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Discussion: (32 comments)

  1. A more open and honest approach to the Keystone issue might be to disclose how many private property owners will have their land appropriated by govt-granted eminent domain and an explanation as to how those takings constitute a public purpose as opposed to the owners negotiating willing buyer-willing seller voluntary contracts.

    we seem to sometimes have a double standard when we talk about property rights these days.

    1. Great point LarryG, all of these “free market” institutions have been extremely hypercritical on the Keystone XL issue.

      TransCanada has pursued dozens of legal suits against landowners and lobbied for government backed eminent domain to forcefully take land from those who did not accept the initial asking price. In some of these suits, courts have ruled in favor of TransCanada, such as in August 2012, when a judge in Lamar County, Texas ruled that TransCanada had the right to eminent domain against Lamar County landowner Julie Crawford. The legal establishment of TransCanada’s right to eminent domain in these suits shows the ambiguous nature of the “public benefit” validation that can even be used to justify state seizure for private use, signaling how far the clause has departed from the original intent that was carefully laid out by our founders in the constitution.

      Furthermore, the outcomes of these cases are establishing extremely dangerous legal precedence that is reminiscent of a planned economy. A foreign corporation (or any domestic corporation for that matter) that can practice rent seeking at the state and local government levels and use U.S. courts to forcefully take rightful landowner’s property in the name of economic growth is a scenario that should alarm “free marketers”. Are profits and economic growth now an excuse to degrade our natural right to property? Will “public benefit” be the final determinant in the right to own property?

      1. I wonder where all the “property rights” defender groups are on this?

        1. Citizen Buddy

          I support the “just compensation” for taking of private property, for a pipeline to benefit the public as a common carrier.

          1. morganovich


            that seems like a very fraught proposition.

            would you feel similarly if it were your house? and just what is “just compensation”? who gets to decide this?

            i might value my home at at rate higher than the market does for personal or sentimental reasons.

            how is it “just” to require me to sell at a price below that which i value my home?

            “just” to my mind is not compatible with coercion.

            this makes the whole notion of eminent domain deeply problematic.

            just because land can be put to “public use” and note that keystone is NOT public use, it is private use whose benefit to the public is lower gas prices, is not a reason to abrogate property rights.

            if you land poses a danger to others, such as eroding off a cliff that is going to take a chunk of the neighborhood with it, such a course might be permissible, but to grab your house to give the land to a private company on the basis that consumers will benefit from the manner in which they choose to use it seems like wild violation of rights and an absolute pandora’s box of bad policy and nepotistic seizures.

            so, if we can take homes by force because a new gas pipeline will benefit consumers, can we then also take homes to build a new walmart which would similarly benefit consumers?

            this is, actually, the precise logic of the horrendous kelo vs new london scotus decision. homes were seized through emminent domain to build a mall because it would provide tax dollars and benefit the community.

            of course, when this same argument was then made by a group seeking to take justice souter’s home and turn it into a museum of liberty, he certainly showed no interest in eating his own cooking…

            emmient domain is a very dangerous power for government to possess. in essence, it makes you a subject and not a citizen. under any but the direst extremis (war or imminent danger) it’s use is deeply unethical and inconsistent with rights and liberty.

            a right that you possess unless the government decides it will not honor it is not right at all. that is a privilege, which is not the same thing at all.

          2. so you support taking for a public purpose?

            what is the public purpose ?

          3. Cit

            I support the “just compensation” for taking of private property, for a pipeline to benefit the public as a common carrier.

            What exactly is “just compensation”? Who decides?

            What if I don’t want to sell at *any* price because my family has owned the property for 4 generations and my parents, grandparents and my wife, as well as one of my children are buried here?

            What price should I be happy with?

            You are advocating tyranny of the majority.

          4. Just compensation is defined as the price that would be agreed upon by unrelated buyers and sellers. It basically assumes that property is fungable in economic theory, and the economists say you are not allowed to have sentimental thoughts about property because that means you are not acting as homo economics, which their models require.
            Interestingly however some sites will not be disturbed very often, you see isolated graveyards, where lines were routed around the graveyard if you drive around in the country. Note that Texas in particular holds that eminent domain cant be used against a cemetery, you have to route a pipeline around it. (Overhead power lines just have to avoid putting structures in the cemetery, but I believe they can use the air rights). One might check laws in your state to see what the situation is.

          5. most property owners would want an annual renegotiable lease or a major shareholder in the company…. or some such… if they had the ability to truly negotiate voluntarily.

            The article pointed out that other pipeline corridors already exist and are actually competing with Keystone to transport the oil so this is more about Keystone as a private company wanting something more than an existing route – which already exists.

            it’s more about them running their own pipeline company and to compete with other companies.

            why is this a public purpose if exiting routes already exist?

          6. morganovich


            ” It basically assumes that property is fungable in economic theory, and the economists say you are not allowed to have sentimental thoughts about property because that means you are not acting as homo economics, which their models require.”

            this seems like a very twisted way to look at economic.

            economics sets the price of a good at that which people agree to engage in voluntary transactions. there is no prohibition about having sentimental value. that just factors into reservation price.

            if i would not sell for less that $100 and you would not pay more than $80, then instead of a price, we have a price spread, which is actually the natural state of most markets as when there is agreement, then transactions occur until you are left, once more, with a bid/ask spread.

            i think what you mean to say is that “just compensation” is the price set by statist coercion which prevent people from setting their own values. this has nothing to do with economic models. it’s all down to a coerced transaction with a price fixed by the state, not the seller, a proposition most economists find abhorrent.

            the very name is orwellian doublespeak.

            why would one need to be forced to take a “just” price?

          7. So Lyle, if I take your car, the cream puff your father left you, which you cherish, and which you have no intention of selling, justice is served as long as I give you Blue book (replacement) price for it?

            You may have missed my point.

    2. Benjamin Cole

      That’s true. All the squalling about property rights goes mute when it comes to the Keystone.

      Private land is seized by the private operator of the Keystone.

  2. PeakTrader

    This is an example how overregulation and red tape slowed U.S. economic growth, even with expansionary fiscal policy and quantitative easing.

    1. Not that the fiscal expansionary policies or QE did anything – but I sure agree with you about the red tape.

      As for Kelo not sure that I was a property rights advocate – but usually to use the property for common good – moving oil or making a road bigger. Not sure if a new mall in New London quite made the grade. A me d like a few councilmen got bribed to accept the developers proposition.

      1. morganovich


        i’m not sure i see the distinction.

        so, taking your house and giving it to a private company so that we can get cheaper oil, which you describe as a common good, is ok, but taking your house to put in a mall to provide cheaper and more convenient goods to the community is not ok?

        those 2 things do not seem terribly different to me.

        1. No-one is being displaced with keystone. 1000’s had to move in Kelo. Also it is dubious whether the mall would have brought in cheaper goods since the town leaders felt they were too good for the area and wanted to upscale it.

          But I do agree with you – the eminent domain line is a difficult one to walk – but at times it is necessary. Example would you have not built I-80 or I-10 I-15 etc because of your principles? Would the higher transportation costs without these highways be worth it?

          1. virtually ALL of our commerce infrastructure came from eminent domain.

            Now that we have a robust rail, road and pipeline system, we have folks that say eminent domain is “wrong” but I don’t hear any of them saying we should give the land back to those whom it was taken from and let them renegotiate truly voluntary agreements… never once heard that advocated by those who say they oppose eminent domain and if it was actually proposed, I’m quite sure they would say it’s a “leftist” idea.

            Easy to be opposed to ED now that we have a fully built-out rail, road and pipeline system.

          2. morganovich


            i think it’s a largely false choice.

            it might have been more expensive to build 1-80 but certainly not impossible.

            there is a whole set of game theory around this. you plan several routes, stay flexible, and create bidding wars to prevent people from sticking you up.

            ideally, you do it before you disclose that you are building a road. you also use contracts that make all the purchases contingent on a viable route being hit so that people do not try to hold out for the and and get pressure/money not just from you but from peers.

            with some foresight and decent management, you could build a highway without ED.

            hell, most of 80 runs through the middle of nowhere.

            it might be a bit more expensive, but that’s often the price of not cheating and stealing and one well worth paying.

            so you have slightly more expensive tolls for a while. even if the federal highway system had cost twice what it did, it would have been well worth it and been able to pay for itself in users fees quite easily.

            this has the added advantage of assuring that things are used well.

            if the users of a highway value it at 100 and the owners of homes displaced value them at 150, you are actually destroying value by taking the homes for 90 and building the road.

            and if the road is valued at 200 and the homes at 100, then there should be not trouble paying for it with use fees.

            ED is only needed if you are upside down and destroying more value than you create with a project. why would you wish to encourage pursing a project like that?

          3. marque2

            Are you arguing that whether or not to take private property should be based only on cost/benefit or convenience?

        2. I guess what I am saying is that if you have a real Common good purpose for ed it *may* be OK – what got people upset with Kelo is that they wanted to do a dubious project just because the government didn’t like the neighborhood.

          1. The Kelo horror was about increasing tax revenue for the City of New London that was to be generated by taking private property for the benefit of another private entity.

        3. You said below most of I-80 is built in the middle of nowhere. Same can be said for Keystone and most pipelines.

          1. morganovich


            “You said below most of I-80 is built in the middle of nowhere. Same can be said for Keystone and most pipelines.”

            precisely, which is why they can buy the land rights from willing sellers.

            it’s not terribly valuable land and diverting the route a few miles would not make much difference.

          2. all interstates go through cities even if there are lots of “nowhere” in between.

            there are over 47,000 miles of interstate and before that many other thousands of miles of Federal Aid Highways signed as “US” and almost none of it was built by the private sector using willing seller/willing buyer – but people still insist it COULD have been.

            and willing/buyer/willing/seller might have worked out in the middle of nowhere but not so much where these roads connect to cities.

      2. PeakTrader

        There are always crackpots, who believe tax cuts, government spending, lower interest rates, and higher asset prices don’t stimulate economic growth.

        Those same crackpots ignore factors that depress economic growth.

  3. Arthur Felter

    I’m sure there’s a good reason for this, but wouldn’t it be a lot easier to build the XL line next to the existing line?

    1. morganovich

      i was actually wondering the same thing.

      it’s not like the proposed route runs through a lot of major markets.

      perhaps it’s to hit the fields in north dakota?

      lots of telcos did this sort of thing for big internet trunks. you find someone who already has the land/right of way and lease it from them. the telcos used railroad lines.

    2. yes… there ARE already existing corridors. This is not about “energy” or helping America – it’s about a rival pipeline company – that wants to use ED to get their private competing pipeline.

      1. not sure if there are that many pipelines in the ND area where they are needed.


          there are EXISTING corridors…. that can add capacity but they would be companies other than Keystone.

          this is all about a rival competitor trying to get it’s own separate route and using ED to do it.

  4. Benjamin Cole

    In other words, Keystone is a giant fraud on the public—a private operator seizing private land for private gain, when there are alternative distribution routes….

    Think tanks lining up for oil money to talk the talk?

    1. The Keystone pipeline is an example of how a propaganda campaign can essentially change the “truth” of something and motivate a popular cause….the demonizes others.

      It’s tried and true with many “economic liberty” think tanks these days who almost never deal with the ED issue.

      CATO to their credit DID deal with it:

      Why aren’t Kelo activists also incensed over
      natural resource development takings?

      but the interesting thing – on the Keystone issue, on blogs like this – I don’t believe I’ve even seen the CATO article cited in the same article discussing the ‘outrage’ of the govt “interfering” with the “right” of a company to pursue business in the ‘private sector’.

      There’s a total double standard when business is conducted on commerce infrastructure obtained via ED – the legalized taking of land from private property owners – to provide “economic liberty” to other property owners.

      One of the fundamental things that sets this country apart from other countries and makes it an economic powerhouse is the fact that it has an extensive and robust commerce infrastructure, road, rail, pipelines, utilities, and river navigation and virtually all of it was a direct product of a “coercive’ govt engaging in theft!

      Now that we have this extensive network, it’s taken for granted – until something like Keystone comes along – and then ED is either forgotten or ignored – even by the Conservative ” liberty and justice” organizations.

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