Obama Blocks Wind Farm Sale To Chinese: Security Or Politics?

Whether there was a national security risk posed by a pair of big-time Chinese executives owning a cluster of tiny wind farms under development near a Navy weapons training facility in northeastern Oregon is difficult to say – but it probably wasn’t hard for the man seeking reelection to see the political risks.

President Obama on Friday moved to swiftly dispense with a case that mixed China, renewable energy, trade and defense into a giant, complex ball of trouble; he ordered Ralls Corporation, owned by the chief financial officer and the vice president at the large but not state-owned Chinese manufacturing conglomerate Sany Group, to divest itself of the wind power projects.

ralls wind farm china

The Navy’s restricted air space, and a disputed wind farm site (image via U.S. Navy)

This is the first time a president has used his power in such a fashion since President George Bush – the first one – stopped the sale of Mamco Manufacturing to a Chinese agency in 1990.

In an executive order, Obama said “there is credible evidence” that led him to believe that Ralls “might take action that threatens to impair the national security of the United States,” but he gave no specifics.

The president stepped in after the Committee on Foreign Investment in the United States (CFIUS) had raised red flags about the Ralls purchase, this past spring, of the projects, which consisted then of everything that comes before wind turbines actually go up at a site: land rights, permits, easements, interconnection agreements, a power purchase agreement (with PacificCorp), etc.

CFIUS is a panel headed by Treasury Secretary Timothy Geithner and consisting of the heads of a range of federal departments, Homeland Security, Energy, Justice, State, Treasury and Defense among them. By statute [PDF], the panel can review foreign acquisitions of U.S.-based businesses to ensure the transactions pose no threat to national security.

The Oregon wind farms – four of them, each with five 2-megawatt turbines, adding up to 40 MW of generating capacity – had been under development in Morrow and Umatilla counties near the Naval Weapons Systems Training Facility Boardman, and one of them was in the facility’s restricted airspace, called R-5701, on its east side.

This region of Oregon and Washington state around the Columbia River, a couple of hours or so east of Portland by car, is thick with wind farms. In fact, the massive 845-MW Shepherds Flat wind farm that went into full operation just a week ago borders the Boardman Navy test area on the west side, with some of its 334 turbines running right up to the edge of the restricted air space, if not into it.

The Navy has acknowledged it does unmanned aerial systems operations training at Boardman, and a Navy letter [PDF] to the Oregon Public Utility Commission mentioned that R-5701 is the “only restricted area in the Western U.S. in which EA-6.8 Prowler and EA-18G Growler fighter jets based at Naval Air Station (NAS) Whidbey Island (Wash.) can complete Low Level Tactical Training and Surface-to-Air Counter Tactics maneuvers.” The Navy said such maneuvers are conducted “to within 200 feet above ground level.” Turbines towers are often 80 to 100 meters tall, with the spinning blade tips reaching much higher than that.

Court and Oregon documents [PDF] indicate Ralls worked with the Navy to move the site of one of the wind farms 1.5 miles – from the middle of the Navy’s restricted airspace to inside the southern edge. According to the Navy, until 2009 it had been able to count on the Federal Aviation Administration to keep wind farm developers out of its hair. However, “(s)tarting in 2009,” the Navy said, “the FAA determined the issuance of a Notice of Presumed Hazard for proposed construction within a restricted area was not appropriate and started issuing a Determination of No Hazard for proposed construction within R-5701.”

The Navy, with little leverage to force the wind farm completely out of its space, supported this move in a letter to Oregon regulators. Nonetheless, CFIUS ordered a halt to work on the projects, called High Plateau, Mule Hollow and Pine City, in addition to Lower Ridge, the one that Ralls had shifted to try to satisfy the Navy. (Together Ralls has referred to the wind farms as the Butter Creek projects, which aren’t to be confused with Butter Creek Power, a separate 4.95-megawatt Oregon wind farm that began operation in 2009.)

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.