Oil, Gas, Wind and Agriculture:
Can’t We All Just Get Along?
Dr. Shannon L. Ferrell
Assistant Professor
Oklahoma State University
Department of Agricultural Economics
Our topics today...
• Surface Use and Damage Considerations
• Water Use
• Fluids Application
• Wind Energy Agreements
• Oil, Gas, Wind, and Agriculture
BEFORE geophysical testing
• Document water quality and quantity with
certified test
• “Before and after” pictures (literally and
figuratively)
• Inform company of areas to be avoided
• Everything in writing!
660 feet
300 feet
Surface use agreements
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Consultation for siting
Setbacks
Attach map
Fencing requirements
Plow-depth restrictions
Specify double-ditching
Considerations for
an application agreement
• Full legal names of all parties
• Sample analyses
• Map of application area
– Setbacks
– Restricted areas
– Access points
Top 10 Things
Your Stakeholders Should Know About:
Surface Damages
1. Know the surface
damage laws.
2. Know what factors are
considered in damage
calculations.
3. Maintain a (good)
relationship with mineral
owners.
4. Consider drafting a
surface use agreement.
5. Consider drafting an
exploration agreement.
6. Document the condition of
the property before entry.
7. Keep good farm records.
8. Don’t forget restoration
issues.
9. Brainstorm non-monetary
compensation forms.
10. Brainstorm what you have
that may be of value to the
company.
Water, water, everywhere…
and we’re using it all for hydrofracking.
• Allowed uses?
• Restrictions to on-site uses
• Timing and source restrictions
Considerations for
fluid application agreements
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Who’s the applicator?
“Material breaches”
Notice – where, when, and how
Indemnity
Payment terms
Tenant terms
Crop insurance
• Impacts of fluid application
– Read your policy documents carefully
– Consult provider BEFORE agreeing to
application
– Explicitly address crop insurance and fluid
application in your written lease
The Top 5 Questions to Ask
about Wind Leases
1. How will your current uses of the property be
affected by the project?
2. How long will agreement last?
3. What are your obligations under the
agreement?
4. How will you be compensated?
5. What happens when the project ends?
How will your current uses of the property
be affected by the project?
• American Wind
Energy Association
estimates total area
of ≈ 60 acres/MW of
capacity.
• ≈ 3 acres (5%) to
actual physical
occupation of land.
• ≈57 acres (97%) to
exclusion area for
windflow
preservation.
¼ section
(160 acres)
Image from Google Earth
Field Impacts
How long will
the agreement last?
• Agreements typically run from 30 – 99
years (150!) BUT
– Leases have to be carefully reviewed for
renewal clauses
• Is renewal automatic?
• Will notice of renewal be provided?
• Is there any opportunity to re-open
lease terms at renewals?
What are your obligations
under the agreement?
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Indemnity?
Property taxes?
Subordination / property interests
Compliance with government programs (CRP,
EQIP, WHIP)?
How will you be compensated?
• What are your payments for easements?
– One-time, up-front, or periodic?
– What unit is used?
• What are your lease payments?
– Per turbine, per megawatt, or a “royalty?”
– Definitions matter!
• What is included?
• What is excluded?
• What can be deducted?
– How will accuracy be verified?
What happens when
the project ends?
• After project term is
completed, will the
agreement provide
for:
– disassembly and
removal of equipment
– restoration of grades
and soils
– replacing vegetation?
• What assurances are
in place?
Oil and Wind
• Who has to moderate between
the oil company and the wind
company?
– What does the agreement say?
• Exploration Rights Act of 2011
– Confirms right of mineral owner to
reasonable use of surface
– Developer must provide notice of
construction to oil and gas
operators
– Developer must publish notice of
construction in local newspapers
860 feet
330 feet
430 feet
280 feet
140 feet
570 feet
125 feet
THANKS!!!
Shannon L. Ferrell
Assistant Professor, Agricultural Law
Oklahoma State University
532 Agricultural Hall
Stillwater, OK 74078
E-mail: shannon.l.ferrell@okstate.edu