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DuVivier on Wind Rights Severance

By Lawrence Solum

K.K. DuVivier (University of Denver Sturm College of Law) has posted Animal, Vegetable, Mineral - Wind? The Severed Wind Power Rights Conundrum on SSRN. Here is the abstract:

U.S. wind power capacity increased fifty percent in 2008, making wind one of the fastest growing energy sources. Wind has several advantages over conventional energy fuels: it is renewable, does not emit pollutants, and does not require scarce water resources to process the raw product or to generate electricity.

Yet wind power?s rapid growth is creating its own crisis. Thousands of landowners across the country have severed their ?wind rights,? splitting wind ownership apart from surface ownership. However, wind power development requires extensive, and perpetual, surface disturbance. As surface owners are the parties most impacted, taking them out of the equation seriously complicates surface access and damage negotiations.

Furthermore, when landowners retain control over both the mineral and wind rights, those landowners can serve important roles as mediators in disputes between competing developer interests. Landowners who receive royalties from both mineral and wind development have an incentive to see both enterprises coexist. This incentive is eliminated when mineral and wind rights are severed and the owners of these separate estates seek only to maximize their own distinct interests.

Commentators have supported the concept of wind severance by comparing wind to minerals. But are these commentators asking the right question? Yes, wind probably can be severed. The more important issue is whether policy makers seeking to promote mineral development and to protect farmers and ranchers should allow it to be severed. Although only a handful of states have examined wind ownership issues, a few have chosen to prohibit wind severance completely.

This paper explores the evolution of severed mineral rights and illustrates that historical and policy rationales concomitant for mineral severance do not apply in the wind context. In addition, it surveys and provides recommendations on how different states have, and may in future, approach the wind severance issue.

Full post as published by Legal Theory Blog on August 05, 2009 (boomark / email).