Friday, December 06, 2013
Tweet[IWS] CRS: KEYSTONE XL PIPELINE PROJECT: KEY ISSUES [2 December 2013]
IWS Documented News Service
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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
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Congressional Research Service (CRS)
Keystone XL Pipeline Project: Key Issues
Paul W. Parfomak, Specialist in Energy and Infrastructure Policy
Robert Pirog, Specialist in Energy Economics
Linda Luther, Analyst in Environmental Policy
Adam Vann, Legislative Attorney
December 2, 2013
http://www.fas.org/sgp/crs/misc/R41668.pdf
[full-text, 43 pages]
Summary
TransCanada’s proposed Keystone XL Pipeline would transport oil sands crude from Canada and
shale oil produced in North Dakota and Montana to a market hub in Nebraska for further delivery
to Gulf Coast refineries. The pipeline would consist of 875 miles of 36-inch pipe with the
capacity to transport 830,000 barrels per day. Because it would cross the Canadian-U.S. border,
construction of Keystone XL requires a Presidential Permit from the State Department. A decision
to issue or deny a Presidential Permit is based on a determination that a project would serve the
national interest, considering potential impacts on the environment, the economy, energy security,
foreign policy, and other factors. Environmental impacts are evaluated and documented in an
Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA).
TransCanada originally applied for a Presidential Permit for the Keystone XL Pipeline in 2008.
The initial proposal included a southern segment from Oklahoma to the Gulf Coast. A key issue
that arose during the permit review was concern over environmental impacts in the Sand Hills
region of Nebraska. This concern led the Nebraska legislature to enact new state pipeline siting
requirements that would alter the pipeline route through Nebraska. In January 2012, the State
Department concluded that it would not have sufficient information to evaluate an altered
pipeline route before a deadline imposed by Congress and denied the permit. The southern
segment of the original Keystone XL proposal, now called the Gulf Coast Project, was
subsequently separated from the original proposal because it did not require a Presidential Permit.
It has been approved by the relevant states and is currently under construction.
In May 2012, TransCanada reapplied to the State Department for a Presidential Permit to build
the northern, cross-border segment of Keystone XL. The new permit application initiated a new
NEPA process. The governor of Nebraska approved a new route through the state avoiding the
Sand Hills on January 22, 2013. On March 6, 2013, notice was published in the Federal Register
that the State Department draft EIS for the reconfigured Keystone XL Project was available for
public comment. The department is in the process of addressing these comments as it prepares a
final EIS. When the final EIS is issued, a 90-day public review period for the national interest
determination begins. The department has not stated when it plans to complete this process.
Development of Keystone XL has been controversial. Proponents base their arguments primarily
on increasing the diversity of the U.S. petroleum supply and economic benefits, especially jobs.
Pipeline opposition stems in part from concern regarding the greenhouse gas emissions associated
with the development of Canadian oil sands, continued U.S. dependency on fossil fuels, and the
risk of a potential release of heavy crude.
In light of the State Department’s denial of the 2008 permit application, some in Congress seek
other means to support development of the pipeline. The Energy Production and Project Delivery
Act of 2013 (S. 17) would eliminate the Presidential Permit requirement for the reconfigured
Keystone XL Project. The Keystone for a Secure Tomorrow Act (H.R. 334) and a Senate bill to
approve the Keystone XL Project (S. 582) would directly approve Keystone XL under the
authority of Congress to regulate foreign commerce. The Northern Route Approval Act (H.R. 3)
would eliminate the Presidential Permit requirement for Keystone XL, among other provisions.
The Senate passed an amendment to the Fiscal 2014 Senate Budget Resolution (S.Con.Res. 8)
that would provide for the approval and construction of the Keystone XL Project (S.Amdt. 494).
The North American Energy Infrastructure Act (H.R. 3301) would transfer permit authority for
oil pipelines from the State Department to the Department of Commerce and would make other
changes to the pipeline permitting process.
Contents
Introduction ...................................................................................................................................... 1
Description of the Keystone Pipeline System .................................................................................. 2
The Keystone and Keystone XL Pipelines ................................................................................ 2
Marketlink for Bakken Oil Production ...................................................................................... 4
Presidential Permit Applications ...................................................................................................... 5
Consideration of Environmental Impacts Under NEPA ............................................................ 7
EPA Rating of the Environmental Impact Statement .......................................................... 8
The National Interest Determination ....................................................................................... 11
State Siting and Additional Environmental Requirements ...................................................... 13
Legislative Efforts to Change Permitting Authority ................................................................ 15
Arguments For and Against the Pipeline ....................................................................................... 16
Impact on U.S. Energy Security .............................................................................................. 17
Canadian Oil Imports in the Overall U.S. Supply Context ............................................... 18
Oil Sands, Keystone XL, and the U.S. Oil Market ........................................................... 19
Economic Impact of the Pipeline............................................................................................. 26
Lifecycle Greenhouse Gas Emissions ..................................................................................... 27
Private Land Use and Oil Spill Impacts .................................................................................. 28
Issues with the Original Pipeline Route Across the Sand Hills ............................................... 30
Figures
Figure 1. Existing Keystone Pipeline and Proposed Keystone Expansions .................................... 3
Figure 2. The Keystone XL Project and Gulf Coast Pipeline .......................................................... 4
Figure 3. Proposed Enbridge Flanagan South Pipeline Route ....................................................... 23
Figure 4. Keystone XL Project—Pipeline Route in Nebraska ....................................................... 32
Tables
Table 1. Milestones in the NEPA process for the Keystone XL Project ........................................ 10
Table 2. Milestones in National Interest Determination Process for the 2008 Keystone XL
Pipeline ....................................................................................................................................... 13
Table 3. U.S. Oil Imports ............................................................................................................... 19
Appendixes
Appendix A. Presidential Permitting Authority ............................................................................. 33
Appendix B. Details of the Initial NEPA Review .......................................................................... 35
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