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Perhaps the most important right granted in a solar development agreement is the right of the solar developer to use the surface of the property to evaluate, construct, and operate the solar farm.  But how can the solar developer ensure that its right to use the surface of the property is not encumbered by or inferior to the rights of others?  Or, more specifically, how can the solar developer ensure that a mineral estate owner will not be able to locate a well in the middle of its solar farm?  This issue is at the forefront of the minds of the renewables industry and was the subject of a recent Texas Court of Appeals decision.  As renewable energy projects continue to multiply, clashes between solar developers and mineral interest owners will increase as well.

To address competing surface uses, many states have adopted the accommodation doctrine—a legal doctrine that is designed to govern competing uses of land, giving consideration to the needs of the mineral owner to use the surface in a reasonable manner to explore for and produce minerals.  Prior to the development of the accommodation doctrine, it was thought—perhaps inappropriately—that the mineral estate was superior to the surface estate and had carried with it the unfettered right to use the surface.  The accommodation doctrine was designed to curtail this harsh result. In 1971 the Texas Supreme Court in Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971) held:

where there is an existing use by the surface owner which would otherwise be precluded or impaired, and where under the established practices in the industry there are alternatives available to the [mineral] lessee whereby the minerals can be recovered, the rules of reasonable usage of the surface may require the adoption of an alternative by the [mineral] lessee.[1]

Until recently, the accommodation doctrine was typically applied to resolve disputes between the surface owner and a mineral lessee.  Recently, however, in Lyle v. Midway Solar, LLC,[2] the El Paso Court of Appeals analyzed the application of the accommodation doctrine to resolve a conflict between a mineral interest owner and a solar developer. Midway Solar, LLC (“Midway”) acquired a solar lease from the surface owner and constructed a solar facility covering approximately 70% of the surface.[3] After the solar facility was constructed, the Lyles (owners of a fractional interest in the mineral estate) filed suit against Midway and the surface owner alleging, among other things, breach of contract and trespass.[4] The Lyles alleged that solar panels and associated transmission lines on the property impaired their ability to drill for any oil and gas which might lie underneath the surface.[5]

As a threshold issue, the Lyles argued that the accommodation doctrine does not apply here and that the parties’ rights are governed by the 1948 deed which reserved the mineral interest owned by the Lyles.[6] The Court ultimately disagreed with the Lyles and concluded that the 1948 deed does not preclude application of the accommodation doctrine.[7]

Once it was determined that the accommodation doctrine would apply, the Court framed the “centerpiece of the dispute” as whether Midway must accommodate the Lyles’ potential use of the property before the Lyles actually seek to use it. It was undisputed that the Lyles had not actively sought to develop their minerals and had no plans to develop their minerals at the time of the dispute.[8] Given that the Lyles were not actively exercising their right to develop their mineral estate (nor had plans to do so), the Court reasoned that there was nothing to accommodate. If the Lyles exercised their right to develop their minerals, then Midway “must yield to the degree mandated by the application of the accommodation doctrine.”[9] But until then Midway owed no duty to the Lyles with respect to the surface usage and, as a result, any trespass or breach of contract claim was premature until such time as the Lyles sought to develop their mineral estate.

Ultimately, the Lyles decision may leave more questions than answers. It is clear that Texas courts will apply the accommodation doctrine to resolve competing surface uses between mineral interest owners and solar developers, but the question remains: had the Lyles had plans to exercise their mineral rights, what would the outcome have been? Solar developers need assurance that they will not be forced to deconstruct a portion of a solar facility to accommodate mineral development sometime in the future.  Conversely, mineral developers must have protections in place to ensure that they are able to reasonably exercise their rights to explore for and produce minerals.

Although Louisiana has not adopted the accommodation doctrine by name, Louisiana Mineral Code article 11 was drafted with the same purpose in mind.  Mineral Code article 11 states that “[t]he owner of land burdened by a mineral right or rights and the owner of a mineral right must exercise their respective rights with reasonable regard for those of the other.” A careful read of Mineral Code article 11 may cause one to question whether the article provides protections to solar developers at all.  After all, the article appears to apply to the “owner of land burdened by a mineral right” and the “owner of a mineral right.” Typically, the solar developer simply leases the land and would not be considered an “owner of land.”  This issue has not yet been decided, but one would expect, either through a liberal application of the correlative rights doctrine expressed in Mineral Code article 11 or through the formal adoption of the accommodation doctrine, that a Louisiana court would recognize a solar developer’s right to a reasonable use of the surface.  Nevertheless, these are the types of issues that are likely to arise as the renewable energy industry continues to grow and expand into Louisiana.

[1] Getty Oil Co. v. Jones, 470 S.W.2d 618, 622 (Tex. 1971).

[2] 618 S.W.3d 857 (Tex. App. Dec. 30, 2020).

[3] Id. at 863.

[4] Id. at 864-65.

[5] Id. at 862.

[6] Id. at 870.

[7] Id. at 871.

[8] Id. at 872.

[9] Id. at 874.

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