A federal judge has denied the Osage Nation’s attempt to prevent the construction of a 94-turbine wind farm west of Pawhuska, finding that the tribe’s claim that the development would interfere with its mineral rights was based on speculation.
U.S. District Judge Gregory Frizzell ruled Thursday at the conclusion of a two-day trial in Tulsa that the mere possibility that a dispute may arise in the future between the wind farm and those who will be drilling for oil and gas on the same Osage County land was not enough to justify an injunction that would have stopped the project.
Frizzell noted that Orion Exploration has plans in 2012 to drill on only one site on the extreme western edge of the wind farm territory, which he said was not sufficient to establish “unreasonable interference” with the tribe’s mineral rights.
John C. McBeath, a vice president of the Austin, Texas-based petroleum engineering firm Platt, Sparks & Associates, had testified earlier Thursday that even if conflicts develop between the wind farm and oil production, they can be worked out through directional drilling or moving a well site.
Frizzell agreed with that assessment, adding that Orion could file a lawsuit in the future if some unsolvable conflict does develop.
The Osage Nation, through the Osage Minerals Council, filed the lawsuit on Oct. 18. It noted that the tribe owns all the minerals located “in and under” Osage County and claimed that construction of the wind turbines would interfere with future oil and natural gas production, which provides income for eligible Osage citizens.
McBeath, called to the stand by defendants Wind Capital Group and Osage Wind, testified Thursday that the potential problems outlined by the tribe are largely speculative.
He said oil companies will still have “reasonable access” to do what they need to do and will still be able to drill profitable wells, even if they incur modest additional costs caused by working around the wind farm.
In the oil-drilling business, “if you’re not prepared for some amount of waiting, you shouldn’t be drilling wells,” McBeath said.
McBeath illustrated for the court examples of wind farms that co-exist with drilling elsewhere in the country.
Tom Green, senior manager of project development for Wind Capital Group, said Frizzell’s decision is a “green light” for the project and that developers will now “analyze where we’re at and put together a new schedule.”
Developers have claimed that they need to break ground very soon for the wind farm to be completed by the end of 2012 and thus qualify for an essential tax credit.
Wind Capital Group Public Affairs Director Jan Christian Andersen said the St. Louis-based organization was pleased with the judge’s decision and had been optimistic that it would prevail.
Andersen said the organization is anticipating having a presence in Osage County for a “very, very long time” and is looking forward to having a cordial relationship with the Osage Nation.
Green testified that the wind farm can be built in harmony with the future drilling efforts of Orion Exploration or any other company. He added that an agreement has already been reached with another oil company to move one of the wind turbines 85 feet north of where it was originally planned.
“Our intention is to work with anybody,” he said.
According to the tribe’s trial brief, Orion Exploration has agreed with the Osage Nation to drill at least 18 horizontal oil and gas wells by early November 2014, with the first five wells to be completed by Nov. 4, 2012.
A document filed by the defense this week states that the tribe’s agreement with Orion involves more than 19,000 acres, with less than 2,500 of that total overlapping with the wind farm.
Orion Exploration Vice President Daniel B. “Skip” Honeyman III testified Wednesday that while the first two anticipated drilling sites lie outside the wind farm area, the third one is within its boundaries.
Osage Principal Chief John D. Red Eagle released a statement after Thursday’s ruling, saying, “We are truly disappointed with the decision of the court to rule in favor of Wind Capital Group and allow industrial wind development in Osage County. However, we are exploring all our legal options.”
Red Eagle continued, “It is our firm belief that the legal standing of the Osage Mineral Estate is paramount and fully protected under federal law.
“Should this ruling stand, it would likely have a significant impact on the individual incomes of those who receive oil and gas royalties in Osage County, and it will have an adverse impact on the tribe’s ability to develop its mineral estate.”
He added, “it is very likely the targeted area for wind development would intrude upon sacred Osage burial sites, which poses a major threat to the tribe’s culture.”
There was no testimony about burial sites during the trial.
Original Print Headline: Attempt to stop wind farm is denied