Eminent Domain for Pipeline? Not Likely

KELO's Ben Dunsmoor stirs some coals over the Transcanada oil pipeline, reporting that the Canadian corporation might turn to eminent domain to get the land it needs to run its pipeline across South Dakota. "They have the right to use [the land]," says Freeman farmer Mike Schultz, for whose land Transcanada has made an evidently unsatisfactory offer, "bu I would say they would be a lot better off if they could make 75 to 80 percent of the people happy."

Toughen up, Farmer Schultz! We can push Transcanada harder than they that. Transcanada isn't the government; it's a foreign company. It has no right to eminent domain. I would say they need to make 100% of the landowners along the proposed corridor happy or move their pipeline elsewhere. South Dakota is under no obligation to make this pipeline happen or help Transcanada minimize its costs. Eminent domain is only for projects that serve the public good, not private development, and I have yet to see how a pipeline through the state makes life better for South Dakotans. It's not like we'll suddenly see more oil in our state; it all gets pumped to Illinois. The pipeline won't increase anyone's land values or tax revenue. As Schultz points out, farmers would lose profitable land. The pipeline doesn't improve South Dakota's quality of life one iota; it just sends oil to Illinois and money to Canada.

I wouldn't worry about eminent domain on this one. In reaction to the Supreme Court's 2005 Kelo v. New London decision, the 2006 South Dakota Legislature passed HB 1080, which prohibits the use of eminent domain "For transfer to any private person, nongovernmental entity, or other public-private business entity." (The bill passed nearly unanimously, with just one nay in the House.) If anyone can show me how Transcanada is exempt from this law, I'll welcome the correction. But KELO seems to be raising a little ruckus that simply can't arise. The pipeline is a private business venture, not a highway, not a public utility. The state should see no benefit in and no legal basis for taking land out of the hands of farmers and putting it into the hands of a foreign company.