Who Controls the Mineral Rights to Hawaiian Home Lands?

·By Sophie Cocke

National Park Service

At stake are millions in potential royalties from geothermal development.

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Sophie Cocke

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Geothermal Renaissance

Protests by Native Hawaiian activists curtailed the development of geothermal energy on the Big Island in the 1970s and 1980s. Cultural objections were raised about drilling into volcanoes like Kilauea and Maunaloa, and the projects were considered harmful to Madame Pele, the fire goddess. Safety concerns followed two explosions and intensified opposition.

But local sentiment has changed as opponents have recognized there may be a way to develop projects that benefit local communities in a culturally sensitive way. Former opponents, such as well-known Native Hawaiian leader Mililani Trask, who led past protests, are now pushing for the development of the resource.

Puna Geothermal Venture, the sole geothermal developer in the state, hopes to expand its operations on the Big Island, and is also exploring the viability of tapping into the resource on Ulupalakua Ranch on Maui. The project is on land owned by the Lyman Estate but the state is getting the royalty money because it owns the mineral rights.

The company, which is owned by Ormat Technologies, based in Reno, Nevada, pays annual royalties to the state. From 2001 to 2009, payments totaled $12.5 million, according to a recent report to the Legislature. Thirty percent is distributed to the County of Hawaii and 20 percent to the Office of Hawaiian Affairs.

Puna Geothermal Venture currently produces about 30 megawatts of geothermal energy, or 20 percent of the Big Island's energy needs, and is awaiting state approval of a contract to add another 8 megawatts.

Innovations Development Group, a local company led by Native Hawaiians, and advised by Trask, is developing 50 megawatts of geothermal energy on Native Maori land in New Zealand. Touting what the group calls a native-to-native business model, the company says it can develop Hawaii's resources in a culturally sensitive manner.

Other companies include Moku Power, which has a new technology its hoping to develop, and Avalor Energy Corporation, which has teamed with the University of Hawaii and Lawrence Berkeley National Laboratory to explore geothermal resources in Hawaii under a $980,000 grant.

Pele's Royalties

While ownership of mineral rights has been the subject of legal action on the mainland, where contracts entered into a century ago did not anticipate lucrative resources that might lay below the earth's surface, it’s a relatively new issue in Hawaii, according to Guy Kaulukukui, deputy of the Department of Land and Natural Resources.

“The state does not have many minerals and the issue with regard to DHHL developing mineral resources has not been raised as far as I know,” wrote Kaulukukui by email. “The rights were not transferred to DHHL because the state had reserved that right on all state land, of which DHHL (in effect) is a subdivision.”

But local attorneys say state ownership could be a subject of dispute.

"The Hawaii state government has a history of ignoring bits in the law that they find inconvenient," said Carl Christensen, who served as senior counsel to the U.S. Senate Committee on Indian Affairs and was an attorney with the Native Hawaiian Legal Corporation.

In the absence of any proof as to state ownership of DHHL's mineral rights, he said he remained "totally unconvinced" about such an assertion.

"Any pre-Statehood conveyances to DHHL under the authority of Congress and the Hawaiian Homes Commission Act would be governed by federal law, not the law of the Territory," he said by email. "And the general rule in federal law is that a conveyance of public land by grant or patent does carry with it the mineral rights unless they are specifically reserved to the government."

"I know of no policy reason why Congress should have wanted to cripple DHHL by giving it more limited rights in its lands than that granted by it to other grantees, so I think the state is engaging in a case of serious wishful thinking," he said.

Christensen said the state needs to cite specific legal authority to DHHL lands.

Kaulukukui said that DLNR was operating under the opinion of the attorney general's office on the matter.

Josh Wisch, special assistant to Attorney General David Louie, told Civil Beat that it's his agency's position that the federal government gave the land to the state.

"The state does have title to those lands and has ownership of mineral rights," Wisch said.

He said the office was taking a closer look into who has "control over those mineral rights or who would be able to administer them."

Rights to geothermal resources are further complicated because the resource could spread for miles underground, crossing property lines, according to Kenneth Kupchak, a Honolulu attorney who has worked on geothermal issues for decades.

“It’s a tough discussion to solve in isolation without looking at the whole resource,” said Kupchak. “Assuming someone brings this legislation at this time, everyone’s discussion points are going to come up and it’s going to be quite complex.”

DISCUSSION: *Do you think that the Department of Hawaiian Home Lands owns the mineral rights to its lands? Join the conversation.