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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

Neelesh Nerurkar, Specialist in Energy Policy

Linda Luther, Analyst in Environmental Policy

Adam Vann, Legislative Attorney

December 12, 2011

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

[full-text, 27 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 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. The project is expected to cost more than $7.0 billion, of

which at least $5.4 billion would be spent on the U.S. portion. TransCanada plans to build a short

additional pipeline so that oil from the Bakken formation in Montana and North Dakota can also

be carried on Keystone XL. Many Members of Congress have expressed support or opposition to

the pipeline due to its potential environmental, energy security, and economic impacts.

 

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

Presidential Permit from the State Department. In granting or denying a permit application, the

State Department must determine whether a proposal is in the “national interest.” Such a

determination must be arrived at in consultation with other relevant federal agencies and after

public input. The determination includes an evaluation of factors including the proposed project’s

potential to affect the environment, economy, energy security, or foreign policy.

 

Potential environmental impacts of the proposed Keystone XL project were identified and

considered in an Environmental Impact Statement (EIS) prepared by the State Department

pursuant to the National Environmental Policy Act (NEPA). Publication of the final EIS on

August 26, 2011, marked the beginning of a 90-day review period for the national interest

determination. According to the State Department, a wide range of public comments both

favoring and opposing the pipeline project were received during this period. In particular, the

department cited concerns regarding the pipeline’s route through the Sand Hills region of

Nebraska, an extensive sand dune formation with highly porous soil and shallow groundwater.

 

On November 10, 2011, in response to concerns regarding the pipeline route and actions by the

Nebraska legislature applicable to pipeline siting, the State Department announced a delay in its

national interest determination to gather additional information necessary to assess a new pipeline

route avoiding the Sand Hills. On November 14, 2011, TransCanada announced its decision to

work with the Nebraska Department of Environmental Quality to identify an acceptable pipeline

route around the Sand Hills. The State Department estimates that the preparation of supplemental

environmental analysis necessary for a new route alternative may be complete in early 2013.

 

International pipeline projects like Keystone XL are not subject to the direct authority of

Congress. Nonetheless, several legislative proposals seek to impose deadlines on the permit

process or require a permit to be issued. The Jobs Through Growth Act (H.R. 3400) would require

the President to issue a final order granting or denying the Presidential Permit for the Keystone

XL pipeline within 30 days of enactment. The North American Energy Security Act (S. 1932), the

American Energy Security Act (H.R. 3537), and the Middle Class Tax Relief and Job Creation

Act of 2011 (H.R. 3630) would require the Secretary of State to issue a permit for the project

within 60 days of enactment, unless the President publicly determines the project to be not in the

national interest. The North American Energy Access Act (H.R. 3548) would transfer the

permitting authority over the Keystone XL pipeline project from the State Department to the

Federal Energy Regulatory Commission (FERC), and would require the commission to issue a

permit for the project within 30 days of enactment.

 

Contents

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

Pipeline Description .................................................................................................................. 2

Keystone XL Extension to Bakken Oil Production............................................................. 4

Presidential Permit Application Requirements and Status ........................................................ 5

Identifying Environmental Impacts of the Proposed Pipeline............................................. 6

Environmental Impacts and the Determination of National Interest................................... 8

Delay in Keystone XL Pipeline Permit Review.................................................................. 9

State Siting and Environmental Approvals.............................................................................. 11

Arguments For and Against the Pipeline ....................................................................................... 12

Impacts to the Nebraska Sand Hills......................................................................................... 12

Impact on U.S. Energy Security .............................................................................................. 14

Canadian Oil Imports in the Overall U.S. Supply Context ............................................... 15

Oil Sands, Keystone XL, and the U.S. Crude Oil Market................................................. 17

Economic Impact of the Pipeline............................................................................................. 20

Canadian Oil Sands Environmental Impacts ........................................................................... 21

Fossil Fuels Dependence and Greenhouse Gas Emissions...................................................... 22

Figures

Figure 1. TransCanada Keystone Pipeline and Original Keystone XL Proposed Route ................. 3

Figure 2. Keystone XL Pipeline Route Across the Ogallala Aquifer............................................. 13

Figure 3. U.S. Changes in U.S. Oil Imports, Selected Sources ..................................................... 16

Figure 4. Gross U.S. Oil Imports ................................................................................................... 17

Appendixes

Appendix. Presidential Permitting Authority................................................................................. 23

Contacts

Author Contact Information........................................................................................................... 24

Acknowledgments ......................................................................................................................... 24

________________________________________________________________________

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.

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Director, IWS News Bureau                
Institute for Workplace Studies 
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