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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)

 

Proposed Keystone XL Pipeline: Legal Issues

Adam Vann, Legislative Attorney

Kristina Alexander, Legislative Attorney

Vanessa K. Burrows, Legislative Attorney

Kenneth R. Thomas,Legislative Attorney

January 23, 2012

http://www.fas.org/sgp/crs/misc/R42124.pdf

[full-text, 32 pages]

 

SUMMARY

In 2008, TransCanada Corp. applied for a presidential permit from the State Department to

construct and operate an oil pipeline across the U.S.-Canada border in a project known as

Keystone XL. The Keystone XL pipeline would transport oil produced from oil sands in Alberta,

Canada, to Gulf Coast refineries. The permit application was subjected to review by the State

Department pursuant to executive branch authority over cross-border pipeline facilities as

articulated in Executive Order 13337.

 

After several phases of review, on November 10, 2011, the State Department announced that it

would seek additional information about alternative pipeline routes before it could move forward

with a national interest determination. In response, several pieces of legislation were introduced,

including Title V of the Temporary Payroll Tax Cut Continuation Act of 2011. Title V dictated

that President must grant the Keystone XL pipeline permit within 60 days of the law’s enactment,

unless the President determined that the pipeline is not in the national interest. If the President did

not make a national interest determination and took no action to grant the permit, then the law

provided that the permit “shall be in effect by operation of law.” The Temporary Payroll Tax Cut

Continuation Act of 2011 (P.L. 112-78), including Title V addressing the Keystone XL permit,

was enacted on December 23, 2011.

 

Pursuant to the requirements of Title V, on January 18, 2012, the State Department recommended

that “the presidential permit for the proposed Keystone XL pipeline be denied and, that at this

time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest.”

The same day, the President stated his determination that the Keystone XL pipeline project

“would not serve the national interest.”

 

New legislative activity with respect to the permitting of border-crossing facilities, a subject

previously handled exclusively by the executive branch, has triggered inquiries as to whether this

raises constitutional issues related to the jurisdiction of the two branches over such facilities.

Additionally, as states have begun to contemplate taking action with respect to the pipeline siting,

some have questioned whether state siting of a pipeline is preempted by federal law. Others argue

that states dictating the route of the pipeline violates the dormant Commerce Clause of the

Constitution which, among other things, prohibits one state from acting to protect its own

interests to the detriment of other states.

 

This report reviews those legal issues. First, it suggests that legislation related to cross-border

facility permitting is unlikely to raise significant constitutional questions, despite the fact that

such permits have traditionally been handled by the executive branch alone pursuant to its

constitutional “foreign affairs” authority. Next, it observes generally that state oversight of

pipeline siting decisions does not appear to violate existing federal law or the Constitution.

Finally, the report suggests that State Department’s implementation of the existing authority to

issue presidential permits appears to allow for judicial review of its National Environmental

Policy Act determinations.

 

A companion report from CRS focusing on policy issues associated with the proposal, CRS

Report R41668, Keystone XL Pipeline Project: Key Issues, by Paul W. Parfomak et al., is also

available.

 

Contents

Background...................................................................................................................................... 1

Authority to Issue Permits for Border Crossing Facilities: Balancing Executive and

Legislative Roles .......................................................................................................................... 4

Source of Presidential Authority to Regulate Foreign Commerce ............................................ 4

Source of Executive/State Department Permitting Authority.................................................... 4

Source of Congressional Authority to Regulate Foreign Commerce ........................................ 6

Reconciling the Executive and Legislative Roles Related to Foreign Commerce and

Border Crossing Facilities ...................................................................................................... 7

Executive Branch Deference to Congress on Cross-Border Facilities................................ 7

Congressional Action Related to Foreign Commerce ....................................................... 10

Judicial Interpretations of the Executive and Legislative Authorities to Regulate

Foreign Commerce......................................................................................................... 10

Summary ........................................................................................................................... 12

Constitutional Concerns Related to Potential Action by States ..................................................... 12

The Dormant Commerce Clause ............................................................................................. 13

Legal Background ............................................................................................................. 13

State Authority for Energy Facility Siting......................................................................... 14

Application of the Dormant Commerce Clause to State Action Related to

Oil Pipeline Siting.......................................................................................................... 14

Federal Preemption of State Pipeline Legislation ................................................................... 17

Background ....................................................................................................................... 17

How Preemption Is Evaluated........................................................................................... 17

Conflict Preemption of State Action Related to the

Proposed Keystone XL Pipeline..................................................................................... 22

Field Preemption of State Action Related to the Proposed Keystone XL Pipeline ........... 24

Judicial Review of the NEPA Process for Permitting Under Executive Order 13337................... 24

Executive Order 13337............................................................................................................ 24

Keystone XL NEPA Background ............................................................................................ 25

State Department NEPA Regulations ................................................................................ 25

Judicial Review ....................................................................................................................... 25

District Court Holdings Related to Executive Order 13337.............................................. 26

Contacts

Author Contact Information........................................................................................................... 29

 

 

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