Elizabeth Brubaker

The summer issue of Pipeline Observer, the magazine published by the Canadian Association of Energy and Pipeline Landowner Associations, makes it clear that many landowners’ concerns about the pipelines and transmission lines that cross their property do not reflect run-of-the-mill NIMBYism. These owners support energy development, but want to be respected as partners in the process. Rather than passively accepting expropriation, they demand the right to negotiate construction practices, operating procedures, and decommissioning rules that will protect their families, their businesses, and the environment.

CAEPLA is committed to working with the energy industry. It is not opposed to pipelines – it understands that they are the cheapest and safest way to transport oil and gas. But it stresses the need for industry to cooperate with landowners to ensure that pipelines are safe and do not needlessly inconvenience those whose land they cross.

Articles in the magazine approach these issues from a variety of angles – historical, legal, and environmental. A number focus on expropriation:

• CAEPLA’s president traces the founding of the modern Canadian landowner movement to an Ontario farmer who, in the 1970s, fought against the pipeline industry’s arbitrary expropriation powers. (Read more about that remarkable struggle here.)

• The leader of Canada’s Libertarian Party advocates a property rights approach to building pipelines. He argues that, given the industry’s recent difficulties getting stakeholder and government approval, private negotiations with landowners regarding access and compensation would ultimately be more practical.

• A financial analyst likewise suggests that negotiation with landowners would be more effective and more equitable than expropriation. He calls the holdout problem, long used to justify expropriation, “mostly fake.” As long as pipeline companies consider several alternate routes, landowners will not be monopolists and will not be able to demand unfair compensation –  competition will give them incentives to agree to fair offers. As an example of voluntary siting, he points to private highways that have been built in the US without expropriation.

• Similarly, a law school dean looks at US transmission lines built without expropriation, proving that utilities are capable of building infrastructure through voluntary market transactions. “Why,” he wonders, “aren’t all such projects done in the same way?”

• The magazine also includes two excerpts from Environment Probe’s work on expropriation – a historical overview of expropriation law in Canada and a primer on expropriation in Manitoba. Read the excerpts here.

The magazine addresses several other important legal and financial issues, as well:

• An energy industry executive discusses provisions in the new Pipeline Safety Act that enshrine the polluter pay principle and make companies liable for the damage they cause. The act establishes a no-fault liability limit of $1 billion for the operators of major pipelines and requires those operators to maintain the financial resources necessary to cover that liability.

• Sounding a less optimistic note, a lawyer reviews the risks of aging pipelines – including contamination, corrosion, collapse, and land subsidence – and notes that the abandonment funding mandated by the National Energy Board will be sufficient to cover the removal of just 20 percent of the country’s aging pipeline infrastructure.