The Texas landscape is changing both physically and legally, especially in West Texas. Wind turbines appear on previously barren horizons, ushering in a new revenue source for landowners and new questions for attorneys. Wind leases differ from mineral leases in significant ways. For example, signing bonuses are less for wind leases, terms are of different length, royalty payments are not protected by statute and surface rights are not automatic. This paper highlights important aspects related to leasing land for wind energy development.

This resolution by the Gillespie County Commissioners Court to oppose industrial wind energy in the county is very similar to the resolutions adopted by the Gillespie County Economic Development Commission and the City of Fredericksburg City Council.

This resolution was adopted by the City of Fredericksburg in Gillespie County Texas.

The Gillespie County (TX) economic development commission has adopted the below resolution regarding industrial wind energy development in the county and surrounding Texas Hill Country area.

Although Texas leads the nation in wind development, you may be surprised to learn that Texas law concerning the wind is basically non-existent. Similarly, there is little to no statutory regulation of the industry. So far, wind farms have been located in remote rural settings; however, as wind turbine technology advances and the land and wind speed necessary for the efficient development of wind energy decreases (and becomes even more profitable), it will not be long before the fight over wind finds itself deeply entrenched in Texas courts. ...While water law and the law governing the rights of wild animals may help resolve the issue of wind ownership, the question remains as to whether the right to develop the wind is a right that is severable from the land. In looking for guidance, the state courts may choose to rely on an area of the law with which they are quite familiar: oil and gas law. It is well established in Texas that the mineral estate (i.e., oil, gas and other minerals) may be conveyed and reserved apart from the surface. Texas courts have also held that certain substances which are historically considered part of the surface estate (such as near surface lignite and gravel, as examples) may be severed from the surface estate.

This working paper is made available by the Resource and Environmental economics and Policy Analysis (REPA) Research Group at the University of Victoria. REPA working papers have not been peer reviewed and contain preliminary research findings. They shall not be cited without the expressed written consent of the author(s).

Editor's Note: The authors’ conclusion regarding ‘effective capacity’, i.e. the measure of a generator’s contribution to system reliability that is tied to meeting peak loads, is that it “is difficult to generalize, as it is a highly site-specific quantity determined by the correlation between wind resource and load” and that ‘values range from 26 % to 0% of rated capacity.” This conclusion is based, in part, on a 2003 study by the California Energy Commission that estimated that three wind farm aggregates- Altamont, San Gorgonio and Tehachpi, which collectively represent 75% of California’s deployed wind capacity- had relative capacity credits of 26.0%, 23.9% and 22.0% respectively. It is noteworthy that during California’s Summer ’06 energy crunch, as has been widely publicized in the press, wind power produced at 254.6 MW (10.2% of wind’s rated capacity of 2,500MW) at the time of peak demand (on July 24th) and over the preceding seven days (July 17-23) produced at 89.4 to 113.0 MW, averaging only 99.1 MW at the time of peak demand or just 4% of rated capacity.