Foreign Company Tries To Seize U.S. Land For Keystone Pipeline

Feb. 24

TransCanada TRP +0.11%, a foreign company based in Alberta, Canada decided to use an amendment to the United States Constitution to seize private American citizens’ property to avoid regulators and build the controversial Keystone Pipeline (USNews).

This should scare you. It certainly scares me.

But it didn’t work. This time.

On Wednesday, Lancaster County District Judge Stephanie Stacy of Nebraska struck down a State law that would have allowed TransCanada to use the power of Eminent Domain to seize private land to help construct a short 300-mile segment of the controversial Keystone XL pipeline between Cushing and Steele City, Nebraska. Judge Stacy declared the law unconstitutional.

The law in question, LB 1161, allows Nebraska Governor David Heineman and TransCanada to avoid regulators in siting a crucial portion of the pipeline.

Judge Stacy sided with three landowners who challenged the law, finding that regulatory power over industrial companies such as TransCanada must remain with agencies such as the Nebraska Public Service Commission, not the governor’s office.

The judge ruled that the law violated the state constitution, and she issued an injunction blocking the Governor’s office from taking any action on the Governor’s January 2013 approval of the Keystone XL Pipeline route, which would include allowing land to be acquired through eminent domain (Court Documents).

Eminent Domain is the power of the state to take private property for public use by a state or national government. However, it can be legislatively delegated by the state to municipalities, government subdivisions, or even private persons or corporations when they are authorized to exercise functions of public character, usually for health and safety (Wikipedia).

It is not often given to corporations. And certainly not to foreign corporations. It is more than questionable whether building the Keystone aides the health or safety of America, or even our general interest. President Obama has said that all decisions should take greenhouse gas emissions into account so it is definitely not settled (EcoNews).

The Keystone XL pipeline is at the heart of this and many other debate. The pipeline will carry 830,000 barrels per day of bitumen product made from tar sand (thicker, more corrosive and more toxic than crude oil) through a meter-wide pipeline from the Alberta fields to refineries on the Gulf Coast, mostly to be exported. The $2.3 billion southern segment from Cushing, Oklahoma to the Gulf Coast is almost complete. The bulk of the $7 billion 2,000-mile pipeline is being held up until President Obama either cedes to Canadian and business pressure or blocks the construction because of environmental and health concerns.

The Keystone pipeline route alternatives through the northern United States. Source: U.S. State Department

At the same time as last Wednesday’s ruling, President Obama, Canadian Prime Minister Harper and Mexican President Enrique Pena Nieto were meeting in Toluca, Mexico. In response to Harper’s push for Keystone acceptance, the U.S. President seemed unconvinced, saying, “Keystone will proceed along the path that’s already been set for it” (The Globe and Mail).

As usual, the political cauldron has been thoroughly churned during this President’s tenure. Eight years ago, President George Bush issued Executive Order 13406 which stated that the federal government must limit its use of taking private property for public use with just compensation for the purpose of benefiting the general public, wording mirrored in the U.S. Constitution. Bush’s Order 13406 limits the use of eminent domain so it may not be usedfor the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.

In the Nebraska case, it was used solely for the purpose of advancing the economic interest of the private party, TransCanada, a foreign private party. Whatever your views on the Keystone XL, the idea of letting a foreign company do an end-around on the Constitution should be alarming.

TransCanada didn’t win this time in Nebraska, but they have won before (NYTimes). In an opposite 2012 ruling, Texas Judge Bill Harris HRS +0.29% of Lamar County upheld TransCanada’s take-over by eminent domain of a strip of land across Julia Trigg Crawford’s pasture in Paris, Texas to build part of its Keystone XL pipeline. The ruling was delivered in a 15-word text message sent from the Judge’s iPhone, demonstrating the seriousness with which the Judge handled such a constitutionally-charged case. Not sure if that ruling is a first in judicial history, but I guess it was better than a Tweet.

To obtain the right to seize Crawford’s property in Texas, all TransCanada had to do was fill out a one-page form and check a box that declared itself to be acommon carrier.

The Texas Railroad Commission, which regulates oil and gas in Texas, processed the one-pager without even thinking about it. Then TransCanada declared itself to be a common carrier because the Railroad Commission said it was. Never discussed was the Commission’s jurisdiction, which only applies to intrastate, not interstate, carriers and I’m sure not to foreign carriers (TX RRC).

This Texas ruling is the reason that the southern segment from Cushing to the Gulf Coast is almost complete.

But why would anyone not want the Keystone pipeline on their property? I mean TransCanada offered Crawford a whopping $7,000 to help complete its $10,000,000,000 project (OEN). Surely that was fair.

Maybe Crawford declined because there have been over 6,300 pipeline incidents since 2002. 154 people have died, 540 people have been injured and $4.7 billion in property damage has resulted (Pipeline and Hazardous Materials Safety Administration; Cornell University). There already have been fourteen spills on those parts of the Keystone Pipeline itself that just began operating (Propublica). The potential economic damage caused by the expected spills from the Keystone pipeline alone will outweigh the benefits of any jobs created by the project, which will not be many.

So, is a perceived piece of energy independence that could have severe environmental consequences worth allowing foreign companies to run roughshod over American citizens, our land, our homes, our lives?

Source: http://www.forbes.com/sites/jamesconca/2014/02/24/foreign-company-tries-to-seize-u-s-land-for-keystone-pipeline/2/?ss=businessenergy