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Pipelines and Privileged Profits vs. Private Property Rights

Here’s a great op-ed from Jason Lee Byas at C4SS, in which he takes sometime libertarian Nick Gillespie to task for a recent pro-business op-ed in favor of the Keystone XL pipeline: One Reason Not to Build the Keystone XL Pipeline: Justice. From the column:

The Keystone XL pipeline has inspired a lot of controversy. For defenders of freed markets, however, it shouldn't. Libertarians should emphatically and unequivocally oppose the pipeline. . . . Since beginning to plan Keystone XL, TransCanada Corporation has used eminent domain to steal more than a hundred tracts of land in Texas alone. If it gets the green light, the pipeline will run up through the plains like a burglar on a spree. Of course, the company does initially offer those who have what they want a chance to make the transaction voluntarily. When that doesn't work, though, unsuspecting landowners receive letters like the one Julia Trigg Crawford got, saying If Keystone is unable to successfully negotiate the voluntary acquisition of the necessary easements, it will have to resort to the exercise of its statutory right of eminent domain.

As Lysander Spooner once remarked, at least a highwayman does not pretend that he has any rightful claim to your property.

If you're like the Crawfords, any deviation from that final offer and you'll hear nothing from TransCanada until your land's condemned. As word spreads, landowners feel threatened. They scramble to agree with whatever crumbs they're offered, before their land just gets taken instead.

. . . Whatever justifications are offered for a hypothetical, peacefully acquired pipeline do not justify the real world pipeline. At least no more than justifications for a hypothetical parking lot would justify one built by taking a wrecking ball to Nick Gillespie's home. If the title libertarian is to mean anything, it must mean a defense of justice. It cannot, and must not, mean endorsing feudalism whenever it's good for the economy.

— Jason Lee Byas, One Reason Not to Build the Keystone XL Pipeline: Justice, at the Center for a Stateless Society (23 February 2013)

Read the whole thing. It’s great.

A couple of quick additional comments from me that I originally posted on the Facebook thread from my sharing the story. As a sidebar to a comment I made about Gillespie’s rhetorical approach, and Jason’s response to it, I mentioned:

. . . My own view is that it is probably pretty near impossible to build a pipeline like Keystone XL without exercising some aggressive government powers; for similar reasons to my reasons for thinking that in a free market probably nobody would have built the Hoover Dam. Not because there’s any reason to think it would be prohibited de jure but because there are reasons to think that, de facto, substitute goods would more or less always be preferable without significant political externalization of the costs of the projects. So justice is a reason to oppose the project as it is actually being conducted, and practicality is a reason to oppose an imaginary free-market version of the same project.

— Charles Johnson, 24 February 2013 11am

Stephan Kinsella and Nathan Scott both asked me what I thought about the use of market means (such as options payments) to assemble rights of way for a long pipeline non-coercively, without resorting to eminent domain in order to coerce holdouts. Now I actually don’t think that high-priced holdouts are the only problem here, but even if they were, I think it would still pose a pretty serious problem for this sort of continental-scale, massively capitalized extractive-industry projects no matter how much fancy contracting you try to do to route around the problem. Emphasis and paragraph breaks added:

Sure, but purchasing options carries a cost. It’s possible for the cost to be outweighed by the benefit of avoiding problems with holdouts. But if the cost of purchasing the options in the first place outweighs the potential benefits of the project as a whole, it won’t matter. So what we have to look at is, either the path of options purchases will be relatively narrow and tied to the concrete details of the project (in which case you replicate the risk of holdouts — the point of failure becomes someone who sees that you need an option from them, and holds out for a higher price on the option) or else will be relatively broad and include multiple possible paths (in which case you allow for routing around the holdouts, but you have to sink more money into paying for options from people whose property you don’t actually end up using).

Now, there may be some discount rate on the options at which the costs of paying for the unused options come out to be less than the costs of of paying for a single-point-of-failure holdout, and also come out to be less than the profits from running the pipeline. But the longer you make the pipeline, the more you multiply those transaction costs, and they don’t necessarily scale linearly with the length of the pipeline either (the longer the path, the wider the possible divergence you have to account for). I think this is a general problem for heavy infrastructure under free market conditions — you’d tend to see a lot more mesh networks and a lot fewer hub-and-spoke networks.

But setting that aside I also have independent reasons for thinking that demand schedules for petroleum would shift significantly leftward, while the costs of extracting and refining petroleum would be significantly higher, with the removal of various state subsidies to oil TNCs. If so there’d be considerably less profit in putting together an oil pipeline and relatively greater investment in producing energy by other means.

— Charles Johnson, 24 February 2013, 11am

I will just add here that mega-industrial projects like Keystone XL, the Hoover Dam and all the rest of them are in many ways deeply undesirable, ecological catastrophes and massively centralizing economic power (either in the hands of the corporate owners or in the hands of the political monopolists who control them, as the case may be). So even if there were some feasible way to build such projects without massive state subsidies in seizing the land and eating the costs — I don’t think there is, but even if there is — they would still, nevertheless, be worth calling out, organizing against, and using freed-market social activism against. But as things stand, as Jason rightly points out, these kinds of massive-scale projects are entirely dependent on the political means of state capitalist confiscation and monopoly.

Another commenter, rather less pleasant, told me that my priorities were obviously insane because, eminent domain or not, The US system is totally dependent on pipelines. . . . I replied:

That sounds like a problem with the US system, not a problem with property rights. If the former come into conflict with the latter, the latter is always more important. Of course, it is ludicrous to claim that in any given case on the margin it is somehow utopian to just suggest that somebody’s house ought not to be condemned by the state in order to force a sale. It’s easy not to do that: you just stop doing it. Nobody’s going to die and no “system” is going to suffocate or instantly evaporate as a result of respecting a homeowner’s rights on the margin. Now it is true that consistently doing this on the whole would eventually produce some radical transformations to business as usual and the infrastructure of everyday life, as people are forced to develop alternatives. But I see that as a benefit of the proposal, not as a drawback. If the US system survives only at war with the human-scale property rights of homeowners, then people need to work out a new system, because the US system sucks, and the sooner they find they have to get on that, the better.

— Charles Johnson, 24 February 2013, 12pm

Also.

Friday Lazy Linking

Friday Lazy Linking

The Clean Water Act Vs. Clean Water

Market Anarchists probably haven’t written about the environment as much as we should. But not because we don’t have anything to say about it. When we do address environmental issues specifically, one of the things that I think market Anarchists have really contributed to the discussion are some key points about how ex ante environmental laws, intended to curb pollution and other forms of environmental damage, makes some superficial reforms, but at the expense of creating a legal framework for big polluters to immunize themselves from responsibility for the damage they continue to cause to people’s health and homes, or to the natural resources that people use from day to day;[1]. And, also, how legislative environmentalism in general tends to crowd out freed-market methods for punishing polluters and rewarding sustainable modes of production. For a perfect illustration of how legislative environmentalism is actively hurting environmental action, check out this short item in the Dispatches section of this month’s Atlantic. The story is about toxic mine runoff in Colorado, and describes how statist anti-pollution laws are stopping small, local environmental groups from actually taking direct, simple steps toward containing the lethal pollution that is constantly running into their communities’ rivers — and how big national environmental groups are lobbying hard to make sure that the smaller, grassroots environmental groups keep getting blocked by the Feds.

In the surrounding steep valleys, hundreds of defunct silver and gold mines pock the slopes with log-framed portals and piles of waste rock. When water flows over the exposed, mineral-laden rock in and around the mines, it dissolves zinc, cadmium, lead, and other metals. The contaminated water, sometimes becoming acidic enough to burn skin, then dumps into nearby streams. So-called acid mine drainage, most of it from abandoned boom-time relics, pollutes an estimated 12,000 miles of streams throughout the West—about 40 percent of western waterways.

Near Silverton, the problem became bad enough to galvanize landowners, miners, environmentalists, and local officials into a volunteer effort to address the drainage—work that has helped avert a federal Superfund designation and restore a gold-medal trout population downstream. With a few relatively simple and inexpensive fixes, such as concrete plugs for mine portals and artificial wetlands that absorb mine waste, the Silverton volunteers say they could further reduce the amount of acid mine drainage flowing into local rivers. In some cases, it would be simple enough just to go up there with a shovel and redirect the water, says William Simon, a former Berkeley ecology professor who has spent much of the past 15 years leading cleanup projects.

But as these volunteers prepare to tackle the main source of the pollution, the mines themselves, they face an unexpected obstacle—the Clean Water Act. Under federal law, anyone wanting to clean up water flowing from a hard-rock > mine must bring it up to the act's stringent water-quality standards and take responsibility for containing the pollution—forever. Would-be do-gooders become the legal operators of abandoned mines like those near Silverton, and therefore liable for their condition.

— Michelle Nijhuis, The Atlantic (May 2010): Shafted

Under anything resembling principles of justice, people ought to be held responsible for the damage they cause, not for the problems that remain after they try to repair damage caused by somebody else, now long gone. But the basic problem with the Clean Water Act, like all statist environmental regulations, is that it isn’t about standards of justice; it’s about compliance with regulatory standards, and from the standpoint of an environmental regulator the important thing is (1) that government has to be able to single out somebody or some group to pigeonhole as the People In Charge of the site; and (2) whoever gets tagged as taking charge of the site, therefore, gets put on the hook for meeting the predetermined standards, or for facing the predetermined penalties, no matter what the facts of the particular case and no matter the fact that they didn’t do anything to cause the existing damage.[2]

The obvious response to this should be to repeal the clause of the Clean Water Act which creates this insane condition, and leave the people with a stake in the community free to take positive action. Unfortunately, the best that government legislators can think of is to pass a new law to legalize it–i.e., to create yet another damn bureaucratic permit, so that shoestring-budget community groups can spend all their time filling out paperwork and reporting back to the EPA instead. Meanwhile, the State of the Debate being what it is, even this weak, hyperbureaucratic solution is being opposed by the lobbying arms of several national environmental groups:

In mid-October, Senator Mark Udall of Colorado introduced a bill that would allow such "good Samaritans" to obtain, under the Clean Water Act, special mine-cleanup permits that would protect them from some liability. Previous good-Samaritan bills have met opposition from national environmental organizations, including the Sierra Club, the Natural Resources Defense Council, and even the American Bird Conservancy, for whom any weakening of Clean Water Act standards is anathema. Although Udall's bill is narrower in scope than past proposals, some environmental groups still say the abandoned-mine problem should instead be solved with additional regulation of the mining industry and more federal money for cleanup projects. If you support cleaning up the environment, why would you support cleaning up something halfway? asks Natalie Roy, executive director of the Clean Water Network, a coalition of more than 1,250 environmental and other public-interest groups. It makes no sense.

— Michelle Nijhuis, The Atlantic (May 2010): Shafted

All of which perfectly illustrates two of the points that I keep trying to make about Anarchy and practicality. Statists constantly tell us that, nice as airy-fairy Anarchist theory may be, we have to deal with the real world. But down in the real world, walloping on the tar baby of electoral politics constantly gets big Progressive lobbying groups stuck in ridiculous fights that elevate procedural details and purely symbolic victories above the practical success of the goals the politicking was supposedly for — to hell with clean water in Silverton, Colorado, when there’s a federal Clean Water Act to be saved! And, secondly, how governmental politics systematically destroys any opportunity for progress on the margin — where positive direct action by people in the community could save a river from lethal toxins tomorrow, if government would just get its guns out of their faces, government action takes years to pass, years to implement, and never addresses anything until it’s just about ready to address everything. Thus Executive Director Natalie Roy, on behalf of More Than 1,250 Environmental And Other Public-Interest Groups, is explicitly baffled by the notion that the people who live by these rivers might not have time to hold out for the decisive blow in winning some all-or-nothing struggle in the national legislature.

The near-term prospects of Udall’s half-hearted legalization bill don’t look good. The conclusion from the Atlantic is despair:

Just a few miles from Silverton, in an icy valley creased with avalanche chutes, groundwater burbles out of the long-abandoned Red and Bonita gold mine. Loaded with aluminum, cadmium, and lead, it pours downhill, at 300 gallons a minute, into an alpine stream. The Silverton volunteers aren't expecting a federal windfall anytime soon—even Superfund-designated mine sites have waited years for cleanup funding, and Udall's bill has been held up in a Senate committee since last fall. Without a good-Samaritan provision to protect them from liability, they have few choices but to watch the Red and Bonita, and the rest of their local mines, continue to drain.

— Michelle Nijhuis, The Atlantic (May 2010): Shafted

(Illustration by Mark Jeffries.)

But I think if you realize that the problem is built in, structurally, to electoral politics, the response doesn’t need to be despair. It can be motivation. Instead of sitting around watching their rivers die and waiting for Senator Mark Udall Of Colorado to pass a bill to legalize their direct action, what I’d suggest is that the local environmental groups in Colorado stop caring so much about what’s legal and what’s illegal, consider some countereconomic, direct action alternatives to governmental politics, and perform some Guerrilla Public Service.

I mean, look, if there are places where it would be simple enough just to go up there with a shovel and redirect the water, then wait until nightfall, get yourself a shovel and go up there. Take a flashlight. And some bolt-cutters, if you need them. Cement plugs no doubt take more time, but you’d be surprised what a dedicated crew can accomplish in a few hours, or a few nights running. If you do it yourself, without identifying yourself and without asking for permission, the EPA doesn’t need to know about it and the Clean Water Act can’t do anything to punish you for your halfway clean-up.

The Colorado rivers don’t need political parties, permits, or Public-Interest Groups. What they need is some good honest outlaws, and some Black-and-Green Market entrepreneurship.

See also:

  1. [1]See, for example, Kevin Carson’s Monbiot: One Step Back and Fred Foldvary on Green Taxes, or my brief comments over at Alas, A Blog↩
  2. [2]Ex ante regulation, by definition, isn’t about looking at particular cases, and it isn’t about looking back to who caused what; it’s about identifying, licensing, controlling, and penalizing agents according to the situation right now. That sounds all progressive and forward-looking and practical, until you realize that the direct effect is to make sure that nobody who gives a damn about their community is able to afford to take responsibility for dealing with preexisting damage; all kinds of positive action get burned out, and all that’s left are cash-strapped, overworked government programs, which can proceed because government has made up the doctrine of sovereign immunity in order to protect its own enterprises from being held legally responsible for anything.↩
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