Keystone East: Not as Reasonable as Reason Thinks

The Keystone XL pipeline is something no libertarian can support if consistency with free market principles matters. But that doesn’t stop a lot of right-leaning self-proclaimed libertarians from instinctively defending it — after all, anything that promotes fossil fuel use and gets environmentalists bent out of shape has to be “libertarian,” right?

Thus A. Barton Hinkle’s “Get Ready for Keystone Pipeline 2?” (September 15) in Reason magazine (motto: “Free Minds and Free Markets”). Hinkle ridicules environmentalist criticism of a proposed Atlantic coast pipeline shipping natural gas to North Carolina from West Virginia’s Marcellus shale formation. According to Hinkle, the power companies comply with EPA regulations. What’s more, environmentalists are partly to blame for the rise of natural gas consumption reflected in new pipeline projects, because they make it more difficult to expand production of coal-fired electricity. And, he adds, “[n]obody who protests power plants and power lines ever volunteers to give up electricity …” Yuk yuk yuk!

In fairness to Hinkle, he addresses, at respectable length, the problematic nature of the eminent domain abuses required to build such pipelines — fairly unusual among fossil fuels cheerleaders on the self-proclaimed libertarian right.

But he leaves out several things. First, eminent domain isn’t the only way in which the state makes natural gas pipelines artificially feasible. Pipelines also depend on liability caps or regulatory preemption of tort liability for leaks (those EPA regulations Hinkle makes so much of), contamination of groundwater and earthquakes associated with fracking and pipeline transport.

Second, it’s not just natural gas, but also coal and oil, that are artificially cheap and economical as a result of state-granted subsidies and privileges. Coal and oil, like natural gas, depend on privileged access to land in the federal domain from which ordinary individual homesteaders have been excluded — or even on land that was stolen either from First Nations or white settlers. The Bundy ranch, site of a recent standoff between a rancher and the federal government, is situated on what had originally been tribal land. And a lot of Appalachian coal mining takes place on land that had already been homesteaded in the days before fully developed state and county governments or regular land titles, then stolen by mining companies with better lawyers. All fossil fuel industries depend on the same liability caps and regulatory preemption of tort law.

And third, Hinkle makes the unwarranted assumption that the level of demand for energy is inelastic, and that the present energy dependency of our economy has nothing to do with assorted subsidies to fossil fuels and transportation. Besides all the fossil fuels subsidies and privileges mentioned above, present levels of long-distance transportation use also reflect heavy government subsidies. The civil aviation infrastructure was built almost entirely at government expense using eminent domain, and jumbo jets only became economically viable after WWII because the Cold War heavy bomber program enabled the aircraft industry to make full use of the expensive dies required to build them. The car culture has grown far larger than it otherwise would have because of urban planning and zoning, subsidized utilities for new subdivisions and use subsidies and eminent domain to support freeway construction. The taxpayer-subsidized Interstate Highway System is also a massive subsidy to artificially long corporate supply and distribution chains.

Hinkle ignores the possibility that, without government’s thumb on the scale to facilitate the consumption of energy, we might just use less of it. We might buy food and manufactured goods produced in our own communities, live closer to the places we work and shop, and keep more energy-efficient homes.

The libertarian problems with fossil fuels don’t stop with the use of eminent domain to build pipelines. That’s only the beginning. Fossil fuels in general are just one example of a larger function of the capitalist state: Providing artificially cheap inputs for an industrial model based on extensive addition of inputs rather than more efficient use of existing ones.

In other words, principled libertarians need to consistently apply their opposition to “crony capitalism” to all manifestations of it, and direct their distaste for welfare to its biggest recipients.

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