide, according to the tribe. This area also includes unearned oil, natural gas and mineral rights, he says.
Enel has not said whether it plans to appeal the decision and has not responded to inquiries from ENR. The company has not explained why it failed to secure the right leases.
Pilar Thomas, a partner in the energy, environment and natural resources practice group at Tucson-based law firm Quarles and Brady, says the case clearly shows the need for energy companies to understand “split ownership,” a legal term related to designations of property rights. when the land surface and underground rights are divided between two parties.
“Before this case, a lot of people thought you could use dirt. But you can’t just use dirt,” says Thomas, who also teaches Native American energy law at Arizona State University and the University of Arizona.
In the Osage case, Enel, the fourth largest renewable energy developer in the United States, obtained the surface leases but failed to secure legal rights from the US Department of the Interior and the Mineral Rights Authority of the Osage Nation, both must approve underground mineral leases. she explained.
Thomas and Porter say they would be surprised if all 84 turbines were removed, as ordered by U.S. District Court Judge Jennifer Choe-Groves in Tulsa. The idea of the project being deconstructed seems to me “much less likely,” says Porter. He said in the online publication recharge that the ruling “has significantly increased the influence of the Osage Nation in the negotiations, which in my view is inevitable.”
Thomas explains that remedial rules issued by federal courts are rarely overturned by higher courts. Cost estimates to deconstruct the estimated 1,000-acre wind power facility are more than $300 million, “a lot of money,” he says. With the court ruling, Enel cannot stay on land with mineral leases.
Porter says it would be “premature” for Enel to file an appeal, explaining that it would focus only on deconstructing the turbines, at the behest of Choe-Groves. He questions whether an appeals court would consider such a small part of the case.
“A more effective solution would be some kind of negotiation,” he says.
