Petroleum Landmen Making the Transition
To become more diversified and marketable, today’s petroleum landman should be familiar with its role in Alternative Energy land practices and the associated contracts. The old saying, “there’s nothing new under the sun” is being proved wrong. Another song said, “the answer my friend is blowing in the wind.” This creates a great opportunity for Petroleum Landmen and others to enter an emerging resurgence of Alternative Energy.
As of 2020, we are witnessing a historic moment for oil and for the energy industry as the world moves more and more toward a clean energy transition. Even before COVID-19 disrupted the global economy and international industries, there was already a lot of talk about peak oil coming very soon and renewable energies such as solar and wind power have been getting cheaper and more efficient by the year, outgrowing subsidies, and becoming competitive with some fossil fuels.
COVID-19 has only fast-tracked this energy transition as world leaders rush to create green stimulus packages for post-pandemic economic recovery at the urging of such experts as the World Economic Forum, which has advocated for a “new energy order” and a ”great reset.” In fact, the tide has turned on emissions-heavy fossil fuels to the extent that Big Oil’s most profitable industry is no longer oil, and in Europe supermajor oil companies are looking to reinvest and rebrand themselves as “Big Energy.” This should be a wake-up call for petroleum landmen.
Recent predictions have been made by the IEA that “Oil and Gas sectors will bear the brunt of this declining oil demand, with 2040 production cuts by nearly 50% when calculated by present value.” So, how can you fit in?
The Diversified Landman
Like with being a Petroleum Landman or Oil and Gas Lease Agent, the more you know about wind and solar operational issues and their associated legal issues, the better you’ll be at furthering your options and your career. Granted the oil and gas industry isn’t going anywhere soon, but the recent alternative energy push could affect your career at some point in time, so now is the time to get prepared.
There’s an old saying, “No well is drilled, bought or sold without a Landman being involved.” The same goes for a ‘wind farm’ or ‘solar farm’. A Landman’s job is always on the move and expanding to fit the latest technology, such as ‘horizontal drilling’ versus ‘vertical drilling’ projects and now wind and solar energy.
According to an article in the Los Angeles Times, Jan. 8, 2020, for the next 10 years, we will likely witness an impressive increase in solar energy, not only due to specific renewable energy goals, but also as a result of generational change that is shifting how the world works.
If a Petroleum Landman is skilled in the following areas, he or she should have little trouble in adapting to the tasks surrounding the Alternative Energy Industry and working with companies who are actively developing wind and solar projects.
- Title and Title Curative Issues
- Oil and Gas Regulatory Issues
- Lease Acquisitions/Agreements
- Surface Damage Issues
- Environmental Issues
In addition, just like in Oil and Gas, the Wind and Solar Energy Industry needs well rounded Landmen for such things as:
- Understanding Environmental Issues (Wetlands, Endangered Species, Indian Artifacts, etc)
- Right-of-Way and Easement Acquisitions
- Negotiating and Obtaining Wind and solar energy lease and Options
- Settling Surface Damage and Use Issues
- Understanding Governmental and State Regulatory Issues (Eminent Domain, etc)
- Understanding oil and gas leases (Mineral Estate vs Surface Land Estate)
- Understanding Oil and Gas Pooling Provisions (State Regulations or provisions in the oil and gas lease)
Even though you may be skilled in title search and reporting, surface title reports can be performed by a Title Company, such as Stewart Title, that can provide title insurance and that will stand behind their report. Think of it as buying a home where the Title Company does the reporting as to the chain of title on the home.
However, your skills in understanding 1) title curative issues, 2) heirship issues, 3) deeds, 4) oil and gas leases, 5) oil and gas regulatory issues, such as spacing units, will help you to perform title curative and possibly due diligence as to the validity of the oil and gas lease that may be present on the land.
As a Landman, you must know, if you plan to work in this field, that both wind and solar operations require state, local, and federal compliance, leases to build and operate the production facilities, and research prior to the development of the project. Even though there are no Spacing or Compulsory Pooling provisions in wind and solar projects, the placement of wind turbines and solar panels can affect drilling operations, especially in lands that are subject to these provisions such as in lands that are subject to the Oklahoma Forced Pooling statutes.
Dominate Estate Doctrine
In addition, despite what you might think, there are several issues surrounding the ‘Dominate Estate Doctrine’ and who has rights over the other – minerals vs surface rights.
For expanded education in some very important and related topics for Landmen working in the Alternative Energy Sector, we recommend you take the following courses, which complement this course extremely well.
- Title Curative Essentials
- Wills and Heirship Issues Essentials
- Right-of-Way Essentials
- Held by Production Essentials
- Concepts of the Oil and Gas Lease
- Surface Use - Damage Issues
To learn more about how to become diversified in the Alternative Energy industry, visit our website at www.InstituteOfEnergyManagement.com. View our course catalog and click on Alternative Land Practices (5-part Series).