Texas Awards First Competitive Offshore Wind Leases

October 3, 2007

The Texas General Land Office on October 2 awarded the first four competitively bid leases for offshore wind power in the United States. All the leases were awarded to Louisiana-based Wind Energy Systems Technology (W.E.S.T., LLC) and allow construction to begin immediately on meteorological testing towers on each of the four tracts.

The research and development stage will last approximately four years and the production term will be 30 years for each lease. Following the research phase, W.E.S.T., LLC plans to develop wind farms on each of the four tracts. If winds are favorable, the company plans to build wind farms that will produce a minimum of 250 to 300 megawatts per lease.

The four offshore tracts were offered for wind development as part of a regular oil and gas lease sale. The tracts are located off the shores of Jefferson County, northeast of Houston; Calhoun County, southeast of Houston; Brazoria County, south of Houston; and Cameron County, on the very southern tip of Texas. The tracts range in size from 12,240 to 23,040 acres, and total 73,098 acres.

W.E.S.T., LLC will now begin paying $91,000 a year into the state's Permanent School Fund for the right to develop the wind farms. Once the wind farms are operational, W.E.S.T. will pay the fund a minimum of $132 million over the 30-year life of the leases, discounted for the present value of the leases. The company's actual dollar commitment to the fund is $258 million.

The Permanent School Fund was established by the Texas Legislature in 1854 expressly for the benefit of Texas public schools. The state Constitution of 1876 stipulated that certain lands and all proceeds from those lands should also be part of the fund. The State of Texas has rights to submerged lands three marine leagues (10.35 miles) out from its shores into the Gulf of Mexico. All lands within that boundary belong to the fund.

Jerry Patterson, Commissioner of the Texas General Land Office, said of the new leases, "The Texas Wind Rush is on, and the pioneers are staking their claims. And wherever there are pioneers, the settlers soon follow."

For more information, see the Texas General Land Office October 2 press release (PDF 128 KB). Download Adobe Reader.

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