LAW

In win for tribe, court says wind farm counts as 'mining'

When is a wind farm also a mining operation? When it's scraping up rocks in Indian Country and using them.

That's the upshot of a federal court decision siding with the Osage Nation in a battle over whether wind development atop Osage land in Oklahoma requires federal and tribal approval.

In a unanimous opinion yesterday, the 10th U.S. Circuit Court of Appeals ruled that Osage Wind LLC violated federal law by "mining" the earth to erect commercial wind turbines without a federal permit.

The case stems from complicated land ownership in Indian Country. In the Osage Nation, much of the surface land is privately owned, while what's underground is managed by the U.S. government for the tribe. That means approval for surface activities can go through individual landowners, but approval for subsurface activities must go through the tribe and the Interior Department.

In 2010, Osage Wind secured a lease for 8,400 surface acres in Osage County, Okla., to build an 84-turbine wind farm. The tribe and the government first raised concerns in federal court that the development would disrupt oil and gas drilling in the area, but the court threw out the claims.

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Osage Wind eventually began site preparation for the wind farm in 2013 and 2014, digging large holes to hold massive cement foundations for the wind turbines. Each foundation measured 10 feet deep and 60 feet in diameter. The company extracted soil, sand and rocks to dig the holes and then crushed the material and used it to fill and cover the excavated sites.

The U.S. government sued over the mineral extraction activities, lost the case and declined to appeal. The Osage Minerals Council — an Osage Nation agency — stepped in and took the case to the 10th Circuit.

The 10th Circuit yesterday sided with the tribe, ruling that the use of the rocks constituted "mining" under federal regulations. The court noted that Interior regulations governing "mineral development" of the tribal subsurface estate should be broadly interpreted to include the excavating activities, especially in light of legal precedent that requires courts weighing laws designed to favor tribes to "liberally construe" any ambiguity in tribes' favor.

"It might be reasonable to adopt the construction favored by Osage Wind, which sets as the definitional boundary the commercialization of the minerals," the opinion said. "But because the phrase 'mineral development' is ambiguous in this regulation, the Indian canon of interpretation tilts our hand toward a construction more favorable to Osage Nation, so we adopt the broader definition of 'mineral development' when construing [Interior regulations]: 'mineral development' includes acting upon the minerals to exploit the minerals themselves."

"On the merits, we hold that Osage Wind's extraction, sorting, crushing, and use of minerals as part of its excavation work constituted 'mineral development,' thereby requiring a federally approved lease which Osage Wind failed to obtain," the court concluded.

Senior Judge David Ebel, a Reagan appointee, authored the opinion, joined by Judge Mary Beck Briscoe, a Clinton appointee, and Judge Gregory Phillips, an Obama appointee.

The wind farm has already been constructed, but yesterday's ruling allows the tribe to seek damages from the company in future district court proceedings.

Fredericks Peebles & Morgan LLP attorney Jeffrey Rasmussen, representing the tribe, praised the decision as a victory for tribal property rights.

"The company needed to lease the tribal property just like it leased the non-Indian property it was using," he told E&E News in an email. "This should be a cautionary tale for companies that they need tribal consent. But one that was, we believe, obvious because [it was] based on such basic property law. The surprising aspect was that this company took such enormous risk by building without that lease in place."

A lawyer for Osage Wind did not respond to a request for comment.

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