In the ever-evolving energy landscape, oil pump jacks, towering wind turbines, and solar farms are becoming unlikely neighbors. Across Texas and other states, drilling operations are increasingly coexisting with renewable energy projects. But with these new neighbors come new challenges – chief among them, how to balance competing land uses without costly disputes or stalled development. Enter the world of Co-Development Agreements—the legal and business tools that turn potential conflict into collaboration. These types of agreements are paving the way for traditional and renewable energy producers to work together, ensuring both sides benefit from the land’s full potential.
Historically, there’s always been some tension between the mineral owners and the surface estate, and the Accommodation Doctrine serves as a fundamental legal principle in balancing the rights of the two. When a mineral estate is severed from the surface estate, the mineral estate holds the dominant interest. This means they have the right to make “reasonable use” of the land to facilitate mineral extraction. However, that right isn’t unlimited.
The Texas Supreme Court first addressed this issue in Getty Oil Co. v. Jones (1971) ruling that mineral owners must accommodate existing surface uses if reasonable alternatives exist. In this case, Getty Oil’s pump jacks interfered with a farmer’s irrigation system, and the court required the company to modify its operations to minimize disruption. Later Texas courts, such as Merriman v. XTO Energy (2013), further clarified that if viable alternatives allow mineral production to coexist with surface use, the mineral estate must adopt those alternatives. In short, even though the mineral estate is dominant over the surface estate, this dominance is not absolute.
Over the years, the Accommodation Doctrine has expanded into other states such as New Mexico, Colorado, Wyoming, and more. However, the rise of large-scale renewable energy projects has added a modern twist to these long-standing legal principles.
Renewables and the Accommodation Doctrine
In one of the first cases to address the interplay between solar energy and mineral development, a Texas Court of Appeals examined the applicability of the Accommodation Doctrine in the renewable energy space. In Lyle v. Midway Solar, 618 S.W.3d 857 (Tex. App. 2020), mineral owners challenged a solar development that occupied 70% of the surface, arguing it obstructed their future drilling operations. The Solar Lease contained designated tracts for future drilling, but these were conceived without any geological assessment or input from the mineral owners. The court ruled that since the mineral owners had no immediate development plans, the Accommodation Doctrine did not apply—there was nothing to accommodate yet.
One interesting detail is that the Lyles (mineral owners) likely only had standing to pursue legal action on this matter because – unlike the other mineral owners on the lease – Midway never secured a surface waiver from them. Thus, Lyle v. Midway stands for two points: (1) mineral owners cant rely on legal doctrines alone to protect their rights, and (2) proactive planning and well-drafted agreements are the best way to ensure both traditional operators and renewable developers can conduct their business smoothly and efficiently.
Cooperation Over Conflict: What are Co-Development Agreements?
Rather than leaving matters to the courts, where litigation is costly and unpredictable, it is becoming a best practice for energy companies to turn to Co-Development Agreements. These types of agreements (sometimes referred to as “Accommodation Agreements” or “Non-Interference Agreements”) establish clear rights and obligations between parties to prevent disputes before they arise.
Co-Development Agreements may include:
1. Surface Waivers to allow one party exclusive rights to designated areas. Solar developers often obtain these from mineral owners, effectively overriding the dominant estate theory. In other words, this is a waiver of the mineral owner’s right to disrupt solar operations.
2. Power Purchase Agreements (“PPAs”) to facilitate energy development while preserving mineral access. For example, solar energy developers have entered into PPAs with the mineral operators on the leased lands to power drilling operations, thus creating a mutually beneficial relationship.
3. Sophisticated Lease Agreements to establish how the developer can access, construct, and operate solar facilities while ensuring landowners receive compensation. These leases are specialized to reflect the exact nature of the renewable project. They may incorporate financial terms, easement fees, and development timelines, and depending on the ownership structure of the land, these agreements may also contain a surface waiver clause.
4. Shared Access Agreements to define how roads, infrastructures, and facilities are shared between energy projects in order mitigate logistical conflicts.
The Bottom Line
The Accommodation Doctrine is fact-intensive and uncertain, often leading to litigation risks. In contrast, Co-Development Agreements provide a proactive solution, allowing both parties to achieve their goals without unnecessary conflict. At R. Reese & Associates, we specialize in helping energy companies, landowners, and operators navigate these complex issues. Whether you’re a renewable energy company looking to secure surface waivers, an operator negotiating shared access agreements, or simply an individual looking to protect your mineral or surface rights – the RR&A team is here to help!
Disclaimer: The information and material on this website is general information about our practice and firm. This information does not offer specific legal advice and the use of this information does not create an attorney-client relationship with RR&A or any of its attorneys. The information on this website should not be used for legal advice, and persons should not act upon the information on this website without engaging professional legal counsel.
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