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Jonathan Mariano headshot

Keystone XL Pipeline Relies on Eminent Domain for Success

Over the weekend, protesters marched on Washington against the construction of the Keystone XL tar sands oil pipeline. A variety of environmental reasons fuel opposition to the pipeline, ranging from possible water contamination, to furthering the continuing use of (dirty) fossil fuels, and even climate change. While these all may be worthwhile reasons, they may fall on deaf ears. Besides the environmental argument, what reason may garner empathy from folks who would not typically fight against oil?

One big reason that may help build opposition to the Keystone construction is eminent domain. The fight against the Keystone XL pipeline has been mostly an environmental fight, but quite frankly, not everyone is an environmentalist and may not resonate with this message.  However, eminent domain may just provide enough common ground for the environmentalist and non-environmentalist alike.

Forceful Takeover
Eminent domain is a forceful takeover of private personal property. Limited government individuals do not like government encroaching on their personal liberties, especially on their personal private property. But more so, landowners do not like their land being taken away from them by the government to be given to a private corporation. How would you like it if your land was forcibly stolen from you?

Take for instance, Randy Thompson, a Nebraska landowner featured in The New York Times. NYT reports that if Thompson did not sell his land, Keystone would use the force of eminent domain to secure an easement to his land.  How can a company, not even based in the United States, use the U.S. Federal Government to seize land?  He is only one of many individuals fighting the fight against eminent domain.

Another Government Corporate Subsidy
Furthermore, eminent domain is akin to a government subsidy for a corporation.  Technically, no money is being taken from taxpayers and given to a private corporation as a subsidy.  However, the use of eminent domain shares characteristics of a government corporate subsidy.

Keystone needs to build a pipeline across America from the Canada border to the Gulf of Mexico.  In a free market, Keystone would have to negotiate one by one with each and every landowner along the pipeline's path, from North Dakota all the way to Texas.  If a landowner declines sale, there is no recourse that Keystone may take.  It is the landowner's private property, after all.

However, eminent domain changes the game.  Keystone as a corporation can ask the government to use eminent domain, thus granting Keystone an easement or even direct rights to the land at “fair price.”  But the question is, is that price “fair” to Keystone or the landowner?

More often than not, the price is unfair because landowners were not willing to sell in the first place.  The only reason they are “selling” is because of the eminent domain.  This is also where eminent domain is similar to a subsidy, because the Keystone buying price is much lower than the price at which the landowner is willing to sell.  Without eminent domain, it would most likely be unprofitable for Keystone to build the thousand mile pipeline in the first place.

Ending Corporate Eminent Domain
The Keystone XL pipeline is a prime example of the Federal Government taking care of corporations rather than the rights of its private citizens. We need to end the practice of eminent domain for corporate gain.  It not only is a violation of our rights to the private property that we own, but more so, it further breeds the collusion between the corporation and state. If not for eminent domain, the Keystone XL project would only be a pipe dream.

Image Credit: rickz via Flickr

Jonathan Mariano headshotJonathan Mariano

Jonathan Mariano is an MBA candidate with the Presidio Graduate School in San Francisco, CA. His interests include the convergence between lean & green and pursuing free-market based sustainable solutions.

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