What Happens When the Wind Stops Sweeping Down the Plains
Oklahoma is one of the leaders in wind energy, ranking third in wind power generation in 2023 with 37,731 GWh. But what happens when the wind stops sweeping down the plains? On December 20, 2023, Judge Chloe-Groves issued an opinion in U.S. v. Osage Wind, LLC (the “Osage Case”), directing Osage Wind, LLC and Enel Energy to take down its 84-turbine wind energy project in operation since 2015. According to Enel, it will take 18 months and cost the company roughly $258 million to remove the turbines and restore the land to its original state.
An appeal of this decision is currently pending. But the case has caused show waves for developers. So what exactly happened? The dispute over the wind project in Osage County has been ongoing since 2011 and is a complex web of multiple lawsuits and appeals. Osage Wind, LLC began developing its wind project in 2010 and leased the surface rights to 8,400 acres. The following year, the Osage Mineral Council, the agency responsible for administrating the tribe’s mineral rights, expressed concerns about the wind project because its location would interfere with the use of its mineral rights. That same year, the Osage Nation filed a lawsuit against the wind project (the “2011 Osage Nation Case”). This case was initially dismissed, and the project began construction.
During the construction process, the Osage Case was filed. The Plaintiffs in the Osage Case brought claims for trespass, conversion, injunctive relief, and declaratory judgment that Defendants engaged in unauthorized mining and excavation without first obtaining a lease. While this case was pending, the Tenth Circuit ruled in the 2011 Osage Nation Case that Osage Wind, LLC’s activities were considered mining and that a lease was required under 25 C.F.R. § 214.7. United States v. Osage Wind, LLC, 871 F.3d 1078 (10th Cir. 2017).
With this as the backdrop, Judge Choe-Groves of the United States Court of International Trade, sitting by designation in the Northern District of Oklahoma, issued an Order awarding “relief to the Osage Nation and the United States in the form of ejectment of the wind turbine farm for continuing trespass.” US v. Osage Wind, LLC, Court No. 4:14-cv-00704-JCG-JFJ, [DKT 386]
But what was the Judge’s reasoning? Before, during, and after construction, Osage Wind, LLC was repeatedly advised by the Bureau of Indian Affairs and the Osage Mineral Council that the wind farm project required a lease related to the mineral estate. Even after the 10th Circuit issued an opinion outlining that the project required a mineral lease, Osage Wind, LLC made no effort to get one. The Judge considered this when issuing her opinion, explaining that “Defendants’ past and continued refusal to obtain a lease constitutes interference with the sovereignty of the Osage Nation and is sufficient to constitute irreparable injury.” Id. at p. 42.
In addition, the Judge recognized that this case includes exceptional circumstances. When discussing the balancing of harm, the Judge acknowledges the potential loss of hundreds of millions of dollars if the wind towers were removed. This type of significant loss of money would likely be sufficient to outweigh a property owner’s interests in a more common case of trespass, but because the case dealt with a sovereign nation, the determination was different. Id at 43.
This case presents two important lessons for developers. First, any wind project must deal with both surface and mineral leases – even when tribal law is not involved. Finally, developers must be mindful of the location of their wind projects and their relationship with the tribal nations in that area. Not doing so, can be a multiple million dollar mistake.
