Major Wind Energy Project Delayed by Failure to Obtain Required Permit

January 8, 2010
Client Alert Newsletter Forecast 2010

Although there is wide support for projects that implement cost effective renewable sources of energy, such projects are still subject to limitations when it comes to endangered species. In Animal Welfare Institute v. Beech Ridge Energy, plaintiffs initiated a citizen suit claim under the federal Endangered Species Act ("ESA"), seeking to protect the interests of the Indiana Bat, which they claim was threatened by the Beech Ridge Energy wind project. The Beech Ridge Energy wind project is an industrial wind energy facility in Greenbrier County, West Virginia, that will cost $300 million to build but would produce electricity "equivalent to the amount of electricity consumed by approximately 50,000 West Virginia households in a typical year." "As noted at the outset [of the opinion], this is a case about bats, wind turbines, and two federal policies, one favoring the protection of endangered species, and the other encouraging development of renewable energy resources … ".

Based on a range of surveys, studies and expert opinions concerning the sensitivities, habitat and behavioral patterns of the Indiana Bat, the Court found that continuing with the project as planned would create a "take" of the Indiana Bat -- meaning this endangered species would with virtual certainty be imminently harmed, wounded or killed during construction and operation of 122 wind turbines stretching along more than twenty miles of the Appalachian Ridge. "Section 9 of the ESA, the cornerstone of the Act, makes it unlawful for any person to 'take any [endangered] species within the United States …'. The ESA defines the term 'take' as 'to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or attempt to engage in any such conduct'." Taking of an endangered species can result in civil and criminal penalties. As the Court explained, "to provide a safe harbor from these penalties" the ESA includes "an incidental take permit ("ITP") process that allows a person or other entity to obtain a permit to lawfully take an endangered species, without fear of incurring civil and criminal penalties, 'if such taking is incidental to, and not the purpose of, the carrying out of an otherwise lawful activity'." This process "reduce[s] the conflicts between species threatened with extinction and economic development activities" and "encourage[s] 'creative partnerships' between public and private sectors."

Although the Court lauded and encouraged efforts to develop wind energy projects and noted that "some wind energy companies have obtained or are in the process of pursing ITPs," it found that Beech Ridge Energy had violated the ESA by failing to first obtain an ITP. Therefore, the Court reasoned, the wind power project must be put on hold until the developer obtains an ITP to protect the Indiana Bat. This would "allow their project to proceed in harmony with the goal of avoidance of harm to endangered species," because the U.S. Fish and Wildlife Service can attach enforceable conditions intended to lessen the impact on the threatened species through the permitting process. In this way, "the two vital federal policies at issue in this case are not necessarily in conflict."

After the ruling, the parties reached a settlement which set forth additional conditions for project construction and operation thereby allowing the project to proceed while Beech Ridge's application for an ITP undergoes consideration. This matter, however, highlights the need to balance the environmental need and economic motivation to pursue alternative, renewable energy projects with the requirement of doing so in a manner that will protect wildlife, particularly threatened and endangered species. The ramifications of this ruling will likely be felt throughout the alternative and renewable energy industry by heightening the sensitivity of developers to conduct the appropriate studies and analysis of impacts on all manner of wildlife, and to obtain the required permits before commencing construction to avoid mid-project set-backs and frustrations.