IWS Documented News DAILY POSTINGS

IWS Documented News Service

_______________________________

Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

________________________________________________________________________

 

Congressional Research Service (CRS)

 

Keystone XL Pipeline Project: Key Issues

Paul W. Parfomak,Specialist in Energy and Infrastructure Policy

Neelesh Nerurkar, Specialist in Energy Policy

Linda Luther, Analyst in Environmental Policy

Adam Vann, Legislative Attorney

May 9, 2012

http://www.fas.org/sgp/crs/misc/R41668.pdf

[full-text, 40 pages]

 

Summary

In 2008, Canadian pipeline company TransCanada filed an application with the U.S. Department

of State to build the Keystone XL pipeline, which would transport crude oil from the oil sands

region of Alberta, Canada, to refineries on the U.S. Gulf Coast. Keystone XL would ultimately

have the capacity to transport 830,000 barrels per day, delivering crude oil to the market hub at

Cushing, OK, and further to points in Texas. TransCanada plans to build a pipeline spur so that oil

from the Bakken formation in Montana and North Dakota can also be carried on Keystone XL.

 

As a facility connecting the United States with a foreign country, the pipeline requires a

Presidential Permit from the State Department. In evaluating such a permit application, the

department must determine whether it is in the “national interest,” considering the project’s

potential effects on the environment, economy, energy security, foreign policy, and other factors.

Environmental impacts are considered pursuant to the National Environmental Policy Act, and

documented by the State Department in an Environmental Impact Statement (EIS). The final EIS

was released for the Keystone XL pipeline permit application in August 2011, after which a 90-

day public review period began to make the national interest determination. During that time the

State Department determined that more information was needed to consider an alternative

pipeline route avoiding the environmentally sensitive Sand Hills region of Nebraska, an extensive

sand dune formation with highly porous soil and a shallow depth to groundwater recharging the

Ogallala aquifer.

 

The Temporary Payroll Tax Cut Continuation Act of 2011 (P.L. 112-78) required the Secretary of

State to approve or deny the project within 60 days. On January 18, 2012, the State Department,

with the President’s consent, denied the Keystone XL permit, citing insufficient time under this

deadline to properly assess the reconfigured project. Subsequently, TransCanada announced that

it would proceed with development of the pipeline segment connecting Cushing, OK, to the Gulf

Coast as a stand-alone project not requiring a Presidential Permit—a decision supported by the

Obama administration. In April 2012, TransCanada submitted to Nebraska proposed pipeline

routes avoiding the Sand Hills. Subsequently, on May 4, 2012, TransCanada submitted a new

application for a Presidential Permit that includes proposed new routes through Nebraska. With

the new permit application, the NEPA compliance process begins anew, although it may draw

from relevant existing analysis and documentation prepared for the August 2011 final EIS.

 

In the wake of the State Department’s denial of the Presidential Permit, Congress has debated

legislative options addressing the Keystone XL pipeline. The Surface Transportation Extension

Act of 2012, Part II (H.R. 4348) and the North American Energy Access Act (H.R. 3548) would

transfer the permitting authority for the Keystone XL pipeline project to the Federal Energy

Regulatory Commission, requiring FERC to issue a permit within 30 days of enactment. The

Keystone For a Secure Tomorrow Act (H.R. 3811), the Grow America Act of 2012 (S. 2199), S.

2041 (a bill to approve the Keystone XL pipeline), the EXPAND Act (H.R. 4301), and the

Energizing America through Employment Act (H.R. 4000) would immediately approve the

original permit application filed by TransCanada. All seven bills include provisions allowing for

later alteration of the pipeline route in Nebraska. S. 2100 and H.R. 4211 would suspend sales of

petroleum products from the Strategic Petroleum Reserve until issuance of a Presidential Permit

for the Keystone XL project. Changing or eliminating the State Department’s role in issuing

cross-border infrastructure permits may raise questions about the President’s executive authority,

however. H.R. 3900 would seek to ensure that crude oil transported by the Keystone XL pipeline,

or resulting refined petroleum products, would be sold only into U.S. markets, but this bill could

raise issues related to international trade agreements.

 

 

Contents

Introduction...................................................................................................................................... 1

Pipeline Description .................................................................................................................. 3

Keystone XL Extension to Bakken Oil Production............................................................. 5

Presidential Permit Application Requirements ................................................................................ 6

Documenting Environmental Impacts Under NEPA................................................................. 7

Overview of the NEPA Process for the XL Pipeline Project............................................... 7

The Role of Environmental Impacts in a National Interest Determination....................... 11

Presidential Permit Denial....................................................................................................... 12

The New Permit Application Process................................................................................ 13

State Siting and Additional Environmental Requirements ...................................................... 14

Legislative Efforts to Change Permitting Authority................................................................ 15

Arguments For and Against the Pipeline ....................................................................................... 16

Impacts to the Nebraska Sand Hills......................................................................................... 17

Impact on U.S. Energy Security .............................................................................................. 19

Canadian Oil Imports in the Overall U.S. Supply Context ............................................... 19

Oil Sands, Keystone XL, and the U.S. Oil Market ........................................................... 21

Economic Impact of the Pipeline............................................................................................. 26

Lifecycle Greenhouse Gas Emissions ..................................................................................... 27

Land Use and Oil Spill Impacts............................................................................................... 28

 

Figures

Figure 1. TransCanada Keystone Pipeline and Original Keystone XL Proposed Route ................. 4

Figure 2. Keystone XL Preferred Alternative Route in Nebraska ................................................. 18

Figure 3. Gross U.S. Oil Imports by Major Sources...................................................................... 21

Figure 4. Proposed Enbridge Flanagan South Pipeline Route....................................................... 24

 

Tables

Table 1. NEPA Milestones for TransCanada’s 2008 Presidential Permit Application ..................... 9

 

Appendixes

Appendix A. Presidential Permitting Authority............................................................................. 31

Appendix B. Milestones in the Initial NEPA Process.................................................................... 33

 

Contacts

Author Contact Information........................................................................................................... 37

Acknowledgments ......................................................................................................................... 37

 

 

________________________________________________________________________

This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.