Tuesday, July 17, 2007

Wind Poaching: Existing Lease Practices

The graphic to the left is to scale. The grid in the background represents four sections of land or 16 quarter-sections. You are looking down at the land. The little round circles are turbines - the size of 100 meter rotor diameters. The angled dashed lines extending up and down, ending at the red borders or caps, show the length of disturbed wind - wake turbulence (10x rotor diameter) - or distance it takes for the wind to repair its flow to full velocity behind a turbine. You will note that they extend to the North-North-West (NNW) and to the South-South-East (SSE) of each turbine. That is because there are two prevailing wind directions in most places and here in the Red River Valley they tend to be out of the NNW in winter and out of the SSE in summer. The amount of time the wind comes from other directions is not worth noting. You will note that most windfarms have turbines stretching out on an angle to reflect these prevailing wind directions. They will place the turbines for more apart upwind and downwind from each other than perpendicular to the prevailing winds.

Currently, leases offered to landowners are only for where the turbine tower is actually placed - turbine real estate. I know of no developer who writes a lease based on consumption of the wind resource. By "consumption of wind resource" I mean the downwind turbulence until the wind repairs to full speed. Look in the bottom right four squares or four quarter-sections. Note that the SW quarter-section of Section 4 is unlikely to ever realize wind development on their land because of the coverage of turbulence from the turbines placed on the NW quarter-section. The SW quarter-section landowner loses all his ability to develop wind without compensation unless the landowner of the SW quarter-section is the same as the landowner of the NW quarter in Section 4. This is true of several landowners in this layout. Of the 16 quarter sections in this graphic whose wind resource is effected, only 7 quarter-sections will receive payment.

This practice is quite like the old practice in oil fields of paying only the landowner where the well head is located for oil extracted from a large pool under several landowner's property. It is neither right nor fair. The taking of someone's wind resource without compensation might be actionable. Unfortunately developers and the American Wind Energy Association (AWEA) know this and know that litigation in the wind fields will not be good for the industry. If litigation is to be avoided, we must change the wind lease terms to reflect the total resource consumed not just the real estate.

More coming on this topic in the next couple posts......

1 comment:

Z said...

I would like to see a redacted lease. I am curious to see what/if there are any standard terms. Not so much concerned about the numbers, just the broad terms. Do you know of any resources where I could find something like this?