March 26, 2015

Kingfisher wind project pauses some construction as Texas oil company questions locations

By Paul Monies | The Oklahoman | Published: March 25, 2015 |

KINGFISHER – Apex Clean Energy has agreed to pause construction on part of its Kingfisher wind farm until more details can be shared with a Texas oil company concerned about the project affecting one of its top areas of exploration.

Newfield Exploration Mid-Continent Inc. pulled its request for an emergency temporary restraining order after attorneys for the company worked out a 15-day “stand-down” with Apex attorneys Tuesday afternoon at the Kingfisher County Courthouse.

A hearing on the order had been scheduled before Kingfisher County Associate District Judge Robert Davis. More than 20 members of a local group opposed to the wind farm, the Oklahoma Wind Action Association, showed up to watch the hearing Tuesday.

Newfield spokeswoman Cindy Hassler said the pause will give technical teams from both companies time to explain their plans.

“Hopefully the 15 days will provide us with the opportunity to analyze data and then have further discussions with the Kingfisher project,” Hassler said.

Tom Wolfe, an attorney with the Phillips Murrah law firm who represented Apex, said the 15-day stand-down covered five of the sections where Newfield was concerned about its oil and gas infrastructure being affected by underground electricity collection cables, lines needed to connect the turbines.

In return for the stand-down, Wolfe said Newfield agreed to drop its claim that Apex didn’t provide adequate notice of construction plans under a 2011 state law requiring notice to owners of mineral rights of new wind or solar projects.

Big stakes on both sides

Legal filings show just how much is at stake in the skirmish between Newfield and Apex, which started construction last week on the $452 million, 298-megawatt Kingfisher Wind project in northern Canadian County and southern Kingfisher County.

Newfield has been aggressively building its position in what it calls the STACK play, a portion of the Anadarko Basin. The company said it spent $790 million in the STACK, including $300 million to acquire leases in 210,000 acres.

Newfield said it secured oil and gas leases in 49 of the 55 sections encompassed at the surface by the Kingfisher Wind project, which has 149 wind turbine locations and more than 100 miles of underground electricity collector cables.

Both Apex and Newfield cited the economic impacts of their respective developments. Apex said the Kingfisher Wind project would generate $1.5 million per year in new tax revenue for county government and schools and provide $2 million per year in lease payments to participating landowners.

Newfield said its production activities in the STACK are expected to provide more than $330 million in royalties from 2015 to 2017. The company has a field office in Okarche with 16 employees.

Oklahoma law gives preference to mineral owners for access to the surface. In the early days of state wind development, conflicts with oil and gas developers were more frequent.

State lawmakers recognized the conflicts and in 2011 put in place two laws, the Oklahoma Wind Energy Development Act and the Exploration Rights Act.

The Wind Energy Development Act established notice requirements for surrounding landowners and a framework to decommission wind farms. The Exploration Rights Act requires notice to owners of mineral rights of new wind or solar projects that could affect access to the surface for oil and gas development.

In court filings, Newfield said it worried about the health and safety of its workers if oil and gas gathering lines came into contact with underground cables planned for the wind farm.

“The stand-down agreement and the information that was finally provided by Apex was crucial to ensure that Newfield could continue to operate in a safe and reasonable manner by managing risks effectively and meeting the expectations of the community and its stakeholders,” Travis Brown, an attorney for Newfield with the Mahaffey and Gore law firm, said in a statement Wednesday.

Apex said it risked losing up to $900,000 if the court granted Newfield’s request for a temporary restraining order. The company already has construction crews scheduled and any prolonged delays could jeopardize state and federal tax credits for wind generation.

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