tag:blogger.com,1999:blog-51257437854527497392024-03-14T03:46:38.640-07:00Wind Rights: Wind ResourceThis blog is motivated by the recognized need to address and compensate for the entire resource consumed in in wind lease/easement contracts. Handled fairly and equitably, windfarms can avoid the predictable future litigation over uncompensated resource depletion that continues under the current practice of compensating only for real estate consumed. PLEASE READ OLDER POSTS FOR WIND RIGHTS ISSUES.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5125743785452749739.post-89497763100430195232013-04-09T05:45:00.001-07:002015-04-23T06:29:46.979-07:002015 UpdateI am still here. The information presented is still what I would propose for wind rights in the future. I know some legislators have looked and that a variation or two of the leasing concept has been proposed to no avail. The concept of "pooling" wind (as happens with oil & gas) remains the most fair recognition of how upwind turbines depreciated downwind resource. Unfortunately, using this type of approach for payments has not been supported by wind developers who find it easier to provide 100% of the compensation to the owner of the land upon which the turbine sits. Until AWEA and developers take a more comprehensive approach to resource compensation - wind developers will continue to be plagued by dissension from those whose wind resource has been sullied or diminished without compensation.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-79303324432226703522009-01-12T14:43:00.000-08:002009-01-12T14:53:57.976-08:00Compensating for Wind Rights Within Windfarms<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjasD-13OmpwQBD7WdLPWDK98A688N1UFs__mTHgOCxub94AfQLRvoFxrBUYQRGccRYSWciKc7L0DG9vwEMAYItsWAkSCtwV_sdf1EfjhjrdtItWjpq2_bnwxjRM9X3OEfaZ-dILaW9htXo/s1600-h/Windfarm-Rectangle2009.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 247px; height: 320px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjasD-13OmpwQBD7WdLPWDK98A688N1UFs__mTHgOCxub94AfQLRvoFxrBUYQRGccRYSWciKc7L0DG9vwEMAYItsWAkSCtwV_sdf1EfjhjrdtItWjpq2_bnwxjRM9X3OEfaZ-dILaW9htXo/s320/Windfarm-Rectangle2009.jpg" alt="" id="BLOGGER_PHOTO_ID_5290541778885472194" border="0" /></a>If we use the rectangles, as suggested in the previous post, as our first definition of area for which wind resource rights should be compensated, we also need to recognize that within a given windfarm there may be areas that fall outside the rectangles and that should be compensated. The simple rule should be: if there is any wind resource stranded within the perimeter boundary of a windfarm that could not reasonably be developed because of the existence of the surrounding windfarm, that stranded resource must be compensated for by the interfering windfarm. The perimeter can be defined by applying the 5rd x 10rd rectangles to the outer turbines and simply drawing the lines to the other outer turbines. All land within that is unlikely to be used for wind because of the larger windfarm should be compensated at the same acreage rate as all other land in the windfarm. <br /><br />It is simple and fair.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-37119075822698296632009-01-11T18:58:00.000-08:002009-01-13T12:26:18.440-08:00Wind Pool Areas: Circle v Rectangle<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWQeS7sK-ALnLgmhdE73Lge9R3Q1KGW0W7qSfbYdas8Hll7hoXRFtZw4hU7I9aUtylhxMNNrZWMmMiM7NyuX7fhEXDK4qjfef3GVkOlUUevlqaVWCvvgfBiYnnnktSRTgssc8fKRcToBYS/s1600-h/MultiCircleRectangle2009.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 247px; height: 320px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWQeS7sK-ALnLgmhdE73Lge9R3Q1KGW0W7qSfbYdas8Hll7hoXRFtZw4hU7I9aUtylhxMNNrZWMmMiM7NyuX7fhEXDK4qjfef3GVkOlUUevlqaVWCvvgfBiYnnnktSRTgssc8fKRcToBYS/s320/MultiCircleRectangle2009.jpg" alt="" id="BLOGGER_PHOTO_ID_5290243656422791266" border="0" /></a><br />Greg Brokaw, a horse guy from south central North Dakota, called to discuss circles and rectangles. A discussion was happening down in Spring Lake Township about who and how wind resource rights should be paid. One thought was that every acre within a distance equal to 5 rotor diameters from the tower should be equally compensated. This would therefore be a circle definition to compensated wind rights. Greg, an astute reader of this blog, thought a rectangle was best. He even suggested that rectangle be 5 rotor diameters across and 10 rotor diameters long with the long side pointed into the prevailing winds. I agree with Greg.<br /><br />In determining the correct wind resource pool configuration from which wind resource compensation should be paid, it is important to recognize that typically there are two different prevailing wind directions, one in summer, the other in winter. Often, in the central U.S. these directions are near opposites. Windfarm developers recognize this when they space turbines 4 or 5 rotor diameters apart perpendicular (line running from southwest to northeast) to the prevailing winds and 8x or more apart downwind from the prevailing winds (northwest and south-southeast). Not all directions from a turbine are equal and they are not equally valued by the industry. A rectangle of approximately 5x rotor diameter wide and 10x rotor diameter in length, skewed so that the long side faces the dominant wind direction, better represents wind resource value than a circle. A circle that provides the same compensation equally in all directions of equal length from a tower unfairly discounts those who provide the most valuable resource in order to compensate those providing the least value.<br /><br />In the above sketch, let us assume that each tower is providing $6,000 for resource use and that 25% of that amount or $1,500 is for real estate upon which the tower sits and 75% or $4,500 is for the wind resource. If one uses a 5x rotor diameter circle around the tower to define each wind resource pool eligible for compensation, then each of the 124.23 acres within the circle (using an 80m rotor diameter) is paid $36.22. Why should an acre four times rotor diameter laterally to the Southwest be paid the same as one to the Southeast when the wind hardly ever blows from the Northeast and when another turbine can be placed at the same lateral distance from the first? It makes no sense; however, some believe the circle is simple and therefore should be used. I contend that a rectangle is even more simple to calculate and certainly a better reflection of value.<br /><br />I suggest a good wind resource pool print is the rectangle skewed toward the prevailing wind direction. It does recognize closer placement of turbines laterally to the prevailing winds and it doesn't dilute the pool shares needlessly. A rectangle would for an 80 meter rotor would contain 79.09 acres with each paying $56.90. A rectangle is more fair, pays better and is easier to plot.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-69448489994311575922008-03-03T08:02:00.000-08:002008-03-03T08:40:16.870-08:00Wind Rights - Attorneys & Legal Scholars NeededLicensed attorneys specializing or wishing to specialize in wind rights work from a landowner's perspective or from an academic perspective are welcome to leave comments on this site. In using the comment area, let us know your experience or your interest including state of practice, or academic institution. While learning of those interested in vetting contract language in various states would be useful to our landowner readership, I have a particular interest in hearing from academicians and others who know of landowner wind related litigation in process or contemplated both of a general contract nature and most particularly aimed at protecting against uncompensated wind resource erosion, depreciation or elimination through siting/placement of neighboring turbines. Please provide citations that will allow our readers to access appropriate source materials. I know you are out there and that folk from around the globe are reading. Although, I suspect most of the readership is by landowners some of whom I know fear speaking out on these subjects and/or are contractually bound to silence, we would like to hear from attorneys who are free to speak on these matters.<br /><br />Public policy makers need to realize that it is increasingly common (from what I have seen) to include contract clauses aimed at precluding landowners from speaking to any legislative or regulatory body except with the specific approval of the lessee. Your response may be that such a gagging is unconstitutional and I will respond by asking who will pay the legal bill in testing that assertion? Don't expect landowners to place themselves in a position of defending against multi-billion dollar corporations. And, we have learned that you can't expect broad-membership-based ag organizations to speak out as some of them have relationships with power companies to protect, some have ideological predispositions against regulations, and almost all have internal conflicts of interest among their membership (those who are receiving compensation versus those whose wind resource is diminished without compensation).Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com9tag:blogger.com,1999:blog-5125743785452749739.post-23851011459344366062007-11-11T10:06:00.001-08:002007-12-08T15:51:00.134-08:00100 Year LeasesThat's what was reported to me this last week. Ok, they were really 99 year leases. Ottertail Power offering 100 year leases in Sheridon County, North Dakota. Please send an anonymous copy to: Joe Richardson, Post Office Box 3112, Fargo, North Dakota 58108. I probably have the best collection of leases in North Dakota and always on the lookout for more. I am betting that this lease is one-sided as heck in that Ottertail, or the party offering, is given a 30 day out while the landowner is bound for generations. Hey, if it has a confidentiality clause in it, they would have an opportunity to sue several generations for disclosing the terms of the agreement.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-38038069000443340642007-10-21T20:15:00.000-07:002008-04-02T09:32:22.891-07:00Wind Contract Clause Hall of ShameThese are from actual contracts. The names of the parties are not provided.<br /><br />1. <span style="font-style: italic;">"This grant of easement of the Wind Non-Obstruction Easement expressly includes the right of [Wind Company] to enter on any part of Owner's Property to enforce [Wind Company's] rights."</span> So if you find them sitting in your office going over your email, get 'em a cup of coffee because you gave them the right to enter upon any of your property to fish around in an attempt to enforce what they consider their rights.<br /><br />2. <span style="font-style: italic;">"Payments from Third Parties and for Non-Wind Energy Purposes. [Wind Company] shall pay to Owner ten percent (10%) of any rent received by [Wind Company] from third parties such as telecommunications providers for equipment of the third pary located on or in the Wind Farm Improvements."</span> Um, telecommunications towers pay far more than wind towers. Did you know that you gave them the franchise to lease your land for release to telecommunication company's for only 10% of the proceeds. Good deal, eh?<br /><br />3. <span style="font-style: italic;">"[Wind Company] shall have the right in its sole discretion and at its sole expense, in its name or Owner's name to contest the validity or applicability to the Easement Properties or Wind Farm Improvements of any law, ordinance, statute, order, regulation, property assessment or the like made by any governmental agency or entity. [Wind Company] shall control any such contest and Owner shall cooperate with [Wind Company] in every reasonable way in such contest."</span> "Owner" means the landowner. You just made yourself the tongue of the wind company. Whatever governmental policy they want that could conceivably effect your easement is now sought in your name and you will cooperate "in every reasonable way." Got it! You thought you were just a simple landlord.....ha!<br /><br />4. <span style="font-style: italic;">"Removal of Wind Farm Improvements. Owner shall have no ownership or other interest in any Wind Farm Improvements installed on the Easement Properties, and [Wind Company] shall have the express right, at any time and in its sole discretion, to remove one or more Turbines or other Wind Farm Improvements from the Easement Properties. Owner expressly waives any statutory or common law liens to which Owner migh be entitled. Upon full or partial termination of any of the Easements, [Wind Company] shall remove all physical material pertaining to the Wind Farm Improvements from the affected Easement Properties to a depth of forty-eight inches (48") beneath the soil surface and restore the area formerly occupied by the Wind Farm Improvements to substantially the same physical condition that existed immediately before the construction of the Wind Farm Improvements (the 'Removal Obligations'). </span><span style="color: rgb(255, 0, 0);"><span style="font-style: italic;">If [Wind Company] fails to complete its Removal Obligations within twelve (12) months of full or partial termination of the applicable Easement, Owner may do so, in which case [Wind Company] shall reimburse Owner for reasonable costs of fulfilling [Wind Company's] Removal Obligations incurred by Owner, less any salvage value reasonably recoverable by Owner."</span><span style="color: rgb(0, 0, 0);"> If the company ever went bankrupt they would not be around to haggle with you about what might be both "reasonable cost" or "salvage value reasonably recoverable." Of course if they are in bankruptcy, you have no ownership interest in the equipment and it could take you quite some time to unravel who actually has the authority to allow you to remove the equipment. In any case, it is unlikely that they would make the effort to clean up the mess when the contract specifically states that they can leave it to you and haggle over what you spent (or received in salvage) later. I have heard the arguments that the steel alone is worth the cost of cleaning up. Ya, but you do not own it and who knows who might come after you for that salvage value? Then I have heard that the pad will be reusable by another turbine. Likely that the turbines twenty years in the future will be as different as the current turbines are to those that were placed in the early eighties. There is no reason to believe the foundation pads will be usable, that you will have a power contract to place anything on them, etc.<br /><br />5. <span style="font-style: italic;">"Exclusivity. Owner agree that [Wind Company] shall have the exclusive right to convert all of the wind resources of the Owner's Property."</span> Unless the definition for "Owners Property" is carefully specified, signing an agreement including this clause gives the company the rights over all your property.<br /><br />6. <span style="font-style: italic;">"[Wind Company's] Right to Terminate. [Wind Company] shall have the right to terminate this agreement as to all or any part of the Easement Properties, or as to any Turbine or other Wind Farm Improvement, at any time effective upon thirty (30) days' written notice to Owner.</span><br /><br /><span style="font-style: italic;"> Owner's Right to Terminate. Except as specifically allowed by this Section 12, this agreement and the Easements shall not by terminable by Owner under any circumsatances."</span><br /><br />Under the contract [Wind Company] has the right to terminate upon 30 day notice and the payments upon such termination cease. The landowner is locked in for the term which, in this contract, is 20 years. Newer contracts are going for 99 year terms. That is, if they are like this one, they lock the landowner in for 99 years and the wind company for 30 days.<br /><br />7. <span style="font-style: italic;">"Confidentiality. Owner shall not disclose to others (except Owner's family, legal counsel, respective Mortgagees and Assignees, and financial advisors who recognize and agree to preserve and maintain the confidentiality of such information) the terms of this agreement and ifnormation about [Wind Company's] methods, power production, or availability of Wind Farm Improvements unless the information is already in the public domain. Owner also agrees not to use such information for Owner's own benefit or permit its use by others for their benefit or to the detriment of [Wind Company]."</span><br /><br />I will close with the confidentiality clause as it is truly a doozy and warrants more writing. For instance, in order to prove that your wife was told of the need to maintain confidentiality and agreed to it, I would suggest you use a Non-disclosure Agreement prior to telling your wife the terms of the agreement. Should your wife leak information to her friend and begin a chain, you might be liable and will need to prove that you told your wife of the need for confidentiality. So too with your lawyer, banker, etc. You may not list the value or otherwise inform prospective purchasers of your land of the value you are receiving for your wind under this clause. When I asked a representative of this company about that, he said that you could contact the company and let them know who it is you wish to tell and they would not unreasonably withhold permission to inform them of the value. This clause drips liability like few others.<br /><br />You will not get this kind of information from your general farm organization....<br /></span></span>Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-2621951958445865292007-08-02T15:43:00.001-07:002007-08-02T15:57:55.784-07:00Resource Based Payment View<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHecVi8e5t4u_jQdpR81-aoo8XyryLjwK5anuFd-3nGMFXi45p_HgV1tzzi6AxHKR869wVlk09q8Vq9ABOA_JxaLMc0y3A3sHBq_qOzWGSmmifn71SvqFq1wAwjjilYXYPjdXUsPwHiDcq/s1600-h/PrevBiased100mPayment.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHecVi8e5t4u_jQdpR81-aoo8XyryLjwK5anuFd-3nGMFXi45p_HgV1tzzi6AxHKR869wVlk09q8Vq9ABOA_JxaLMc0y3A3sHBq_qOzWGSmmifn71SvqFq1wAwjjilYXYPjdXUsPwHiDcq/s320/PrevBiased100mPayment.jpg" alt="" id="BLOGGER_PHOTO_ID_5094237811831764386" border="0" /></a><br />This shows how much each quarter section is paid using a resource model. In this model, using a 1.5 MW capacity turbine with 100 meter rotor diameter, the amount available for leasing is $5,000 annually (with escalators). <br /><br />Twenty-five percent of the $5,000 goes to the owner of the land upon which the turbine tower and road sits (2 or fewer acres). The remaining 75% goes into the wind resource pool to be shared by all whose wind resource is likely to be impacted. <br /><br />We have 305.7 acres above which the wind is disturbed or consumed by the turbine. Thus, each acre receives approximately $12.27. I did some rounding in the figures provided.<br /><br />Landowner of the NE quarter of Section 1 has 19.6 acres used and is entitled, therefore, to 6.4% of the wind pool or about $240 per annum. NW quarter of Section 2 has 9.4 acres receiving $116 per annum; SE quarter of Section 1 has 82 acres of wind resource used and receives an annual payment of $1,005; SW quarter of Section 2 has the real estate for the wind turbine and collects that $1,250 annually along with his/her 16.5% share of the wind pool for another $619 or $1,869 annually; NE quarter of Section 3 has 16.6 acres taken for 5.4% of the wind pool paying $203 annually; NW quarter of Section 4 has 116 acres taken and receives 38% of the wind pool for $1,425 annually; and, last SW quarter of Section 4 has 11.7 acres receiving about 3.8% of the wind pool or $143 annually. <br /><br />Everybody is fairly paid.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-36291818569056418542007-07-19T11:46:00.001-07:002007-07-24T08:07:06.562-07:00Wind Resource Compensation<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6pCuXiKEa6LHs-z4lMwk3NoFuZRb0lgpIZkuW82zFwWYCk3m2sAg7PT0ruyyomW5g2pvufyRTSh6w-4d9GXKt6ekswFnO82OaJYGQ0efwC2jJFQHwaCfPh4iIcjfu7Xhc_owD2vKlXUHo/s1600-h/PrevBiasedComp100m.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6pCuXiKEa6LHs-z4lMwk3NoFuZRb0lgpIZkuW82zFwWYCk3m2sAg7PT0ruyyomW5g2pvufyRTSh6w-4d9GXKt6ekswFnO82OaJYGQ0efwC2jJFQHwaCfPh4iIcjfu7Xhc_owD2vKlXUHo/s320/PrevBiasedComp100m.jpg" alt="" id="BLOGGER_PHOTO_ID_5089003703341093874" border="0" /></a><br /><br />The graphic to the left lays a foundation for discussion over how an equitable resource-based compensation formula could be used. Note: you may click the image for a larger view.<br /><br />This is using a 100 meter rotor diameter ("rd") turbine. The arrows show the most pronounced direction of the wind and the dashed lines reflect a 45 degree angle that encompasses most of the directional variation in the two seasons, summer and winter (Red River Valley). The wake extends 10 times the rotor diameter; however, the small erosion of wind resource between 8 and 10 times the distance from the rotor might arguably allow for a distance of 8x rotor diameter.<br /><br />The green curved lines to the side are 4x rotor diameter reflecting the disturbed wind lateral to the turbine and therefore the diminishment of prospects for having wind turbine development within that distance.<br /><br />The total acres covered are: 305.7. The wind turbine itself takes at most 2 acres of land out of agricultural production. Furthermore, a farmer will have that 2 acre obstacle to plow and plant around.<br /><br />A common lease/easement compensation for a 1.5 megawatt wind turbine (by those who negotiate) is $5,000 per annum. As it now stands, only the owner of the real estate upon which the turbine is located is compensated. As you can see in the graphic, this means that the owner of the NW quarter in Section 4 loses his wind resource asset without compensation.<br /><br />Oil Comparison<br /><br />The practice of compensating only for where the turbine is located is quite like my allowing and being fully compensated for an oil well located on my property that sucks the oil out from under the neighbors land without compensating them - something that existing regulations do not allow. In grabbing all of the oil under the neighbors property, I might argue as some have, that I was lucky enough to be the one who received the well and that is just how life goes. The "I'm lucky and you are not" argument has been used. It amounts to "because I am lucky, I have the right to take your wind resource without compensation."<br /><br />Toward a Solution<br /><br />We should view the $5,000 per annum as an amount that could compensate for ALL of the assets consumed. I propose, for the sake of discussion, that all who contribute resources consumed by a turbine (or at least parties equaling something above 75%) negotiate to do a deal. Just as is the case with oil, if one minor party refuses to negotiate or come to terms that the others want to accept, that party is compelled.<br /><br />I suggest that 25% of the amount provided for, in this case, a 1.5 MW capacity wind turbine be for the real estate (land upon which the turbine is located) and 75% be for the wind resource.<br /><br />Therefore, the wind turbine site owner receives $1,250 per annum for the real estate resource consumed. However, the site owner also gets his share of the wind resource consumed. The 305.7 acre wind field owners receive collectively $3,750 or $12.27 per acre. In the case illustrated, the owner of the land upon which the turbine sits also has about 56.2 acres of wind resource consumed and would therefore receive an additional $689.57 per annum for wind resource. The owner of the NW quarter of Section 4 whose wind resource is almost entirely consumed, would have about 116 acres of wind resource taken, allowing for a compensation of $1,423.32 per annum. Now, given that this last party is being compensated rather fairly for the turbine placed on the neighbors land, there should be absolutely no gripe. Yes the NW/Section 4 party is unlikely to host a turbine on their land, but then, they don't have to plow and seed around the road and pad for the turbine either. Fair deal.?<br /><br />See next post.Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com3tag:blogger.com,1999:blog-5125743785452749739.post-77906505344879853202007-07-17T09:28:00.001-07:002007-07-24T08:10:04.428-07:00Landowner Losers: Wind Resource<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjG4MaiS5SG2T_iHsY3ElaAYQoFW_sIYSLxK4Esi2yUrRonRsOCOJzllueIYMpCtAh20cVXxwoaWy011WruwB0EhYYpGRUbrkiJixOu1YH0nGkWKIHd6WuF-5GLg4oSYqipve3zTTmJ5J1n/s1600-h/MutliT100mLosers.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjG4MaiS5SG2T_iHsY3ElaAYQoFW_sIYSLxK4Esi2yUrRonRsOCOJzllueIYMpCtAh20cVXxwoaWy011WruwB0EhYYpGRUbrkiJixOu1YH0nGkWKIHd6WuF-5GLg4oSYqipve3zTTmJ5J1n/s320/MutliT100mLosers.jpg" alt="" id="BLOGGER_PHOTO_ID_5088203692667769810" border="0" /></a><br /><span style="font-size:85%;">Note: same scale as previous graphic, this is four sections (numbered 1 - 4) of land (grid), divided into 4 quarters each (labeled NW, NE, SW, SE). The little round circles are wind turbines using 100 meter rotors and the dashed lines are the wake of disturbed wind (extending 10x rotor diameter) behind the turbines when the wind is blowing from the two seasonal prevailing directions in the Red River Valley near Fargo.<br /><br /><span style="font-size:100%;"><span style="font-size:130%;">Currently wind resource lease/easement compensation is entirely provided to the owner of the land beneath the turbine. However, once wind hits a turbine its power potential is diminished until it has time to repair to its previous strength. Sailors call this turbulence behind objects (like a sail) "dirty air." It is also referred to as a "wind shadow" or "wind wake."<br /><br />The placement of a turbine upwind (in either of the seasonal prevailing wind configurations) can materially effect the value of the wind resource downwind. It is possible that a neighbors wind resource rights can be rendered worthless by the turbulence caused by a neighboring upwind turbine. Put more bluntly, the ability to develop your wind resource may be eliminated entirely without compensation by the placement of a neighboring upwind wind turbine.<br /><br />In the above graphic layout of four sections of land, the yellow quarter-sections are parcels that will have their wind resource effectively stripped, without compensation, by a turbine on another quarter section. The darker, peach colored rectangles are 1/8th sections that would lose their wind resource without compensation.<br /><br />We must move to resource-consumption-based compensation models. This would value the wind resource consumed - meaning the wind disruption caused to neighbors as well as the real estate the turbine is sitting on and the need for a farmer to navigate tractors and equipment around that turbine.<br /><br />I will, for discussion sake, present thoughts on how such compensation might be structured in the next postings. I welcome and encourage commentary that is aimed at bringing more equity into the equation.<br /></span></span></span>Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com0tag:blogger.com,1999:blog-5125743785452749739.post-52292950526306565902007-07-17T09:23:00.000-07:002007-07-17T10:13:01.465-07:00Wind Poaching: Existing Lease Practices<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYN7lad53C9-kuu21FXoHKEOwZElIuWwnJx4MVfKDieeaEn1YfFDYC16e2jFlC0Ssd3rVSho6DoV_jAsaMLNIMoQ1IPo4kIiilg9CoCElziNHbm_xrI1YQhZRG8EMkM1Fxiw-nzCO95R0N/s1600-h/MutliTurb100m(75%25).jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYN7lad53C9-kuu21FXoHKEOwZElIuWwnJx4MVfKDieeaEn1YfFDYC16e2jFlC0Ssd3rVSho6DoV_jAsaMLNIMoQ1IPo4kIiilg9CoCElziNHbm_xrI1YQhZRG8EMkM1Fxiw-nzCO95R0N/s320/MutliTurb100m(75%25).jpg" alt="" id="BLOGGER_PHOTO_ID_5088203035537773506" border="0" /></a><br />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.<br /><br />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.<br /><br />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.<br /><br />More coming on this topic in the next couple posts......Joe Richardsonhttp://www.blogger.com/profile/17457142505365690791noreply@blogger.com1