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DAVID KRUSE

The last resort

June 26, 2015
Farm News

The 610-mile-long Sandpiper pipeline across North Dakota and Minnesota needed easements from 799 landowners in North Dakota alone. The company worked to get voluntary easements and got the number down to a handful from which they will have to use eminent domain for only one landowner who held out for principle.

The pipeline is underground, which to me is much less offensive than seeing gargantuan power lines looming over property as the Rock Island Clean Line and Grain Belt Express now propose.

When they talk about "process" for gaining easements the example in North Dakota is how it is supposed to work. The company should negotiate agreements with landowners to secure virtually all voluntary easements, with eminent domain used for just the last intransigent.

This process however, is not spelled out in the Iowa code for the specific amount of easements that companies need to acquire voluntarily through private deals before the state would grant the companies eminent domain power.

Legislation was proposed in the Iowa legislature that would require that a company would have to acquire 75 percent voluntary easements before the Utilities Board can grant use of eminent domain. The bill to do that, advanced by committee, was blocked by legislative leadership.

Eminent domain should be the last resort. While the "process" that politicians claim exists and that they profess to support is not specific as to when use of eminent domain is deemed appropriate, it would be extremely unsavory and costly for private companies to gain access to or have use of eminent domain power to acquire a majority of the easements that they need.

As of June 1, RICL had only gotten just 15 percent of the needed easements voluntarily. This means that up until when private companies gain a majority of needed easements, the landowners are still in control. The concept that commercial easements are worth only the value of farmland is also being challenged.

Commercial values are much higher than agricultural values and RICL or other private companies do not intend to farm but to move electricity for a substantial profit. These easements should likewise have a similarly higher commercial value unrelated to farmland values.

Wind turbines are sited with landowners who have all negotiated commercial deals with wind power companies and the towers for electrical lines planned are just as looming, yet give landowners less compensation for easements than wind turbine contracts receive.

Even the Iowa Farm Bureau is conflicted. They have typically always been very strong supporters of private property rights, but not this time. Their lack of support for a benchmark process to determine use of eminent domain prioritizes wind power interests over the rights of private landowners has been duly noted.

They do not appear to be able to discern the difference between a private property rights issue and support for wind energy. A Farm Bureau member explained, "RICL spent a great deal of time and money promoting their project to the upper levels of Iowa Farm Bureau Federation staff and at various high levels IFBF events.

I have been told that it was a very well produced marketing piece full of a lot of feel good, God Bless America moments.

The grass roots didn't stand a chance to have their voice heard or even to provide a balanced view of the project. I'm not sure that Iowa Farm Bureau is conflicted on the issue, I feel that it actively supported the RICL project in the beginning and now seems to have gone to the sidelines(to save face) as the focus on private property rights has become much stronger."

I have been a Farm Bureau member since I was 19 years old which was a while ago and like any organization there are times when interests conflict. There is no commercial reason for private companies to be handed easements by use of eminent domain until they have proved that they are economically and organizationally viable enough to have obtained a reasonable majority of easements through private treaty with landowners.

But once they have done so, then it is in the public interest that pipelines and power lines get built so eminent domain power is then applicable. That used to be the kind of position that the Farm Bureau would stand behind.

I have also been told FB fears setting a benchmark on the number of voluntary easements could become a hurdle for those wishing to build an ethanol pipeline across the state.

Now I would not think that my support for ethanol would be questioned after all these years, but whoever plans to build an ethanol pipeline should not be granted eminent domain power until they have proven their economic and organizational viability by acquiring a strong majority of easements from landowners by private treaty without the threat of eminent domain being part of the negotiation.

Believe me, you can favor oil pipelines and power lines and ethanol pipelines and not throw private property rights under the bus to be crushed by a process dominated by political interests.

The reality is that for-profit power line companies, in the instance of RICL, will take power generated from wind turbine farms that exist without employing the use of eminent domain and deliver it to out-of-state customers by securing easements by force using eminent domain from landowners who are denied the same market determination of the value of easements that farms with wind turbines have secured.

These legislators and the IFB will often portray themselves as conservative Republicans which has previously meant strong support for private property rights and commercial fairness, while in this instance they would appear to either have become crony capitalists or are making an exception for socialism.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

 
 

 

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