Liberty's Blog

Fast-track to Offshore Wind Power

Louisianna based Wind Energy Systems Technologies first choice to build the first wind powered electric generation plant off the shore of the United States was in Louisanna, but decided to build 7 miles off the beaches of Galveston. Projects have been bogged down off Cape Cod and Long Island with the application process. W.E.S.T was able to get a lease agreement fairly painlessly and the State of Texas gets a pretty good deal at the same time.

Once construction is complete, the 30-year production phase will begin. The lease royalty structure is designed to encourage early production of energy and will create an entirely new stream of revenue from state-owned, submerged lands.

For the first eight years of production, W.E.S.T. will pay the Land Office a 3.5 percent royalty from the wind energy development’s total production. Years nine through 16 of the 30-year lease will earn the state a 4.5 percent royalty. Years 17 through 30 will earn a 5.5 percent royalty.

The state should earn a minimum of $26.5 million in royalties over the 30-year lease. Like royalties from oil and gas produced on state lands, this money will flow into the state’s Permanent School Fund.

Since taking office in 2003, Patterson has pushed to make Texas a leader in sustainable energy. Already, the Land Office has earned more than $782,000 in royalties from the Delaware Mountains wind farm in West Texas.

“This is important, because while oil and gas have been good for Texas, we need to think long-term and find new ways to put money into the Permanent School Fund,” Patterson said. “Oil and gas won’t last forever.”

The reason this all happened is because of some foresight of Sam Houston.

Other wind energy companies have expressed an interest in Texas, in part due to the unique benefit the state offers in the competition to secure offshore wind development. In 1836, after securing independence from Mexico, Texas claimed the offshore boundaries observed under Spanish, then Mexican rule. Sam Houston, president of the new republic, successfully maintained sovereignty over all submerged lands in the Gulf out to 10.36 miles, or three marine leagues. Texas entered the Union in 1845 with its boundaries intact, and defeated an attempt at federal control of the tidelands in the 1950s.

For this reason, there is only one entity in Texas for an offshore wind developer to deal with — the Texas General Land Office.

Also, development within the 10.36 miles offers proximity to the state’s electrical grid to carry wind-generated power to customers.

Coastal winds also tend to rise during the day when the state’s electrical generating capacity faces peak demand, therefore generating power when it’s most needed. Plus, the gentle slope of the Texas Gulf Coast makes the development of an offshore wind farm easy.

Texas’ natural assets, plus the foresight of its founders, make the Gulf Coast an ideal place to build a wind farm, Patterson said.

“When Texas entered the Union in 1845, we came in on our own terms,” Patterson said. “Because of Sam Houston’s foresight we now have the regulatory authority to move forward with less federal red tape. Who would have thought that the hero of San Jacinto would help bring wind energy to Texas?”

Texas gets to determine what to do with the lease money, not the federal government. Money won't be earned off the coast of Texas to build $223 million bridges to nowhere, but to help fund Texas education.

posted by Liberty @ 6:58 PM