September 30, 2012
Oregon

Obama blocks Butter Creek wind farm construction

By ANNA WILLARD | East Oregonian | September 28, 2012 | www.eastoregonian.com

Citing threats to national security, President Barack Obama issued an executive order Friday blocking construction on the Butter Creek Wind Project, south of Hermiston near the Boardman Bombing Range.

The Ralls Corp., a Chinese company that owns the project, was ordered to stop all operations at the site July 25 by the Committee on Foreign Investments in the United States, according to the order obtained through federal court documents. The order cited risks to the United States through the sale of the wind farms from Terna Energy – a U.S. holding corporation – to the Ralls Corporation.

This is the first time in 22 years a president has blocked such a foreign business deal, the Associated Press reported.

Ralls is owned by Dawei Duan and Jialing Wu, both Chinese nationals and executives of the Sany Group, based in China, according to federal court documents.

The wind farm sites are all within or near restricted airspace, according to a U.S. Treasury Department statement, and the airspace is used by the U.S. Navy for low-altitude, electronic-attack training. The planes fly as low as 200 feet and nearly 300 miles per hour at the bombing range.

President Obama stated in the executive order that there is credible evidence that leads him to believe that Ralls Corp. might take action that threatens national security. According to the order, Ralls’ ownership of the project is prohibited and the company must “divest all interests” in the project.

“The President’s decision is specific to this transaction and is not a precedent with regard to any other foreign direct investment from China or any other country,” according to the treasury department.

The administration would not say what risks the wind farm purchases presented. The Treasury Department said CFIUS made its recommendation to Obama after receiving an analysis of the potential threats from the Office of the Director of National Intelligence.

The project was a 20-turbine project in collaboration with four landowners on Kent Madison’s property. Five of the proposed turbines in the project were re-sited in June due to flight safety concerns from the Navy.

The Ralls Corp. issued a statement Friday denying that the project posed a national security threat.

“We regret President Obama’s order today prohibiting a jobs-creating wind farm project in Oregon,” said Tim Xia, Ralls’ legal counsel, in a statement. “The project poses no national security threat whatsoever, and the President’s order offers no explanation otherwise.”

The company’s original complaint filed Sept. 12 stated the committee exceeded its statutory authority by prohibiting the action and regulating foreign trade nor did the committee provide an explanation.

Joel McElvain, U.S. Department of Justice attorney declined to comment on the case.

The first committee order signed by Aimen N. Mir, CFIUS staff chair, also banned the company from accessing the project site located on Madison’s property.

A second order was submitted Aug. 2 stating the previous restrictions and banning the sale or transfer of Sany items or the sale of projects to a third party unless anything installed at the site was removed and the committee approved of the buyer.

The committee on foreign investments is a multi-agency body chaired by the U.S. Secretary of the Treasury, which reviews transactions that could result in the control of a U.S. business by a foreign person, according to documents filed Sept. 12 in the U.S. District Court for the District of Columbia. The committee works to determine the effect of those transactions on the national security of the United States.

“We’re hoping for different turbines and a different owner,” Madison said. One driver to get this project done was a tax incentive, but those credits expire Dec. 31 and renewal of those tax credits is not a sure thing.

“From another standpoint this would’ve generated some revenue because we would’ve paid property taxes,” he said, “so we’re all losers there.”