“A better solution would see pipeline companies negotiate with landowners privately to access their property and come to terms on compensation. While some might argue this will slow down pipeline production, given the recent difficulties the industry has faced getting ‘stakeholder’ and government approval, I am confident private negotiations that respect property rights are ultimately more practical for industry.”
Yes, you can support energy transport and keep your property rights, too.
Affordable, reliable energy has been one of the greatest liberating forces in human history. Oil and other fossil fuels have made life immeasurably better for much of mankind. We live longer and enjoy greater prosperity because of oil and those who drill it, ship it and refine it.
Despite this, when I was asked at an all candidates debate while running for office in Fort McMurray representing the Libertarian Party of Canada whether I was “pro-pipelines or anti-pipelines,” I wasn’t able to provide a definitive answer.
I am naturally a proponent of fossil fuels and pipelines. My views are a matter of public record. I made international news when I called out musician Neil Young on his hypocrisy toward the oil sands given his affluent, energy-intensive Hollywood lifestyle. I protested in front of the White House promoting ethical Canadian oil over OPEC conflict oil. I’m producing a film that promotes Fort McMurray and the oil sands. But while I support the oil industry and pipelines, I am more concerned with the protection of property rights.
So the question should not be whether or not one is supportive of pipelines but whether or not the oil and pipeline industry can coexist with property rights.
Property comes into existence when you mix your labour with an unowned resource. When you pick fruit to eat, hunt bison, plough a field, build a house, or fabricate a pipeline, you are creating property. Property rights led to the division of labour, free markets, industrialization, the ability to extract and use of fossil fuels, and a dramatic rise in human life span and quality. Property rights are essential to individual rights, and it is appropriate for government to protect these rights through laws and policy.
History teaches us that societies that respect property rights flourish and those that don’t end in catastrophe. This message, however, has been lost on many people, especially those in power. Listen to the collectivist rhetoric. People often refer to resources as “our” natural resources, belonging to Albertans, or all Canadians. In actual fact, “we” don’t own anything unless “we” actually do the work of going out and getting it, creating it or trading for it.
While it is true that the energy sector is entitled to its property, it is also true that landowners have the same rights. Specifically, they have a right to exclude pipelines from crossing their property.
When the desire of pipeline companies conflict with the desires of land owners, the government intervenes by forcing land owners to relinquish their property rights in exchange for compensation for the trespass and lost use of their property. This imperfect solution is intended to promote the energy sector but it comes at the cost of land owner property rights.
A better solution would see pipeline companies negotiate with landowners privately to access their property and come to terms on compensation. While some might argue this will slow down pipeline production, given the recent difficulties the industry has faced getting “stakeholder” and government approval, I am confident private negotiations that respect property rights are ultimately more practical for industry.
I encourage those in the energy sector to promote property rights at every opportunity. If the state is justified in expropriating land on behalf of an energy company today then it is justified in expropriating an energy company on behalf of environmentalists tomorrow. You can be a hero to landowners and protect your long term interests, or you can profit in the here and now by using government force and undermine the property rights framework that supports you.
So back to the original question: Am I “pro” or “anti” pipelines? Well like any good politician I danced around the question, not because I was avoiding the question but because I disagreed with the very premise that a politician ought to have an opinion about such matters.
Pipelines are property, just like much of the land they cross. The role of government is to protect property not to impose an agenda and violate rights. The government shouldn’t expropriate land from a rancher nor should they prohibit a pipeline from being built just because Neil Young and his crowd don’t like it.
———————
Tim Moen ran for prime minister as leader of the Libertarian Party of Canada in the last federal election. He was raised on a Northern Alberta farm and is a former fire fighter/paramedic from Fort McMurray, a filmmaker, a father, speaker, businessman and publisher of WesternStandard.ca.
This article first ran in Pipeline Observer, a publication of the Canadian Association of Energy and Landowner Associations.
Pipeline companies enjoy the power of eminent domain, in the USA, because they are considered common carriers. As common carriers they get this powerful privilege but in return, the rates they may charge and other aspects of their business are subject to heavy regulation. It is a quid pro quo arrangement between a private entity and the people – represented by the various states and the federal government.
Actually, it is not “something for something.” It is the worst of both and all possible worlds — private owners stripped of their property to subsidize a private company, and a private company protected from competition. This legal land theft and “protection” winds up hurting all parties, and the economy at large And if you read the article, the very power to expropriate on behalf of an energy transport project is precisely the power to expropriate energy transport companies themselves. And we are very close to that here in Canada
The common carrier requirement is the obligation to accept all oil until capacity is reached, after which the oil is taken ratably from different producers.
The quid pro quo is not public utility regulation when a cost-based maximum rate is imposed. I don’t think that this requirement is cronyism as eminent domain.
One other comment. In the absence of eminent domain, there would be a private market in rights-of-way where entrepreneurs would independently work with landowners to get permission rights, projects on the come.
Companies, too, could secure rights-of-way well ahead of actual projects to reduce costs and reduce delay.
ED has increased the cost of such voluntary alternatives to coercion.
Having worked in a large public agency as a real estate appraiser involved with eminent domain, the problem that is not discussed in the article or comments is what to do with a property owner who will only accept a holdout price? And once a holdout price is paid then everyone else will want it.
There is another solution to this. That would be to pay for an easement right by pay for it annually like rent. Landowners would prefer some sort of annuity than a lump sum payment. Any rent would have to be adjusted for money inflation and would not be subject to cancellation by the landowner to try and extort an even higher amount of rent.
Something like this is being planned in Santa Antonio, Texas where the San Antonio Water System agency plans to pay landowners in Burleson County an annual payment for the right to extract groundwater that would be conveyed by the proposed Vista Ridge Pipeline to San Antonio. SAWS is not using eminent domain to acquire the water rights.
Public agencies would rather pay a one time price and be done with it.