Gavel to Gavel: What is mining? - Journal Record

LeAnne Burnett

Mineral rights beneath Osage County were reserved for the Osage Nation (it’s common to sever mineral estates from surface rights).

No “mining or work of any nature” is permitted upon the Osage mineral estate until the U.S. secretary of the interior approves a lease. In 2014, the United States filed suit alleging a wind energy project interfered with Osage mineral rights because the project failed to obtain a lease before excavating for turbine foundations. The district court disagreed, holding that mining necessarily involved the sale of minerals. The court said the government’s interpretation of mining was so broad as to “render the term meaningless.”

On appeal, the case presented the question: Does excavation associated with installing wind turbines constitute “mining?” The wind farm’s “large-scale mineral excavation work to install wind turbines” included removing rock, sediment and soil, creating large holes for cement turbine foundations, sorting the extracted rock and using it for backfill and support.

The 10th Circuit reversed the district court’s opinion. Although surface construction for a wind farm was a “far cry from a typical mining operation,” the project “developed” the removed rock in a way that would stabilize the turbines, thereby exploiting the minerals themselves. According to the 10th Circuit, such extraction and use of excavated materials constitutes mineral development, requiring a mining lease. The turbine bases were built without leases, so the 10th Circuit remanded the case to determine damages. The decision isn’t final, and the case will not return to the district court until the mandate issues.

The 10th Circuit denied a rehearing but granted the project’s motion to stay the mandate pending filing a petition for certiorari to the U.S. Supreme Court. Despite opposition to the stay, the 10th Circuit refused to issue mandate, stating, “…this case presents several substantial issues of federal law upon which there is a substantial possibility that the Supreme Court would decide to review by certiorari…”

It appears that simply removing dirt, without further manipulation, would not constitute mining, but digging, sorting, crushing, using and backfilling may constitute “mineral development,” thereby requiring a federally approved lease. This decision adds another factor wind and other commercial developers analyze and address and leaves surface owners to ponder what they do own.

LeAnne Burnett is a Crowe & Dunlevy attorney and co-chair of the firm’s Energy, Environment & Natural Resources Practice Group.

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