What about the land renewable energy projects are built on?

By Joan Janzen

A local landowner recently shared some interesting information at an open house at Oyen, as well as on his video blog. Tyler Chiliak farms near Alsask and is described as a “straight shooter” by those who listen to his podcast. Numerous comments from his listeners followed his recent talk about industrial blanket easements; it was a topic of interest to local landowners. Tyler agreed to have the information shared in this article, which is much appreciated.

Tyler Chiliak farms near Alsask. Last month he spoke at an open house in Oyen, to discuss the term “Industrial Blanket Easement”. SUBMITTED

As a landowner, he notes he’s not opposed to solar and wind power and uses renewable energy on his farm. “However, one side of renewable energy that nobody really talks about is the landowners,” Tyler said. Although numerous studies have been done on renewable projects, virtually nothing is said about the land on which the projects are built. And here is where the words industrial blanket easement comes into play.

He explained the definition of easement as an agreement between a landowner and someone who wants to use their land. The person who wants to use the land approaches the land owner about using the land for a particular purpose. They’ll give the specific details of what they want to do and how much they’ll pay the land owner and try to come to an agreement.

“In oilfield country, we call this a lease,” Tyler said. “An oilfield company will be very specific about what they want; they need to be sure they have enough space to do whatever they need done, and they’ll show you what it will look like. But with renewables, it’s not quite the same.”

A salesperson will approach the farmer about putting renewables on their land. They’ll present a drawing detailing where they will place a windmill or other renewable project, the size of the area required, as well as where the access road and trenching for the cable will be located.

“But what they don’t tell you is that’s not the easement agreement. The easement agreement is kind of buried in a bit of fine print,” Tyler explained. The word “blanket’ in blanket easement agreement means covering the whole thing. Therefore, the easement covers the entire parcel of land, whether it’s a quarter or whole section.

The word “Industrial” refers to the zoning of the land. Tyler noted that industrial-zoned land is worth far more than agricultural land by an incredible margin. Industrial land can be used for turbines, solar farms, etc. and therefore has a lot of value.

Before a project begins, a salesperson will approach the land owner, asking to put a project on their land. He’ll ask the land owner some questions, and the land owner signs a paper and waits to receive information regarding the project. They also wait to receive their money because they will be promised a lot of money to make this project happen.

After the agreement has been signed, a representative from the company that wants to develop the project takes the agreement to a financial institution. “They say they have an industrial blanket easement and want to build a wind turbine and want a loan to do it. The land is collateral,” he explained. “They get the money and are good to go.”

Unfortunately, the land owner may not even be aware this is happening. In fact, Tyler said he had heard of several instances where the land owner received a notification in the mail. The notification said the collateral no longer exists for the quarter of land the farmer had put up as collateral for his crop inputs loan so he could run his farm.

“That quarter of land has a multi-million dollar loan lien put against it, and you can’t use it for that anymore,” Tyler added. Furthermore, the land owner can’t transfer that land to an estate. “If you want to sell the land before you die, you can’t because the land is tied up and has a lien against it.” The land cannot be sold until the lien is satisfied, and if it has a multi-million dollar lien against it, even selling the land won’t satisfy the lien.

Tyler’s main point is that a lot of landowners aren’t aware that they have an industrial blanket easement. The contracts may vary, but depending on how the contract is worded, the industrial blanket easement gives the company that’s developing the project the right to do whatever it wants. “Depending on how the contract is set up, they might be able to do whatever they want with the entirety of the land without your say, so because you now have 49% controlled interest in your own land,” he explained. “If they told you they’re going to put up one turbine, maybe they’ll put up three. Maybe you have a dugout there you want protected, and they might fill it in because they want to put something there.”

Many of the large projects are financed, and land for the project is via industrial blanket easements. “If you have an industrial project on your land, and you’re not aware of this, you might want to dig into your contract,” he advised. “Maybe ask a lawyer or a land agent about it. Chances are you have an industrial blanket easement, and you don’t even know about it.”