Pipeline Protester: 'Our Rights as Native People'

In North Dakota, the construction of an oil pipeline has ceased due to the Standing Rock Sioux Tribe's protests. The Native American protesters oppose the pipeline because it crosses sacred Sioux burial ground and additionally they fear that it could pollute local drinking water. Energy Transfer Partners, the company that owns the pipeline, was given full property rights to the land by the U.S. Army Corps of Engineers, but the Obama administration stepped in and halted construction of the pipeline so that the Corps can reevaluate their decision to approve the pipeline.

This is an example of poorly defined property rights resulting in conflict over negative production externalities. The pipeline is a negative externality to the Native Americans because they would be left without compensation for polluted drinking water and the destruction of their sacred burial grounds. Perhaps the two groups could have negotiated to find a Coasian solution if the pre-requisite of clearly defined property rights had been met. However, this incident demonstrates that it is difficult for the government to delineate property rights so finding a Coasian solution is not always possible.