Sunday, January 10, 2016

Eminent Domain: The Dark Side of Pipelines

The principle of free trade—the freedom to work and trade one’s work product for the work product of other producers—is a core individual right. So are property rights—the freedom to keep, dispose of, and be secure in one’s earned wealth. But what if the two fundamental rights clash? That’s the case with pipelines.

There is a real threat to the vital American fossil fuel industry in the form of a jihad on pipelines now sweeping the country. The Environmentalist Jihadists, who oppose fossil fuels, are increasingly teaming up with local NIMBY (Not-In-My-Back-Yard) groups, and together employ many rationalizations, from “green” ideology to economic need, for stopping pipelines at any cost. They are highly organized and effective, and even the Federal Energy Regulatory Commission (FERC), the federal agency charged with the power to approve pipeline proposals, is feeling the heat.

Pipelines are vital to our energy security and economic well-being, and pro-industrial, pro-free market advocates must fight off the jihadists. But there is a dark side to FERC approvals of pipelines, and the NIMBYs do have one valid issue—the eminent domain powers typically granted to pipeline companies as part of the government’s pipeline approval process. Eminent domain is blatantly rights-violating and illegitimate in all of its manifestations, including in its Constitutional form.

But the NIMBY’s fighting pipelines based on eminent domain have some baggage of their own that somewhat undercuts their case.

For example, consider the current battle over the proposed PennEast pipeline in New Jersey.

The Hunterdon County, New Jersey Board of Freeholders has recently voted to actively fight to stop the pipeline (although they are on record “that they are not against underground pipelines in general”). Among other reasons, the Freeholders cited eminent domain for their action. As Sallie Graziano reports for

"Among the properties lying in the proposed pipeline's path are 23 farms constituting 2,007 acres of county-preserved open space," [Freeholder Director John] King said, reading from the proposed resolution. "If approved, the PennEast pipeline would necessarily extinguish the county's conservation easemetnts [sic] on those farms and trump a county open space policy mandated by three successive voter referenda. This issue alone warrants county opposition."

The way the land preservation program works is, farmers apply for payment from the government in exchange for giving up certain development rights, and deed-restricting the farm as is. Application for “preserved” status is strictly voluntary on the part of the farmers.

But how are the land preservation and open space programs funded? By forcibly taking monetary property, in the form of taxes, from people across the state against their will. How is monetary taking different from eminent domain taking? In an important sense, farmland preservation funding is worse than eminent domain.  At least victims of eminent domain have some constitutional protection—they must be compensated. But there’s no such protection for nonconsenting taxpayers, who get nothing in compensation for funding the “preserved” land the money forcibly seized from them pays for. (Majority voter approval of preservation taxation doesn’t mitigate the fundamental injustice. Citizens are free to voluntarily pool their money to preserve land. But they have no “democratic right” to force unwilling citizens to pay also, regardless of the unfortunate fact that it is legally permissible. Those who vote “no” to open space taxation—who don’t consent—are victims of an uncompensated taking.)

And often, open space is preserved through regulatory taking and/or zoning.

So owners of “preserved” land complaining about the eminent domain threat to their property are being somewhat disingenuous (though likely unintentionally). What moral right do the farmers or county government have to complain about eminent domain when they themselves are beneficiaries of government-sponsored takings, albeit not strictly defined as eminent domain?

Of course, not all threatened landowners are guilty of this disingenuousness. John and Jodi Markowski, for example, could have part of the backyard of their home taken for the pipeline construction and related easement whether they agree to it or not. They are pure victims.

But even regarding the Markowskis, there is a murky question mark. Do the Markowski's oppose eminent domain consistently and across the board? Or do they oppose eminent domain only as it applies to their property? The question points to a more subtle double standard at work in the eminent domain/pipeline controversy.

Observe the following protest sign, which headlines the front page article of the 10/22/15 Hunterdon County Democrat titled PIPELINE PUSHBACK:

The sign refers to the eminent domain powers to take private land for easements that would accompany federal approval of the PennEast Pipeline company’s natural gas conduit through the region, and hand it over to other private interests for private purposes.

It is certainly true that eminent domain transfers of private property to other private parties is un-American, and contrary to the “takings clause” of the U.S. Constitution, which allows takings for public use only. But, the victims of the eminent domain threat, while private property owners, are not actually all themselves pure victims. Many are beneficiaries of another kind of taking—the far less controversial “public use” form. This includes John and Jodi Markowski.

Public vs. private use (or purpose) is in an essential respect an artificial distinction. What do we mean by “public?” After all, the public is made up of. . . what? Private individuals, that’s what. Highways are generally considered a “public use” and thus a relatively uncontroversial use of eminent domain. But if you use a highway built on private land taken through eminent domain, how is that fundamentally different than a private corporate entity benefiting through eminent domain? You, the driver, are a private citizen. And here you are, benefitting from eminent domain by using that road. A public use is really a means for benefitting private individuals.

Of course, no one can escape being a beneficiary of eminent domain in some way. The simple fact that I drive a car doesn’t make me a hypocrite if I oppose domain. The key is consistency. I am fully consistent. I oppose all eminent domain, whether for private or public purposes. Do John and Jodi Markowski? If not, then their stand against the PennEast pipeline based on the eminent domain threat to their property must be considered morally compromised.

You can’t be for eminent domain when it serves a public use, and against it when it serves “corporate gain,” and escape a double standard. That’s both having and eating your cake. You can’t be against eminent domain when it targets you, but for it when you benefit. On closer examination, obfuscation of the issue with meaningless distinctions like public vs. private disintegrates. The builders, investors, and consumers of the pipeline are each as much members of the public as the driver of the car. If you support eminent domain as a means of providing you with roads, then how can you be against eminent domain as a means of providing jobs to pipeline employees or natural gas to energy consumers? Only those who stand uncompromisingly opposed to eminent domain and other government property takings in all of their manifestations—direct or indirect, tax or regulatory, monetary or land, for public or private purposes, “just” compensation or not—can with good conscience take a clear moral stand against the PennEast pipeline for reasons of eminent domain.

Granting that people fearful of eminent domain provisions included in pipeline approvals have double standards, the provisions are a serious concern for a pro-individual rights perspective. Does one oppose pipelines, in effect joining the anti-pipeline jihad and violating free trade rights? Given the importance of pipelines to energy freedom, that’s not a good choice, in my view. But neither is it a good choice to simply pretend that the dark side of pipelines doesn’t exist, in effect neglecting the rights of property owners.

Eminent domain should not be part of the pipeline approval process. We should advocate for its removal, but not as an uncompromising condition of pipeline approval. That doesn’t mean nothing can be done for the property owner. Short of getting eminent domain stripped from pipeline approvals, which would make the pro-pipeline advocacy cleaner and less problematic, we can go to bat for the victims in ways other than simply opposing pipelines and, in effect throwing the baby out with the bathwater. For example, by fighting for better “just compensation” for the victims. In this last regard, the Hunterdon Freeholders advanced a proposal that can fit with the pro-pipeline/anti-eminent domain scenario. As part of its resolution to oppose the pipeline, the Freeholders cited “insufficient proposed compensation for affected landowners.” Their proposed solution has merit. As Graziano reports:

The freeholders also take issue with a one-time payment for an easement, stating that with PennEast reaping continuous profits, it should handle the situation as wireless companies handle cell towers, giving the landowner a stream of income. "If PennEast is going to earn continuous proficts [sic--profits] from the exploitation of the land of another, it should make that owner a partner," the board's resolution states.

Of course, you could make the same argument about roads built on eminent domain takings. Roads facilitate ongoing commerce.

Conflicts of rights are not inherent in free market economies. Such conflicts are inherent in mixed economies. Only a mixed economy can pit the right to production and trade against property rights. It’s something that, for now and for the foreseeable future, we must live with. That can create a situation of having to choose the lesser of two evils. That’s the case with pipelines. Anti-fossil fuel environmentalists have targeted pipelines on the theory that preventing the means of delivering fossil fuels to refineries and consumers—pipelines—will slow and eventually stop the drilling, particularly hydraulic fracturing. In alliance with NIMBY groups, the environmentalists’ growing organized jihad against pipelines poses a significant threat to the energy market and to our energy security. That is unacceptable to anyone who values human life and liberty. The jihad must be defeated and the pipeline industry defended.

But we must keep in mind the bigger picture, as well. The fight for pipelines is a vital one. But it requires fighting for individual rights not just on behalf of pipeline companies but on the eminent domain and other fronts, as well.

Related Reading:

Untangling the PennEast Pipeline Rights Conundrum

No comments: