Why Property Rights are Imperative for Energy Transport Prosperity
Published in January, 2019
Canada has become a banana republic when it comes to pipelines...
Property rights protect landowners. Without them, farmers and ranchers are forced to subsidize shareholders in energy companies. This of course can generate a lot of resentment toward industry.
We wonder if the willingness of farmers in Mexico to act as accomplices to oil thieves -- who are literally building their own pipelines to siphon it off! -- is related to resentment over being expropriated for energy transport projects.
At any rate, what is clear is that the property rights of pipeline companies in Mexico are not secure. Because government cannot protect property, they are actually shutting lines down. And turning to slower, riskier, and more expensive modes of truck and rail.
And so we now have Mexico being compared to the chaotic socialist basket case Venezuela.
But is Canada really all that different from Mexico?
Here in Canada, property rights are not protected so landowners can be expropriated by Ottawa and the provinces for energy transport projects.
Here in Canada, pipeline companies themselves do not even have property rights.
Which is why we have seen so many projects strangled by red tape, placed in suspended animation, or killed outright.
Worse, anti pipeline saboteurs routinely vandalize pipeline infrastructure putting local energy corridor residents -- pipeline landowners like you -- and the environment at risk. The punishment meted out by the courts in every case is never more than a slap on the wrist.
The absurd tragedy of course is that in Mexico -- one of Canada's major trading partners with whom our laws and regulations are very much harmonized -- thieves can build pipelines while north of the 49th, major companies can't.
Property rights would solve the problem in both countries. But for now, Canada remains much more like Mexico -- and Mexico more like Venezuela -- than the United States.