Chinese-backed wind project sparks Texas border brawl

Source: By Edward Klump, E&E News reporter • Posted: Thursday, August 27, 2020

A plan to generate wind power near the Texas-Mexico border is becoming a geopolitical flashpoint as national security and military training join concerns about wildlife and tourism.

At issue: A Chinese-backed project called Blue Hills Wind, which could bring more than 40 turbines to Val Verde County, Texas. The proposal’s future is in doubt as the Trump administration ramps up criticism of both renewable energy and China.

Blue Hills is drawing heat from wide-ranging opponents, including politicians like Sen. Ted Cruz (R-Texas) and Rep. Will Hurd (R-Texas) as well as landowners and conservationists. Even the Sierra Club, a strong supporter of renewable energy, doesn’t favor a wind farm at the current site. GH America Energy LLC, which is pursuing the project, said its plan would add to the clean energy investment in Texas.

“With so much private land in Texas, we would urge the company to look for other better locations for its wind project,” Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club, said in a statement.

Texas remains the leader of installed U.S. wind capacity, and wind trailed only natural gas as a source of electricity in the state’s main power market through the first seven months of 2020. But challenges to emerging projects and transmission lines are apparent amid worries about costs, siting and security. At the same time, Blue Hills adds to tension between the United States and China over issues such as civil rights in Hong Kong, the Trump administration’s decision to close a Chinese consulate in Houston and the future of the TikTok social media app.

Much of the focus on Blue Hills centers on Laughlin Air Force Base, which helps pilots learn to fly military aircraft. While some wind turbines are already in the area, there’s worry among some public officials that training routes could be disrupted by a slew of new ones. A February letter to federal officials from Val Verde County Judge Lewis Owens and Mayor Bruno Lozano of Del Rio, Texas, suggested the turbines could have tip heights about 499 to 700 feet above ground level.

“Both the impact to U.S. Air Force’s mission and national security concerns are worthy conversations by all parties involved,” they wrote in the letter, obtained by E&E News. “We believe that this project and future projects of a similar nature will result in unacceptable risk to national security of the United States.”

GH America Energy responded to questions from E&E News with written comments from Stephen Lindsey, vice president of government and regulatory affairs. He said the company “has and continues to follow the applicable regulatory review process for onshore wind turbine development projects.” Lindsey said a business decision was made to invest in Texas given its renewable energy potential and the “long-term stability” of the U.S. business environment.

GH America Energy is based in Texas, Lindsey said, and is an indirect subsidiary of a company whose controlling shareholder is Xinjiang Guanghui Industry Investment (Group) Co. Ltd. Sun Guangxin, who appears on Forbeslist of billionaires, is chairman of Xinjiang Guanghui Industry Investment.

A related entity called Brazos Highland Properties LP owns about 100,000 acres of ranch properties in Val Verde County, according to Lindsey. That includes about 15,400 acres leased to GH America Energy that could be used for Blue Hills.

The Blue Hills proposal includes the potential for about 254 megawatts of wind energy, based on a document from the Electric Reliability Council of Texas, the state’s main grid operator. Lindsey said there are plans for 46 turbine locations, with five alternative locations that could be used. He said a federal application was submitted that could allow up to 700-foot tip heights and enable changes related to design requirements over time.

“Originally, we proposed 73 turbine locations, however following review with the Laughlin command staff, we revised the layout to approximately 46 locations in order to address concerns related to flight training routes,” Lindsey said, adding, “The current project proposal eliminates building wind turbines within certain areas of the property to avoid any conflict with an established flight training route.”

Construction could start in 2023, or perhaps sooner. One wild card is how the project might be positioned to qualify for federal tax credits. GH America Energy also could sell the development rights.

Lindsey said the U.S. government reviewed an earlier deal that led to the creation of a sister company called GHA Barnett LLC, which produces natural gas from the Barnett Shale in North Texas.

In any case, criticism continues. Cruz, Hurd and Sen. John Cornyn (R-Texas) publicized a letter to Treasury Secretary Steven Mnuchin last month to ask for a classified briefing related to the project. The three members of Congress expressed concern about possible effects on the Laughlin base.

“This installation houses the training grounds for our world class Air Force pilots, many of whom are future F-35 and B-21 pilots,” they said in the letter. “There is concern that a project with ties to the Chinese Communist Party in such close proximity to the area where these pilots are training could threaten our competitive edge and our national security.”

Wind resistance

The Devils River area is a region many environmentalists, fishermen and hunters want protected.

In a statement, Carter Smith, executive director of the Texas Parks and Wildlife Department, said the region has some of the most “irreplaceable landscapes in the state.”

The river features “long, deep pools; wide shallow areas; and relatively deep, turbulent rapids,” according to a Texas Parks and Wildlife website. Plants near the river include pecan and live oak trees, the site says, and the area is known for birds as well as fish such as gar and shiner.

“The Devils River is a place many consider to be the last pristine river in Texas,” the Devils River Conservancy declares on its website.

And the region is home to indigenous rock art, which the Texas State Historical Association says can date back thousands of years.

It’s also true that wind is big business in Texas. The state has over 30,000 megawatts of installed wind capacity, according to the American Wind Energy Association.

Advocates say wind energy is good for consumers and the environment. The Institute for Energy Economics and Financial Analysis, which promotes the use of “sustainable” energy, recently outlined how corporate demand and bipartisan political support are helping to boost wind in Texas and nationally.

But tension surrounding wind energy remains, and a protracted fight over Blue Hills could hurt the wind industry’s reputation in the state.

A group called the Energy Alliance recently issued a report that argued subsidies for wind and solar increase electricity costs in Texas.

Separately, Ohio-based American Electric Power has seen pushback on its wind plans for customers in the state, including regulators’ denial of a project that is going ahead with support from regulators in Oklahoma, Arkansas and Louisiana.

In 2017, Texas state Sen. Donna Campbell (R) sponsored legislation to restrict the eligibility of wind projects for state incentives if they’re within a certain distance of military aviation installations. That bill passed.

“I can assure you that as a member of the Texas Senate I will do everything possible to further protect Laughlin Air Force Base and the Devils River wildlife region,” Campbell said in a recent statement about Blue Hills.

Daniel Hoffman, who contributes commentary for The Washington Times and Fox News, is among those raising alarm about the wind proposal.

But Dave Belote, a Virginia-based consultant who is working as an adviser to GH America Energy, told E&E News that if the Air Force and Department of Defense sign a document saying they’re good with the project, that will mean any military issues have been resolved.

Belote is a former commander of an Air Force base in Nevada. He worked to set up what’s now called the Military Aviation and Installation Assurance Siting Clearinghouse, which reviews energy and transmission projects that could affect military readiness and training.

“I trust all aspects of the permitting system,” Belote said. “I will trust the answer that comes out of the clearinghouse process in regards to [the project’s] impact on military and national security.”

Cruz proposed an amendment to a federal defense authorization bill to bolster the review of wind projects planned near military installations if they’re backed by entities tied to China or several other countries. But it’s not clear that such language will make it into law.

The amendment would provide consideration of national security interests and operations at bases when “a foreign adversary” tries to acquire land near critical infrastructure, according to Jessica Skaggs, a spokeswoman for Cruz.

Broadly, Skaggs warned that China has shown “a willingness to invest billions of dollars in specific, targeted economic initiatives through private companies to expand the global reach of their security and espionage capabilities.”

Hurd, in a recent opinion piece in the Houston Chronicle, argued that allowing an adversary to connect to the power grid could allow it to perform “a false data injection attack,” or make the system think certain activity is happening. Hurd worried that the grid could be “tricked” into a situation that would bring part of it down.

And he said owners of Blue Hills would “gain access to security industry alerts, private industry insights and national security threat assessments” as a member of the power community.

“This could create the ultimate fox in the hen-house scenario, where we [are] giving an adversary our playbook and telling them which play we are running and when,” Hurd wrote.

‘Don’t blow it’

Texas encouraged an expansion of wind capacity earlier this century through a roughly $7 billion program known as CREZ, which stands for Competitive Renewable Energy Zones. That ended, but it enabled a build-out of infrastructure that helps move wind power from West Texas to load centers to the east.

Now, there’s concern that enough long-distance capacity isn’t being built as renewable energy continues to expand.

“Communities across Texas are seeking wind and solar investments, but the lack of transmission is stopping those projects,” said President Jeff Clark of the Advanced Power Alliance, which promotes renewables and energy storage. “A stronger transmission and … infrastructure policy would put projects where they’re desperately wanted and not where they are not.”

Wayne Walker, a former wind energy developer who partially owns a family ranch adjacent to the Blue Hills site, said he doesn’t think there’s adequate transmission to go forward with the project at the moment. Walker said transmission also would be a concern if solar capacity were proposed in the same area, though he sees a need to fight climate change.

“My big concern is that these guys have a big checkbook and they’re just not paying attention to traditional business sort of thresholds on whether to build this thing or not,” said Walker, who lives in Oklahoma and is involved in endangered species mitigation.

He visits the family ranch in Texas at times during the year and described efforts to increase wildlife conservation through partnerships over two decades. Hunting is also a key part of business at the ranch.

Walker sketched out a possible future where the Blue Hills project gets built and isn’t economic, and its ownership sells it or walks away — meaning people could have to look at it for 30 or 40 years while it doesn’t operate or underperforms.

But Lindsey said GH America Energy “identified Val Verde County as having robust wind and solar energy resources and available interconnection capacity.” He said the project would provide “clean, low cost energy,” create construction and operation jobs, and generate tax revenue.

Regardless, there are potential obstacles for Blue Hills.

One is the Committee on Foreign Investment in the United States. Foreign Policy reported in June that an analysis from CFIUS “found that the wind farm does not currently pose a national security concern.” But that may have been preliminary, and further review may be ongoing.

Another is the Military Aviation and Installation Assurance Siting Clearinghouse. The Federal Aviation Administration also has a review role.

Then there’s the need for an interconnection agreement with a wires company that operates in the region managed by the Electric Reliability Council of Texas.

Lindsey said GH America Energy is working with the Department of Defense and Air Force on a draft mitigation agreement. Lindsey said the Blue Hills site is more than 60 miles from Laughlin Air Force Base, but it is in a military area of operation.

“The Department of Defense is aware of the project and is working to identify any potential risks to national security,” Russell Goemaere, a department spokesman, said via email. “The Military Aviation and Installation Assurance Siting Clearinghouse considers all potential impacts to military operations, testing and training in its review and response.”

Lindsey noted that an existing wind farm is closer to the base than the Blue Hills site. The earlier development is on land partially owned by an entity related to GH America Energy’s ownership. GH America Energy was not involved in creating that wind project.

Reed of the Sierra Club said his organization favors developing wind and solar as part of a transition toward a clean energy economy. But, in terms of the Blue Hills proposal, he noted “significant concern and community opposition as it would be located a stone’s throw from the Devils River, an important recreation, economic and ecological resource.”

Lindsey said GH America Energy has worked to understand concerns, including looking at how to possibly reduce light impact at night.

“We welcome the opportunity for open and transparent engagement with any government agency, political leaders or other stakeholder about their concerns related to our project development and planning,” he said.

Randy Nunns, president of the Devils River Conservancy, said red lights at night would detract from stargazing, while turbines could also affect bats and birds and hunting businesses that attract travelers. He’d like to see GH America Energy pursue the sort of conservation easements found elsewhere in the area. Potential non-energy uses for the land include hunting and livestock, he said.

Nunns, who has recreational property on the Devils River and lives in San Antonio, said his organization isn’t opposed to wind power altogether. But he suggested that wind turbines go to locations that want them or to previously developed areas. The conservancy’s websiteexamines the subject as well.

“We’ve got a pretty clear position out there that we’re not against renewable energy,” Nunns said. “We just say don’t blow it by putting it in the wrong place.”