One Cheer for Obama on the Keystone XL Boondoggle

RGBStock.com Oil Refinery PhotoAs I write this, Congress has passed a bill bypassing the US State Department’s endless review process and approving construction of TransCanada’s Keystone XL pipeline. President Barack Obama’s vow to veto that bill is the right thing to do, but for the wrong reasons. He’s blowing an opportunity to steal congressional Republicans’ thunder on one of their own banner issues.

Obama’s public justification for the veto is that the State Department should be allowed to complete its review in its own good time. That’s bureaucratic window-dressing. The real constituents for Obama’s regulatory foot-dragging  are environmentalists concerned about the pipeline’s potential for disastrous leaks and spills, aquifer damage, etc.

But any excuse for the Keystone veto will satisfy the environmentalists. They don’t care how Obama justifies it; they’ll happily chalk it up as a victory for Mother Earth, move on, and continue to vote Democrat. So why not address the elephant in the room (pun very much intended) and openly side with libertarians against this GOP boondoggle on property rights grounds?

The Keystone XL pipeline is big-government corporate welfare of the type that can only be carried off through abuse of “eminent domain” — imposition of government force to buy property from owners who don’t want to sell (or who won’t accept the offered price).

Libertarians oppose that kind of thing, and Republicans have spent the last decade — since the US Supreme Court’s decision in Kelo v. City of New London — denouncing and pledging to put a stop to “eminent domain abuse.”

In Kelo, homeowners were forced to sell their homes so that their city’s government could “spur economic development” by handing the land over to developers for a convention center. They sued under the implicit 5th Amendment stricture that eminent domain power is reserved for “public use.”

The homeowners lost their case but won the public debate. It turns out that no, Americans don’t approve of governments stealing homes in the name of “economic development” and handing them over to “private sector” owners as sites for sports stadiums, big-box stores, hotels and convention centers . Or pipelines. And Republican politicians have made joyous hay of that disapproval.

But a funny thing happened on Keystone XL Phase IV’s way from Hardesty, Alberta to Steele City, Nebraska. Republicans rediscovered their abiding love for stealing land and handing it over to the “private sector” for “economic development.”

As Obama and the Republicans savaged each other over whether or not Keystone will create jobs and boost the US economy without harming the environment, nearly 90 landowners in Nebraska went to court versus eminent domain actions undertaken by their own state government in league with TransCanada. Ditto Montana and the Dakotas — and previous phases of Keystone have already been built on stolen land in Oklahoma and Texas. Not to mention land on American Indian reservations which at least theoretically enjoy some measure of sovereignty but now find themselves fighting the same government/industry collusion.

As a practical matter, Obama’s veto accomplishes the goal of stopping Keystone, at least temporarily. But citing the malignant nature of government “takings” for private purposes as an additional reason for whipping out that pen would put him on much higher moral ground. Not to mention pulling a rhetorical rug from beneath the posteriors of Mitch McConnell and John Boehner.

Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

  • steve m

    I was reading an interesting book… “Girls of the Atomic City” it is about the woman who went to work in Oak Ridge Tenn during the second world war to help build and run the Uranium processing plants. In it, the book talks about how the farmers in the area, which became Oak Ridge, had their land taken and they were payed “fair” rates for their property… thing was that because so much land was taken and so little land in the areas around what became Oak Ridge was for sale… what the farmers were payed couldn’t buy equitable replacement property.

    • Steve,

      Yes, that is one of the many problems with eminent domain. In a real market transaction, “market price” is the price that a buyer and seller are willing to agree on. In eminent domain, a government authority refers to some numbers (e.g. average sale price for a home of the same size in the same neighborhood over the last x years) and decides that that’s what it’s going to pay whether the owner wants to sell at that price — or ANY price — or not.

      In cases like Oak Ridge, even that kind of scenario goes out the window with respect to actual market values because it’s not just one house they’re taking — the act of taking so MUCH land eats into supply versus demand and drives the real market prices around the area up. So what might have been a reasonable price six months ago is suddenly far too low to compensate the unwilling seller for his actual loss.

      But that’s just one of the practical bad consequences. The moral case is: If I have something and you want it, either I agree to sell or I don’t, and either I accept your offered price or I don’t. If I don’t agree to sell or accept the offered price, taking it by force is stealing, period, end of story.