N LA cases to provide property rights tests

Louisiana is reaching a point where it must affirm private property rights in dealing with private company’s abilities to expropriate property.

Owners of land in north Louisiana face a couple of challenges on this issue. In northeast Louisiana, in response to the Hyperion data center project that promises to infuse $50 billion into the economy and create hundreds of well-paying jobs, the large power needs have put landowners on alert that the electric utility Entergy, and to a much smaller extent the electric cooperative Northeast Louisiana Power Coop, shows signs they will pursue expropriation of land to provide the transmission line infrastructure to send power to Hyperion.

The Louisiana Constitution permits this, but only for a “public purpose” as outlined where whether that qualifies is justiciable. Some landowners think these transmission lines don’t qualify as these primarily, they argue, would help Hyperion.

These opponents could take the power companies to court, but a far less onerous political solution exists. The Public Service Commission regulates such lines, and could force their rerouting or concessions by the companies to increase the public benefit brought about by those. Already, state legislators have suggested the same at a Dec. 16 meeting of the LPSC, if not delaying consideration until a later date with more facts in.

Such a solution is absent in another such case. This involves an entirely private concern wanting to lay pipelines to transport captured carbon for enhanced oil recovery purposes across northwest Louisiana. Again, landowners doubt whether a true public purpose exists for this that justifies an exercise of expropriation.

Although the Constitution doesn’t mention explicitly this possibility, unlike its naming public utilities having this power, statute tacks on the specific instance of carbon transport for enhanced oil recovery. Still, unlike a public utility whose transmission lines could serve the public as a whole, this clearly does not. Worse, no direct political solution exists, as statute places the matter in the hands of bureaucrats in the Department of Conservation and Energy as to whether it accepts a public purpose rationale.

To say that disseminated reason isn’t thin in this instance is generous, to say the least. The company declares the public purpose as the pipeline would enable drawing more hydrocarbons out of the ground, incrementally reducing America’s energy dependence on foreign sources – an argument forgiving in reach and scope to the point if generally applied makes a mockery out of the concept of “public purpose.” If accepted by DOCE, the only way to stop that would be through an expensive court battle with an uncertain outcome.

Legislators should prevent this. Statute, if not the Constitution, should be tightened to define public purpose as something that conveys direct benefits largely accruing to state residents, not in some diffuse sense well concentrated outside the state’s borders. If DOCE allows this explanation to win the day, it sets a precedent greatly expanding government expropriation powers and eroding property rights. Legislation needs to cut this off at the pass.