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Gas or Hot Air?

10:38 AM, Jun 14, 2011 • By ADAM J. WHITE
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At last night's debate, one audience member raised the issue of energy infrastructure:

Here in New Hampshire, there is a popular bill that is being considered by our state legislature that would restrict the state's power to seize private land to build a power plant or a transmission facility. Should governments at any level be able to use eminent domain for major projects that will reduce America's dependence on foreign oil?

The question was posed to Gov. Mitt Romney and Rep. Ron Paul, both of whom categorically answered "no." But while Rep. Paul's answer was characteristically silly ("Right now, we really don't own our land. We just pay rent on our land and we listen to all these regulations."), Romney attempted a more thoughtful response: while eminent domain is appropriate when the government needs land for roads and highways, eminent domain should not be used to condemn land "for purposes of a private enterprise." And then he pivoted to the question of American energy security more broadly, calling on the nation to produce more oil, natural gas, and clean coal. 

Romney was right to remind the audience that America's energy security depends first and foremost on America's energy supplies. And thanks to newly accessible shale gas reserves, natural gas should be a centerpiece of American energy policy. But he failed to recognize that his views on domestic energy supplies are at odds with his broad statement on eminent domain, especially with respect to natural gas.   

Since 1947, the federal Natural Gas Act has given federally certified interstate natural gas pipelines the power of eminent domain, to take (and pay for) land needed for the pipeline. Congress gave that power to build natural gas pipelines just nine years after the Natural Gas Act was first passed, to remedy an obvious problem left unsolved by the original bill: because long pipelines cross many property lines, every single property owner can threaten to block the whole project—namely, the inherent "holdout problem." If interstate natural gas pipelines projects were not able to utilize the power of eminent domain, those pipelines would not be built.

Natural gas is not alone in this respect. Federal law long has given eminent domain power to other private energy infrastructure projects, including certain oil pipelines (since 1941) and hydroelectric projects (since 1920). In 2005, Congress and President Bush overwhelmingly supported a new law giving eminent domain power to "national interest electric transmission corridors."

This cannot be characterized strictly as a Progressive Era violation of property rights: as far back as 1864, the federal government granted eminent domain power to railroads. (A 2008 report by the Congressional Research Service concisely summarizes this history.) Even Abraham Lincoln—no slouch on the subject of natural rights—understood that the full scope and nuance of property rights cannot be reduced to a bumper sticker, especially with respect to infrastructure in the public interest.

To be clear, Romney deserves no special criticism for his take on eminent domain and private projects. All of the GOP candidates probably would have given the same answer, had they been asked the same question, because they are thinking first and foremost of the Supreme Court's controversial decision in Kelo v. City of New London (2005), which affirmed a city's use of eminent domain to condemn houses to clear space for an economic redevelopment zone.

Kelo has become a rallying cry—and rightly so—against abuse of eminent domain power. But there is an important difference between taking land for private real estate projects that could simply be relocated, on the one hand; and taking land for private infrastructure projects that cannot be built absent eminent domain, because of the inherent "holdout problem," on the other.

The Republican candidates would be wise to keep this distinction in mind. Because if domestic natural gas—especially the vast new shale gas reserves—are to play a central role in American energy security, the next president and Congress will need to facilitate that process through proper administration of energy and environmental laws—including the eminent domain laws that make national energy infrastructure possible.

Adam J. White is a lawyer in Washington, D.C. 

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