Keystone XL Illustrates that Zoning and Permitting by Governments Are Unconstitutional
September 3, 2021
The Keystone XL heavy-oil pipeline project was inflated and blocked for long enough that TC Energy has cancelled the project and sued President Biden .
The local development of a mixed use—for example, the development, in a largely-suburban area, of a multi-unit residence, or a retail business, or a light-industrial business—regularly is blocked by zoning, and potential developers see no end in sight. Because of this, such projects never even get proposed.
In both cases, a few activists use political processes to impose their will to prevent many customers and producers from taking actions to realize the value of their current property and to add more value. In both cases, government people stand ready to gain crony funding and votes by empowering the few activists . And in both cases, government people are prohibited from doing this by the Fifth Amendment.
But congresses and presidents have failed to preemptively protect people’s Fifth Amendment property rights by enacting explicit statutes that would make the difference. Instead, politicians in all jurisdictions have helped activists, and by doing so have helped themselves to votes. And for their part, judges have left people’s Fifth Amendment property rights unsupported and instead have grabbed for themselves their own pieces of the administrative action.
This zero-sum game was well understood by the voters who the Constitution’s ratifiers needed to win over . Such voters had been willing to go to war against England. To put an end to this game, the ratifiers gave us all the legal framework we need.
It’s still ours, if we can keep it .
Zoning Lets Activists Block Customers
Zoning was originally sold as the way to preserve and enhance property. Property owners would be better off if their city governments would maintain whatever standards seemed the best .
In practice, zoning lets politically-vocal people block politically-quieter people from using their own property to add more value .
In the Progressives’ ongoing century-plus, this extension of so-called scientific management into city development was advocated both by crony business managers and by government people, and quickly spread and became near-ubiquitous .
Near-ubiquity, as we’ve seen recently with COVID-19 lockdowns and masking, greatly limits our ability to compare to counterexamples.
Even so, Houston emerged as a partial counterexample that shows that order readily emerges if there’s no zoning by city governments (at least like in this case, where covenants by neighborhood associations are allowed for the 25% of land where people want them) . (Note that just as property owners who are less vocal need their property rights to be made secure from city governments, property owners who have less voice need their property rights to be made secure from neighborhood associations .)
Boston emerged as a different counterexample that shows that centralized zoning by city governments has less power in practice than decentralized local initiative by customers and producers .
The overall lessons are simple and universal.
Empirically, government people and their cronies (and neighborhood associations) have often been unconstitutionally allowed to run rampant. Government people and their cronies (and neighborhood associations) if allowed to, will more-severely limit uses , will typically not change for long time periods, will sometimes change significantly and disruptively , and will always add costs by increasing business risks and extracting considerable rents.
In contrast, value-seeking customers, and the value-adding producers who need to satisfy them, will use detailed local knowledge  to put scarce resources to their most-valuable uses , if government people protect people’s property rights.
Permitting Lets Activists Block Customers
Where property rights are systematically disrupted citywide by zoning, property rights are systematically disrupted one project at a time by permitting.
In the case of the Keystone XL pipeline project, fossil-fuel liquids like those that would be produced given this pipeline are used by customers for 89% of the energy used for transportation . Alberta tar sands can produce heavy oil on a scale that can be processed best in Houston refineries. Pipelines are the safest, most-efficient way to transport this resource.
Pipelines are mature technology. Definitive risks can be insured against most efficiently by collaborating to take precautions to prevent losses in the first place; and insuring industrial risks is a mature business . Refineries use mature technologies, and suitably-configured refineries can process heavy oil. Distribution of transportation fuels to customers is mature technology.
But Progressives have settled on climate change as a crisis they can use to rationalize grabbing control over customers’ and producers’ voluntary cooperation, by grabbing for government people substantial control  over energy production and use.
In July 2008, TransCanada announced its planned Keystone XL expansion of its Keystone pipeline.
On September 19, 2008 TransCanada requested a cross-border permit, and on January 18, 2012 President Obama rejected the request.
On May 4, 2012 TransCanada again requested a cross-border permit, and on November 6, 2015 President Obama rejected this request.
On March 9, 2017 TransCanada resubmitted its request for a permit, and on March 24, 2017 the State Department approved the permit. But on November 20, 2017, the State Department announced it would review the permit again. Also, on November 9, 2018, U.S. District Judge Brian Morris published an opinion that the permit should be blocked pending a supplemental environmental review, and President Trump acted in accordance with the opinion .
On March 29, 2019 President Trump issued a permit, but on January 20, 2021, President Biden revoked the permit .
Under the guise of permitting, then, first Progressives inserted a delay of 13 years before customers and producers would have been able to voluntarily cooperate to develop and use resources using mature technologies, which greatly increased the project’s uncertainty and cost. Next, Progressives added another delay of at least 4 years. This was enough to end this voluntary cooperation by customers and producers, keeping some of this heavy oil in the ground for now.
For now, customers get no benefits from the heavy oil that’s kept in the ground. TC Energy, Alberta producers, and Houston refiners don’t get to develop resources and add value. TC Energy lost money that it will have to make up for by charging other customers more, or by suing. TC Energy’s suit is for $15 billion . Taxpayers will pay for President Biden’s defense and for any damages and court costs that are awarded. Customers, producers, and taxpayers lose. Biden wins votes, and Progressives win control.
But what exactly is permitting, anyway? If you set aside its familiarity as a common practice and you step back and think about it clearly, you can see that any kind of permitting is a grab of power that’s breathtaking in its audacity. Under permitting, we are no longer allowed to act independently to buy and to produce. First we must wait for permission, and only if deemed acceptable, receive permission.
There is a kind of permitting that’s useful: the use of permits to control maintenance operations that have potential hazards. This kind of permitting is a tool that helps keep people from being deprived of life or property , so naturally it was initially developed by producers’ people voluntarily.
There also is the harmful kind of permitting that has been used to block the Keystone XL pipeline project: the use of permits to control whether property owners get to use their property at all. This kind of permitting is a tool for exerting control to achieve ends that are politically decided. It unconstitutionally uses the force of law to deprive property owners of the use of their property, and therefore of the value of their property. Such permitting is a forcible taking of property, and it occurs with no just compensation for the injury, plus with the insult of added costs for project delays, litigation, and studies. And of course the losses of the added value from these resources, and the costs added by government people, are borne, in the end, by customers and taxpayers.
Customers Decide Best
To the extent that the climate is found to change and to the extent that people decide that it will be valuable to them to adapt to these changes or to limit further changes, these adaptations and this limiting will be done suboptimally if they are done using political-decisionmaking processes that limit the use of resources and talents, and that extract added rents along the way.
These adaptations and this limiting will be done optimally if customers and producers voluntarily cooperate to put scarce resources to their most-valuable uses and to add value.
Always, how well we live will be determined by who decides: customers, or cronies . The best control—the control that uses the most knowledge as inputs, uses the best thinking, and uses the quickest, finest, most-finely-distributed actions—is control by customers.
In nations where people are freer, mostly customers got wealthier, producers developed helpful technologies, and customers and producers led the transitions to an environment that’s cleaner . Afterwards, government people enacted laws and wrote regulations requiring smaller emissions of pollutants, and falsely claimed credit themselves for having made the environment cleaner. In nations where people are more coerced, the customers are poorer, the producers are less innovative, and the government people are wholly unresponsive, and the environment stays dirtier. The environment is cleanest where customers and producers are freest .
Notice about the timeline presented earlier that even though presidents Obama, Trump, and Biden took different actions on approving the Keystone XL permit, neither they nor anyone else took any action to repeal the Fifth-Amendment-violating unconstitutional statutes that were used as the rationales for their claiming they had the power to require this permit in the first place.
There’s a fundamental premise that underlies the actions (and inactions) of all these people: a shared, unquestioning belief that customers must not be in ultimate control, but that instead, government people and their cronies must be in ultimate control. This premise is agreed on, seemingly without conscious thought, by all Democratic elected representatives and by most Republican elected representatives . This premise fundamentally opposes the Constitution.
Let’s say that your key issue is climate change, and you want the best results. Or, say that your main concern is individual freedom.
In either case, you will be denied the results that you care about the most by the majority grifter class of government people and their cronies.
In either case, what you need is elected representatives who will tear down the Progressive state by not executing the unconstitutional enabling statutes, by repealing those statutes, and by enacting statutes that better-secure the applicable Fifth-Amendment protection by explicitly preventing deprivations of property without due process of constitutional military, criminal, or civil law.
To get elected representatives who will do this, what you need to do is to expand the beachhead currently held by Republican constitutionalists in various jurisdictions—the people whose Conservative Review Liberty Scores  would be at least 80% pro-liberty .
In all cases, we will do better as soon as we begin to appreciate the full extent of the deeply dug-in systems of Progressivism. And as soon as we vote to eliminate all carriers of this plague, in all races, especially locally, starting in each primary .
James Anthony is the author of The Constitution Needs a Good Party: Good Government Comes from Good Boundaries and rConstitution Papers: Offsetting Powers Secure Our Rights. He has written articles in rConstitution.us, American Greatness, Foundation for Economic Education, American Thinker, and The Federalist. Mr. Anthony is an experienced chemical engineer with a master’s in mechanical engineering.