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DAVID KRUSE

By Staff | Dec 19, 2014

A paradigm is defined by Dictionary.com as “a framework containing basic assumptions, ways of thinking and methodology that are commonly accepted.”

Ideas don’t become paradigms overnight, as the fundamentals that form them require that they be hardened from repeated experiences over a considerable period of time.

They don’t even have to be real. Impressions or misimpressions can become paradigms which serve as the reality.

I see paradigms in the efforts by commercial concerns to build pipelines and power transmission lines across rural private property requiring easements.

It is commonly perceived that pipe and transmission line companies can use eminent domain to secure the easements they need.

Another paradigm is that while wind turbines pay landowners annual payments for easements, pipe and transmission line companies make one payment to buy an easement.

Another paradigm is that commercial easements through farmland are worth farmland values rather than commercial values. I think that all of these paradigms deserve to be aggressively challenged as being inaccurate or outmoded.

That these commercial companies can gain use of eminent domain to force landowners to surrender easement rights, this should be prohibited as a violation of property rights protection. Eminent domain was created for public interest, not private profits. The REC or TVA or Highway Commission are government acts, entities or agencies. After they build a public highway, no private company owns it.

Commercial companies such as the Rock Island Clean Line who intend to build a power transmission line connecting power generated by wind turbines in the Western Corn Belt to consumers in Illinois, or Energy Transfer Partners, who plans to build a pipeline to pump oil from the Bakken fields in North Dakota to Illinois, should pay negotiated values for these easements.

These are private, for-profit commercial enterprises. They build these projects, they own them and they profit from them. They are not government entities.

How can you justify the government giving the power to private companies to take private property away from landowners with a government sanctioned power reserved for public interest?

That would be government sanctioned commercial confiscation. The Iowa Utilities Board will have to decide how to justify something like that.

If private companies are not successfully making deals to get voluntary easements then they are not viable entities. The government should not be running interference putting their interests above landowners.

A private company recently buried more than 800 miles of fiber optic cable between Chicago and a New Jersey financial trading exchange without the use of eminent domain. It made commercial deals with property owners for the entire route. Why is that any different than building a power transmission line or burying an oil pipeline?

These are all private companies engaging in commercial enterprises for profit.

The second paradigm is that easements for power lines or pipelines can be settled with a single one-time payment up-front while easements for wind turbines pay annual payments.

Who made that rule? First of all, every wind turbine that you see was the result of a commercial agreement between the landowner and commercial company. None of the towers is the forced result of use of eminent domain.

They made deals with land owners. The transmission line towers proposed by RICL will rival the size of wind turbines and the revenue generated from them can be shared with landowners just like those who agreed to allow wind turbines to be sited on their property. The easement lasts forever and the payments for power lines as proposed don’t.

The third paradigm that needs to be broken is that the value of easements through farmland is based on farmland values. Go figure.

For example, Holiday Inn Express is building a new motel in Spencer. Did it pay a farmland value for the property or a higher rate for commercial purposes?

Holiday Inn doesn’t plan to farm the ground and neither RICL nor Energy Transfer Partners don’t either.

The value of a private easement should be determined by its commercial value which is typically a multiple of farmland valuation.

The bottom line is that these old paradigms need to be deleted and a new working process where commercial concerns negotiate values with landowners for easements allowing private companies to build pipelines and power lines takes their place.

Let the market decide what happens. Private commercial enterprises should not gain use of eminent domain, they should pay annual payments for the duration of their enterprise and the easements should be valued as commercial property values rather than farmland.

These companies have made claims that they negotiate values, but the only way that they will really negotiate is if landowners collectively turn down the valuations offered and break the paradigms that these commercial companies intend to exploit for their commercial gain.

If state or federal governments decide that these projects are worthwhile and they are of economic benefit they can provide economic development incentives to help these companies.

Governments should not be allowed, however, to sacrifice the rights of private property holders or help private companies game a system over individuals where they can acquire easements below commercial market values.

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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