The Wrongologist

What’s
Wrong Today:

It’s
been more than 7 years (2005) since the US Supreme Court decided Kelo vs. City of New London, involving the use of eminent domain to transfer land from one private
owner to another private owner to further economic development.

In
a 5–4 decision, the Court held that the benefits a community enjoyed from
economic growth qualified private redevelopment plans as a permissible “public use” under the Takings Clause of the Fifth
Amendment.

So, homeowners
lost. And corporations won in the Supreme Court, again.

According
to the CBS affiliate Channel 8, the city then ripped down 90 acres
worth of homes. But 7 years later, nothing
has been built there. Still, the corporatists won anyway since companies, not
just governments, now enjoy the fruits of eminent domain.

Eminent
domain and the Keystone XL pipeline.

Keystone,
a subsidiary of TransCanada, wants to build a
pipeline across America from the Canada
border to the Gulf of Mexico. There are two challenges to building the
pipeline: The US Department of State needs to issue a presidential permit to allow
the project to cross the international border, and TransCanada needs to acquire
the private land on which to build the pipeline.

TransCanada
isn’t waiting for the permit; they are busy acquiring rights to private lands
throughout the mid-west using eminent domain.

Keystone
Pipeline under construction in Oklahoma in March 2013

In a free
market, Keystone would have to negotiate with each landowner along the
pipeline’s path, from North Dakota to Texas.  If a landowner declined to
sell or lease land to Keystone, there would be no recourse for Keystone. It’s
the landowner’s private property, after all. But Keystone is another example of the Federal Government taking care of
corporations rather than the rights of its private citizens.

Why is it
that Republican Free Marketers hate free markets?

Eminent
domain enables Keystone’s game plan. They can ask a state government to use
eminent domain and if successful, Keystone is granted an easement or even
direct rights to the land at a “fair price.”  

But that “fair”
price is in the eye of the beholder. More often than not, landowners were not
willing to sell in the first place.  The only reason they are selling is
because eminent domain forces the transaction.  So, is the “fair” price
fair? Unlikely.

In this
case, eminent domain works like a subsidy, because Keystone’s buying price is lower
than the price at which most landowners are willing to sell. Without assistance
of eminent domain, it would most likely be unprofitable for Keystone to build
the thousand mile pipeline in the first place.

Eminent
domain could also breed collusion
between the corporation and state. The next time will not be the first
time.

From State
Impact: Julia Trigg Crawford of Lamar County, Texas, is the manager of
a 650-acre farm that her grandfather bought in 1948. TransCanada offered
Crawford $21,626 for an easement. Here’s Crawford:

She
refused, and TransCanada exercised the right of eminent domain and seized two
acres of the farm for their pipeline.

Since Kelo, private corporations may seize
private property if the property is taken for public use and the owner is given
fair compensation.

Although
the exercise of eminent domain to seize land for the public good is commonly
believed to be restricted to the government, in addition to Kelo, federal
law gives natural gas companies that right. To get the “right,” in Texas, all
TransCanada had to do was fill out a one-page form and check a box that the
corporation declares itself to be a “common carrier.”

The Texas Railroad
Commission, which regulates oil and gas, merely processes the paper, it doesn’t
investigate the declaration. In the contorted corporate logic we often see,
TransCanada declared itself to be a common carrier because the Railroad
Commission said it was, even though the Commission’s jurisdiction applies only to intrastate, not
interstate, carriers.

At least 89
Texas landowners
have had their properties seized by TransCanada.

But this
isn’t just happening in Texas. Randy
Thompson, a cattle buyer in Nebraska, was
informed that if he did not
grant pipeline access to 80 of the 400 acres left to him by his mother along
the Platte River, “Keystone
will use eminent domain to acquire the easement.”

Sue Kelso’s family in
Oklahoma was sued in the local district court by TransCanada
after she refused to allow the pipeline to cross their pasture. Mrs. Kelso:

By its own count, the TransCanada currently
has 34 eminent domain actions pending against landowners in Texas and an
additional 22 in South Dakota.

The New York Times reported that a TransCanada spokesman,
Shawn Howard, said the company does not have to wait for a license from the
State Department to begin securing land in Nebraska. He said the company has
the right to force lease agreements upon landowners in all six states the
pipeline would pass through. 

Timothy Sandefur, a
lawyer with the Pacific
Legal Foundation,
a nonprofit advocate for property rights issues, said that if the project is
approved, Keystone will be on firmer ground. He said: (Emphasis by the
Wrongologist)

In what has been
interpreted as a virtual green light for the project, a State Department report last August concluded that the pipeline would have minimum
environmental impact if operated in compliance with federal regulations.

So eminent
domain will continue to be one of TransCanada’s tools to muscle their way
across the Mid-West.

We need to
end the use of eminent domain for corporate gain.