Property Rights versus Public Good - March 5, 2007

 

I read with interest your article on property rights versus the public good. A subject in general that is of growing profile not only in the pipeline industry but concerning infrastructure in general. The issues are common to any project that has an impact on a third party. Hydrocarbon pipelines, due to their large footprint and hazardous product, have an enhanced exposure to these issues.

 

The problem may be dealt with by using a sustainable development methodology. Not surprisingly, the utilization of scientific and economic principles along with a transparent and equitable distribution of costs and benefits will translate into smooth and low cost development.

 

Many of the problems with the routing of new pipeline projects is the result of poor planning. Regional authorities responsible for zoning need to take into account future demands for economic infrastructure. If infrastructure corridors, transportation corridors and industrial zones are not properly planned for they will not proceed or the cost of those developments will be prohibitive. The end result will be that the growth and standard of living in the area will be retarded.

 

Imminent domain does not allow the public good to trample individual rights. For example a pipeline project cannot subject third parties to unacceptable risk. The hierarchy of approach is generally: impact avoidance, mitigation, and then finally compensation. Each progressive alternative is utilized based on comparative cost. When the cost of mitigation becomes less than the cost of avoidance that alternative becomes preferred and so forth. The principle of imminent domain allows a fair price to be paid where compensation is the preferred option. At the same time this does not mean that the compensated individual is subject to an intolerable increase in risk.

 

Some impacts such as visual impairment or diminished enjoyment are quite subjective and in these cases it may be difficult to come to terms that all parties are happy with. The majority of the more tangible impacts are manageable and a fair and equitable settlement that falls within the framework and goals of sustainability is most often possible.

 

Imminent domain allows for the economic surplus of a project to be distributed in a fair and transparent manner. It is the same type of protection given to the public that prevents one party from grabbing and holding economic benefits that should be distributed to a larger group. As with any tool it may be abused and misused. If so the short term gain of the offending party will lead to the pain of another party and in the longer term it hurts society through the propagation of mistrust and economic distortion.

 

Ian Morrison
Principal
Stantec Consulting

 

What the article does not talk about is the path of the pipeline and the extent of the right-of-way they are seeking. It does not seem the people are upset about the pipeline per se, but the land issues surrounding it. So I would first want to ask just how much land is needed for the pipeline and can it be installed using existing right-of-ways, Possibly even replacing an existing pipeline with a larger diameter to achieve the desired delivery figures they want.

 

The other thing that I can see from the State's perspective and the residents is to ask first if the pipeline company is doing anything to promote energy conservation. The gas people are in the business to sell gas and the pipeline people are in the business to install and transport gas, but both should be required to educate people and even have programs to encourage consumers to be more efficient with their use of gas. I have just received a tankless water heater for installation in my home and I am looking to use solar in a radiant heating system to lower my overall use of gas. These are just two items that I am doing and there are certainly many more. And there are big savings to be achieved in commercial and industrial applications.

 

Couple together such actions can mitigate the necessity to add these new pipelines saving a lot of people a lot on mental energy and expense in fighting these proposals. And such cooperative workings will strengthen the relationships between parties such that we are working together rather than against one another.

 

Bradley Schneider
President/CEO
Recovered Energy Resources, Inc.

 

In your article, you quote "Eminent domain exists because services such as electricity, natural gas, sewer and water are considered necessities," says Mike Enoch, general manager of the Chester County Natural Gas Authority in South Carolina."

 

I would counter to say that eminent domain exists because public works are considered important. Private, for profit, companies would do better improving their image and working with the residents they claim to serve, rather than trying to push their way through using eminent domain.

 

Chris Stehlik

 

Although your editorial makes a stab at telling both sides of the story, your version of the property rights disputes is decidedly one sided. I have only one comment. The idea that infrastructure will not be built if property rights are upheld is ludicrous. The pipelines will simply have to be built where the property owners can agree on the terms. If the gas company makes a few million dollars less profit, so be it. And how do you feel about this scenario: My little town has no grocery store, and I live on a very nice piece of corner property... just right for the location of the new Super Wal-Mart. Should my property be taken from me so Wal-Mart doesn't have to build a store a few miles away costing them some potential profits? Everyone in town could conceivably benefit from having the store close by... and if Wal-Mart has to spend more money for the land maybe they won't build the store this year. But property RIGHTS are just that, I have a right to own that property and refuse to give it up to another private entity.

 

Robert Wyner
Uvalde, Texas

 

I read this article with interest in both directions. After 25 years in the utility sector, I have had to use the right of eminent domain in only a few rare occasions. Most problems can be negotiated, but it requires much work and patience. I have seen other companies weigh the cost of the time required in negotiating, against legal fees and skip right to the IP hearing procedure and let the courts determine the value to be paid after construction is complete.

 

As a landowner, I do not want any company in pursuit of profits restricting or taking my land or exercising any rights on my land for their own gain. I feel that when pipeline companies and electric utilities became unregulated profit mongers, they forfeited any rights of eminent domain. They no longer operate for the benefit of the public sector, only to the benefit of stockholders and their own management. Most supply shortages and deliver constraints are more contrived by greed than the actual inability of pipes and wires to deliver the product. The actual need for these additional lines is greatly exaggerated by lopsided market rules and protocols.

 

John Sheppard

Energy Central

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