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KEYSTONE XL AND THE NATIONAL 

INTEREST DETERMINATION 

HEARING 

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

MARCH 13, 2014 

Printed for the use of the Committee on Foreign Relations 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys/ 

FOREI-43947 with DISTILLER

COMMITTEE ON FOREIGN RELATIONS

ROBERT MENENDEZ, New Jersey, Chairman

BARBARA BOXER, California 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

CHRISTOPHER A. COONS, Delaware 

RICHARD J. DURBIN, Illinois 

TOM UDALL, New Mexico 

CHRISTOPHER MURPHY, Connecticut 

TIM KAINE, Virginia 

EDWARD J. MARKEY, Massachusetts 

BOB CORKER, Tennessee 

JAMES E. RISCH, Idaho 

MARCO RUBIO, Florida 

RON JOHNSON, Wisconsin 

JEFF FLAKE, Arizona 

JOHN McCAIN, Arizona 

JOHN BARRASSO, Wyoming 

RAND PAUL, Kentucky 

DANIEL E. O’BRIEN, Staff Director

LESTER E. MUNSON III, Republican Staff Director

(II)

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C O N T E N T S 

Page 

Brune, Michael, executive director, Sierra Club, San Francisco, CA .................. 9 

Prepared statement .......................................................................................... 11 

Responses to questions submitted for the record by Senator Robert 

Menendez ....................................................................................................... 58 

Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement ................. 2 

Hansen, James, Ph.D., director of the Program on Climate Science, Awareness and Solutions, and adjunct professor, Columbia University Earth Institute, New York, NY .............................................................................................. 19 

Prepared statement .......................................................................................... 21 

Responses to questions submitted for the record by Senator Robert 

Menendez ....................................................................................................... 61 

Harbert, Hon. Karen Alderman, president and CEO, Institute for 21st Century Energy, U.S. Chamber of Commerce, Washington, DC ............................ 26 

Prepared statement .......................................................................................... 28 

Responses to questions submitted for the record by Senator Robert 

Menendez ....................................................................................................... 64 

Responses to questions submitted for the record by Senator Bob Corker ... 65 

Responses to questions submitted for the record by Senator John 

Barrasso ......................................................................................................... 67 

Jones, Gen. James L., USMC (Ret.), president, Jones Group International, 

Vienna, VA ............................................................................................................ 4 

Prepared statement .......................................................................................... 6 

Responses to questions submitted for the record by Senator Robert 

Menendez ....................................................................................................... 57 

Responses to questions submitted for the record by Senator John 

Barrasso ......................................................................................................... 69 

Menendez, Hon. Robert, U.S. Senator from New Jersey, opening statement .... 1 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

‘‘A Description of Fee and Dividend,’’ written by Boston Businessman Jim 

Miller, submitted by Dr. James Hansen ............................................................ 55 

Letter from the Laborers’ International Union of North America submitted 

by Senator Robert Menendez .............................................................................. 71 

Prepared Statement from National Nurses United submitted by Senator Barbara Boxer ............................................................................................................ 73 

(III)

FOREI-43947 with DISTILLER

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(1) 

KEYSTONE XL AND THE NATIONAL 

INTEREST DETERMINATION 

THURSDAY, MARCH 13, 2014 

U.S. SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, DC. 

The committee met, pursuant to notice, at 11:19 a.m., in room 

SD–419, Dirksen Senate Office Building, Hon. Robert Menendez 

(chairman of the committee) presiding. 

Present: Senators Menendez, Boxer, Udall, Kaine, Markey, 

Corker, Johnson, and Barrasso. 

OPENING STATEMENT OF HON. ROBERT MENENDEZ, 

U.S. SENATOR FROM NEW JERSEY 

The CHAIRMAN. This hearing of the Senate Foreign Relations 

Committee will come to order. We welcome our distinguished panel 

of experts and advocates to address something that has long been 

an issue of practical and political concern for many in this town 

and across the Nation. Today we are here to find answers and shed 

more light than heat, I hope, on the issue; hear the facts and the 

rationale on both sides. 

The proposed Keystone XL pipeline cross-border segment would 

link Morgan, MT, at the Canadian border to Steele City, NE. It 

would have a capacity of 830,000 barrels of tar sands per day. 

Later this year, the State Department will determine whether the 

project is in the national interest and that is the question we will 

hear testimony about today from our four panelists. 

I hope this can be a balanced, thoughtful hearing, a hearing that 

puts aside some of the politics that have surrounded this debate 

and deal with the underlying question of what is in our national 

interest. I hope we can build a record on both sides of this debate 

that may not result in agreement, but may result in more agreedupon facts. 

Proponents of the pipeline point to jobs, economic development, 

and energy security as reasons why the pipeline should be 

approved, and claim that the alleged harm to the environment is 

overstated. Opponents raise climate change concerns, concerns 

about potential spills, and downplay any energy security or economic advantages of the pipeline. That is not to say I do not have 

my own views. I do, but I want to hear the facts from our witnesses 

and have a full-throated open discussion. 

Before I conclude, I want to introduce into the record a letter 

written on behalf of the 500,000 members of the Laborers 

International Union of North America that is signed by their 

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2 

distinguished General President, Terry O’Sullivan. The letter 

strongly supports the Keystone XL pipeline, and if there is no 

objection to that I will enter it into the record. President O’Sullivan 

has made it very clear about his support of the pipeline and we 

offered him an opportunity to include his position on behalf of his 

members in the record. 

I have called for this hearing because this committee has been 

a bastion of bipartisanship when it comes to such issues, and with 

the help of Senator Corker, the ranking member, I know we can 

have a rational discussion today. Senator Corker and I believe this 

is a debate worth having and I want to thank the ranking member 

for helping us put this hearing together and the four witnesses 

before us today to take time to provide their insights. 

With that, let me turn to the ranking member, Senator Corker, 

for his remarks. 

OPENING STATEMENT OF HON. BOB CORKER, 

U.S. SENATOR FROM TENNESSEE 

Senator CORKER. Mr. Chairman, thank you, and thanks to all of 

our witnesses for being here. I understand we have two very divergent views on Keystone and I think we can all learn from both of 

those views. I want to thank you again for the markup we had yesterday and the strong bipartisanship shown with the support of 

Ukraine. 

It is unfortunate that the administration declined to testify here 

today, very unfortunate. I understand they do not want to prejudice the outcome of the national interest determination process 

they are going through right now, but I do think it would have 

been important and is important that they explain to us all of the 

factors they will consider in making this decision. 

I hope today we can look at past determinations—I think that 

will be very important to us—and circumstances and come up with 

a clear picture of what it should be. Both sides of this issue would 

agree in some respects that the United States national interest is 

indeed at stake here. 

The administration is not going to be able to be indecisive at the 

end of this process, which hopefully will end very soon. I am certainly interested to hear both sides, but to me the link between the 

completion of the Keystone pipeline and ensuring our energy security, thus our national security, is clear and compelling. Despite 

years of rigorous review and strong public support for completion 

of the pipeline, the administration is now the only thing standing 

in the way of thousands of American jobs, with the potential for 

many more, and access to a large supply of North American energy. 

Based on what I understand from similar pipeline decisions, for 

Secretary Kerry or the President to determine that Keystone is not 

in our national interest they would, in effect, have to embrace the 

idea that this single pipeline, not just fossil fuels in general but 

this single pipeline, would have a clear, demonstrable contribution 

to the global climate catastrophe. Such a determination would 

seem far beyond the bounds of what the process has been in the 

past and what we would expect it to be now. 

The President’s apparent climate standard for the approval of 

the pipeline, announced in a speech last summer, appears to ignore 

FOREI-43947 with DISTILLER

3 

the findings of exhaustive concrete environmental and economic 

development analysis that demonstrate the benefits we would reap 

from this project, which would also strengthen ties with Canada, 

our largest trading partner. 

In fact, the State Department has already determined that Keystone is unlikely to affect the rate of oil sands extraction or demand 

for heavy crude. Therefore, when compared to other forms of transporting oil the pipeline is likely to provide a safer and more environmental friendly method. Also, I am not sure how refusing to 

complete this project will do anything to lessen our Nation’s 

dependence on fossil fuels. 

So I look forward to hearing your thoughts on this and other 

aspects of the issue, and I want to thank the chairman again for 

calling this hearing. 

The CHAIRMAN. Thank you, Senator Corker. 

Let me introduce our panelists. Gen. James L. Jones is currently 

the president of the Jones Group International. Over his distinguished 40-year career in the Marine Corps, General Jones served 

as Supreme Allied Commander in Europe and as the 32d Commandant of the Marine Corps. Following his retirement from the 

Marine Corps, General Jones served as Special Envoy for Middle 

East Security and as the President’s National Security Adviser. We 

welcome you, General, back and thank you for your service to our 

country. 

Michael Brune is the executive director of the Sierra Club and 

formerly of the Rain Forest Action Network. Mr. Brune is a fellow 

New Jerseyan and we welcome him before the committee to listen 

to his insights. 

Dr. James Hansen is an adjunct professor and director of the 

Earth Institute Program on Climate Science Awareness and Solutions at Columbia University. For more than three decades, Dr. 

Hansen served as the head of NASA’s Goddard Institute for Space 

Studies and his scholarly work has made him a respected leader 

in the field of climate science. 

Let me say that in the past both Dr. Hansen and Mr. Brune have 

been both arrested at protests of the Keystone pipeline. I cannot 

guarantee it, but I hope this proves to be a more comfortable experience. 

Finally, our final panelist today is Karen Alderman Harbert, 

president and CEO of the Institute for 21st Century at the U.S. 

Chamber of Commerce. She previously served as Assistant Secretary for Policy and International Affairs at the U.S. Department 

of Energy and as the Deputy Assistant Administrator for Latin 

America and the Caribbean at USAID. 

We thank you all for joining us, and your full statements will be 

included in the record without objection. I would ask you to summarize your statements in around 5 minutes so that the members 

can have a dialogue with you, and I will ask you to testify in the 

order in which I introduced you. 

General Jones. 

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STATEMENT OF GEN. JAMES L. JONES, USMC [RET.], 

PRESIDENT, JONES GROUP INTERNATIONAL, VIENNA, VA 

General JONES. Thank you, Mr. Chairman and Ranking Member 

Corker, and members of the committee—it is a pleasure to be here 

today. It is an honor to be here to share my views with you about 

the national interest at stake in the Keystone XL pipeline determination. Thank you for making my fuller testimony a part of the 

record. If I could, I would also recommend that we provide for the 

committee’s interest a 2-year study done by the Bipartisan Policy 

Center, where I cochaired a study with former Senator Trent Lott, 

former Senator Byron Dorgan, and former EPA Administrator Bill 

Reilly, which was a very bipartisan effort on tackling our overall 

energy future. 

[EDITOR’S NOTE.—The Bipartisan Energy Council report mentioned 

above was too voluminous to include in the printed hearing. It will 

be retained in the permanent record of the committee.] 

General JONES. Mr. Chairman, you requested that I testify today 

on the U.S. geostrategic and national security interests associated 

with the approval of the pipeline, interests that in my view are 

intrinsic to America’s energy security and leadership in this century. I hope that my testimony will be useful to the committee’s deliberation on both issues, as they will largely determine the direction of our Nation’s future, a cause to which, as you pointed out, 

I have dedicated my 42 years of professional life both in and out 

of uniform. 

It is both significant and highly commendable that the Senate 

Foreign Relations Committee is holding a hearing focused on an oil 

pipeline. I think it speaks volumes about energy’s role in modern 

international affairs, a message that resonates especially powerfully today in light of events playing out in the Ukraine. 

The fact that energy security is vital to a nation’s domestic economy is well established. The Crimean crisis, however, is proving 

once again that energy security is also a central pillar of global stability. This current crisis serves as one more example of how tension and rivalry over access to energy plays out in conflicts across 

the international landscape. 

Mr. Chairman, I am passionate about energy because there is no 

doubt in my mind that it is a frontline 21st century national security issue, a reality I came to appreciate during my service as Commandant of the Marine Corps, NATO Commander, and National 

Security Advisor. We should understand clearly that Mr. Putin’s 

incursion in the Crimea is, among other things, about exercising 

political power through the control of energy and about brandishing 

the threat of energy scarcity to intimidate and manipulate vulnerable populations. 

For the very same purposes, the Iranian regime habitually 

threatens the flow of energy through the Strait of Hormuz. In Venezuela, Hugo Chavez used energy abundance to keep his population 

in check for decades. It is also the same reason that Saddam Hussein invaded Kuwait, sparking 20 years of international tension 

and conflict, and why one of Osama bin Laden’s last decrees to his 

forces was to attack the global energy infrastructure. 

FOREI-43947 with DISTILLER

5 

Energy scarcity is a potent strategic weapon. The greater the gap 

between global supply and demand, the more destructive that 

weapon becomes. The difference between Mr. Putin and us, however, is that he wields energy as a weapon to achieve his 

geostrategic goals, while we look to energy flow in free markets as 

a means of promoting international peace, prosperity, and economic 

stability. 

Less than a week ago, four NATO allies from the eastern part 

of Europe—Hungary, Poland, Slovakia, and the Czech Republic— 

appealed to the Congress of the United States to protect them from 

Russian domination, not by requesting troops or arms, but by sending energy. This is the future we are facing and, fortunately, we 

are blessed with the capacity to rise to the challenge if we choose 

to do so. 

How many Americans are aware that within the next year the 

United States will surpass Russia as the world’s largest producer 

of oil and gas combined? We can be sure that Mr. Putin is well 

aware of that fact. What a stunning change of fortune for our country, whose energy narrative over the past 40 years has been dominated by terms such as ‘‘dependence, vulnerability, and peak oil.’’ 

The United States is on track to produce nearly 10 million barrels 

of oil a day by 2016, equal to that of Saudi Arabia. 

The story, however, does not end at our borders. Our neighbors 

to the north and south are also blessed with energy abundance 

and, with the proper resolve and strategy, North America can, and 

in my view should, become a global energy hub. Energy supply to 

Europe can serve as a linchpin in the revitalization of the transatlantic dialogue with NATO and as a consequence to Mr. Putin’s 

aggression in the Crimea. 

Members of the committee, within our reach is a historic opportunity to harness energy sufficiency to solve some of our country’s 

most significant challenges: insecurity, joblessness, trade imbalance, and a devastating national debt, all of which erode our 

strength and our global leadership. 

But we cannot seize this incredible opportunity if we continue to 

say ‘‘no’’ to the infrastructure requirements necessary to develop 

and utilize these resources. I would like to pose what I regard to 

be a pretty fundamental question: Why would the United States 

spend billions of dollars and place our military personnel at risk to 

ensure the flow of energy half a world away, but neglect an opportunity to enable the flow of energy in our very own backyard, creating jobs, tax revenue, and greater security? 

I both respect and appreciate the fact that climate change concerns weigh heavily on this issue and on the minds of us all, as 

they should. We should not have a discussion on energy without 

discussing climate impact. At a later date, if you would like, I 

would look forward to testifying on the importance of tackling climate issues in a strategic, comprehensive, and realistic way, 

through global solutions to what is clearly a global challenge. 

In the meantime, I would simply raise two considerations: canceling the Keystone XL pipeline does not mean that the oil from 

Canadian oil sands deposits will go undeveloped, sparing the world 

some modest increment of carbon emissions. The Prime Minister of 

Canada has promised that the country’s oil sands will be developed 

FOREI-43947 with DISTILLER

6 

should the Keystone not be approved. In fact, if the Keystone pipeline is not approved, the perverse result would be that the hydrocarbons will go to countries with very poor environmental records 

rather than to the United States, where our regulations are comprehensive, strong, and enforced. 

Second, a more overarching but no less significant point—and of 

this I am convinced—if America does not remain prosperous and 

strong, an imperative dependent on energy security, we will not be 

in a position to engineer the low-carbon energy solutions the world 

needs, nor will we be able to exercise the global leadership necessary to answer the climate challenge. 

The decision on the pipeline is a litmus test of whether America 

is serious about national, regional, and global energy security, and 

the world is watching. America’s workers and consumers are 

watching. Investors and job-creators are watching. Our allies, who 

need a strong United States and a reliable energy partner, are 

watching. The developing world, which requires global energy 

abundance to lift hundreds of millions of people out of poverty, is 

watching. And the international bullies who wish to use energy 

scarcity as a weapon against us all are watching intently. 

So if we want to make Mr. Putin’s day and strengthen his hand, 

we should reject Keystone. If we want to gain an important measure of national energy security, jobs, tax revenue, and prosperity 

to advance our work on the spectrum of energy solutions that do 

not rely on carbon, then it should be approved. 

What we need more than symbolic, overpoliticized debates on 

particular projects is a more strategic approach to U.S. energy and 

climate policy, one that promotes energy diversity, sustainability, 

productivity, and innovation. We need to develop the vast array of 

energy potential that we are blessed to have at our disposal, bearing in mind the environmental impact. 

Mr. Chairman, once again allegations are being made both here 

and abroad that the United States is a nation in decline. My definition of that condition—— 

The CHAIRMAN. General, I will ask you to sum up for me now, 

please. 

General JONES. I am summing up. 

The CHAIRMAN. Because we are well over 5 minutes. 

General JONES. My definition of that condition is that a nation 

is in decline when it can no longer bring itself to do those things 

that deep down it knows it needs to do for its own good. As a 

national and international security issue, building this pipeline is 

one of those things that we must do for our own good. 

I thank you for the opportunity to appear before you today. 

[The prepared statement of General Jones follows:] 

PREPARED STATEMENT OF GEN. JAMES L. JONES

Thank you, Chairman Menendez, Ranking Member Corker, and members of the 

committee. I am honored to be here and to share my views with you about the 

national interests at stake in the Keystone XL pipeline determination. 

You requested that I testify today on the U.S. geostrategic and national security 

interests associated with the approval of the pipeline—interests that are intrinsic 

to America’s energy security and leadership in the 21st century. I hope my input 

will be of service to the committee’s deliberations on both issues, as they will largely 

determine the quality of our Nation’s future—a cause to which I have dedicated my 

professional life, both in and out of uniform. 

FOREI-43947 with DISTILLER

7 

It is both significant and commendable that the Senate Foreign Relations Committee is holding a hearing focused on an oil pipeline. I think it speaks volumes 

about energy’s role in modern international affairs; a message that resonates especially powerfully today in light of the events playing out in Ukraine. 

The fact that energy security is vital to a nation’s domestic economy is well-established; the Crimean crisis, however, is proving once again that energy security is 

a central pillar of global stability. This crisis serves as one more example of how 

tension and rivalry over access to energy plays out in conflicts across the international landscape. 

In a world where global energy demand is expected to increase by 70 percent by 

mid-century, I suspect that the U.S. Congress, and in particular this committee, will 

host many more hearings on the future-defining challenges of food, water, and 

energy insecurity, as well as on the related international environmental issues we 

must tackle. 

Mr. Chairman, I’m passionate about energy because there’s no doubt in my mind 

that it is a frontline 21st century national security issue—a reality I came to appreciate in my service as NATO commander and National Security Advisor. 

First, without energy security America will not prosper. If we are not prosperous, 

we cannot lead in a world that still fervently desires and needs American leadership. We are blessed with abundant and diverse energy resources that are unmatched anywhere else in the world; what we do with this abundance and diversity 

will have geostrategic consequences that we are just now beginning to comprehend. 

Second, energy is a flywheel of the international trading system and serves as a 

catalyst for human development abroad. Exclusion, extreme poverty, and want, 

present the most prevalent threats to international peace and global order that we 

face today. The United States has an important role to play in the international 

community, where developing countries grapple with their own energy futures. 

Third, energy disparities create dangerous friction between the energy haves and 

have-nots. Throughout history—both in war and in peace—poverty and prosperity 

have been inextricably connected to energy through the enormous power it confers 

on those who have it and the vulnerability it spells for those who don’t, as well as 

the tension created by the breach between them. Here again, American leadership 

on energy development and climate can be an effective means by which we affect 

world outcomes on a critically important question. 

The members of this committee understand clearly that Mr. Putin’s incursion in 

the Crimea is, among other things, about exercising political power through the control of energy, and about brandishing the threat of energy scarcity to intimidate and 

manipulate vulnerable populations. For the very same purposes, the Iranian regime 

habitually threatens the flow of energy from the strait of Hormuz, and in Venezuela, 

Hugo Chavez used energy abundance to keep his population in check for decades. 

It’s also the same reason that Saddam Hussein invaded Kuwait, sparking 20 years 

of international tension and conflict; and why one of Osama bin Laden’s last decrees 

to his forces was to attack global energy infrastructure. Energy scarcity is a potent 

strategic weapon. The greater the gap between global supply and demand, the more 

destructive the weapons will become. 

The difference between Mr. Putin and us, however, is that he wields energy as 

a weapon to achieve his geostrategic goals, while we look to energy flow in free 

markets as a means of promoting international peace, prosperity, and economic 

stability. 

While Russian troops occupy a sovereign country, including a major port, to stop 

Ukraine from receiving energy imports, Mr. Putin’s rubles are being spent on campaigns to stop natural gas development in central Europe—all with a mind toward 

creating scarcity, dependence, and vulnerability among countries who are U.S. 

friends, allies, and trading partners. 

Less than a week ago, four NATO allies from the eastern part of Europe—Hungary, Poland, Slovakia, and the Czech Republic—appealed to the Congress of the 

United States to protect them from Russian domination, not by requesting troops 

or arms, but by sending energy. This is the future we are entering. 

The good news is that the United States has never been better situated to counter 

these dynamics—to achieve unprecedented levels of energy security—not just by virtue of the vast reserves of unconventional oil and gas we are able to unlock thanks 

to advanced technology, but due to innovation across the energy spectrum—including in renewable energy and energy efficiency. 

How many Americans are aware that next year the United States will surpass 

Russia as the world’s largest producer of oil and gas combined? We can be sure that 

Mr. Putin is well aware of that fact. What a stunning change of fortune for our 

country, whose energy narrative over the past 40 years has been dominated by 

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terms such as ‘‘dependence, vulnerability, and peak oil.’’ Energy is now at the forefront of our national and international strategic security agenda. 

The story, however, does not end at our borders. Our neighbors to the north and 

south are also blessed with energy abundance. Together with the proper resolve and 

strategy, North America can become a global energy hub, providing not only for our 

own prosperity and security but also serving as a reliable energy source to our allies 

and global energy markets. Energy supply to Europe can serve as a lynchpin in the 

revitalization of the trans-Atlantic dialogue and with NATO, and as a consequence 

to Mr. Putin’s aggression in the Crimea. 

Members of the committee, within our reach is the historic opportunity to harness 

energy sufficiency to solve some of our country’s most significant challenges: insecurity, joblessness, trade imbalance, and a devastating national debt—all of which 

erode U.S. strength and global leadership. But we can’t seize this incredible opportunity if we continue to say ‘‘no’’ to the infrastructure requirements necessary to 

develop and utilize these resources. This includes the transmission lines needed to 

transmit electric energy created by new wind and solar facilities every bit as much 

as it does for pipelines needed to carry new sources of oil and gas to market. In 

the case of the Keystone XL pipeline, it will serve as a conduit that, once completed, 

will add a mere 1 percent to the length of our country’s oil pipeline infrastructure. 

As the committee members know, America’s Fifth Fleet is headquartered in Bahrain, primarily to secure the continued free passage of oil through the Persian Gulf 

and Strait of Hormuz to global markets. We do so because we understand how 

instrumental this flow is to global economic stability and to U.S. national interests. 

I would like to pose what I regard to be a pretty fundamental question: why 

would the United States spend billions of dollars and place our military personnel 

at risk to ensure the flow of energy half a world away, but neglect an opportunity 

to enable the flow of energy in our very own back yard—creating jobs, tax revenue, 

and greater security? 

I fully understand that policymakers must weigh many concerns and factors when 

considering major infrastructure projects, particularly those that cross international 

boundaries. I will leave it to others more conversant in the details of this process 

than I to address them as they apply to the Keystone determination, but there is 

no doubt in my mind that the outcome is of strategic importance to this country. 

I both respect and appreciate the fact that climate change concerns weigh heavily 

on this issue and on the minds of us all, as they should. Please know that I don’t 

count myself a denier of climate science or its importance; on the contrary. Much 

of the initial, groundbreaking research on greenhouse gas emissions and the effects 

of climate change was conducted by the Office of Naval Research. There’s no doubt 

that significant shifts in global climate patterns are themselves important international security issues we must take very seriously. 

At a later date, I would look forward to testifying on the importance to international security of tackling climate issues in a strategic, comprehensive, and realistic way through a global solution to what is clearly a global challenge. 

In the meantime, I would simply raise two considerations. 

Canceling the Keystone XL pipeline does not mean that the oil from Canadian oil 

sand deposits will go undeveloped, sparing the world some modest increment of carbon emissions. The Prime Minister of Canada—a country with strong carbon management policies—has promised that the country’s oil sands will be developed; and 

Canada is making every arrangement to fulfill that pledge should the Keystone be 

canceled. 

In fact, if the Keystone pipeline is not approved, the perverse result would be that 

the hydrocarbons will go to countries with very poor environmental records rather 

than to the United States, where our regulations are comprehensive, strong, and 

enforced. Moreover, if not moved to market via an east-west pipeline alternative, the 

Canadian oil will continue being transported by means of trains and trucks that 

could produce a larger carbon footprint and generate even greater environmental 

risk. No less than five studies authored by federal agencies, including the Department of State, have concluded that the pipeline will have no net negative impact 

on the environment. To quote the administration’s position directly, ‘‘the overall 

contribution to cumulative GHG impacts from proposed Project construction and 

operation would not constitute a substantive contribution to the U.S. or global 

emissions.’’ 

Second, is a more overarching but no less significant point, and of this I am convinced—if America does not remain prosperous and strong—an imperative dependent on energy security—we will not be in a position to engineer the low carbon 

energy solutions the world needs, nor will we be able to exercise the global leadership necessary to answer the climate challenge. 

FOREI-43947 with DISTILLER

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The decision on the pipeline is a litmus test of whether America is serious about 

national, regional, and global energy security, and the world is watching. 

America’s workers and consumers are watching. Investors and job creators are 

watching. Our allies who need a strong United States and a reliable energy partner, 

are watching. 

The developing world, which requires global energy abundance to lift hundreds of 

millions of people out of poverty, is watching. 

And the international bullies who wish to use energy scarcity as a weapon against 

us all are watching intently. 

If we want to make Mr. Putin’s day and strengthen his hand, we should reject 

the Keystone. If we want to gain an important measure of national energy security, 

jobs, tax revenue, and prosperity to advance our work on the spectrum of energy 

solutions that don’t rely on carbon, it should be approved. 

What we need more than symbolic, overpoliticized debates on particular projects 

is a more strategic approach to U.S. energy and climate policy—one that promotes 

energy diversity, sustainability, productivity, and innovation. We can’t do that until 

we organize ourselves better to make and execute a bona-fide national energy security strategy. To that end I would like to submit for the record a copy of a national 

energy strategy produced by the Bipartisan Policy Center. 

Mr. Chairman and distinguished committee members, the logic I would offer in 

answering the hearing’s fundamental question about national interest is simply this: 

The Keystone XL pipeline is integral to U.S. and North American energy security. 

Energy security is paramount to our Nation’s prosperity and leadership. And, America’s ability to prosper and lead in a dangerous and uncertain world that needs us 

is quite clearly a preeminent matter of national interest. I think that is why 

Congress has voted consistently, and in a bipartisan manner, to move forward on 

Keystone. 

I hear many at home and abroad define the emerging new world order with fear 

and trepidation. They see in it the imminence and inevitability of ‘‘American 

decline.’’ Frankly, I’ve heard about the so-called American decline since the 1950s, 

when the Soviet’s launch of ‘‘Sputnik’’ shook our national confidence. This forecast 

has been repeated every decade since then, but has not happened yet. And I submit 

to you today that it will not happen unless we let it happen. We control our destiny, 

not China or India or Brazil or Russia; no one does but us! 

I’m not entirely sure what defines a nation in decline, but it seems to me that 

a strong warning is when a country can no longer bring itself to do those things 

that it knows it must do for its own good. I think we are at such a crossroads. I 

have every faith and confidence that we will make the right decision that will once 

again answer any question of ‘‘American decline’’ and more, optimistically, perhaps 

usher in even a new age of American ascendancy! 

Again, thank you for the opportunity to testify today. I look forward to answering 

any questions you may have. 

The CHAIRMAN. Thank you. 

Mr. Brune. 

STATEMENT OF MICHAEL BRUNE, EXECUTIVE DIRECTOR, 

SIERRA CLUB, SAN FRANCISCO, CA 

Mr. BRUNE. Mr. Chairman, Ranking Member Corker, members of 

the committee, it is an honor to appear before you today to discuss 

whether Keystone XL is in our national interest. I am Michael 

Brune, executive director of the Sierra Club. The Sierra Club and 

the more than 2 million people who submitted comments last week 

to the State Department know that this pipeline is not in our 

national interest. The Keystone XL tar sands pipeline would cut 

through more than 1,000 miles of American farms and ranches, 

carrying oil that is more toxic, more corrosive, more carbon-intensive, and more difficult to clean up than conventional oil, all the 

way to the gulf, where most of it would be exported. 

Like many of you, I am a parent, and I am deeply concerned 

about the world we are leaving for our children. One lesson my 

wife and I try to teach our kids is the need to set goals and to stay 

focused as they strive to achieve them. Our country has a clear, 

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10 

science-based goal to limit carbon pollution. We must keep this in 

mind and recognizing that achieving that goal is incompatible with 

permitting this pipeline. 

None of the scenarios in the State Department’s analysis show 

how Keystone XL could be built in a way that ensures our Nation 

can meet those climate goals. In fact, Keystone XL would significantly exacerbate climate pollution because it would increase substantially the development of tar sands in Alberta that you see 

here. 

A report last week from Carbon Tracker found that Keystone XL 

would spur additional production of roughly 500,000 barrels per 

day, the emissions equivalent of building 46 new coal-fired power 

plants. I would like that this report be added to the record. 

The CHAIRMAN. Without objection. 

[EDITOR’S NOTE.—The report from Carbon Tracker was too voluminous to include in the printed hearing. It will be retained in the 

permanent record of the committee.] 

Mr. BRUNE. Although the climate impacts of tar sands are sufficient reason to reject this project, there are others, a few of which 

I will cite. First, any spill from this pipeline could be catastrophic. 

Transporting tar sands crude into the United States poses a 

heightened risk to communities and their air and water than conventional oil. Diluted bitumen is heavier and more toxic than conventional crude. When it spills in a waterway, it sinks. Just one 

tar sands spill in Michigan fouled more than 35 miles of river. 

After 31⁄2 years and more than a billion dollars, it still has not been 

cleaned up. 

If you take a look here at this image of a neighborhood in 

Mayflower, AR where an Exxon Mobil pipeline ruptured, spilling 

more than 7,000 barrels of tar sands into residents’ backyards and 

driveways. 

But even without spills, Keystone XL would risk the health and 

livelihood of communities living near each stage of the project. Pet 

coke is a byproduct of tar sands production and it is a major health 

hazard for U.S. communities. Fuel-grade pet coke contains high 

levels of toxins, including mercury, lead, arsenic, selenium, and 

chromium. Huge pet coke piles from refining processes have begun 

to appear in cities like Chicago and Detroit. 

Furthermore, Keystone XL would not even benefit American consumers. This oil is intended for export. Keystone XL would deliver 

tar sands to refineries on the gulf coast that already export most 

of their refined products, have increased exports nearly 200 percent 

in the past 5 years, and are planning to increase these exports further into the future. 

Keystone XL would also be a threat to national security, because 

it would facilitate the development of one of the world’s most carbon-intensive sources of oil. It is important to consider the impacts 

that these additional greenhouse gas emissions would have on people worldwide and on America’s national security. 

Since 2010 key national security reports have indicated that 

floods, droughts, and rising seas brought on by a destabilized climate in places of geostrategic importance to the United States multiply threats and the risks for Americans working in those areas. 

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11 

Climate disruption directly affects our Armed Forces. Admiral 

Samuel Locklear, who is head of the U.S. military’s Pacific Command, believes the single greatest threat to his forces is the instability sparked by climate disruption. 

Finally, clean energy will power a new American century. Let us 

not delay. America is a land of innovators. Today the factories of 

Detroit, the laboratories of Silicon Valley, and the next generation 

of American consumers are already investing in, and profiting 

from, clean energy technology. Thanks to fuel efficiency standards, 

gasoline demand in the United States is decreasing and projections 

show decreases through 2040 and beyond. 

Investing in the clean energy economy is supported by American 

businesses, American workers, and all who care about clean air, 

clean water, and a stable climate. That is a win-win-win scenario. 

Compare this to Keystone XL, which jeopardizes our drinking 

water, our farm land, our climate, and our health. The sad truth 

is that the Keystone XL tar sands pipeline is all risk and no 

reward. 

Secretary Kerry has called climate disruption ‘‘the world’s most 

fearsome weapon of mass destruction.’’ And last week he instructed 

all U.S. diplomats and employees around the world to lead by 

example through strong action at home and abroad to fight the 

climate crisis. America can lead on climate by saying ‘‘no’’ to this 

polluting pipeline and by saying ‘‘yes’’ to clean energy. 

Thank you. 

[The prepared statement of Mr. Brune follows:] 

PREPARED STATEMENT OF MICHAEL BRUNE

INTRODUCTION

Mr. Chairman, Ranking Member Corker, members of the committee, it is an 

honor to appear before you today. My name is Michael Brune, and I am the Executive Director of the Sierra Club. 

The Sierra Club, and more than 2 million people who submitted comments last 

week to the U.S. State Department, firmly believe that the Keystone XL tar sands 

export pipeline is not in the national interest. 

In 2009, President Obama made a commitment to reduce U.S. greenhouse gases 

by 17 percent by 2020. The Obama administration put this forward in Copenhagen 

as our country’s share of a global effort to limit climate change to no more than 2 

degrees Celsius, or 3.6 degrees Fahrenheit—the target scientists tell us may be safe. 

Achieving this goal, which has been unanimously agreed on at a global level, is 

central to the success of President Obama’s Climate Action Plan, announced in June 

of last year. 

It is therefore shocking to realize that the State Department failed to take this 

target into account when it evaluated the climate impacts of the Keystone XL pipeline. 

By avoiding any consideration of climate safety, the State Department report is 

blindingly clear on one point, if only by implication: The Keystone XL tar sands 

pipeline is not compatible with a climate-safe world. 

Last week, Secretary John Kerry issued instructions to all U.S. diplomats and employees around the world on combating climate change. ‘‘Lead by example through 

strong action at home and abroad,’’ was his first directive to his staff. America can 

and should lead on climate, by saying no to this polluting pipeline, and by saying 

yes to clean energy and the many more jobs it will create and the security it will 

bring for us here at home. 

If America, and the world, are going to meet the challenge of climate change, we 

must face the conclusion of climate science that the vast majority of proven fossil 

fuel reserves will need to be left in the ground if we are to limit warming to less 

than 2 degrees Celsius, or 3.6 degrees Fahrenheit. Given this clear science, it makes 

no sense to permit a pipeline that would facilitate the extraction of some of the 

dirtiest, most expensive oil on the planet. We have to start stopping somewhere. 

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Keystone XL would significantly exacerbate climate pollution because it would increase the development of the tar sands substantially. A report just last week from 

the U.K.-based organization Carbon Tracker showed that Keystone XL would enable 

additional production of roughly 500,000 barrels per day and trigger the emissions 

equivalent of building 46 new coal plants. 

Put another way, the additional emissions triggered by Keystone XL over the next 

35 years would be roughly equivalent to all the carbon emissions of the United 

States in 2013. That sounds very significant to me. 

Proponents of Keystone XL like to say that industry will inevitably develop Alberta’s tar sands, so even a rejection of the pipeline would make no difference. This 

has always been Goliath’s argument to David: You can’t make a difference, so don’t 

even try. Americans know, though, that we can make a difference. They said we 

couldn’t put a man on the moon, but we did. 

Like many of you, I am a parent, and I am deeply concerned about the world we 

are leaving for all our children. One of the most important lessons I try to teach 

my kids is the need to set goals, and to keep them in mind over time as you strive 

to achieve them. Our country has a clear, science-based, laudable goal to limit global 

warming. We must keep that goal in mind and recognize that achieving it is inconsistent with permitting the Keystone XL pipeline. 

Building the Keystone pipeline is incompatible with the level of emissions reductions 

necessary to avoid catastrophic climate change. 

It is now clear from industry reports and analysis that building the Keystone XL 

Pipeline only makes sense in a world where the United States fails to meet its climate goals, and oil prices stay high partly as a result of this failure. If Environmental Resources Management, the consulting group that prepared the State 

Department’s Final Supplemental Environmental Impact Statement (FSEIS) for 

Keystone XL, had considered a scenario where the United States together with 

other countries achieves our climate goals, the Keystone XL pipeline would have 

been shown to be both uneconomic and disruptive to the climate. 

The FSEIS used three future U.S. energy-demand scenarios developed by the 

Department of Energy. None of these scenarios modeled a world in which the 

United States meets its stated goal of limiting climate change to less than 2 degrees 

Celsius, or 3.6 degrees Fahrenheit, despite the fact that even these flawed models 

revealed that the carbon impact of the pipeline could equal as much as 5.7 million 

cars each year. According to the Carbon Tracker Initiative, the projected U.S. oil 

demand for 2035 in the FSEIS is 68 to 86 percent above the safe climate scenario 

modeled by the International Energy Agency. 

Additionally, the FSEIS analysis is at odds with Goldman Sachs, Citi, and other 

mainstream oil industry analysts. Carbon Tracker substituted the data that those 

analysts use rather than a ‘‘hypothetical value’’ used by State, and found that the 

KXL pipeline triggers emissions would be on a par with building 46 new coal plants. 

Finally, all of the scenarios used by the State Department in the FSEIS would 

place us on a path to 6 degrees Celsius, or 11 degrees Fahrenheit, of global warming. International Energy Agency Chief Economist Fatih Birol said recently that a 

6-degree Celsius temperature rise would have ‘‘catastrophic implications.’’ 

Similarly, the FSEIS scenarios link the economic viability of tar sands to a scenario of rising oil prices that is unlikely to occur if the world begins to seriously 

reduce greenhouse gas (GHG) emissions. The long-term viability of oil sands production is closely linked to rising oil prices (which are underpinned by a consistent 

growth in global oil demand). 

Even leaving aside the impact of effective climate policies, oil analysts don’t agree 

with the high prices projected in the report. The FSEIS projects oil prices to be in 

excess of $100 per barrel in 2020, but the current futures price for WTI crude is 

$79.13 by December 2019. The International Energy Agency similarly estimates 

that oil prices will decline by about $20 a barrel over the next 5 years. 

Keystone XL is a linchpin to tar sands development. 

Industry analysts are clear that the Keystone XL pipeline is a linchpin to tar 

sands development. If the President approves the pipeline, he will be effectively 

approving the further development of the tar sands. 

In February of 2013, RBC Dominion Securities said: ‘‘The growth envisioned in 

Canada’s oil sands is likely to be temporarily deferred in the event that Keystone 

XL is not approved. Our analysis would suggest that up to 450,000 bbl/d—or onethird, of Canada’s oil sands growth could be deferred in the 2015–17 timeframe.’’ 

The International Energy Agency’s 2013 World Energy Outlook (November 2013), 

states that the oil industry’s plan for tar sands expansion ‘‘is contingent on the construction of major new pipelines to enable the crude to be exported to Asia and the 

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United States.’’ They later add that, ‘‘In Canada, if the controversies over the Keystone XL pipeline and the pipelines from Alberta to the British Columbia coast were 

to be resolved quickly, oil sands production could easily grow 1 Mbd (million barrels 

per day) higher than we project.’’ 

A recent working paper by the Stockholm Environmental Institute analyzed a 

number of scenarios to answer the question of how the proposed ‘‘Keystone XL 

might affect the global oil market by increasing supply, decreasing prices, and thus 

increasing global oil consumption.’’ The study concludes that the ‘‘approval of the 

Keystone XL pipeline could lead (depending on assumptions about how much of the 

oil would otherwise make it to market) to an increase in global GHG emissions four 

times as big as prior analyses have concluded and potentially counteract some of 

the flagship emission reduction policies of the U.S. Government.’’ 

In December 2013, Barclays Bank released its ‘‘Global 2014 E&P Spending Outlook’’ with its projections and recommendations for the new year. It stated: 

‘‘Approval of the northern leg of the Keystone XL pipeline, which will transport oil 

from Alberta to Cushing, remains the most significant catalyst for improving takeaway bottlenecks, in our view.’’ 

Goldman Sachs, in a 2013 research report, entitled, ‘‘Getting oil out of Canada: 

Heavy oil diffs expected to stay wide and volatile,’’ wrote: ‘‘In the event that either 

the Keystone XL newbuild or Alberta Clipper expansion (or both) encounter further 

delays, we believe risk would grow that Canadian heavy oil/oil sands supply would 

remain trapped in the province of Alberta, putting downward pressure on WCS pricing on both an absolute basis and versus WTI.’’ 

Goldman Sachs’s emphasis that Keystone XL and the expansion of the Alberta 

Clipper pipeline are linchpins to future tar sands growth is especially significant in 

light of the fact that the Obama administration has the ultimate power to approve— 

or reject—both of them. The Alberta Clipper expansion would increase the capacity 

of that pipeline (which stretches from Canada’s province of Alberta to Superior, Wisconsin) to 800,000 barrels per day. As 16 environmental organizations stated in a 

letter to the State Department in January 2014, that President Obama could deny 

both of these projects only further demonstrates that tar sands development is not 

inevitable—the U.S. Government has a great deal of influence over the future development of this resource. 

Oil industry representatives and Canadian officials admit that Keystone XL is a 

linchpin to tar sands development. 

As recently as January of this year, Russ Girling, CEO of Transcanada, said when 

referring to Keystone XL, ‘‘[w]hen markets come up, you have to take advantage of 

them . . . If you miss an opportunity, you may lose it for decades and decades to 

come.’’ 

Brian Ferguson, CEO Cenovus Energy Inc., a large Canadian oil company that 

plans to nearly triple its tar sands production to reach 1 million bpd by 2023, recently said, ‘‘If there were no more pipeline expansions, I would have to slow down.’’ 

Steve Tungesvik, President and CEO of Statoil, said in 2013 that he is ‘‘reluctant’’ 

to invest in tar sands due to the uncertainty around export pipelines. 

Joe Oliver, Canada’s Natural Resources Minister, stated in a memo obtained 

through Canada’s Access to Information Act that, ‘‘in order for crude oil production 

to grow, the North American pipeline network must be expanded through initiatives, such as the Keystone XL pipeline project.’’ 

Rail is not a viable alternative to a project that would pump 830,000 barrels per day 

through the United States. 

The argument that tar sands development is inevitable, based on the notion that 

oil companies could simply export the same amount of oil from Canada’s province 

of Alberta by rail, is fundamentally flawed. 

The recent Carbon Tracker analysis demonstrates that Keystone XL would have 

a greater impact on the rate of future tar sands development than rail. The lower 

costs of transporting tar sands through this pipeline, as opposed to rail, mean that 

by 2018 industry could develop an additional 510,000 to 525,000 barrels of bitumen 

per day. This is a quarter of Canada’s entire 2013 bitumen production. By 2050, 

Keystone XL would be directly responsible for the additional greenhouse gas emissions equivalent to 1 billion passenger vehicles’ annual emissions, or equivalent to 

yearly emissions from 1,400 coal-fired power plants—almost the amount of total 

U.S. emissions in 2013. 

Even the U.S. State Department, in its FSEIS, recognized that transporting tar 

sands by rail costs $15 to $20 per barrel (versus Keystone XL’s cost of $8 per barrel). The State Department estimated that, on average, rail would cost $8 a barrel 

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tives recently told Canadian officials that increasing costs by $0.80 per barrel would 

hinder investment and curb production, rail’s incremental cost demonstrates its 

infeasibility as an alternative to new pipelines. 

Genscape, a provider of energy information for commodity and financial markets, 

recently reported that the economics of railing Canadian heavy crude to the gulf 

coast are deteriorating. It reported that, in the last week of February, the price differential between Mexican heavy crude, known as Maya, and Canada’s heavy crude 

(WCS) had widened to $13–14 per barrel and $24 less than WTI (West Texas Intermediate). In reference to railing Canadian heavy to the gulf coast, it quoted a crude 

oil trader as saying, ‘‘It’s not that viable to break even railing to the gulf.’’ 

And while transporting bitumen by rail is already more costly than a new pipeline 

would be, the cost of rail is only likely to increase. In the past few years, it has 

become strikingly evident that crude-by-rail projects are dangerous and sometimes 

even deadly—and certainly not a solution to the country’s energy needs. 

2013 was marked by a numerous rail accidents (like the Lac-Me ́gantic train derailment in Quebec, which killed 47 people) and spills (in 2013, U.S. trains spilled 

more crude oil than they had in the previous four decades combined). U.S. Government agencies are currently calling for stricter regulations on the transportation of 

oil by rail, which would require extensive capital investment in the modernization 

of crude-by-rail infrastructure. 

For example, in September 2013, the Pipeline and Hazardous Materials Safety 

Administration (PHMSA) announced that it was considering revising Hazardous 

Materials Regulations (HMR) ‘‘to improve the regulations applicable to the transportation of hazardous materials by rail.’’ During PHMSA’s public comment period, the 

Association of American Railroads (AAR) argued that the new regulations should 

include retrofitting 72,000 older tanker cars, performing minor upgrades on 14,000 

additional cars, and phasing out any cars that do not meet new safety requirements. 

AAR’s recommendations also included upgrading the DOT–111, a model that represents approximately 85 percent of the Nation’s 92,000 tank cars, as these have 

been demonstrated to puncture when trains crash. 

Additionally, in January 2014, both the U.S. National Transportation Safety 

Board (NTSB) and the Transportation Safety Board of Canada issued joint recommendations ‘‘to address the safety risk of transporting crude oil by rail.’’ Expressing concerns about ‘‘major loss of life,’’ NTSB recommended stricter standards for 

trains carrying crude, including modifications to tank cars that, according to 

Bloomberg Government, could cost shippers and leasing companies $5.2 billion. Also 

in January, U.S. Department of Transport Secretary Anthony Foxx stated that the 

oil and rail industry would begin implementing voluntary accident-reduction procedures in early 2014, which will include reduced train speeds for certain trains carrying crude oil. 

These planned and proposed regulations by U.S. agencies and the rail industry 

demonstrate that stricter regulations are inevitable, since, as NTSB Chairman 

Deborah Hersman said in January, ‘‘The large-scale shipment of crude oil by rail 

simply didn’t exist 10 years ago, and our safety regulations need to catch up with 

this new reality.’’ These important regulations not only will do more to protect our 

communities but will also make rail more expensive—making the idea that they 

could ‘‘replace’’ proposed tar sands pipelines even more absurd. 

Keystone XL would be an export pipeline. 

Keystone XL would be a pipeline through, rather than to, America. Thanks in 

great part to increased fuel efficiency standards and the fact that, for the first time 

since 1970, U.S. oil production is on the rise, a new pipeline that would increase 

the amount of oil coming into the U.S. is not only unnecessary—it would increase 

the likelihood that tar sands oil will be exported. 

Keystone XL would deliver tar sands to refineries in the gulf that already export 

most of their refined product, and that are planning to increase these export 

amount. The State Department’s Draft Supplemental EIS acknowledged that gulf 

coast refineries export most of their product. 

Since 2008, when the Keystone XL permit application was first submitted to the 

State Department, gulf coast exports of petroleum products have soared 172 percent. 

Many gulf coast refineries have access to deep water port facilities, and the region 

now produces much more product than the U.S. markets can handle. Throughout 

the 2008–2013 period, the gulf coast refineries averaged 73 percent of U.S. oil 

exports. In 2013, that rose to 76 percent. 

Exports of refined petroleum products from the gulf coast region (also know as 

PADD 3) reached nearly 3.3 million barrels per day in December 2013, nearly four 

times the capacity of Keystone XL. 

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And while the gulf coast refining region includes a number of inland refineries 

without access to export facilities, Keystone XL would primarily supply a group of 

refineries in the vicinity of Houston; Port Arthur, TX; and Lake Charles, LA. These 

refineries all have excellent access to export facilities and are at the heart of the 

gulf coast export boom. 

The Motiva Port Arthur Refinery—owned by Saudi Aramco and Shell—recently 

became America’s largest refinery. As a Bank of America-Merrill Lynch analyst has 

stated, ‘‘The bulk of the Motiva plant’s production is—like a growing share of refinery capacity along the gulf coast—geared for export (. . .) (w)e can export gasoline 

and diesel to northwest Europe cheaper than they can produce it locally.’’ 

Asia would be a major recipient of the product transported by Keystone XL. The 

comments submitted by Sierra Club, et al., to the State Department in March 2014 

summarize a key finding of a report by Philip K. Verleger, Jr. (which was cited in 

the State Department’s FSEIS) to have concluded that the Keystone XL pipeline, 

if built, would facilitate Canadian crude exports to China rather than the United 

States, because buyers for refineries on the gulf coast can limit their purchases of 

Canadian crude, forcing the Canadian producers to seek buyers in overseas markets, most likely China. 

Another recipient of Keystone XL product would be Europe. For years, industry 

representatives and Canadian Government officials have been lobbying the European Union (EU) to not label tar sands as an especially carbon-intensive source of 

fuel as part of the EU’s efforts to combat climate change. The EU’s proposed Fuel 

Quality Directive would classify tar sands as a particularly dirty source of transportation fuel, as part of a plan to require countries in the EU to reduce the greenhouse 

gas intensity of transportation fuels by 6 percent by 2020. 

It is significant that a current prohibition on the export of crude from the U.S. 

(i.e. nonrefined product) does not apply to Canadian crude if it has not been commingled with U.S. oil. Keystone XL would likely create a surplus of heavy oil on 

the market that would have to leave the gulf somehow. Or as a Platts editorial 

director explained, ‘‘When the Canadian crudes rise in price [U.S. refiners] will look 

at other alternatives, and force the Canadian crudes to move out of the gulf coast. 

The Canadian crudes cannot go back up into Canada again. They will have to go 

out.’’ 

Keystone XL proponents like to maintain that the pipeline would simply replace 

the heavy oils the U.S. already imports from countries like Venezuela. This argument ignores the evidence that Keystone XL oil would not replace heavy oil from 

Latin America or the Middle East. Venezuela, Saudi Arabia, and Mexico own 

around half of the heavy oil refining capacity in the gulf. Those refineries are expected to continue giving preference to refining their own countries’ oil as opposed 

to Canadian heavy oil. Meanwhile, thanks to high levels of U.S. light oil development, gulf refiners can buy discounted domestic oil, and these refiners are increasing their intake of domestic light oil while reducing their processing of heavy oil. 

This makes it all the more likely that a glut of Canadian heavy oil in the gulf will 

be pushed onto the world market by exploiting a loophole in U.S. crude export regulations. 

In short, the argument that Keystone XL is a pipeline that would benefit oil consumers in the U.S. ignores a mountain of evidence demonstrating that this project’s 

product is intended for export. 

Approving Keystone XL would be a threat to national security. 

Because Keystone XL would facilitate the development of one of the world’s most 

carbon intensive sources of oil, it is important to consider the impacts that these 

additional greenhouse gas emissions would have on global populations and on 

national security. 

On the issue of national security, I rely on military and intelligence professionals 

to assess the national security threat from climate change. Since 2010, key documents setting out U.S. security doctrine have indicated that the destabilizing 

impacts of climate change on basic human needs, such as food and water, as well 

as extreme weather events and coastal flooding can have a major destabilizing effect 

in areas of geostrategic importance to the U.S.—acting as a threat multiplier that 

increases security risk to Americans. 

The recently released Quadrennial Defense Review 2014, stated that ‘‘[t]he impacts of climate change may increase the frequency, scale, and complexity of future 

missions, including defense support to civil authorities, while at the same time 

undermining the capacity of our domestic installations to support training activities.’’ The report further states: ‘‘The pressures caused by climate change will influence resource competition while placing additional burdens on economies, societies, 

and governance institutions around the world. These effects are threat multipliers 

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that will aggravate stressors abroad such as poverty, environmental degradation, 

political instability, and social tensions—conditions that can enable terrorist activity 

and other forms of violence.’’ 

The top U.S. commander in the Asia-Pacific region, Adm. Samuel J. Locklear III, 

recently stated that climate change is the top security threat in that region. 

Locklear is a four-star admiral in charge of monitoring hostilities between North 

and South Korea, as well as between China and Japan, so his determination that 

the top threat is climate change does not reflect a lack of other serious security concerns in his area of responsibility. In a recent interview with the Boston Globe, 

Admiral Locklear stated: ‘‘We have interjected into our multilateral dialogue—even 

with China and India—the imperative to kind of get military capabilities aligned 

[for] when the effects of climate change start to impact these massive populations 

. . . If it goes bad, you could have hundreds of thousands or millions of people displaced and then security will start to crumble pretty quickly.’’ 

Interestingly, these comments were made months before Typhoon Haiyan devastated the Philippines, displacing millions. 

In addition to destabilizing conditions overseas, the Keystone XL pipeline presents 

a new threat to homeland security. According to the Department of Homeland Security, pipeline infrastructure has been a popular target for cyber security attacks. In 

fiscal year 2012 alone, the Department’s Industrial Control Systems Cyber Emergency Response Team assisted 23 oil and natural gas sector organizations with incident response and recovery efforts. According to DHS, the hackers succeeded in 

obtaining information pertaining to the organizations’ Industrial Control Systems 

and Supervisory Control and Data Acquisition (SCADA) systems—including data 

that DHS says would facilitate remote operations. All of us who live in the California Bay Area remember the catastrophic consequences of the natural gas pipeline 

rupture in San Bruno. As someone who has seen at close hand what can happen 

when pipeline managers aren’t getting accurate data from their SCADA systems, I 

am deeply worried about potential cyber security attacks on Keystone XL’s SCADA 

system that threaten communities throughout America’s heartland. 

The number of hearings and bills on cyber security, as well as the recent Executive order and framework, demonstrate that Congress and the administration share 

my concern about the cyber security threat to critical infrastructure. Of course, this 

sort of cyber security threat is not something that can ever be fully prevented, but 

that doesn’t mean that the Obama administration should approve a major new 

cyber security target without significant evidence that they are taking action to protect Americans along the route. In the absence of clear evidence that the U.S. Government has assessed this risk, and has an effective plan in place to manage it, the 

State Department would not be in a position to determine that the pipeline is in 

our national interest. 

Finally, it is intriguing that Keystone XL proponents argue that approving Keystone XL, by increasing exports, would reduce countries like Ukraine’s dependence 

on Russia. Besides acknowledging that Keystone XL’s product would be intended for 

export, this argument has been rebutted by energy security experts. For example, 

the Council on Foreign Relations’ Michael Levi recently noted: ‘‘The idea that U.S. 

oil exports would give Europe some sort of special buffer is silly. The world oil market is pretty flexible, and U.S. exports would be a drop in an already large sea. To 

the extent that Europe is constrained in its ability to switch oil sources quickly, 

that’s because of infrastructure, something U.S. exports wouldn’t change.’’ 

There is no evidence that either the Government of Canada or the provincial Government of Alberta would be willing or able to ‘‘mitigate’’ the emissions from a project 

that would increase the development of Alberta’s tar sands. 

Canada’s Prime Minister, Stephen Harper, has reportedly offered to embark on 

a plan to reduce Canada’s GHG emissions if President Obama approves Keystone 

XL. However the Government of Canada, under Prime Minister Harper’s leadership, 

should be judged by its inability to live up to its climate commitments to date. Canada’s Federal Government has repeatedly missed its own targets to regulate Canada’s oil and gas sector. In fact, it will miss its own 2020 GHG reduction targets, 

in large part due to tar sands development. Tar sands are Canada’s fastest-growing 

source of greenhouse gas emissions. Even though it has a relatively small population, Canada is already one of the top 10 greenhouse gas-emitting countries in the 

world. In 2011, the Canadian Federal Government’s own peer-reviewed reports forecast that emissions from tar sands would be triple 2005 levels by 2020. 

Prime Minister Harper has shown an unwillingness to take serious action on climate change, and he has even actively undermined his own government’s climate 

programs and research. Prime Minister Harper’s government drastically cut funding 

for government research on climate change, ended the government’s National Round 

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Table on the Economy and Environment, and cut support for research programs like 

the Canadian Foundation for Climate and Atmospheric Sciences. 

Meanwhile, the province of Alberta’s ‘‘Specified Gas Emitters Regulation’’ (SGER) 

is ostensibly intended to reduce greenhouse gas emissions on oil and gas development in the province. However, its carbon pricing mechanism, as the Pembina Institute details, ‘‘is too weak to provide an incentive for oilsands operators to meaningfully reduce greenhouse gas emissions.’’ The SGER means tar sands operators have 

to pay a mere 18 to 22 cents to produce a barrel of oil, which is too weak a penalty 

to prompt emission reductions. Moreover, targets are set in terms of intensity (GHG 

emissions per barrel) instead of a cap, and tar sands emissions have grown every 

year since this policy went into effect. 

A 2013 study compiled extensive evidence showing that fewer than 1 percent of 

environmental violations in Alberta’s tar sands region are actually enforced with 

fines or other enforcement mechanisms. 

Keystone XL would produce up to 15,000 tons of petcoke a day, a filthy byproduct 

of tar sands production that is hazardous to communities and has its own major climate implications. 

Petroleum coke, or petcoke, is an extremely carbon-intensive byproduct of tar 

sands production. Petcoke resembles coal and commonly replaces coal as a fuel in 

power plants and other industry processes. When combusted, petcoke releases 5 to 

10 percent more carbon dioxide than coal (on a per-unit of energy basis). As Oil 

Change International details in its 2013 report ‘‘Petroleum Coke: The Coal Hiding 

in the Tar Sands,’’ the bitumen carried by Keystone XL would carry approximately 

15,000 tons of petcoke each day——enough to fuel five coal-fired power plants. 

Much of the petcoke produced by Keystone XL would be shipped overseas and 

combusted in power plants in countries like China. The U.S. and Canada already 

export millions of tons of petcoke each year. Petcoke is sold at an average of a 25 

percent discount to conventional coal, meaning its cheap price incentives power 

plants to blend it with coal. Thus, as Oil Change International stresses, ‘‘Petcoke 

is making coal-fired power generation more carbon intensive and cheaper at exactly 

the time that we urgently need low carbon solutions to energy production.’’ 

In addition to releasing climate-disrupting greenhouse gases, petcoke is also a 

major health hazard for U.S. communities. Fuel-grade petcoke has high levels of 

metals including mercury, lead, arsenic, selenium, chromium, nickel, and vanadium. 

Huge petcoke piles from refining processes have begun to appear in cities like Chicago and Detroit, from which black dust clouds often escape and land on homes and 

communal spaces. The particulates in these dust clouds include EPA-recognized carcinogens, as well as other metals proven to cause developmental and cardiovascular 

problems in humans. On February 26, 2014, Senators Barbara Boxer and Sheldon 

Whitehouse invited health experts to speak to brief press and staff on the health 

impacts of extracting and refining tar sands, including the harmful impacts of 

petcoke piles to communities in Chicago. 

Tar sands cause additional major impacts to communities and their health. 

The extraction, development, and refinement of tar sands are harmful to communities’ health in both Canada and the U.S. 

In Canada, communities living near tar sands mines are exposed to chemicals in 

their air and water that are proven to cause cancer, damage DNA, and cause developmental impacts. First Nation communities near the Fort McMurray tar sands 

extraction site are being negatively impacted by high concentrations of carcinogenic 

pollutants in their air and water. Studies have found elevated concentrations of benzene, styrene, and seven different polycyclic aromatic hydrocarbons (PAHs) within 

30 miles of Fort McMurray. Toxic tailings ponds, full of arsenic, mercury, benzene, 

lead, and ammonia, leak into the surrounding environment and threaten water supplies. A 2009 study on health impacts in the Fort Chipewyan community, 124 miles 

downstream of tar sands development in Fort McMurray, found that from 1995 to 

2006, cancer rates were 30 percent higher than typically expected during this time 

period, with high rates of biliary tract, blood and lymphatic, lung, and soft tissues 

cancers. Dr. John O’Connor, a physician in the Fort Chipewyan community, has 

called for more public health investigations in his community, particularly in 

response to three localized cases of cholangiocarcinoma, a rare form of cancer. 

Tar sands also have major health implications for refinery communities in cities 

like Houston and Port Arthur, TX, where tar sands from Keystone XL would be 

refined. Emissions from diluted tar sands are significantly more toxic than conventional crude oil and release significantly higher concentrations of copper, nickel, 

lead, and benzene. These pollutants have been demonstrated to increase the risk of 

cardiovascular illnesses, respiratory ailments, developmental delays, and cancer. 

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The impacts of tar sands refinement are disproportionately high on low-income 

communities and communities of color. Dr. Earthea Nance, Associate Dean and Professor at Texas Southern University, recently submitted comments on the FSEIS 

illustrating that the proposed pipeline would have ‘‘disproportionate impacts’’ on 

African-American and Latino communities in Houston and Port Arthur, TX. She 

illustrated that affected communities in Port Arthur face ‘‘increased risk of developing cancer, asthma, and cardiovascular disease caused by their proximity to 

industrial sources of pollution.’’ 

A spill from KXL would be catastrophic. 

Transporting tar sands crude oil into the United States poses a different risk to 

communities and natural resources than conventional oil does. Diluted bitumen, or 

dilbit, is a highly corrosive and acidic blend of thick raw bitumen and volatile natural gas liquid condensate. The impacts of spills can be much greater than conventional crude, and effective clean-up methods do not yet exist—and may never exist. 

The health impacts from a tar sands spill and its subsequent long-term persistence in the environment include numerous toxic effects. Long-term exposure to benzene, which is a known carcinogen, can adversely affect bone marrow and cause 

anemia, leukemia, and possibly death. Long-term exposure to toluene may affect the 

nervous system or kidneys. Long-term exposure to ethylbenzene has been observed 

in animal studies to cause damage to the kidneys, inner ear, and hearing, and more. 

This information is based on the paucity of research that has been done on the 

health impacts from tar sands spills. This means that the residents of communities 

affected by tar sands spills, like Marshall, Michigan, and Mayflower, AR, are involuntarily serving as guinea pigs for determining the long-term impact of a tar sands 

spill. 

There is still no indication that dilbit, which would be traveling along the Keystone XL pipeline, can be effectively cleaned up. TransCanada’s Keystone I pipeline 

leaked 14 times in the United States—including one spill of as much as 21,000 gallons—and 21 times in Canada during its first year of operation. If the proposed 

pipeline were to spill and contaminate the Ogallala Aquifer, it would be a catastrophe for the millions of Americans who rely on it for drinking and irrigation water 

every day. Building Keystone XL would be an abdication of the U.S. Government’s 

responsibility to protect resources like the Missouri River, Prairie Pothole Region, 

Ogallala Aquifer, and the thousand other bodies of water that this pipeline would 

transect. 

The projected job numbers from Keystone XL are low. 

Keystone XL will not create many jobs. The State Department’s FSEIS concluded: 

‘‘Approximately 10,400 seasonal construction worker positions, engaged for 4-to-8- 

month construction periods, would be required to complete the proposed Project. 

When expressed as average annual jobs, this equates to approximately 3,900 average annual jobs (3,900 over 1 year of construction, or 1,950 per year over 2 years). 

Thus, if built over a 2-year period consistent with the explanation provided above, 

the proposed Project would likely generate 1,950 construction jobs per year . . . 

Once the proposed Project enters service, operations would require an estimated 50 

total employees: 35 permanent employees and 15 temporary contractors.’’ 

Rejecting Keystone XL and continuing to reduce demand will create jobs and benefit 

the economy. Energy security will come through reduced demand and clean energy 

alternatives—not from a new tar sands pipeline. 

America is a land of innovators. And today the factories of Detroit, the laboratories of Silicon Valley, and the next generation of American consumers are ready 

to invest in and profit from clean technology. The U.S. does not need to accelerate 

development of one of the most toxic forms of oil in the world. Largely thanks to 

fuel efficiency standards, U.S. demand for gasoline is decreasing. In fact, due to 

improved fuel efficiency and decreases in vehicle miles traveled, the U.S. Energy 

Information Administration (EIA) projects that the energy use by light-duty vehicles 

will decline steadily through 2040. Meanwhile, U.S. production of oil is rising for 

the first time since 1970. 

The 2012 fuel efficiency standards are expected to save 3.1 million barrels of oil 

per day in 2030. That is equivalent to the amount of oil we import currently from 

Venezuela and the Persian Gulf together. By burning less oil and improving vehicle 

air conditioning systems, these recent standards will keep 570 million metric tons 

of greenhouse gas pollution out of our atmosphere in 2030—that’s nearly 10 percent 

of current U.S. greenhouse gas emissions. 

Additionally, these more-efficient vehicles will save consumers money at the 

pump. A family that buys a new vehicle in 2025 will save $8,000 compared with 

the average vehicle on the road today, even after paying for fuel-saving technology. 

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That’s money that can be reinvested in local economies, instead of being sent to 

Canada to buy tar sands and into the pockets oil companies. Combined, Americans 

are expected to save $140 billion in 2030 as a result of these fuel efficiency standards, after paying for new fuel-saving technologies. 

By setting standards through 2025, President Obama is giving automakers the 

certainty they need to innovate and thrive. Already, automakers have technologies 

that can help meet these standards—advanced transmissions, start/stop engines, 

and strong, lightweight materials. The innovation and manufacturing of vehicles as 

a result of these standards will continue to create jobs—in the auto industry and 

throughout the economy. The Blue Green Alliance projects that the second round 

of fuel efficiency standards alone (from 2017–2025) will create roughly 570,000 jobs. 

Over the next 2 years, new standards for our medium- and heavy-duty trucks are 

also expected, which will further increase investment in our economy and decrease 

our reliance on the oil industry. 

Investing in the clean energy economy brings the support of American businesses, 

American employees, and environmental groups, and we create win-win-win scenarios. Compare that with Keystone XL, which threatens major sources of freshwater, American lands, and a stable climate. 

XIV. CONCLUSION

The proposed Keystone XL pipeline is not in the national interest. The U.S. is on 

track to lower the amount of oil that we consume, and we are taking active steps 

to reduce our greenhouse gas emissions. Approving Keystone XL would be a step 

backward and would jeopardize the stability our our climate, the strength of our 

economy, and our children’s futures. 

Thank you for this opportunity to testify, and I look forward to answering any 

questions you might have. 

The CHAIRMAN. Thank you. 

Dr. Hansen. 

STATEMENT OF JAMES HANSEN, PH.D., DIRECTOR OF THE 

PROGRAM ON CLIMATE SCIENCE, AWARENESS AND SOLUTIONS, AND ADJUNCT PROFESSOR, COLUMBIA UNIVERSITY 

EARTH INSTITUTE, NEW YORK, NY 

Dr. HANSEN. Thank you for the opportunity to discuss climate 

and energy and the significance of the Keystone pipeline. 

My first chart shows the carbon content of conventional oil, gas, 

and coal and the unconventional fossil fuels, including tar sands. 

The purple portions have been burned already. The science is crystal clear. If we want to avoid leaving young people a climate system that is spiraling out of their control, the additional fuel burned 

must be less than that already burned. That means we must phase 

out coal burning and leave most of the unconventional fossil fuels 

in the ground. 

Tar sands are among the dirtiest and most carbon-intensive 

fuels. It makes no sense to set up a system to exploit them in a 

major way. 

My second chart shows that China is now the largest emitter of 

carbon dioxide, the pie chart on the left. However, it is the cumulative emissions that drive climate change, the pie chart on the 

right. The United States is by far the largest emitter. We have 

burned our fair share of the carbon budget and some of China’s and 

India’s. We are all on the same boat. We will either sink together 

or find a way to sail together. 

My next chart shows that fossil fuels provide over 85 percent of 

our energy. Nonhydro renewables provide only 3 percent of our 

energy in the United States and in the world. 

So how can we possibly phase down carbon emissions? My next 

chart shows the two things that we can do. We can reduce our 

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energy intensity and we can reduce the carbon intensity of the 

energy. We have been reducing the energy intensity, the amount 

of energy per GDP, improving efficiency, and appropriate policies 

can further improve that. However, the principal requirement is to 

reduce the carbon intensity. Over the next few decades, we must 

drive the carbon intensity down near zero. 

There is one country that has done a good job, Sweden. Sweden 

has decarbonized its electricity, which is provided by nuclear power 

and hydropower. They have one more big step to make, to make 

liquid fuels from electricity. That is actually not difficult, but they 

are a small country and have not developed that industry. 

Why is the rest of the world not driving carbon intensity down? 

It is because fossil fuels appear to the consumer to be the cheapest 

energy. Fossil fuels are not really the cheapest energy. They are 

not required to pay for the human health costs of air pollution and 

water pollution or for the costs of climate change. The public picks 

up the tab. 

So the required policy is to put a gradually rising fee on carbon, 

collected from fossil fuel companies at the first domestic sale, at the 

domestic mine or port of entry. One hundred percent of the money 

should be distributed to the public, equal amounts to all legal residents, so the person who does better than average in limiting his 

carbon footprint will make money. This will provide a huge incentive for individuals and a huge incentive for entrepreneurs and 

business people. It will spur our economy, make it more efficient, 

and it will modernize our infrastructure and create hundreds of 

times more jobs than building a pipeline to transport the dirtiest 

fuel on Earth. 

With a fee of $10 per ton of CO2, rising $10 each year, after 10 

years it will reduce our fossil fuel use almost 30 percent, according 

to economic simulations by the Carbon Tax Center. It will reduce 

our oil use in 10 years three times more than the volume of the 

Keystone pipeline. 

George Shultz and conservative economists, in fact most economists, agree that a rising revenue-neutral carbon fee is the way to 

solve the climate and the energy problems. In fact, it is an opportunity to make our economy more efficient. An important point is 

that such legislation I think needs to be introduced by a conservative, because I am afraid liberals will try to take part of the 

money to make the government bigger. Not one dime should go to 

the government; 100 percent should go to the public. 

Now, I would like to enter in the record a specific one-page 

description of this fee and dividend which was written by Jim Miller, a Boston businessman. He gave me a copy yesterday. I think 

it is a nice simple summary of a fee and dividend system. 

One final comment that I would like to make. It is crucial that 

we begin to work with China to solve both their air pollution 

problem and their carbon emission problem. China is now contemplating and making plans for a massive coal gasification operation 

hundreds of times bigger and copied to some degree on the coal 

gasification plant in the Midwest that Jimmy Carter started, but 

on a massive scale. 

We cannot allow that to happen—if that happens, it will be very 

difficult, nigh impossible, for our children to control climate change. 

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So we need to work with them and work with them on clean energies, including nuclear power, where we still have the best capabilities. With our university system and our free enterprise system, we 

should work with them and help them get clean energy, because 

it is to our benefit as well as theirs. 

Thank you. 

[The prepared statement of Dr. Hansen follows:] 

PREPARED STATEMENT OF DR. JAMES HANSEN

Thank you for the opportunity to discuss climate and energy. Fundamental facts 

about climate and energy reveal a great responsibility that our government has not 

only to the American public today, but to future generations. The facts imply the 

need for specific actions to address this responsibility. The required policies would 

improve our economy and our security, while also dealing with current issues such 

as the advisability of the Keystone tar sands pipeline. 

Science has exposed the fact that we cannot burn all fossil fuels without enormous 

growing costs that would be borne most heavily by young people. So far we have 

burned about 380 GtC (gigatons of carbon), the purple areas in Fig. 1. Preserving 

creation, a planet that continues to look like the one civilization developed on, 

requires that we limit total fossil fuel emissions to something close to 500 GtC. 

The exact limit is debatable, but there is no scientific debate about the fact that 

we cannot burn all of the fossil fuels without unacceptable destruction of life and 

property. That means we must phase out coal emissions and leave most of the 

unconventional fossil fuels, including tar sands, in the ground. 

Fossil fuel emissions need to be phased down as rapidly as practical. Appropriate 

policies will spur development of carbon-free energies until tipping points are 

reached and rapid energy transition occurs. Time required to replace existing energy 

infrastructure means that some overshoot of the 500 GtC emissions target is probably unavoidable, but prompt policy actions can keep the overshoot small. In that 

case, improved agricultural and forestry practices can help draw down the excess 

atmospheric carbon. The crucial requirement is that we not push the climate system 

so far into the danger zone that we leave young people with a planetary system spiraling out of their control. 

Fig. 1. Fossil fuel CO2 emissions and carbon content. Purple portions are fossil fuels already 

burned. Unconventional oil includes tar sands and tar shale. Unconventional gas includes hydraulic-fracturing. See following for further information, units and data sources. (Hansen, J., P. 

Kharecha, M. Sato, V. Masson-Delmotte, F. Ackerman, D. Beerling, P.J. Hearty, O. HoeghGuldberg, S.-L. Hsu, C. Parmesan, J. Rockstrom, E.J. Rohling, J. Sachs, P. Smith, K. Steffen, 

L. Van Susteren, K. von Schuckmann, and J.C. Zachos, 2013: ‘‘Assessing ‘dangerous climate 

change’: Required reduction of carbon emissions to protect young people, future generations and 

nature.’’ PLOS ONE, 8, e81648, doi:10.1371/journal.pone.0081648.) 

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Fig. 2. (a) Fossil fuel CO2 2012 emissions and (b) cumulative 1751–2012 emissions. (Boden, 

T.A., G. Marland, and R.J. Andres. 2013. Global, Regional, and National Fossil-Fuel CO2 Emissions. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. 

Department of Energy, Oak Ridge, Tenn., U.S.A. doi 10.3334/CDIAC/00001—V2013.) 

China’s fossil fuel emissions today far exceed those by the United States (see Fig. 

2a) and China’s emissions are continuing to increase rapidly, mostly from coal burning. However, climate change is driven by the cumulative emissions (Fig. 2b), as the 

CO2 (carbon dioxide) from fossil fuels remains in the climate system of the order 

of 100,000 years. The United States is, by far, the nation most responsible for excess 

CO2 in the air today (Fig. 2b), a conclusion that is all the more true on a per capita 

basis. 

The United States burned not only its share of the global carbon budget, but a 

large part of the budget belonging to China, India, and other countries. While it can 

be argued that the United States has a right to burn its own resources, we have 

no right to unlimited use of the global atmosphere as a waste dump. The capacity 

of that dump is limited. We have filled much of that dump, leaving little room for 

other nations. If other nations follow our example, the consequences, without question, will be catastrophic for all. 

This situation does not call for hand-wringing and despair. Other nations do not 

wish to fill the air with waste. However, they have the right to develop, to aspire 

to a better life. Thomas Jefferson posited ‘‘pursuit of happiness,’’ after life and liberty, as one of the most fundamental human rights, the human rights that Americans decided to fight for. That specific right implies a right to develop. Development 

requires energy. We used fossil fuel energy to develop our Nation and raise our 

standard of living. If the rest of the world follows our example we will all be losers. 

Let’s be clear. The task before us is not easy. Developing countries need energy 

to lift their people out of poverty, just as developed countries did. Affordable energy 

is important as a matter of justice, but also to bring global population under control. 

As countries develop and poverty declines, so do birth rates, which is important so 

that we leave room on the planet for all the other species whose eco-services we 

depend upon. Developed countries have a responsibility to work with the developing 

world, because we burned much of their share of the global carbon budget. 

Developed nations, including the United States, also have a need for abundant 

clean, affordable energy. Clean energy is needed to phase out fossil fuels and to provide energy for producing liquid fuels, for desalinizing water, for recycling metals. 

Yes, we can be more efficient in our energy use, but energy needs are not going 

away. Obtaining an adequate continuing supply of clean energy is a great challenge. 

The energy challenge is also a great opportunity. We have the potential to meet 

the challenge. We have the potential for innovations. Our free enterprise system, 

fed by the greatest university system in the world, creates the potential for rapid 

progress. However, we must have policies that provide the incentives required for 

this potential to be realized, not policies that hamstring it. 

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Fig. 3. World energy consumption for indicated fuels, excluding wood. 

The needed policies are easier to define if we first examine two more charts. The 

fuels that provide global energy are shown in Fig. 3. Fossil fuels provide more than 

85 percent of global energy. Coal use has surged in the past decade, surging in absolute terms even more than in the percentage shown in Fig. 3. Most of the growth 

is in developing countries, with 60 percent of the increased CO2 emissions from 

China. 

Nonhydro renewable energies provide only about 3 percent of global energy and 

3 percent of U.S. energy. Thus total installed renewables, installed over a period of 

a few decades, offset only one year’s growth of global energy use. Renewables are 

nowhere near covering the growth of energy requirements. 

I am sorry that we scientists have not done an adequate job of communicating 

energy facts. A note and a draft op-ed discussing the energy situation in simple 

direct language is available. (Hansen, J. Sleepless in Ningbo and World’s Greatest 

Crime Against Humanity and Nature.) 

My final chart (Fig. 4) shows the energy intensity and carbon intensity for several 

nations and for the world. There are two ways we can reduce our carbon emissions 

while still having the global economic growth that is needed to phase out poverty. 

One way is to reduce our energy intensity, i.e., use less energy to produce our products. Energy intensity is declining slowly in most nations, and with appropriate policies we can make it decline faster. 

The crucial urgent factor is the carbon intensity, the amount of carbon released 

to the atmosphere per unit energy. We must reduce carbon intensity to near zero 

to stabilize climate. 

There is one nation that has come close: Sweden. Sweden decarbonized its electricity, mainly via the combination of hydropower and nuclear power. With one additional step Sweden can be at or near the low carbon intensity needed to stabilize 

climate. The main remaining need is to produce liquid fuels for transportation from 

electricity or perhaps a breakthrough in battery technology. 

Fossil fuels are the dominant energy source globally because they are, or appear 

to be, the cheapest energy. They are not actually cheapest, but they appear cheapest 

to the consumer because they are not required to pay their costs to society. They 

do not pay for the human health effects of air pollution and water pollution. They 

do not pay for growing climate effects. 

The policy that is needed is a gradually increasing across-the-board carbon fee collected on oil, gas, and coal at the first domestic sale, at the domestic mine or port 

of entry. It is very simple to collect from a small number of sources. One hundred 

percent of the funds should be distributed to the public, equal amounts to all legal 

residents, electronically to their bank account or debit card. 

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Fig. 4. (a) Energy intensity, defined as energy consumption (Gt of oil equivalent) divided by 

real gross domestic product (trillions of 2005 US$), and (b) carbon intensity, defined as fossil 

fuel carbon emissions (GtC) divided by energy consumption (Gt of oil equivalent). 

Thus the person who does better than average in limiting his fossil fuel use will 

make money. There will be an incentive for individuals to move to low-carbon and 

no-carbon energies, and an incentive for entrepreneurs to develop those products. 

Energy choices are left to the individual and the market place. Not one dime to the 

government. It’s a conservative plan that would work wonders. In 10 years, if the 

fee rises $10 per ton of CO2 per year, U.S. emissions will be reduced by 20–30 percent according to economic simulations by the Carbon Tax Center. (This fee is progressive. Sixty percent of the people, especially low-income people who do not travel 

around the world a lot, will receive more in the dividend than they pay in increased 

prices. But to stay on the positive side of the balance sheet, they must pay attention 

to what they buy.) 

The annual reduction of oil use alone, after 10 years, would be more than three 

times the volume of oil carried by the proposed Keystone XL pipeline, rendering the 

pipeline superfluous. By eliminating the need for the pipeline, the danger of oil spillage on American soil is also eliminated. With this approach we would move over 

a period of years to true energy independence, as the economic incentive from a rising carbon fee would spur our entrepreneurs to develop alternative energy carriers, 

including liquid fuels from abundant no-carbon electricity. The no-carbon electricity 

can be provided by renewables or nuclear power or some combination as the market 

decides or as the public chooses. 

In addition to a carbon fee-and-dividend, we in the United States have a moral 

obligation and a great opportunity to work with China to help assure that their 

drive to develop energy does not release so much CO2 as to cause climate change 

out of humanity’s control. It is an obligation, because we burned much of their share 

of the global carbon budget. It is an opportunity, because it will provide us the 

chance to get back on top of the nuclear technology world. For the sake of the whole 

world, as well as for our own sake, it is important that the United States provide 

leadership to assure that nuclear technologies are as safe as possible and resistant 

to weapons proliferation. 

The alternative is that we leave the field to Russia. Russia is more than happy 

to fill the void. Indeed, China has already agreed to purchase nuclear technology 

from Russia, including fast reactors with potential for recycling of nuclear material. 

The United States still has the best technology capabilities, but that lead is rapidly 

shrinking and will be gone in the near future if we continue to languish. 

Before describing what we should do in such cooperation, I must say what we 

should not do. It is inappropriate and an insult to go to China and tell them to work 

harder on renewables and energy efficiency. China is already doing more in these 

regards than we are in the West. For example, where possible, codes for new buildings in China require use of geothermal heat and other renewables, and efficiency 

standards are ratcheted up as soon as improved technologies appear. 

We also should not expect China to use renewable energy for base-load electricity. 

We just completed a solar power plant, Ivanpah, near the Nevada-California border 

on public land provided free. Ivanpah cost $2.2B and it covers 5 square miles (about 

13 square kilometers). With a generous estimate of 0.25 for the plant’s capacity factor (the ratio of average power to peak power when the sun is highest and the sky 

is clear), Ivanpah will generate 0.82 TWhours of electricity per year. The power is 

intermittent because Ivanpah does not have energy storage, which would make the 

plant far more expensive. 

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In contrast, Westinghouse is nearing completion of two AP–1000 nuclear plants 

in China. These nuclear facilities each require about 0.5 square miles (about 1.3 

square kilometers). With a capacity factor of 0.9, typical of nuclear power plants, 

the output of each plant will be 8.8 TWhours per year. It would require more than 

10 Ivanpahs to yield as much electricity and an area of more than 50 square miles 

(128 square kilometers), area that China does not have to spare. The AP–1000 cost 

in China is about $3.5B per plant 

What the United States should do is cooperate with China and assist in its 

nuclear development. The AP–1000 is a fine nuclear power plant, incorporating several important safety improvements over existing plants in the United States, which 

already have an excellent safety record. There has been only one serious accident 

among 100 reactors, at Three Mile Island in Pennsylvania, and it did not kill anyone. However, further advances in nuclear plants beyond AP–1000 are possible and 

the large demand in China allows rapid progress and building at a scale that can 

drive down unit cost. 

China has initiated nuclear R&D programs, including cooperation with U.S. universities and firms. Cooperation with our universities and the private sector could 

be expanded rapidly, and areas of relevant excellence persist in some Department 

of Energy Laboratories despite inadequate levels of support. Training of nuclear 

engineers and operators in the U.S. could help assure safe operations during a challenging period of rapid expansion. Benefits of cooperation in technology development 

can eventually circle back to United States industry and utility sectors as cost effective power plants are perfected. 

In assessing the potential for the U.S to eventually benefit from a cooperative program of nuclear technology development, it is apparent that reforms are required 

in our Nuclear Regulatory Commission. There is widespread agreement that the 

NRC has done a good job of regulating. They have capable technical staff, and they 

do a good job as resident inspectors at nuclear plants, in incident reporting, and in 

keeping the nuclear plant operators on their toes. 

It is a different matter, however, with regard to the nuclear reactor permitting 

process. The heavily lawyer-laden permitting process results in paper-work requirements and delays that stretch into years and billions of dollars of cost growth. 

Nuclear power proponents make a strong case that this situation is in part a consequence of pressure from antinuke ‘‘greens’’ who aim to delay nuclear construction 

and make nuclear power so expensive that it will fade away. Whatever the balance 

of causes, this problem needs to be fixed or the U.S. will suffer serious economic 

disadvantages and decline in comparison to rising economic powers such as China. 

SUMMARY

Issues such as the Keystone pipeline (and the reliability of Russian energy 

exports) should be viewed in a broader context of energy and climate. Basic facts 

include: 

(1) The carbon budget for the planet has been nearly used up, implying that the 

world as a whole needs to phase off fossil fuel energy as rapidly as practical. 

(2) Current skyrocketing of global emissions is primarily a consequence of rapidly 

developing countries, especially China. 

(3) The West, especially the U.S., has burned more than its fair share of the 

allowable global carbon budget, implying a responsibility to help developing countries find a low carbon pathway to development. 

(4) Nonhydro renewables provide only a tiny fraction of global energy and do not 

appear capable of satisfying the large energy requirements of developing nations 

such as China and India. 

These facts suggest the following policy recommendations: 

(1) A carbon fee-and-dividend system that places a flat across-the-board rising fee 

on the carbon content of fuels with the funds distributed 100 percent to legal residents. This approach provides a strong incentive for energy efficiency as well as 

development of carbon-free energies. A flat across-the-board rising carbon fee provides the basis for an international agreement that could begin to phase down global 

carbon emissions. Such an approach would require initial agreement only among a 

few major nations such as the United States and China. Border duties would be 

placed on products from nations without an equivalent carbon fee to avoid handicapping domestic manufacturers, and the carbon fee on products exported to nonparticipating nations would be rebated to domestic manufacturers. 

(2) The United States should cooperate with China to aid its transition to lowcarbon and no-carbon energy sources, including the development and deployment of 

improved nuclear power technology. It is to everyone’s disadvantage if China continues down a path of heavy carbon emissions, including, for example, extensive 

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development of coal gasification. There is a strong complementarity of the contributions that the two nations could bring to such cooperation and there could be enormous benefits, not only to the two nations, but to the world. 

The CHAIRMAN. Thank you. 

Ms. Harbert. 

STATEMENT OF HON. KAREN ALDERMAN HARBERT, PRESIDENT AND CEO, INSTITUTE FOR 21ST CENTURY ENERGY, 

U.S. CHAMBER OF COMMERCE, WASHINGTON, DC 

Ms. HARBERT. Chairman Menendez, and Ranking Member 

Corker and all the members of the committee, thank you for the 

opportunity to testify today. 

By 2040 global energy demand will grow by over 50 percent, but 

90 percent of that demand will be in the developing world and we 

will be well on our way to adding 2 billion people to this planet. 

China, India, Africa, and even the Middle East will be growing in 

their energy demand and traditional suppliers will be looking to 

sell to them and not to us. 

Our own government has concluded that by 2040 still 80 percent 

of the world’s energy demand will be met by fossil fuels. That 

means we have to do more here at home to meet our energy 

demand. The unrest in the Ukraine has shown that energy vulnerability equals geopolitical vulnerability. Despite an increase in supply here coupled with moderating demand, we will still import 40 

percent of our oil by 2020. So we can choose the status quo by 

relying on oil from Venezuela, which has people today protesting 

in their streets, or from places far away that do not share our values or democratic principles. 

In 2002 North America had 5 percent of the world’s reserves, 18 

percent the following year when oil sands from Canada were 

added, and now our own EIA believes that could even be tripled. 

However, the global share of production of oil from those countries 

that are considered Not Free or Partly Free by Freedom House has 

jumped from 65 percent in 1985 to 77 percent in 2012. 

So we have a choice. We can choose to embellish the legacy of 

Hugo Chavez and ignore the geopolitical manipulation of energy, or 

we can choose to have a secure and stable supply of oil from Canada and develop our own vast resources here. Let us not forget that 

KXL will also transport U.S. crude. Canada is our most important 

energy supplier already and one of our most stalwart allies. They 

were there for us right after Hurricanes Katrina and Rita. They 

were there for us right after 9–11. They accompanied us into war 

against terrorism. 

They have made a choice to develop their oil sands. It is in their 

national interest and they will do it one way or another. Increasing 

our existing deep relationship with our longstanding ally Canada, 

coupled with reforms in Mexico and production here at home, we 

could shift the gravity of the oil market to North America. 

Jobs. The Keystone pipeline will create 42,000 jobs. And for those 

who say those are temporary, they do not understand the construction industry or they are simply against the $2 billion that will 

be put in labor’s pockets. Or they are against the $3.4 billion in 

additional GDP for our economy that is sputtering. Or they are 

against the pipeline being one of the largest property taxpayers in 

FOREI-43947 with DISTILLER

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Montana, South Dakota, Nebraska, which will support schools, fire, 

police services, and infrastructure. 

Today the United States and Canada enjoy a very robust trading 

relationship and the most peaceful border. I do not think we have 

to fear the Canadian Mounties coming and circling our bases like 

Russia is doing to Crimea. But equally that trade relationship pays 

off. For every dollar we spend buying a Canadian good, 89 cents 

returns to the United States. That is money that stays here for the 

benefit of our economy. That is not like our other oil suppliers. 

Only 27 cents comes back here from oil we buy from Venezuela. 

On the environment. I would suggest that every one of us here 

in this room is an environmentalist. We enjoy and like and support 

clean air, water, and land, and the State Department has concluded some very important things in its review. Number one, the 

Keystone pipeline will have a negligible impact on the environment. Today the oil sands production accounts for only 0.1 percent 

of global greenhouse gas emissions and their carbon footprint is 

going down and in 2011 it is now equal to the Venezuelan crude 

that it seeks to displace. 

Number two, the oil sands will be developed with or without the 

Keystone pipeline. Our Government has concluded that, the Canadian Government has concluded that, and they are now looking 

east, west, and south for options and producers are investing to 

make that a reality. 

Third, alternatives to the Keystone pipeline would have a higher 

emissions profile than the pipeline itself. 

So, put plainly, given our practical energy reality, if you are in 

support of the environment you are in support of the pipeline. 

So in conclusion, the 5-year review process has been exhausted, 

hearing from people and organizations all across this country. It 

has included field hearings and Cabinet agencies’ input. In fact, it 

has received input from the people on this panel. And the conclusion is clear: Keystone XL is in our national interest, as was its 

predecessor, the Keystone pipeline. Keystone is good for the economy, jobs, tax revenue, property revenue, investment, and trade. It 

is good for our energy security, adding a more stable and secure 

source of energy. And the State Department has concluded that the 

Keystone pipeline will have a ‘‘negligible impact’’ on the environment, their words, and that oil sands will be developed one way or 

another. 

KXL and, more broadly, developing the resources here in North 

America will have a significant effect on improving our national 

security and by adding more democratic molecules to our mix. 

Sixty-five percent of the American people support this pipeline. We 

live in a dangerous and precarious time. Approving the pipeline 

will strengthen our economy, decrease our energy risk, respect our 

commitment to the environment, while also furthering our trade 

and bilateral relationship with our democratic ally to the north. 

The Keystone XL pipeline is in our national interest and, in the 

words of Canada’s Prime Minister, is a ‘‘no brainer.’’ 

Thank you very much. 

[The prepared statement of Ms. Harbert follows:] 

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PREPARED STATEMENT OF HON. KAREN A. HARBERT

Thank you Chairman Menendez, Ranking Member Corker, and members of the 

committee. I am Karen Harbert, president and CEO of the Institute for 21st Century Energy (Institute), an affiliate of the U.S. Chamber of Commerce, the world’s 

largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and 

industry associations, and dedicated to promoting, protecting, and defending America’s free enterprise system. 

The mission of the Institute is to unify policymakers, regulators, business leaders, 

and the American public behind a common sense energy strategy to help keep 

America secure, prosperous, and clean. In that regard we hope to be of service to 

this committee, this Congress as a whole, and the administration. 

INTRODUCTION: THE STRATEGIC CONTEXT

According to the Energy Information Administration (EIA), fossil fuels will remain 

the largest energy source worldwide for decades into the future. As the global economy recovers and developing economies continue to rapidly expand, demand for 

energy will increase by as much at 56 percent by 2040, and competition for petroleum and all forms of energy will increase throughout the world. 

Through the application of new technologies, North America is moving from an 

era of energy resource scarcity to one marked by energy abundance. Indeed, the core 

assumption underlying our energy policy—scarcity—is no longer valid. North America has the largest fossil fuel resource base in the world. 

This has caused a shifting in the world’s energy center of gravity from the Middle 

East to North America. The rapid change in U.S. and Canadian energy fortunes has 

caught many analysts and policymakers by surprise. Many experts now believe 

energy self reliance for North America actually may be within reach in the coming 

decade. 

Nevertheless, forecasts agree that the United States will continue to be a net 

importer of oil for many years to come. EIA’s ‘‘Annual Energy Outlook’’ 2014 Early 

Release, for example, projects that U.S. consumption of petroleum and other liquids 

will peak around 2020 at 19.5 MMbbl/d and decline gently thereafter. EIA also 

projects that crude oil production will approach 9.6 MMbbl/d by 2020. As a result 

of these two trends, net crude oil imports have declined from 60 percent of total 

crude oil supply in 2011 to less than 50 percent today, and they are projected to 

decline further to 40 percent by 2020. As the United States remains a net importer 

of crude oil, the greater access to Canadian crude oil afforded by Keystone XL would 

increase the reliability and the diversity of foreign supplies of crude oil the United 

States will continue to need. 

America needs sustained economic growth. The economy continues to expand at 

a slow pace, and unemployment remains stubbornly high. North America’s abundant energy resources provide a readily available mechanism to ensure affordable 

energy, grow our economy, create millions of well-paying jobs, and strengthen our 

Nation’s long-term energy security. We have the largest stimulus package available 

to our economy in the form of energy, and this economic injection is not one that 

is borne by the American taxpayer. 

In 2002, North American proved reserves accounted for about 5 percent of the 

world total. The following year, the addition of 175 billion barrels of oil from Canada’s oil sands to proved reserves boosted North America’s reserves to 215 billion 

barrels and its share of proved global reserves to 18 percent. In a recent report, EIA 

estimates that in 2013—10 years later—technically recoverable resources of 

unproved conventional and shale oil resources could be as high as 594 billion barrels, triple the 2003 estimate. Rapidly improving technology could send this estimate even higher. When combined with the estimated 2 trillion barrels of U.S. oil 

shale and oil sand resources, North America’s crude oil resource is greater than the 

amount of proved conventional reserves in the rest of the world today. The region 

can be an energy superpower if we let it. 

Canada has doubled its oil production over the last two decades and sends almost 

all of its oil exports to the United States (though with new outlets for Canadian 

crude oil in the works, that will change). Production from the Alberta oil sands can 

increase from the current 1.4 MMbbl/d to more than 3.5 MMbbl/d by 2025, and some 

estimates are higher still. This represents crude oil that we will not need to import 

from OPEC nations. Much of the Canadian crude is supplied to the United States 

through 19 cross-border pipelines, which received permits under both Republican 

and Democratic Presidents, including President Obama. 

Canada is an important and reliable trading partner and is by far the largest supplier of oil and natural gas to the United States, supplying 16 percent of U.S. petroFOREI-43947 with DISTILLER

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leum consumption needs and 28 percent of U.S. petroleum imports. Stable, longterm energy supplies from Canada are critical to U.S. energy security at a time 

when global supplies are often found in geopolitically unstable regions of the world 

and production from once-reliable sources is slowing. 

The Institute has taken a close look at energy supply issues and how they impact 

U.S. and international energy security as part of our Index of U.S. Energy Security 

Risk and International Index of Energy Security Risk studies. One way to look at 

supply risk is to measure how much of the global oil supply is in the hands of potentially politically unstable countries. This was done using Freedom House rankings 

of civil and political liberties, which the group uses to categorize countries as Free, 

Partly Free, and Not Free (Figure 1). The chart shows that since 1980, output from 

Not Free and Partly Free countries has increased while output from Free countries 

has been stuck in a range of 17 to 20 million barrels per day. As a result, the share 

of global production in Not Free and Partly Free countries climbed from a low of 

65 percent in 1985 to a high of 77 percent in 2012. At a time when North Sea oil 

output is falling, large emerging economies are growing into large oil consumers, 

putting pressure on spare oil production capacity globally. Potential political instability in many producing countries is also on the rise, and greater output from a 

close friend and ally like Canada is needed and welcome. 

Taking this analysis a step further, the Institute has developed metrics of global 

supply risks for oil, natural gas, and coal reserves and supplies that combine measures of reliability (using Freedom House rankings as a proxy) and market diversity. 

Diversity of supply is a key aspect of energy security—the greater the supply diversity, the lower the supply risk. 

Of particular relevance to this discussion is the global crude oil proved reserves 

risk metric shown below (Figure 2). It shows a sharp increase in global supply risks 

in the early to mid-1990s because of increases in reserves being listed for Iran, Iraq, 

Saudi Arabia, United Arab Emirates, and Venezuela. The stunning plunge in global 

risk observed in 2003 is entirely due to the listing of an additional 175 billion barrels of crude reported for Canada. 

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Both of these charts demonstrate energy supplies from reliable trading countries 

such as Canada can lower energy security risks for the United States and other 

countries. Therefore, the construction of TransCanada’s Keystone XL pipeline will 

help us lower our energy security risk while also realizing the economic and energy 

security benefits of Canadian and U.S. resources. 

ECONOMIC BENEFITS

We believe it is clearly in the national interest that TransCanada’s Keystone XL 

(KXL) pipeline project proceeds. TransCanada’s Keystone XL pipeline is a $3.3 billion pipeline expansion project that would increase the existing Keystone Pipeline 

system that connects Canada’s 175 billion barrel oil sands resource to U.S. refining 

centers from a capacity of 591,000 bbl/d to more than 1.2 MMbbl/d. 

The economic impact and long-term benefits of the construction of the KXL pipeline are significant and vitally important to American jobs and our economy, especially during this time of sluggish economic growth. According to the Department 

of State’s Final Supplemental Environmental Impact Statement (January, 2014), 

42,100 Americans will be employed in direct, indirect, and induced jobs during construction of Keystone XL, generating $2.02 billion in earnings for workers. In addition,the FSEIS reported that the project will generate $66 million in sales tax for 

goods and services during construction that will infuse economic vitality into local 

communities. Overall, the Keystone XL project will contribute $3.4 billion during 

construction to the U.S. Gross Domestic Product (FSEIS, January 2014). 

Keystone also will enhance an already deep trading relationship. It is estimated 

that for every $1.00 spent to buy oil from Canada, $0.89 is returned in the purchase 

of U.S. goods or services. The development of Canadian oil sands resources already 

supports tens of thousands of American workers in hundreds of companies spread 

throughout the Unites States who are supplying goods and services to oil sands 

developers. The approval of the Keystone XL pipeline will help allow for the continued growth in development of the oil sands and an increased flow of trade between 

the United States and Canada. 

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Once the pipeline is built, TransCanada will become one of the single largest 

property taxpayers in Montana, South Dakota, and Nebraska. During construction 

of the pipeline, TransCanada will pay $55.6 million in property taxes to states and 

local communities in counties with Keystone facilities (FSEIS, January 2014). This 

revenue will help support key local services like schools and fire and police services, 

as well as needed projects like roads, bridges, recreation facilities, and new 

schools—thus helping create and support additional construction jobs and economic 

benefits. 

In addition to these economic benefits, expansion of the Keystone XL pipeline 

would enhance U.S. energy security. Linkages to the pipeline system also could 

enable crude oil production from the Bakken formation and, if they are allowed to 

be developed, oil shale formations in Wyoming to be transported to refineries in the 

gulf region more efficiently. 

The failure of the Federal Government thus far to grant a construction permit for 

the Keystone XL pipeline exemplifies perhaps better than anything the challenges 

of building energy projects and the need for common sense energy policy reform in 

the United States. 

FOREIGN RELATIONS AND TRADE

After over 5 years of environmental and other reviews, the portion of the northern 

section of the pipeline from the Canadian border to Steele City, NE, is still awaiting 

Presidential approval. Some have called this the most studied piece of U.S. infrastructure ever. The Prime Minster of Canada called the project a ‘‘no-brainer.’’ And 

leaders, investors, and markets have been watching. This failure has tarnished 

America’s image as a ‘‘can do’’ country open to investment, a failure that can be difficult to shake from investors’ minds. 

Also, while the Keystone XL proposal has been under consideration and delayed, 

Canadian oil sands developers have been looking to countries other than the United 

States, such as China and India, as markets for oil sands crude. Proposals have 

been developed and accelerated to build pipelines that would stay within Canadian 

borders, running west from Alberta to the Pacific Coast, and move crude to markets 

in the East. 

Reliable, long-term energy supplies from Canada are critical to U.S. energy security at a time when global supplies are often found in geopolitically unstable regions 

of the world and in countries that aren’t concerned with U.S. best interests. While 

expansion of U.S. domestic energy sources must remain a top priority, imported oil 

will continue to play a key role in meeting energy demand, and oil from Canada 

can help meet our supply and demand challenges. 

The increased supply of crude oil from KXL would greatly contribute to our move 

toward North American energy self-sufficiency. U.S. refineries in the gulf coast rely 

mostly on foreign imports of heavy crude oil. When completed, the KXL pipeline will 

have the capacity to supply over 800,000 barrels per day of crude oil from Canada 

and the U.S. Bakken region to U.S. refineries, curbing dependency on crude oils 

from Venezuela and Mexico, whose volumes of crude exports are in decline, and less 

stable countries in the Middle East and Africa. 

It is critical to reiterate that Canada is an important and reliable trading partner 

for the United States. These two nations already enjoy the largest trading partnership across the longest peaceful border in the world. In addition, the approval of 

the Keystone XL pipeline would result in an increased flow of trade between the 

U.S. and Canada. For every U.S. dollar spent on Canadian products, Canadians 

return 89 cents through the purchase of U.S. goods and services. Compared to the 

27-cent return that we get from energy trade partners like Venezuela, the benefits 

of Canadian trade are obvious, as are the energy security advantages. 

Finally, during the 5-plus year period that the project has been under review, 

America has been sending billions of dollars overseas to purchase oil from countries 

that are not our allies. It just doesn’t make sense. 

ENVIRONMENTAL GOALS AND OBJECTIVES

The Keystone XL project is a ‘‘win-win’’ for the United States. The FSEIS (January, 2014) found that the project will have ‘‘limited adverse environmental impacts’’ 

during construction and operation. It will help provide an important source of 

energy for our Nation, boosting our economy and improving our energy security by 

reducing our dependence on oil from overseas. 

According to EIA (2013), U.S. energy-related emissions of carbon dioxide fell are 

at their lowest level since 1994. While Canada is committed to developing its oil 

sands resources, it is also steadfast in its efforts to reduce its greenhouse gas (GHG) 

emissions and has made great strides in cutting emissions from oil sands. According 

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to the Canadian Government, technological advancements have cut per-barrel GHG 

emissions from oil sands production by 26 percent compared to 1990 levels. Oil from 

the oil sands is destined to reach the United States and our refineries. Efforts to 

stop crude transportation projects like KXL will have no impact on the development 

of oil sands. The recently released FSEIS states that approval or denial of any one 

crude oil transport project is unlikely to significantly impact the rate of extraction 

in the oil sands or the continued demand for heavy crude oil at refineries in the 

United States. 

The FSEIS also states that KXL will produce 28–42 percent less GHG emissions 

than any other possible alternative oil sands transportation scenarios, adding additional benefit for the environment. 

The Department of State has conducted a comprehensive, extensive, and thorough 

independent environmental review. Multiple federal, state, and local agencies have 

been involved, and opportunities for public input were provided throughout the process. Any further reviews or delays are unnecessary and unwarranted. 

CONCLUSION

The Keystone XL pipeline has called attention to a much larger problem in America. The good news is that over the last 5 years the world’s energy center of gravity 

has shifted closer to North America. The alarming news is that our energy policy 

has lagged far behind this reality and is now standing squarely in the way of realizing a more competitive and secure energy future for America. The question is on 

the table: ‘‘Is America open for business?’’ 

As a nation, we have been blessed with abundant natural resources and a great 

capacity for technological innovation. Fulfilling America’s energy potential requires 

strategic thinking underpinned by durable policy. For too long, our approach to 

energy has been conflicted, contradictory, and myopic. The extraordinary opportunities being created in U.S. energy today have come about despite government policy, 

not because of it. That has to change if we are to energize the economy and put 

people back to work, and that means approving needed energy infrastructure, like 

the Keystone XL pipeline, in a timely manner. 

If done right, energy can be a potent driver for our Nation’s economic recovery. 

We can choose to seize the new opportunities being created across America’s energy 

landscape or simply cede these potential advantages to other countries. 

The Energy Institute believes that unleashing the power of free markets to create 

a competitive energy marketplace will stimulate economic activity and create jobs. 

The majority of the Keystone XL project has been under review for over 5 years, 

taking into consideration comments and information collected through multiple 

hearings, comment periods, and interagency processes. Public citizens, governments, 

Tribal governments, and nongovernmental organizations have all taken part in the 

review process. A new scientific poll shows that 65 percent of Americans support 

this pipeline. There is no doubt that the oil sands in Alberta will be developed, and 

the only question is where the oil will go. America has a choice of getting more oil 

from its trusted ally Canada and in the process increasing revenue and investments 

in the United States or sending more of our hard earned money to unfriendly or 

unreliable countries. 

Approving the Keystone XL pipeline and making energy infrastructure a priority 

will put America on a long-term path to a safe, strong, prosperous, and clean energy 

future. It is more than past time to move forward and grant the Presidential Permit 

to allow construction on the pipeline to begin. 

The CHAIRMAN. Thank you all for your testimony. 

Several witnesses have asked for documents to be entered into 

the record and, without objection, they shall be included. 

So let me start off. Mr. Brune, I understand the seriousness of 

climate change. I have seen its effects when Super Storm Sandy 

devastated our home State of New Jersey. I personally believe in 

acting on climate by putting a price on carbon and I support the 

President’s plan to cut carbon emissions from power plants. 

However, it seems strange to regulate carbon by means of transportation, which is what denying the Keystone pipeline would 

amount to. We do not limit the amount of carbon on roads leading 

to power plants, so why should we regulate carbon through this 

pipeline? 

FOREI-43947 with DISTILLER

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You need to put your microphone on when you are responding. 

Mr. BRUNE. Thank you, Mr. Chairman. The reasons to oppose 

this pipeline are as varied as the reasons to promote fuel efficiency 

in our cars and trucks. For the pipeline, again, we would be taking 

oil from the most carbon-intensive fuel source on the planet, taking 

it all the way through the country, most of it to be exported. This 

is a fuel source that has been documented to be much more carbon 

intensive than conventional oil. But it is also a fuel source that 

has, through experience, we have seen polluted American waterways and posed a significant risk to air quality across the country. 

When we have a policy decision before us where we have a choice between putting $7 billion into this pipeline or investing instead in 

clean energy and fuel sources that would create more jobs, it is incumbent upon us to think both for what would strengthen our 

economy today, but would also protect and strengthen our economy 

long into the future. So from our perspective this is not a step to 

regulate carbon; it is a step that could be taken—rejecting this 

pipeline is a step that could be taken to promote clean energy and 

energy efficiency instead. 

The CHAIRMAN. Well, what about Ms. Harbert, just to continue 

on this as a mode of transportation versus the other issues, which 

I generally agree with you. The State Department’s final EIS for 

the pipeline expansion concluded that if the pipeline expansion is 

blocked and producers are forced to ship the oil by rail or truck 

instead, overall transportation emissions could be greater than that 

of the pipeline by 28 to 42 percent and would likely result in additional accidents. 

So is approving the pipeline actually more environmentally 

sound and safer than the alternatives? 

Ms. HARBERT. That is what the State Department concluded. 

The CHAIRMAN. I am sorry, I was not asking you. I know you 

said that. I was referring to Mr. Brune that you made that comment. I expounded upon it. 

I would like to hear your response to it. 

Mr. BRUNE. We believe it is a false choice. What has been proven 

is that shipping tar sands oil by rail is not safe. We have seen more 

accidents by rail in the last year than we have in the past previous 

decades. What is also been proven is that shipping tar sands oil 

through pipelines is not safe. The first tar sands pipeline leaked 12 

times, spilled 12 times in the first 12 months. 

So the choice is not whether to accept the increased risk through 

rail or to accept increased risk through pipeline, but whether to 

take this oil out of the ground to begin with. The IPCC, the world’s 

top climate scientists, have said that in order to keep global warming below 2 degrees Celsius, or 3.6 degrees Fahrenheit, we have to 

keep at two-thirds of our fossil fuel reserves around the world in 

the ground. So a reasonable person would suggest that the way to 

do that—and that is a tall order for the global economy. It is a tall 

order for the American economy. The best way to do that is to start 

with the most carbon-intensive fuel sources, such as the tar sands 

up in Canada. 

The CHAIRMAN. Ms. Harbert, your testimony—we have heard a 

lot of testimony about jobs. I have heard a great variety of figures 

around the number of jobs this project will create. TransCanada 

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has claimed that the project will create 20,000 jobs in construction 

and manufacturing and almost a half a million, 465,000 jobs 

exactly, throughout the U.S. economy. Tom Donohue, your boss, 

lowered the indirect jobs number to 250,000, and in previous testimony you upped the construction jobs to 25,000 and lowered the 

indirect jobs to 116,000. 

However, the State Department’s final EIS concluded that the 

project would only create about 2,000 short-term construction jobs 

and only 50 ongoing jobs for maintenance. So how do you justify 

the wide spread even within your own organization on numbers? 

And if one is looking to the EIS as a compelling reason for 

approval, then as it relates to the jobs how is it that you are so 

disparate from where they are? 

Ms. HARBERT. That is a very good question and let me address 

it in two different ways. 

The CHAIRMAN. We only ask good questions here. 

Ms. HARBERT. Of course. That is why we are here. 

Those larger numbers were the entire span of the pipeline from 

Canada all the way to the Gulf of Mexico and, as you well know, 

half of that pipeline or the lower third is already under construction and being put into operation now. So the numbers obviously 

for what we are looking at now are smaller. 

We are happy to take the State Department numbers—— 

The CHAIRMAN. So the State Department’s numbers are what 

you would say for that which is under consideration? 

Ms. HARBERT. We are going to take the State Department at its 

word that it believes those are the numbers. 

The CHAIRMAN. So 2,000—— 

Ms. HARBERT. But we would like to see the 42,000 jobs that they 

cite in their EIS, not 2,000 but 42,100, to be exact, is what they 

put forward in the final environmental impact statement. Certainly 

we would like to see those bigger. I know our friends in the labor 

community are hoping they are bigger. But we are going to use 

what the government has put out. I would have to say, as I said 

in my testimony, those are good-paying jobs for construction workers and we should not be against them. 

I will say one thing about Mr. Brune’s testimony that he just put 

on the table. He said the question is whether we should take these 

oil sands out of the ground. I would just like to submit that I do 

not think that is the United States decision. That is Canada’s decision to make, not ours. 

The CHAIRMAN. Well, let me ask you, since I listened to your testimony with interest. Your testimony suggests that the Chamber of 

Commerce is an environmentalist organization. 

Ms. HARBERT. Did you say environmental-less? 

The CHAIRMAN. An environmentalist—— 

Ms. HARBERT. Environmentalist. 

The CHAIRMAN [continuing]. Organization. Sorry, I am struggling 

with a cold here. 

Does that mean the Chamber agrees that, one, that climate 

change is real and is caused by humans? 

Ms. HARBERT. The Chamber has a long record on climate and 

here is what it is. Number one, we support addressing our environment in things that work. We look today at what is happening in 

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the United States. Our emissions are coming down, and why? Well, 

we have had a recession. That is unfortunate. But we have increasing efficiency in our economy and we are not doing what Europe 

is doing. Europe’s emissions are going up and they have a very 

hard and difficult cap-and-trade system, which is not working. 

We want to be in favor of things that work, technologies that 

work, that put Americans back to work. So we strongly believe in 

improving the environment while also protecting the economy. 

The CHAIRMAN. I appreciate that—but that is not responsive to 

my question. I asked a very simple question. Does the Chamber believe that climate change is real and caused by humans, yes or no? 

Ms. HARBERT. We believe that we should be doing everything in 

our power to address the environment. 

The CHAIRMAN. That is great. Is climate change caused—is it 

real? Is it real? 

Ms. HARBERT. The climate is warming, without a doubt. 

The CHAIRMAN. Okay, so climate change is real. Is it caused by 

humans? 

Ms. HARBERT. And the other part of that answer is, is it warming 

as much as some of my colleagues on this panel have predicted in 

the past? And the answer is ‘‘No.’’ 

The CHAIRMAN. I am going to get to them, too. I have been getting to them. You have got to give me your answer. Is it caused 

by humans? 

Ms. HARBERT. It is caused by lots of different things and you cannot say that climate change is only caused by humans. I think the 

science is what people are—what you are pointing to, and we have 

a robust debate going on in this country, as we should. And those 

that would say that everything is settled sort of undercut the integrity of science. It is an ongoing discussion. 

The CHAIRMAN. Does the Chamber believe that a price on carbon 

is needed to reduce emissions? 

Ms. HARBERT. One could argue today we already have a price on 

carbon, in that we are pushing efficiency into our vehicles and into 

our electricity, which is raising prices. So we have an indirect price 

on carbon already. 

The CHAIRMAN. Well, would then—is that your argument? Is that 

the Chamber’s argument? 

Ms. HARBERT. That is a fact. It is not an argument. 

The CHAIRMAN. Okay, so that is the Chamber’s fact? You use 

that as a fact. 

Ms. HARBERT. No, it is an economic fact. That is what—I am just 

quoting the facts. 

The CHAIRMAN. If it is a fact that you say that there is a price 

by greater efficiency, then the arguments that were made earlier 

that there is a price that is paid—I think it was Dr. Hansen who 

said—that there is a price to be paid that collectively, we as a society, pay for the emissions in the consequence of health costs, agricultural problems, and other elements would be then fair to include 

as well. There are prices on both sides. 

Ms. HARBERT. I am not sure that that actually logically flows 

through. 

The CHAIRMAN. Well, let us try and see if we can follow the logic. 

Ms. HARBERT. Okay. 

FOREI-43947 with DISTILLER

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The CHAIRMAN. You say that there is a price as a result of 

greater efficiency and that that efficiency creates greater costs, and 

you say therefore we could argue—your words, not mine—that 

there is already a tax. 

Ms. HARBERT. If you are going to be building a residence or a 

building that is going to be more energy efficient and those materials are more expensive, then there is a cost associated with that. 

If you are going to be buying something that is more expensive, 

there is a cost associated with that. But I have to tell you, I do 

not agree with the fact that you think that the Chamber lacks 

a compass on the environment. It is quite the opposite. We have 

been a proponent of research and development on advanced technologies—— 

The CHAIRMAN. You made the—— 

Ms. HARBERT [continuing]. The biggest supporter on energy efficiency legislation. 

The CHAIRMAN. You made the comment. I did not say the Chamber lacked a compass. I asked some specific questions as it related 

to climate change. Now, the question simply is: should we not include a cost of what happens when we allow any person or industry 

in our country to ultimately operate in a way in which it creates 

a collective consequence on our health and well-being, and that is 

subsidized by what—by the government, through health care, 

through Medicare, through Medicaid, through a whole host of other 

things. 

I think it is good for the goose, it is good for the gander. That 

is my point. 

Senator Corker. 

Senator CORKER. Thank you, Mr. Chairman. I thought it was 

going to be contentious on our side of the aisle. But it has been a 

very good hearing. I appreciate all the witnesses being here. 

Dr. Hansen, I have to say that I actually found some like-mindedness in your testimony and I appreciate you being here. It seems 

to me that, number one, you are a very strong proponent of nuclear 

energy. I know you were using Sweden as an example and most of 

their energy comes from nuclear energy, so I find this to be very 

like-minded in that regard. 

Dr. HANSEN. Well, I am a strong proponent of clean energy, carbon-free energy, and letting the market choose the energy source. 

We should not be specifying that electricity has to come from 

renewable energy. We should say it has to be clean, carbon-free 

energy, and let the alternatives compete. 

It is likely that nuclear power would compete well. Now, it is not 

going to be easy in the United States because it has been made so 

difficult—a nuclear power plant. It takes so long to build a nuclear 

plant. That is another reason why we need to work with China, because if we do they are going to build on a large scale and they 

will be able to drive down the unit cost, and then it can circle back 

to the United States if, in fact, we want to have more nuclear 

power in the United States, and I think we should. 

Senator CORKER. If our Nation was ever to get to a point where 

it was going to put a price on carbon, the carbon tax would be a 

much better way than the Rube Goldberg mechanism that the 

Senate looked at a few years ago. So I just want to tell you, while 

FOREI-43947 with DISTILLER

37 

that is not where we are, if that was ever to come about I would 

agree with you that that is a much better way, especially a revenue-neutral way of doing it, than what was contemplated in the 

past. 

Dr. HANSEN. Well, I agree with that. And it had better come 

about pretty soon or we are not going to solve this problem, 

because that is the only way you can do it. As long as you allow 

the fossil fuels to get by scot-free without paying their costs, then 

we are going to keep burning them. You are basically burning dirt. 

Senator CORKER. So I will let stand the comments you made 

about what people might do with the money. But let me ask you 

about the transportation issue. I know the chairman mentioned 

that. What I do not get about the Keystone pipeline and the resistance to it is that the alternate transportation, as was mentioned, 

is very expensive and it is hugely carbon-intensive. 

I guess I would ask you this question. The Canadians are obviously going to develop these whether we transport it south or not. 

I have met with them directly. I am sure you have, too. And certainly they are going to build a pipeline to the west, which would 

go to China, if we do not do this. I guess I do not understand how 

someone like you, that has such credentials environmentally, would 

oppose a more efficient way of that oil, that fossil fuel, making it 

to market. 

Dr. HANSEN. It is a question of how much of that tar sands is 

going to be taken out of the ground. If we build this expensive pipeline, it will facilitate the extraction of much more than if we do not 

build it. 

As soon as you put a price on carbon that is significant and rising, one of the first things that falls off the table is tar sands. And 

Canada knows that. That is why they are so desperate to get the 

United States to approve this. If we do not approve it, a lot of that 

tar sands will never be developed. 

The world is going to realize pretty soon that we have to limit 

the amount of carbon we put in the atmosphere and we are going 

to have to do that via a price on carbon, and that is going to cause 

the most carbon-intensive fuels to be left in the ground and that 

includes tar sands. 

Senator CORKER. Mr. Brune, let me ask you this question. Again, 

this pipeline, it has been beyond belief to me that it has generated 

this much opposition when it seems, as was mentioned by someone, 

to be such a no-brainer. But we have 19 pipelines that cross between Canada and the United States and I am just curious as to 

whether your organization is opposed to all of those in the same 

way that you are opposing this one? 

Mr. BRUNE. First let me say that I appreciate your earlier comment about the carbon tax. I appreciate your earlier comment 

about the carbon tax and should there be a moment where there 

is an opportunity to move that forward the Sierra Club would look 

for an opportunity to do that with you. 

Senator CORKER. I was not suggesting I was necessarily—— 

Mr. BRUNE. I understand that. 

Senator CORKER. But I do think if it were going to be addressed, 

it is far more transparent. There is a way to make it revenueFOREI-43947 with DISTILLER

38 

neutral. And what we considered a few years ago was utterly 

ridiculous. 

But go ahead. 

Mr. BRUNE. I understand you were not preparing to introduce 

legislation, but when the moment comes perhaps we could talk. 

Senator CORKER. Thank you. 

Mr. BRUNE. Regarding your question, I am not sure if the Sierra 

Club has taken a position against all 19. I would be happy to get 

back to you on that. But to be clear, we are opposed to the expansion of development in the tar sands, and to the extent that this 

oil would come through the United States we are opposed to those 

types of projects. 

Part of the reason that I think needs to be shared here today is 

that we do not agree with the assumption that this oil will come 

out of the ground anyway. As you know, Alberta is landlocked. 

They are currently producing 2 million barrels of oil per day. The 

vision for the industry coming from the Prime Minister is to have 

that production grow to about 6 million barrels of oil per day. 

There are two pipelines that have been proposed to the west 

through British Columbia. There are two pipelines that are being 

proposed to the east and there is the Keystone XL pipeline to 

the south and another one, and other projects that are being 

considered. 

Each of those faces significant resistance. The two pipelines 

going to the west are dead in the water. They are not moving forward. They have opposition coming from the provincial government 

in B.C. as well as the First Nations, the native communities in 

B.C., who have legal standing to oppose those pipelines. The ones 

to the east also are facing significant difficulties. 

So you may, or may not, believe the veracity of what the Sierra 

Club is saying, but if you look at what the oil industry in Canada 

is saying and if you look at what oil industry analysts from CIBC, 

RBC, and other banks up in Canada are saying, this oil will not 

come out of the ground if the tar sands Keystone XL pipeline is not 

built. 

Senator CORKER. Listen, thank everyone for being here. General 

Jones, thank you for your service. It is always good to see you. I 

very much appreciated your testimony. 

I just want to ask one specific question, if I could, to Mrs. 

Harbert. In August 2009 this administration determined that the 

Alberta Clipper crude oil pipeline was in the U.S. national interest. 

The pipeline was designed to bring large quantities of crude oil 

from the oil sands of Alberta, Canada, to oil markets in the Midwestern United States. In particular, the national interest factors 

cited by the State Department in its determination that this pipeline would be in the national interest included: increasing the 

diversity of available supplies among the United States worldwide 

crude oil sources in a time of considerable political tension in other 

major oil-producing countries, shortening the transportation pathway for crude oil supplies, and increasing crude oil supplies from 

a major non-OPEC producer. 

Just asking you this one question, Would these same factors that 

led to a successful national interest determination for Alberta Clipper apply to the KXL case? 

FOREI-43947 with DISTILLER

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Ms. HARBERT. Absolutely. The only thing that has changed is 

that the demand around the world for oil has gone up, and so we 

must do even more to ensure that we can supply more here within 

North America to our market. 

Senator CORKER. Thank you all for your testimony. 

The CHAIRMAN. Senator Boxer. 

Senator BOXER. Thanks so much. Thanks to all of you. 

I ask unanimous consent to place in the record the final supplemental environmental impact statement on Keystone from the 

State Department, showing there would be 50 permanent jobs. I 

would like to put that in the record. 

The CHAIRMAN. Without objection. 

[EDITOR’S NOTE.—The State Department Impact Statement mentioned above was too voluminous to include in the printed hearing. 

It will be retained in the permanent record of the committee.] 

Senator BOXER. All right. And I want to say, Ms. Harbert, you 

are a great advocate, but you do not speak for environmentalists. 

And when you said if you are an environmentalist you are in support of the pipeline, let me just say that is ludicrous on its face, 

please do not speak for me, and do not speak for lots of folks who 

do not see it that way. 

And I appreciate some people saying it is a no-brainer. Maybe in 

some brains it is a no-brainer, and I respect that. But in my brain 

it is not a no-brainer. 

So I want to tell you, Mr. Chairman—and I want to thank both 

you and Senator Corker for this hearing—National Nurses United, 

representing 185,000 nurses, has joined me and Senator Whitehouse in calling for a thorough health impacts study on our people, 

the people of America, when you look at the immediate 45 percent 

increase in importation of tar sands and the eventual 300 percent 

increase in production of this filthy, dirty oil. The nurses—some of 

them are here in the audience. I want to thank them. 

By the way, 82 percent of the people give them an approval rating, compared to 8 percent for the Congress. When I stood next to 

them today, I hoped a little would rub off. But I just want to thank 

them, because they understand the impact on the health of our 

families. 

I want to show you two pictures. It does not matter which one 

first. This is pet coke, Mr. Chairman. You need to take a look at 

this because a lot of it is going to be stored around our Nation. 

Already we have seen it coming. This is just a sample of what 

America is going to look like when you see this tar sands filthy, 

dirty oil. This is what remains of it after it is refined, and it is 

stored just like this. We had testimony from people in Chicago who 

said kids were having a picnic, the stuff blew around, they were 

covered in soot and had to leave. 

I want to show you Port Arthur, TX, and what it looks like when 

this stuff is refined. Here it is. This is what the people—right by 

a playground. This is what is going on. So when my friend the General talks about our national interest, I personally believe we have 

to weigh in on a health impacts study, because personally I think 

our national interest should include if our kids are going to suffer 

more asthma, cancer, and the rest. 

FOREI-43947 with DISTILLER

40 

So I guess I would ask my friend from the Chamber, Are you 

familiar with the fact that the community in Canada where the tar 

sands are located continues to be disproportionately burdened with 

blood, lymphatic, and rare cancers that have been linked to chemicals produced by the petroleum industry? Are you familiar with the 

studies? 

Ms. HARBERT. Senator, we agree with you. We agree we should 

protect our air and our water. 

Senator BOXER. Are you familiar with the studies? If you could 

just stick to this because I do not have a lot of time. 

Ms. HARBERT. If there is a particular study you want us to review—— 

Senator BOXER. Yes. 

Ms. HARBER [continuing]. I would be delighted to review it. 

Senator BOXER. The Alberta Cancer Board study—I am going to 

send it to you—from 2009. 

I am also going to send you the 2010 article entitled ‘‘Oil sands 

development contributes elements toxic at low concentrations to the 

Athabasca River and its tributaries.’’ 

Mr. Brune, is it in our national interest to promote an industry 

that has increased the levels of carcinogens, such as PAH—and I 

am going to say it—polycyclic aromatic hydrocarbons, PAH’s, and 

nervous system toxins such as mercury in the river and into our 

lakes? Is it in the national interest? 

Mr. BRUNE. Absolutely not. Our national interest must include 

protecting the health of American families. 

Senator BOXER. I would say, Mr. Brune, Is it in the national interest to expose U.S. communities living close to refineries that will 

refine Keystone XL tar sands, such as Port Arthur, TX, to higher 

levels of toxic and cancer-causing air pollutants? Is that in the 

national interest? 

Mr. BRUNE. Absolutely not, particularly when we have clean 

energy alternatives that will protect our health, clean up our air 

and water, and put more people to work. 

Senator BOXER. Absolutely. You know, I think we need to be fair 

and look at everything, and I think we have to weigh everything. 

But for me, I take an oath to protect and defend the people. That 

includes their health. And the nurses testified today from these 

areas where they already see—and let us put up the refinery picture—they see who is coming in to the emergency room, what is 

happening. These are the forgotten voices in this debate. 

I ask unanimous consent to place into the record a letter from 

the nurses in which they call on Secretary Kerry to look at a health 

impacts study before any decision is made. 

The CHAIRMAN. Without objection. 

Senator BOXER. So I just want to say this, and I am going to stop 

before my time is up. If you have ever met a child with a breathing 

problem—and I am sure that you all agree with this—you just 

want to do everything you can to help them. Why is it when it 

comes to this project we are told it is a no-brainer, if you are an 

environmentalist just do it? No. Let us look at what is happening 

in Canada. 

I will tell you, I stood shoulder to shoulder with doctors from 

Canada who have seen 30 percent increases in rare cancer. I think 

FOREI-43947 with DISTILLER

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that issue has been swept under the rug. I am just one Senator, 

I am just one voice. But now I have 185,000 nurses behind me. And 

I am just saying to you, I am going to do every single thing in my 

power to protect the health and safety of the people. 

I want energy security, desperately, and if you look at California, 

we are moving quickly toward clean energy and it is exciting. And 

the jobs are growing exponentially. But we cannot do something in 

the name of national interest where it winds up costing us the 

health of our families. 

So I am going to keep pressing on this, and I thank you for the 

time. 

The CHAIRMAN. Thank you, Senator. 

Senator Johnson. 

Senator JOHNSON. Thank you, Mr. Chairman. 

Dr. Hansen, do you offhand know the average price of electricity 

per kilowatt-hour? 

Dr. HANSEN. No, I do not have that off the top of my head. I do 

not have a specific number. 

Senator JOHNSON. Do you have some concept of it? 

Dr. HANSEN. Certainly, and I know that—— 

Senator JOHNSON. Let me—just throw a number if you think you 

kind of know where it is at? 

Dr. HANSEN. No—— 

Senator JOHNSON. Cents per kilowatt-hour? Mr. Brune, do you 

know? 

Dr. HANSEN. No. It is more important to know the relative costs 

of one source versus another. 

Senator JOHNSON. Again, I will get to that. 

Mr. Brune, do you know the cost per kilowatt-hour? 

Mr. BRUNE. It depends greatly on the region that you are talking 

about. 

Senator JOHNSON. I understand, but overall? 

Mr. BRUNE. 10 cents, give or take. 

Senator JOHNSON. Very close. It is about 10 cents per kilowatthour in 2013. 

Senator Obama when he was a candidate said because of his capand-trade proposal that electricity rates would necessarily skyrocket. Dr. Hansen, did you basically concur with that? 

Dr. HANSEN. Cap and trade I would not advocate. It indeed 

would cause an increase in costs. What we need is an economically 

sensible approach and that is to put a simple fee on carbon. 

Senator JOHNSON. So how would that prevent electricity rates 

from skyrocketing like a cap-and-trade proposal would? I mean, 

you talked about a fee and dividend system. 

Dr. HANSEN. Yes. 

Senator JOHNSON. You are going to impose costs on energy. Is 

that not going to increase the price of energy? 

Dr. HANSEN. It will impose costs on carbon-based fuels, yes. Presently those fuels are—the costs are there, but they are borne by the 

public. 

Senator JOHNSON. President Obama’s Energy Secretary, Steven 

Chu, made the comment that somehow we have got to figure out 

how to get our gasoline prices up to the level of Europe. I think 

FOREI-43947 with DISTILLER

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he made that comment when our gasoline prices were, I think, 

actually below $2 a gallon. 

Dr. HANSEN. No—— 

Senator JOHNSON. I might be wrong. 

Dr. HANSEN [continuing]. No, we are not—— 

Senator JOHNSON. Let me finish my question. Back then I think European gasoline prices were $8 per gallon. 

Now, again, so these are the stated goals, the stated policy—— 

Dr. HANSEN [continuing]. No, I did not state that goal—— 

Senator JOHNSON. Mr. Hansen, Dr. Hansen, please let me finish. 

So these are the stated goals of President Obama and his Energy 

Secretary, to get electricity rates to skyrocket or get gasoline prices 

basically to quadruple. Do you disagree with those policies, with 

those goals? 

Dr. HANSEN. Certainly, certainly. What I have said is to make 

the costs honest. There are health costs, there are climate costs, 

and those are borne by the public. You are dumping all those costs 

on the public. Let us add them to the fossil fuels where they 

belong. 

Senator JOHNSON. This is my question and answer period here. 

I understand the externalities. I am talking right now about 

what families would feel in Wisconsin in terms of their energy 

price, their monthly energy bill. Their utility bill would necessarily 

skyrocket if the policies that are supported by individuals like 

you—and by the way, I agree with Ms. Harbert. I think we are all 

environmentalists. I like a pristine environment. I get my water 

out of a well. I love to fish. I love the outdoors. So we are all environmentalists. 

Dr. HANSEN. What you are saying is blatantly false. 

Senator JOHNSON. It is not. 

Dr. HANSEN. What you can easily show is that if you put an honest flat fee on carbon, 65 percent of the people will get more money 

than they pay in increased electricity and other prices. The economic models show that very clearly. 

Senator JOHNSON. I come from a—— 

Dr. HANSEN. Only the high-income people will pay more than 

they get in the dividend. 

Senator JOHNSON. Listen, I come from a manufacturing background. Ms. Harbert, is it not true if you want to manufacture 

goods you need power? 

Ms. HARBERT. Well, they are the largest consumer of power in 

the country. And you look at what is happening right now in Germany, which has electricity prices four times as high as we have 

here, and the German industrial community, where are they going? 

They are coming and investing in the United States. Why? Because 

we have got affordable energy, affordable electricity, affordable natural gas. 

So we are seeing investment come out of Europe because of high 

prices and come here. So we do not have to look very far to a model 

that is not working. And by the way, their emissions are going up, 

not down. 

Senator JOHNSON. So if electricity rates were necessarily to skyrocket, that would put a real—that would really hamper manufacturers’ ability to be competitive in the world. And what would that 

FOREI-43947 with DISTILLER

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do to the number of jobs that would be created and available here 

in the United States? 

Ms. HARBERT. Well, it would certainly hurt our competitiveness. 

It would reduce investment. It would hamper jobs. But also, let us 

not forget that that is regressive. It would hurt the lowest part of 

the people with the less, the least amount of disposable income 

would pay the most. So it is very painful. 

Senator JOHNSON. Okay, I appreciate those comments. 

Dr. Hansen, are you familiar with the estimates from the 

National Renewable Energy Laboratory—because you were mentioning all the jobs that would be created with green energy—that 

showed the government spent $9 billion over the last few years on 

green jobs and created 910 new jobs, which means that cost $9.8 

million per job. Are you aware of those types of statistics? 

And by the way, I have seen three or four different studies. This 

is kind of the midpoint in terms of the cost of these green energy 

jobs. 

Dr. HANSEN. Yes. I strongly disagree with such policies. I say put 

a simple, honest fee on carbon. Do not say you have got to buy 

renewables. 

Senator JOHNSON. Okay. 

Dr. HANSEN. I have never agreed with that—so do not blame 

those policies on me. 

Senator JOHNSON. I am not blaming you. I am just talking about 

the policies that are actually being pushed by this administration. 

They are not creating the jobs. The jobs that have been created are 

enormously expensive and they are policies that are going to really 

hamper the ability to create new jobs. 

Dr. HANSEN. So that is why I am asking you to stop and think, 

and what is the conservative solution to this? It is to put a price 

on carbon. 

Senator JOHNSON. President Obama on November 14 said: ‘‘The 

temperature around the globe is increasing faster than was predicted even 10 years ago.’’ Yet an article in The Economist in 

March 2013, said: ‘‘Temperatures have not really risen over the 

last 10 years.’’ A month earlier, the BBC News reported that since 

1998 there has been an unexplained standstill in the heating of the 

Earth’s atmosphere. 

This is largely correct, right, that temperatures have remained 

flat over the last 10, 15 years? 

Dr. HANSEN. No. The rate of increase has been lower, and it is 

not unexplained. There is the natural Pacific decadal oscillation 

and the Pacific tropical temperature has not warmed during that 

period, and that has affected the global temperature. 

Senator JOHNSON. I think the evidence refutes that. 

Let me ask just a final question. Mr. Brune, Dr. Hansen, are you 

both familiar with a fellow named Patrick Moore? 

Mr. BRUNE. Yes. 

Senator JOHNSON. So he was the founder of Greenpeace, correct? 

Mr. BRUNE. And disavowed by them three decades ago. 

Senator JOHNSON. Well, he is disavowing them as well. He said 

that—he left the group because he said the group became more interested in politics than science and had taken a sharp turn to the 

political left. But he made the statement, he said: ‘‘We do not know 

FOREI-43947 with DISTILLER

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whether the present pause in temperature will remain for some 

time or whether it will go up or down at some time in the near 

future. What we do know with extreme certainty is that climate is 

always changing between pauses and that we are not capable with 

our limited knowledge of predicting which way it will go next.’’ 

I live in Wisconsin. There were, I think, 200-foot thick glaciers 

in Wisconsin. How do you explain—before man ever had a carbon 

footprint. How do you explain that environmental change? 

Dr. HANSEN. The statement you just made is blatantly false. We 

do know—— 

Senator JOHNSON. How do you explain? How do you explain climate change that occurred 10,000 years ago before man had a carbon print? How do you explain that? 

Dr. HANSEN. Climate—there are variations in the Earth’s orbital 

elements. The eccentricity of the Earth’s orbit, the time in the season at which it is closest to the sun, and—— 

Senator JOHNSON. So those variations just end right now, so now 

it is all man-made? 

Dr. HANSEN. No one has said it is all man-made. There are natural—— 

Senator JOHNSON. Well, that seems to be the tack that most 

environmentalists take. 

Dr. HANSEN. However, the manmade effect is now dominant, and 

we can measure that, because we can measure the energy balance 

of the planet, and we see that there is more energy coming in than 

is going out. So therefore the planet is going to continue to get 

warmer. 

It does not mean each year it is going to get warmer, because 

there are natural fluctuations. But this decade is going to be 

warmer than the last one, and the following one will be still 

warmer. We know that. 

Senator JOHNSON. I agree with Ms. Harbert. I think the science 

is far from settled. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

I am going to—expressions of approval or disapproval are not 

permitted in the committee. 

I am going to ask Senator Kaine to preside while I go to vote. 

I do have other questions for this panel, so I intend to come back 

and ask you to—you will have as much time, Senator Kaine, as you 

need. 

Senator KAINE [presiding]. Thank you, Mr. Chairman. 

To the panel, thank you for being here today. I may get 10 or 

15 minutes, which is fantastic. 

I am going to put myself in the camp that does not believe this 

is a no-brainer. So people who say it is a no-brainer one way or the 

other, I do not think that is the case, because while the testimony 

of the panel is kind of divergent, you put two pretty important 

interests on the table, energy security of the Nation and its multiple ramifications and the important science about climate and the 

damage that we may be doing to the planet, which our kids in 

grand-kids will be the ones who will have to figure it all out if we 

do not take the appropriate leadership role—and I think those are 

two very compelling interests. 

FOREI-43947 with DISTILLER

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This project in and of itself I do not believe the support of it is 

game over for the planet, and I do not believe that opposition for 

it is coddling Chavez or Putin. It is a hard question that requires 

careful thought. And I do not pretend to expertise on this, but I do 

think you have to start with the science. I will just be blunt. There 

are people I care about very deeply, some in this room, who are on 

both sides of this issue. I think you have to start with the science. 

In Virginia I feel comforted in that. Our quintessential Virginian, 

Thomas Jefferson, was the preeminent scientist of his day. So I say 

grapple with the science and ask yourself the basic question. And 

I think the scientific consensus is quite clear. It is not unanimous. 

It is not unanimous, but it is overwhelming. It is an overwhelming 

consensus that the climate is changing in ways that negatively 

impact the planet and that humans have a significant effect on 

that. Not the only effect. There are plenty of other effects that will 

continue, but human effect is significant. 

When I hear from witnesses or anybody who contacts me about 

this who will not kind of grapple with the science, who either deny 

the science or pretend that there is essentially an equivalence 

among the scientific debate, I have a hard time taking that position 

seriously. I think the Chamber ought to have a position on whether 

human activity affects climate. I think any organization should, yes 

or no. You can acknowledge some continuing debate, but I think 

people ought to take a position on the science. An unwillingness to 

take a position on the science troubles me. I think those of us who 

are making decisions, we have to start there. We have to take a 

position on the science. 

I think the science is clear. I have lived it, I am seeing it. I am 

seeing it in Virginia with sea-level rise, Hampton Roads second 

most vulnerable community in the eastern part of the United 

States—the sea-level rise. There are people I know on Hampton 

Roads who live in homes that, they cannot sell them now, homes 

that were built 100, 150 years ago, that have been able to be sold 

many times during the cycle. These homes, they cannot sell them 

now because these homes are now on flood plains and they were 

not earlier. 

We see it in extreme weather events, and we have an obligation 

to try to do something about it, I believe, consistent with promoting 

the security goals that some testify. 

I agree with General Jones, the disapproval of this particular 

project, if it were just this project, might have an incremental effect 

on climate. But I also believe the disapproval of this project is 

going to have an incremental effect on the global energy security 

status. I think you testified, I think it is correct, the United States 

is going to be number one over Russia whether or not, because we 

do not count tar sands oil as American energy and we have a lot 

of energy that we are producing here and that we will continue to 

produce that I strongly support. 

But I do strongly believe that you have got to grapple with the 

science and answer that yes-or-no question and then make policy 

decisions based on it. The way I look at it is this. I would have 

loved to have had this hearing before I had to vote on this matter, 

but I have already voted and I can change my mind. We have had 

to have a vote. We had to grapple with this in connection with the 

FOREI-43947 with DISTILLER

46 

vote last March, and my staff and I dug deeply into the science 

question. 

My review of the science leads me to conclude that we have got 

a pie chart of the way we produce energy in this country and in 

this world and there are elements of the pie chart that are heavy 

carbon and there are elements of the pie chart that are lighter carbon and there are elements of the pie chart that are small but 

growing that are no carbon. The right strategy is to make it cleaner 

tomorrow than today, to grow the pieces of the pie chart that are 

low carbon, to grow the pieces of the pie chart that are no carbon, 

and to take the pieces of the pie chart that are heavy carbon and 

reduce them in size progressively over time, not immediately, but 

to also reduce the carbon intensity of those portions of the pie 

chart. 

Oil is a portion of the pie chart. Tar sands oil by virtually all 

accounts is significantly dirtier than conventional petroleum. Could 

it be made cleaner? Sure it could be, but it is still significantly 

dirtier, not only in carbon emissions but in other kinds of emissions, lead and other concentrations, than other kinds of petroleum. 

I just grapple with this question, when we have so many other 

alternatives, both low carbon, no carbon, but also fossil fuels like 

natural gas, that have enabled us to fuel-switch. As Ms. Harbert 

indicated, we have been improving our emissions in this country 

without agreeing to the Kyoto Accords, without congressional 

action, because of innovation in the natural gas area. And that 

moves us down the carbon density scale, not as fast as some would 

like, but it is moving us down the carbon density scale. 

When we are showing through American innovation that we can 

get cleaner tomorrow than today and move down the carbon density scale, why would we backslide? Why would we backslide to tar 

sands? 

I acknowledge your point and it is absolutely correct that this is 

a decision for Canada to make. They will make that decision. But 

the United States sends a very powerful message about whether we 

want to lead on this issue of dealing with climate change or not by 

whether we embrace and support tar sands oil or whether we say, 

you know what, that is a bridge too far; we want to be cleaner 

tomorrow than today, we do not want to be dirtier tomorrow than 

today, we are going to focus on cleaner alternatives. 

So while I acknowledge the laborers have a great point of view, 

our scientists have a great point of view, our military has a great 

point of view, I am just struck by the need of this body to take 

leadership on an issue. I think we have waited too long to take 

leadership on it. 

One of my predecessors, John Warner, near the end of his 30- 

year career in the Senate, decorated combat veteran of two service 

branches, the Navy and the Marines, as General Jones knows, and 

Secretary of the Navy, and then 30-year member of the Senate on 

the Armed Services Committee, he ended up concluding that the 

biggest security challenge we faced as a nation was actually not 

energy independence, but was climate, because of its destructive 

nature, pushing migrants across borders, destabilizing countries, 

affecting natural resources. 

FOREI-43947 with DISTILLER

47 

He reached that point at the end of his career and was and remains a proud champion for American leadership on climate action. 

I think it would be very hard for us to be a leader in tackling climate if we embrace tar sands oil and say we think it is fine. 

So that is not a question, obviously, but it is an explanation, 

because there are people in the room I care about who care a lot 

about this issue, who have seen the way I voted, probably have not 

heard my full explanation of it. That is why I have come to the conclusion that I do not think this is a good idea. 

It is funny. We talk about it as a pipeline. It is not about the 

pipeline. Pipelines are fine. Pipelines are fine. I was mayor of a city 

with a gas utility. We built pipelines. It is really about tar sands 

oil and where tar sands oil is in the continuum of energy sources 

from low carbon, no carbon, heavy carbon, dirty carbon. That is the 

challenge with this. I think sometimes the debate about the pipeline confuses everybody about what the real issue is. I think it is 

carbon density. 

I have taken my time with a statement, not a question. Senator 

Markey, you are up. 

Senator MARKEY. Thank you, Mr. Chairman, very much. 

We are talking about the dirtiest oil in the world, coming 

through the United States, almost using us as a straw, bringing it 

down to Port Arthur, TX, and then exporting that oil around the 

world. Where is the advantage for the United States to export oil 

out of the United States, with no restrictions on it? The Chamber 

of Commerce opposes any restrictions on where the oil can go. They 

say here: Well, we have to do everything we can to help energy 

independence in North America. But when you say how about a 

restriction on taking all this oil and making sure it stays here in 

America, oh no, they say, oh no. 

And by the way, they also support exportation of American natural gas. Yes, do that too, they say. But meanwhile we are sending 

hundreds of thousands of young men over to the Middle East, and 

we know what they are over there for. We know at the core it is 

oil. Oil is fueling the revolutions over there, oil that we import into 

the United States. 

By the way, right now we import, we import in the United 

States, 6.3 million barrels of oil a day, 6.3 million barrels. That is 

our Achilles heel. That makes us weak. So what does this proposal 

say? Take the dirtiest oil in the world for Canada, build a pipeline, 

have the United States take all the environmental risks, bring it 

down to Port Arthur, TX, and then export it. 

By the way, we were having a big debate here yesterday about 

exporting natural gas, the natural gas that could be used to move 

our vehicles from oil, which emit more greenhouse gases, over to 

natural gas and have it be here in the United States. What do the 

people who are on this committee say? Well, we should start 

exporting our natural gas, too. Well, we already export our young 

men and women over to the Middle East so that we can protect 

imports. 

We do not have self-sufficiency in natural gas in the United 

States. We import it. We do not have self-sufficiency in oil. We 

import it. So this is a national security issue. It is an economic 

issue. It is a manufacturing issue. It is a climate change issue. 

FOREI-43947 with DISTILLER

48 

Now, I heard the Senator from Tennessee say earlier that, talking to Mr. Brune, there was a bill that he supported that was 

utterly ridiculous. I assume he is talking about the WaxmanMarkey bill in the House. I did not take it personal, but I like the 

company I am with. I like the company I am with with that bill. 

We had the Edison Electric Institute endorse it, the Nuclear 

Energy Institute endorse it, General Electric, Dow Chemical, 

Dupont, Johnson Controls, United Auto Workers, United Steel 

Workers, Dow-Corning, Applied Materials, utility workers, all the 

way down the line. 

We had industry on our side. The Chamber of Commerce was not 

with us, no question about it. But I like who we had. I do not think 

the Edison Electric Institute was utterly ridiculous. I think they 

understood where we have to go to protect the climate, an 80- 

percent reduction in greenhouse gases by the year 2050. 

So this just is a further extension of what is going on. The oil 

industry is pushing to reverse four decades of law prohibiting the 

export of American crude oil so that our crude oil can be shipped 

to China. There is a crude oil ban right now. They want to lift it. 

As we debated here yesterday, the natural gas industry is pushing 

to use the crisis in Ukraine as a basis for unleashing natural gas 

exports to China, because that is where it is going. It is 15 bucks 

in China they pay for it, only 10 bucks in Europe. Where do you 

think Exxon-Mobil is going to send it? To China. 

The mantra of the Chamber of Commerce from 5 years ago, 

‘‘Drill here, drill now, pay less,’’ has morphed into ‘‘Drill here, 

export to China, pay more here in the United States as we export 

our own natural resources.’’ That is what it has morphed into, and 

we are supposed to accept it as though somehow or other we are 

in an Orwellian 1984 where you can just change all the language. 

Now it is better for us to export this. 

And this Keystone pipeline down to Port Arthur, TX, to export 

it, while we take all the environmental risks, while the planet 

takes environmental risks. That is utterly ridiculous. It just is. 

So, ladies and gentlemen, we have a huge debate here, and I 

thank everyone who is here and participating, and I apologize for 

the rollcalls which are on the floor right now. But the Senator from 

Wisconsin, he raised a question earlier about higher energy prices 

and what it would do to our manufacturing sector. Well, this natural gas export issue dwarfs anything we are talking about here 

today. The Energy Information Agency said that if we allow for an 

export, just one more terminal is approved, that it would lead to 

a $62 billion increase in costs for American consumers per year. 

That will just devastate this return of manufacturing from China, 

from other countries, to our own shores, just devastate that revolution. There is only two major costs in manufacturing: labor, energy. 

So we are here debating these issues as though they are unrelated to the real economy that we live in, but also the responsibility 

that the United States has to be the leader in climate change 

issues. The world is looking at us. They are saying: You cannot 

preach temperance from a bar stool. You have got to be lowering 

your greenhouse gases, not increasing them. You have got to show 

that you are serious about this. 

FOREI-43947 with DISTILLER

49 

I think we had an incredible corporate coalition who are ready 

to get serious about it, that then was stymied over here in the Senate back in 2009 and 2010. 

So I guess what I would ask from you, Ms. Harbert, would you 

support as part of this Keystone approval a ban on any of this oil 

leaving the United States, so that, in your own words, we can have 

North American energy independence? Would you support that 

going in as part of the language? 

Ms. HARBERT. Thank you very much for the question, because I 

think it is very important to understand the contractual part of 

this pipeline. One hundred percent of that oil is under contract to 

refineries to refine it here in the United States, so therefore no 

molecules have the ability to be exported in their raw—as crude oil. 

Senator MARKEY. Again, here is the bottom line on all of this. It 

is great, it is great. Just so we understand, this is in the hands of 

the oil companies. It is all in the hands of the oil companies. 

Whether we talk about natural gas exports—it is not going to 

Ukraine; it is going to China; 15 bucks versus 10 bucks. You do not 

have to go to Harvard Business School to take a 50-percent markup 

to send it to China. 

So that is really what this whole debate is about. It is an oil company agenda and they just want to refine it and send it around the 

world. Well, we need it here in America. We need the low-priced 

oil, if we are going to do it. If we are going to take all the environmental risks, if we are going to raise the risk of asthma and climate change and damage, leaks out of the pipeline, the least that 

we should be able to say to the oil industry, keep that oil here. And 

that refined product could be, in fact, kept here, because right now 

there is no restrictions on it being kept here. We have a restriction 

on crude oil being exported. We could put a restriction on that 

refined product being exported, so it would be lower priced in Boston, lower priced in communities all across America, that they 

could use it for their purposes. 

So that is why I am going to be introducing legislation today to 

ensure that the Keystone pipeline, if it is approved, that oil has to 

stay in the United States. We should not be a middleman to transport the dirtiest oil in the world to the thirstiest foreign nations 

who are our economic rivals. I mean, that just fails the test on so 

many different levels—national security, economic, and environmental—that it just makes no sense. 

So I am going to file that legislation, so we have a vote on that. 

And then all the ads that we see on Sunday morning on all the talk 

shows funded by the American petroleum industry, Canada, the 

United States, Keystone pipeline, North American energy independence—let us either vote for this amendment or stop running 

those ads, because those ads are deceptive. If you do not want that 

oil to stay in the United States, then what is the point of us participating in this? What is the point? What is the point? 

These young men and women are over there. They are serving 

our country. They take great risks every single day. The least that 

we should have is a policy that squares up what we do here with 

what we are expecting those young men and women to do overseas. 

So let us not export this oil, or otherwise we have to continue to 

export young men and women. We are importing 6.3 million barFOREI-43947 with DISTILLER

50 

rels of oil a day. So let us just make this truth in legislation, truth 

in treaties, and make sure that we guarantee that we are protecting those that we say that we are most interested in protecting. 

Thank you, Mr. Chairman. 

The CHAIRMAN [presiding]. Thank you, Senator. 

I appreciate the panel’s forbearance. I think we can finish up 

shortly. 

I just want to follow on the one question. I think I may have 

missed Senator Markey’s full engagement with you. I do not know 

if he specifically asked a question on this issue, but for the record, 

General Jones, you argued that if we fail to grasp the enormous 

opportunity presented by Keystone XL pipeline we will miss out a 

chance to improve the energy security of the North American alliance. But the question is, What assurances do we have that this 

crude oil shipped through our country to the gulf coast will stay in 

the United States and contribute to our energy security? 

My understanding is that the energy market is global in nature 

and so there is no guarantee that, even if we put up the pipeline 

and have the tar sands flow to the gulf coast, that at the end of 

the day it is going to stay in the United States or, for that fact, 

even in North America. 

General JONES. Mr. Chairman, I think these are obviously business and economic decisions that will have to be made. The same 

argument could be made in Saudi Arabia—why should they export 

their oil? Why not just keep it? 

The CHAIRMAN. They have an overwhelming abundance and they 

want to sell it. 

General JONES. Sure. 

The CHAIRMAN. Which is really what the marketplace is all 

about, right? 

General JONES. Sure, sure, exactly. And by 2016, by some projections, we will be producing as much oil as the Saudis from our own 

sources. 

My perspective on this is that, first of all, I really enjoyed listening to the testimony of my colleagues here at the table. I learned 

something. I have always believed that the United States is blessed 

by having an abundance of energy sources. They all are important, 

they all should be developed, and they all should be developed in 

such a way as to be respectful of the environment and impact on 

the climate. The technologies that we are preeminent as a country 

in being able to develop make our energy future so optimistic and 

are very encouraging. 

I believe that we are at a transformative period in our history 

and the American people should be fully aware of just how enormous this potential is and what it means for the future of our country. By the way, I am not an advocate for the term ‘‘energy independence’’ because I think it is protectionist and isolationist. We 

live in a globalized world. Energy leadership demonstrated by this 

country, with its responsibilities toward the climate, the environment, and also the wealth of energy that we can influence, will 

have significant ramifications for the rest of the century with 

regard to American leadership, including in the developing world. 

So this is an enormous opportunity that will prove to provide a 

truly historical and transformational change if done right. I firmly 

FOREI-43947 with DISTILLER

51 

believe that the Keystone pipeline is a part of it. KXL is not the 

determining factor of our energy future, but it is an important and 

symbolic piece. It reinforces the importance of working with our 

very close neighbors and allies to our north and south to create a 

North American energy hub that can greatly enhance our ability to 

exercise leadership and influence geopolitical issues in a complex 

world. This committee has enormous influence over whether we 

will be able to realize this vision, of which the Keystone pipeline 

is an important component. 

The CHAIRMAN. I appreciate that. To use your words, not energy 

independence; you mentioned energy security for the North American alliance. My only question is here that in fact we have— 

energy is a global marketplace, and so there is no way to confine 

that energy here within the United States. As a matter of fact, 

when I proposed legislation that says, when we had a big push to 

let us drill everything we have, and I said, well, if we are going 

to drill it we should keep it, there was strong opposition to that. 

So the problem is that there is no guarantee that energy transported in this case through Keystone to the gulf ultimately does not 

end up in a global marketplace. And so—and that may be an economic equation that we want to consider. But we should be honest 

with the American people that in fact that that energy that is created or could be created from tar sands does not necessarily mean 

it stays in the United States, inures to the benefit of America consumers or manufacturing or anyone else. I think that is an honest 

statement to be made. 

General JONES. Mr. Chairman, I would just simply respond by 

saying that I believe that the United States is in a historically new 

and exciting position. The potential to harness home-based energy 

abundance has happened very, very quickly, and I am not so sure 

that we really understand the ramifications. But I am convinced 

that in the case of Ukrainian and European dependence on Russian 

energy, how the United States, Canada, and Mexico together use 

our vast energy potential can actually have geopolitical ramifications that would prevent future insecurity and conflicts. 

The Europeans remain overly dependent on energy from abroad. 

I was in Europe as the NATO commander in 2006 when Mr. Putin 

played with the energy pipelines into Europe, and he uses energy 

as a weapon. So we have an opportunity now to better counter this 

kind of behavior. We are not as dependent as we were, and for the 

foreseeable future we control our energy future, which is something 

that for 40 years we have hoped to achieve. So it is a great opportunity if we do it right. 

The CHAIRMAN. Well, let me ask one final question, and they are 

somewhat different in nature, but the same in my effort to deduce 

a set of facts here. One is to you, General Jones; the other is to 

you, Dr. Hansen. 

General, in 2011 you said that if the Keystone XL was not 

approved that, ‘‘We are definitely in a period of decline in terms of 

our global leadership and in terms of our ability to compete in the 

21st century.’’ And you have echoed that sentiment today in your 

testimony. Why would the denial of a single pipeline permit 

request from a foreign corporation signify a decline in U.S. global 

leadership? 

FOREI-43947 with DISTILLER

52 

To Dr. Hansen, along the same, somewhat the same lines: I understand the seriousness of climate change, but is it really true 

that Canada tapping into its tar sands reserves would be a, your 

words, ‘‘game over’’ for the climate, as you have claimed? Is that 

not an exaggeration of the threat posed by this one project? Could 

we not lower emissions in other sectors to compensate? 

I would like to hear from both of you on those answers, General 

Jones first and then Dr. Hansen. 

General JONES. Thank you, sir. The world watches what the 

United States does. The Keystone pipeline has become a litmus test 

for how people will determine how the United States projects itself 

in the global energy arena. I think that is enormously important. 

I am a proponent of energy sufficiency. I do believe that it would 

be wrong, though, to regard energy as something that we hoard. It 

would be a tremendous mistake, in terms of the global playing 

field, to refuse to accept the leadership role that comes with being 

a major energy producer. 

The decision on the pipeline, particularly as it relates to one of 

our closest allies and the energy future of the North American alliance, if you will, is something that is transformational on the 

global playing field and has far-reaching ramifications. Even little 

gestures sometimes cause people to draw conclusions that may be 

far out of proportion to the judgment itself, but the consequences 

of those conclusions are real and can be very powerful. 

For that reason, I think that we should go forward with the 

project. I quote Professor Chris Knittel, a professor of energy economics at MIT, who says, ‘‘If we build Keystone, greenhouse gas 

emissions will, if anything, go down. Any oil that comes from it will 

displace the most expensive oil on the market today, heavy Venezuelan crude that results in more carbon dioxide emissions than 

tar sands oil.’’ 

The CHAIRMAN. Dr. Hansen. 

Dr. HANSEN. I am glad you asked me that question because my 

comment continues to be misinterpreted. My first chart showed 

how much carbon there is in conventional oil and gas and in coal 

and in the unconventional fossil fuels. It was clear, it has been 

clear, that conventional oil and gas are limited. We are probably 

close to peak oil for conventional oil. So the science is clear that 

we cannot burn all the coal. We are going to have to phase that 

out and that is a solvable problem because coal is used mainly for 

electricity production and we can generate electricity in other ways, 

including nuclear power, which is carbon free. 

Then there is this other huge source of carbon, the unconventional fossil fuels. My statement was that if we are going to now 

open up that other source, unconventional fossil fuels—that is what 

tar sands are, the first big step into that unconventional fossil 

fuels. But the science tells us we cannot do that. We are screwing 

our children and grandchildren and all the young people in future 

generations if we think we can use that unconventional fossil fuels. 

The science is crystal clear on that and the world is just ignoring 

the science. The scientists are saying: Wait, you cannot do that. 

And that is what I was saying. This is game over if you do not 

understand that we have to leave that extremely large amount of 

carbon in the ground. 

FOREI-43947 with DISTILLER

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The CHAIRMAN. So I have now the greater definition, I just personally do not think that the approval or disapproval of the pipeline is a decline in global leadership, nor do I believe that the specific approval or disapproval is necessarily game over. I understand 

what you are saying. There is a broader context, which is whether 

you have access to this fuel when you start down that road. 

So I just wanted to refine this as it relates to the question before 

the committee, which is the question of approval of the pipeline. 

Senator Barrasso. 

Senator BARRASSO. Thank you very much, Mr. Chairman. Mr. 

Chairman, I just want to follow up on Senator Corker’s comments 

at the unwillingness of the administration to testify here today. I 

think it is clear that the administration knows that its failure to 

permit a pipeline in 51⁄2 years, after five environmental reviews, is 

an embarrassment and it is a disgrace and cannot be defended. 

General Jones, in your testimony you discuss the recent events 

in Ukraine. You explain that Mr. Putin’s incursion into the Crimea 

is about brandishing the threat of energy scarcity to intimidate and 

manipulate vulnerable populations. You note that last week four of 

our NATO allies appealed to Congress to protect them from Russian domination, not by requesting troops or arms, but by sending 

energy. 

You explain that North America can become a global energy hub, 

providing not only for our own prosperity and security, but also 

serving as a reliable energy source to our allies and global energy 

markets. Finally, you state that energy supply to Europe can serve 

as a linchpin in the revitalization of the transatlantic dialogue and 

NATO. 

So my question is, would you please discuss—and we have about 

5 minutes left; this is my only question. Could you please discuss 

how exports of American natural gas to our allies in Europe will 

enhance U.S. national security interests? And please be extensive 

in your answer. Thank you. 

General JONES. Thank you, Senator. During my time as the 

Supreme Allied Commander of the North Atlantic Treaty Organization—still arguably one of the best, most important security organizations on the planet—we paid a lot of attention to the threat of 

terrorist organizations to attack our energy infrastructure. We did 

some analysis about the vulnerability of the Nation to such attacks 

and we found that our infrastructure was extremely vulnerable. 

I started to learn just how important energy is in terms of our 

national and international leadership, as well as the future. I came 

to the conclusion that the future for the United States is not only 

bright, but incredibly bright, and that it would be highly advantageous for the United States to set an example for the rest of the 

world by developing our energy responsibly. 

We know that in different parts of the world energy has in some 

cases started conflicts and in other cases, with people who have an 

abundance of energy, prevented them. But how a nation develops 

and uses its energy assets is what is really important here. So to 

me energy is a national security issue that deserves to be treated 

as such along with cyber security and the more conventional 

threats to U.S. security and prosperity. 

FOREI-43947 with DISTILLER

54 

Where Europe is concerned, energy could serve to revitalize the 

transatlantic dialogue with our longest and oldest partners. We 

could be of assistance to them in making them less dependent 

on Mr. Putin’s energy exports. And that will have a behavioral 

change, in my view, on Russia’s tendency to be aggressive toward 

its neighbors. The Russian economy is a fraction of the United 

States economy. It essentially has two components. It has nuclear 

weapons and energy. Thankfully, we have held the nuclear weapons in check, but now we have to do what we can to come to the 

aid of not only the four countries that requested it, but also to the 

broader set of European allies. 

There are many ways to do that. We are a globally influential 

nation and I presume most Americans would like us to remain that 

way. There are other ways we can do that employing energy to 

help bring greater stability and development to vulnerable areas. 

For instance we could champion a pipeline from Basra through 

Turkey to the port of Ceyhan on the Mediterranean. 

There are other ways in which you can use energy in coalition 

with our Arab friends. Many of our Arab friends have concluded 

that because of our own brighter energy future we are now less interested in the Persian Gulf and in the problems of this vulnerable 

and strategically critical region: in the Middle East peace process, 

in Syria, and so on and so forth. My personal view is that nothing 

could be further from the truth, because this is the most dangerous 

place on the planet. 

Energy can play a key role for a superpower and a nation of 

global influence not only to use its own resources, but also to show 

the world how the flow of energy can promote prosperity in the 

developing world and prevent future conflicts. 

Thank you. 

The CHAIRMAN. Thank you, General. 

Let me thank you all. Let me just make a comment for the 

record. I have heard several of my colleagues suggest that the 

administration refused to testify. We inquired about an administration witness and they thought it inappropriate to testify about a 

pending matter that they have yet to make a final decision on. 

After listening to that, I did not consider it a refusal. Clearly, when 

the administration makes a decision that can be the subject of a 

hearing, at which time we would expect the administration to testify. But since it is pending—there are many times in which we 

have matters that have the State Department pending in its review 

that we do not have witnesses from the administration on. That is 

true both past and present. 

I appreciate the testimony from all of you and the dialogue that 

has been had. I think we have gotten, flushed out a lot of the 

issues that are pertinent to the specific issue of the pipeline and 

in some cases beyond. 

The record will remain open until the close of business tomorrow 

and, with the gratitude of the committee, this hearing is adjourned. 

[Whereupon, at 1:05 p.m., the hearing was adjourned.] 

FOREI-43947 with DISTILLER

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ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

A DESCRIPTION OF FEE AND DIVIDEND WRITTEN BY BOSTON BUSINESSMAN, 

JIM MILLER, SUBMITTED BY DR. JAMES HANSEN

CLEAN ENERGY AND SHARED PROSPERITY ACT

Under the Clean Energy and Shared Prosperity Act the federal government will 

levy a fee on carbon dioxide (CO2) emissions an CO2 equivalent emissions that are 

generated from acquiring, transporting, and burning fossil fuels like coal, natural 

gas, and petroleum. The fee will be levied on energy companies at the approximately 

3,000 points of production where the energy is produced or imported into the United 

States (wellhead, mineshaft, port, or pipeline). All of the revenue that is generated 

from the Clean Energy and Shared Prosperity Act will be placed in the Clean 

Energy and Shared Prosperity Fund and returned to the American people as annual 

dividend payments. 

CLEAN ENERGY AND SHARED PROSPERITY FUND

1. The Clean Energy and Shared Prosperity Fund will be held at the U.S. Treasury in its own fund, separate from the Federal Government’s General Fund. 

2. The funds held in the Clean Energy and Shared Prosperity Fund and any 

income generated by those funds can only be used to make annual Clean Energy 

Dividend payments to the American people. 

3. In order to receive a Clean Energy Dividend payment you must file a federal 

income tax return or extension by April 15 of each year. 

4. If you are filing jointly or are head of a household with dependents, your 

income tax return must include the name, birth date, and social security number 

of all the adults and dependent children on your tax return. If you do not owe any 

federal income taxes there will be a simple, one page form for you to file stating 

that you do not owe any federal income taxes. 

5. Everyone is counted equally in determining the amount an individual or family 

receives in their dividend check. For example, a couple filing jointly with two 

dependent children will receive a dividend check four times larger than a single person filing an individual tax return. 

6. On or before May 15, dividend payments will be mailed or electronically transferred to every eligible American or legal resident of the United States who filed 

a federal income tax return or extension by April 15. 

Question. Is there any dividend program similar to this? 

Answer. Yes. Since 1982 the Alaska Permanent Fund has paid an annual dividend to every Alaskan resident from the royalties paid to the state by oil companies 

for oil drilled in Alaska. The Alaska Permanent Fund dividend program is incredibly 

popular and there is no danger of the funds being used by the government for any 

purpose other than annual dividend payments to the residents of Alaska. 

Question. How will it work? 

The key to this model is twofold: 

1. The Clean Energy and Shared Prosperity Act carbon fee will increase by $10 

per metric ton of carbon dioxide each year until the United States is on track to 

reduce its carbon emissions to 10 percent of 1990 levels by 2050. This represents 

a 8.4 cents increase in the price of a gallon of gasoline and less than half a cent 

per kilowatt hour of electricity each year while the country transitions to clean, 

renewable energy sources; and 

2. The government does not keep a penny of the carbon fee. One hundred percent 

of the revenue collected is refunded equally to the American people on a per-capita 

basis as Clean Energy Dividend payments. 

Question. How much will Americans receive in their Clean Energy Dividend 

checks? 

Answer. The amount of money in your dividend payment will be decided by the 

price placed on carbon pollution. The primary goal of the Clean Energy and Shared 

Prosperity Act is to lower carbon and CO2 equivalent emissions, so the carbon fee 

has to be sufficiently high in order to change the market forces behind energy generation and consumption, which will in turn lead to lower carbon and CO2 equivalent emissions. Fortunately, a higher carbon fee means larger annual dividend 

checks for all Americans. It is a very simple formula: Higher Carbon Fees = Larger 

Dividend Checks + Lower Carbon Emissions. 

Question. What are the costs of doing nothing? 

FOREI-43947 with DISTILLER

56 

Answer. The costs of doing nothing are enormous and no country has more to lose 

from the devastating effects of global warming than the United States. Hurricane 

Katrina caused over $100 billion in damage. Hurricane Sandy is projected to cost 

as much as $50 billion. It is a scientific fact that global warming fed these monster 

storms and is at the root of the relentless rise in temperatures that has scorched 

the United States and other parts of the world in recent years. Although climate 

change is a global crisis, it has become an especially destructive force in the United 

States. Droughts threaten to turn America’s farm belt into a dust bowl. Uncontrollable wildfires threaten to consume the great forests of the Rocky Mountain and 

West regions. Warmer oceans and rising sea levels threaten every inch of America’s 

82,836 miles of ocean coastline. This includes every beach and coastal community 

in the United States as well as major metropolitan areas like Washington, DC, New 

York, Boston, Miami, New Orleans, San Diego, San Francisco, and Seattle. In the 

face of the destructive power of global climate change, the most expensive and dangerous thing we could do is to do nothing. We must act now. 

Question. Will a carbon fee put American manufacturing at a competitive disadvantage? 

Answer. Absolutely not. If a product imported into the United States is manufactured in a country that does not meet or exceed the carbon emissions standards set 

forth in the Clean Energy and Shared Prosperity Act, then a carbon import fee 

(‘‘Carbon Import Fee’’) will be assessed in order to account for the costs of carbon 

emissions associated with making the product and transporting it to the United 

States. The World Trade Organization would recognize the Carbon Import Fee as 

a fair trade and free market solution that levels the playing field between foreign 

and domestic manufacturing and promotes innovation. In fact, America is blessed 

with vast wind, solar, and other renewable resources, which promise to put American manufacturing at a competitive advantage to its foreign counterparts while providing other countries a powerful incentive to also place a price on carbon pollution. 

Question. Are there any health benefits to reducing carbon emissions? 

Answer. Yes. The same fossil fuels that are driving climate change are also 

responsible for polluting our air, water, and food. Burning fossil fuels generates pollutants that make us sick, reduce our life expectancy, and drive up health care costs 

while driving down the productivity of American workers. For example, coal pollution causes over $100 billion in health care costs from asthma and other respiratory 

illnesses each year. Coal and gas fired power plants are causing acid rain and ocean 

acidification. Coal plants are responsible for dangerous levels of mercury in the fish 

we eat. Billions are lost each year in lost productivity from workers who become ill 

or who have to take time off from work to care for sick children and other family 

members. It does not have to be this way. By reducing the amount of fossil fuels 

we burn, the Clean Energy and Shared Prosperity Act is guaranteed to reduce 

health care costs and better protect our air, water, and food which in turn offers 

Americans the opportunity to lead longer, healthier, and more productive lives. 

Question. Will a carbon fee reduce the deficit? 

Answer. All of the revenue generated from the Clean Energy and Shared Prosperity Act will be returned to the American people in annual dividend payments. 

In that regard, it is revenue neutral with all of the money going back to the American people rather than to reducing the deficit. It does, however, indirectly reduce 

the deficit by reducing health care costs and increasing productivity. 

Question. Is there a free market, small government solution to this problem? 

Answer. Yes. The Clean Energy and Shared Prosperity Act is a free market, small 

government solution to the problem of carbon emissions and climate change. 

1. It is a small government solution in which 100 percent of the revenue collected 

is refunded equally to the American people. The government does not keep a penny 

of the carbon fee. 

2. There are real, quantifiable costs associated with burning fossil fuels—destruction of wealth and property; diminished quality of life, shorter life expectancies, and 

increased health care costs; polluted air, water, and food supplies; loss of productivity and economic growth potential; enormous military spending in the Persian 

Gulf; and global warming and climate change, to name just a few. In spite of all 

this, carbon emissions are the only pollutants that we allow companies to dump onto 

the public at no cost. This creates market distortions that unfairly favor fossil fuels 

and unwisely stifles innovations and investments in other energy solutions. 

3. The Clean Energy and Shared Prosperity Act is designed to account for these 

costs but it does not pick winners and losers. Instead it levels the playing field by 

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placing solar, wind, thermal, and hydroelectric energy on equal footing with fossil 

fuels. 

4. With a level playing field, the creative genius of America’s free market capitalism will be unleashed to pursue energy solutions that promise a future of clean, 

sustainable, and ubiquitous power for the American people. 

RESPONSES OF GEN. JAMES L. JONES TO QUESTIONS

SUBMITTED BY SENATOR ROBERT MENENDEZ

Question. The Keystone XL pipeline project is an addition to the existing Keystone 

Pipeline system that connects Canada’s 179 billion barrel tar sands resource to U.S. 

refining centers. It would increase capacity from 591,000 bbl/d to more than 1.2 

MMbbI/d. However, given the size of this oil resource, a push for further pipeline 

expansion is inevitable. 

♦ Given that this seems to be an initial step in drastically increasing tar sands 

production, do you think opponent’s concerns about carbon emissions have 

merit? 

Answer. I am unaware of any plans to expand the United States pipeline infrastructure beyond Keystone XL. As a general matter expansion, if it were to be 

required, should be based on its merits when proposed, recognizing that the United 

States pipeline infrastructure is extensive and Keystone XL (if constructed) will add 

a small percentage to the total length of the existing network. 

I personally am concerned about carbon emissions as a global issue, and am committed to helping find ways that the United States can continue down the path of 

reduction during the coming decades (a path that we have pursued with a remarkable degree of success over the past several years thanks in part to the abundance 

of U.S. natural gas, which emits fewer emissions than other alternatives such as 

coal). However, based on government studies, I do not believe that rejecting the 

Keystone pipeline is likely to have a large effect on carbon emissions or is an effective means of dealing with this issue. 

The oil that would be transported through the Keystone pipeline if it is built will 

be taken out of the ground regardless of whether or not the United States sanctions 

the project; the Canadian Prime Minister himself has proclaimed this publicly. Since 

the Canadian Government has already determined to bring this oil to market, the 

question I think we should focus on is: who will help deliver it to market in the 

most responsible and efficient manner possible? My answer is that the United 

States should be the partner that Canada can rely on to do this. EPA Administrator 

Gina McCarthy recently told the Boston Globe in an interview about Keystone XL 

that: ‘‘If there’s oil there, someone will find it and use it.’’ Indeed, if Keystone XL 

isn’t built, Canada will have greater incentive to ship its oil sands via other pipelines or by truck or rail for export to China and other Asian markets, which do not 

have the same stringent environmental standards that we do, and as Canada also 

does. 

The Department of State has conducted a thorough review of the proposed project 

that has involved federal, state, and local constituencies, and provided comprehensive analysis of alternate routes and crude supply scenarios in its EIS. The Department has found that the proposed project will have negligible impact upon the environment during both construction and operating phases. 

Lynne Helms, Director of the Department of Mineral Resources of the North 

Dakota Industrial Commission, recently testified that greenhouse gas emissions 

from rail transportation and truck transportation are 1.8 times and 2.9 times 

greater than the emissions from pipeline transportation, respectively. 

I continue to believe that even as the United States continues to reduce its total 

carbon footprint, we must tackle the issue of global climate change on an international basis. Much of the innovation necessary to build a bridge to a low carbon 

future will come from the United States. Ensuring our energy security is necessary 

if we are to sustain a strong economy and innovation system necessary to drive 

future energy and environmental solutions. 

Question. Those arguing that the Keystone XL will improve U.S. energy security 

often state or at least imply that fuels derived from the pipeline will be used domestically. For instance the API Web site states that ‘‘[t]he Keystone XL pipeline expansion would provide a significant boost to U.S. energy security, bringing more than 

800,000 barrels of oil per day to U.S. refineries. . . .’’ 

♦ Is there any assurance that the fuels derived from the oil sent through this 

pipeline, for which America would assume the environmental risk, will stay in 

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the United States and therefore increase our energy security and benefit American consumers? 

Answer. The oil transported via the Keystone pipeline from Canada will be 

refined and processed in U.S. facilities, which is undoubtedly good for the U.S. economy and employment, and therefore American consumers. 

As a general matter the oil transported through the Keystone pipeline does not 

need to remain in the United States in order to greatly benefit the energy security 

of America, and, in particular, American consumers. Today’s oil market is global. 

New sources of supply coming onto the market, whether sold in the United States 

or exported to third countries benefit all oil consumers. Similarly, disruptions in 

supply affect oil prices around the world, even in oil producing countries. 

Over the past 10 years or so Canadian oil sands have become a key component 

of the oil supply globally; this has meant that oil sands have become the single largest source of U.S. oil imports. Additionally, there is potential for this new resource 

to account for as much as 16 percent of all new oil production by 2030. 

The increased North American energy production that we have enjoyed thus far 

is already helping us to reduce the chance of price shocks resulting from supply disruptions in the Middle East and other regions of the world. Today, for the first time 

in several decades, the United States is in a position of increased stability in terms 

of potential disruptions to the global oil market. As Fox Business reported, U.S. reliance on oil from unstable regions of the world is dropping rapidly, thanks to our 

shale boom and to the fact that we are importing so much more oil from our neighbor and ally, Canada. 

On the matter of the United States assuming environmental risk, Keystone XL 

is the safest way to transport Canada’s resources. The State Department concluded 

in its EIS that: ‘‘Keystone XL would have a degree of safety over any other’’ as it 

will go above and beyond the requirements of current operational pipelines and 

adopt approximately 57 extra safety measures. 

RESPONSES OF MICHAEL BRUNE TO QUESTIONS

SUBMITTED BY SENATOR ROBERT MENENDEZ

Question. I understand and sympathize with many of the arguments you have put 

forth as to how this project could cause damage to our environment. It is clear, however, that there are other considerations relevant to this project, such as energy 

security, jobs, relations with Canada, and many others. Should our carbon policy, 

as applied to one pipeline, trump all of these other considerations? 

Answer. As I illustrated in my testimony, rejecting Keystone XL is very important 

from a climate perspective, as it will serve a linchpin to the development of one of 

the most carbon-intensive sources of oil on the planet. Additional considerations 

about energy security, jobs and relationships with other counties are not only important; they bolster the argument that this project should be rejected. 

ENERGY SECURITY

Our energy security will be undermined by this export pipeline. Leadership from 

Transcanada has refused under oath to commit to keeping the tar sands oil that 

travels through Keystone XL in the United States, which flies directly in the face 

of the argument that this pipeline somehow strengthens our own energy security. 

As already acknowledged by the State Department’s Draft Supplemental EIS, the 

gulf goast refineries where Keystone XL will deliver crude oil already export most 

of their product. Exports of refined petroleum products from the gulf coast region 

(also know as PADD 3) reached nearly 3.3 million barrels per day in December 

2013, nearly four times the capacity of Keystone XL. As a result of increasing U.S. 

oil production along with improved fuel efficiency standards, it is likely that most 

of the crude traveling through Keystone XL will be exported. 

Asia would be a major recipient of the product transported by Keystone XL. The 

comments submitted by Sierra Club, et al., to the State Department in March 2014 

summarize a key finding of a report by Philip K. Verleger, Jr. (which was cited in 

the State Department’s FSEIS) to have concluded that the Keystone XL pipeline, 

if built, would facilitate Canadian crude exports to China rather than the United 

States, because buyers for refineries on the gulf coast can limit their purchases of 

Canadian crude, forcing the Canadian producers to seek buyers in overseas markets, most likely China. 

Keystone XL proponents like to maintain that the pipeline would simply replace 

the heavy oils the United States already imports from countries like Venezuela. 

This argument ignores the evidence that Keystone XL oil would not replace heavy 

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oil from Latin America or the Middle East. Venezuela, Saudi Arabia, and Mexico 

own around half of the heavy oil refining capacity in the gulf. Those refineries are 

expected to continue giving preference to refining their own countries’ oil as opposed 

to Canadian heavy oil. Meanwhile, thanks to high levels of U.S. light oil development, gulf refiners can buy discounted domestic oil, and these refiners are increasing their intake of domestic light oil while reducing their processing of heavy 

oil. This makes it all the more likely that a glut of Canadian heavy oil in the gulf 

will be pushed onto the world market by exploiting a loophole in U.S. crude export 

regulations. 

JOBS

President Obama himself has acknowledged what the State Department’s FEIS 

concludes: the tar sands pipeline is not a major jobs creator. 

But there’s no question we need jobs. Fortunately, job growth in the clean energy 

economy is more than two times faster than the rest of the economy. Every dollar 

invested in clean energy creates three times as many jobs as every dollar invested 

in fossil fuel. Rejecting the Keystone XL pipeline and continuing to invest in efficiency, clean energy, and sustainable forms of transportation will create more jobs 

as demand for these options continues to skyrocket. 

A report from the clean energy industry released last month announced that our 

Nation had more than 78,600 clean energy and clean transportation jobs in 2013. 

Solar power generation saw the most growth in 2013, with more than 21,600 jobs 

added. Other strong sectors included building efficiency and public transportation 

in 46 states. Rounding out the Top 10 states for the year were: TX, HI, MD, MA, 

IL, NV, OR, NY and MO. The Top 10 states for the fourth quarter were: TX, AZ, 

NY, CA, IA, RI, HI, GA, ND and NM. 

Let’s look at the big picture. What happened to our vision as a country? We 

shouldn’t have to choose between putting food on the table and poisoning our water 

supply and cooking the planet. 

By setting standards through 2025, President Obama is giving automakers the 

certainty they need to innovate and thrive. Already, automakers have technologies 

that can help meet these standards—advanced transmissions, start/stop engines, 

and strong, lightweight materials. The innovation and manufacturing of vehicles as 

a result of these standards will continue to create jobs—in the auto industry and 

throughout the economy. The Blue Green Alliance projects that the second round 

of fuel efficiency standards alone (from 2017–2025) will create roughly 570,000 jobs. 

RELATIONS WITH CANADA

Many in Canada have already made clear that they don’t want Keystone XL or 

tar sands oil. In fact, earlier efforts to send this dirty fossil fuel through British 

Columbia were rebuffed, forcing the industry to look southward for their project that 

offers all risk and no reward to all of those in its path. So, it is critically important 

to draw the distinction between the Canadian people—many of whom have already 

said ‘‘no’’ to Keystone XL—and the Canadian Government. 

At the same time, large majorities in the United States are demanding action on 

climate disruption. Approving Keystone XL would amount to the exact opposite. 

Canadian Prime Minister Stephen Harper’s conservative government hope that the 

approval of Keystone XL will help them meet their goal of 5.2 million barrels per 

day by 2030, but U.S. energy policies need to lead by example, not fold to pressure 

from other countries. While the United States is currently on a path to meet its 

emissions targets, the additional emissions triggered by Keystone XL over the next 

35 years would be roughly equivalent to all the carbon emissions of the United 

States in 2013. If the United States approves this pipeline it will send a signal to 

the world that the United States is not serious about its climate commitments, by 

facilitating the development of the extreme fossil fuel reserves that climate scientists say need to remain unburned. 

Canada’s Prime Minister, Stephen Harper, has reportedly offered to embark on 

a plan to reduce Canada’s GHG emissions if President Obama approves Keystone 

XL. This seems unlikely based on Canadian Government’s inability to live up to its 

climate commitments to date. Canada’s Federal Government has repeatedly missed 

its own targets to regulate Canada’s oil and gas sector. In fact, it will miss its own 

2020 GHG reduction targets, in large part due to tar sands development. Tar sands 

are Canada’s fastest-growing source of greenhouse gas emissions. Even though it 

has a relatively small population, Canada is already one of the top 10 greenhouse 

gas-emitting countries in the world. In 2011, the Canadian Federal Government’s 

own peer-reviewed reports forecast that emissions from tar sands would be triple 

2005 levels by 2020. 

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Prime Minister Harper has shown an unwillingness to take serious action on climate change, and he has even actively undermined his own government’s climate 

programs and research. Prime Minister Harper’s government drastically cut funding 

for government research on climate change, ended the government’s National Round 

Table on the Economy and Environment, and cut support for research programs like 

the Canadian Foundation for Climate and Atmospheric Sciences. 

Recent developments make the Canadian Government even less likely to follow 

through on Harper’s supposed plans to reduce Canada’s GHG emissions—2016–20 

budget cuts to Environment Canada’s climate program will cut over 1,000 staff positions. This does not bode well for the creation of more stringent regulations for the 

oil and gas sectors, or illustrate a serious commitment to joining the United States 

in fighting climate change. 

Good relations between nations requires good faith actions on the part of both— 

but the Harper Government has proven to be only interested in forcing dirty Canadian fuels on the American people with little to be gained in return. 

Question. You have stated in your testimony that you are ‘‘deeply worried about 

potential cyber security attacks on Keystone XL’s SCADA system that threaten communities throughout America’s heartland.’’ The United States currently has 2.6 million miles of pipeline built. Would constructing one additional pipeline truly present 

a significant new threat to homeland security? 

Answer. 

‘‘As you well know, a cyber attack could have the same impact as a well-placed 

bomb.’’—Robert S. Muller, Director of the FBI, March 2010 

Thank you for the opportunity to further explain why the Keystone XL pipeline 

would introduce a new and significant security threat for America. While it is true 

that there are more than 2 million miles of oil and gas pipeline in the United 

States, Keystone XL presents an increase in cyber security risk far beyond its percentage increase in existing pipeline miles. As with other pipelines that would be 

considered critical infrastructure, the private sector is expected to proactively put 

in place cyber security protections. TransCanada has not demonstrated that it has 

put in place the necessary cyber security precautions and TransCanada’s record suggests it cannot be trusted to voluntarily implement an effective approach to managing this risk. There are also risks that are unique to this pipeline because of the 

political battle that has been waged around approving it, and because many proponents of the pipeline have gone out of their way to publicly promote the notion 

that this particular piece of infrastructure is essential to America’s energy security, 

thereby enhancing its attractiveness as a target for cyber attack. We further elaborate on each of these issues below, and cite documents to support the level of care 

that is expected from Keystone XL in this regard, and TransCanada’s past record 

of poor compliance. 

The growing threat of cyber attacks on critical infrastructure is a clear security 

concern for the United States. Within the past year, the Obama administration has 

issued an Executive order and released a NIST Framework on improving critical 

infrastructure cyber security, and both houses of Congress have considered bills on 

this topic. 

Concerns over cyber security threats to critical infrastructure reflect the growing 

threat of cyber attacks. My written testimony to the committee made reference to 

the Department of Homeland Security’s ICS–CERT report on attacks on pipelines 

within the ONG sector. Specifically ICS CERT reported having assisted 23 oil and 

natural gas sector organizations with incident response and recovery efforts. DHS 

highlighted the fact that hackers had succeeded in obtaining information pertaining 

to the Organizations Industrial Control Systems and Supervisory Control and Data 

Acquisition (SCADA) systems which would allow remote operations. To be clear, remote operation of a SCADA system could vary from preventing controllers from 

accessing accurate information about pipeline conditions, to changing pipeline flow 

and pressure and causing physical harm. 

While the risks from a cyber attack on a pipeline’s SCADA system can never be 

fully mitigated, the EO and NIST framework set up a system in which we rely on 

private organizations to implement highly effective security controls. This voluntary 

system enhances regulatory requirements in place to ensure pipeline safety. The 

Pipeline and Hazardous Materials Safety Administration recommended 57 special 

conditions be imposed on Keystone XL’s design, construction, operation and maintenance plans in order to get a Presidential Permit. Nearly half of those conditions 

referred to Keystone XL’s SCADA system. 

While the United States currently relies on private sector entities to lead assessing and designing their cyber security protocols, this reliance ought to be based on 

an expectation of good faith. Though cyber security was included in the FEIS for 

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Keystone XL, there is not one statement in that section which implies that the company provided any evidence to support its assertions that its cyber security protocols 

would be adequate to manage risk. The State Department should be very concerned 

that TransCanada has not given sufficient evidence of its compliance with an industry-designed set of standards and best practices to help organizations manage cyber 

risk, particularly in light of the fact that TransCanada is not meeting Canadian 

legal standards around risk. A recent audit by Canada’s National Energy Board 

(Board) found TransCanada ‘‘non-compliant’’ in four of none subelements including: 

2.1 Hazard Identification, Risk Assessment and Control; 

3.7 Operational Control-Upset or Abnormal Operating Conditions; 

4.1 Inspection, Measurement and Monitoring. 

This same report goes on to state that ‘‘the Board is also investigating certain 

steel pipe and fittings installed on the Keystone Pipeline with the potential to 

exhibit lower than specified yield strength.’’ Finally, the Board noted that ‘‘a number 

of the allegations of regulatory noncompliance were identified and addressed by 

TransCanada only after the complainant’s allegations were made and were not 

proactively identified by the company’s management system.’’ The fact that TransCanada cannot be bothered to meet its legal obligations in Canada until a whistleblower reports malfeasance, gives little basis to expect that it will proactively ensure 

that Americans are protected from risks of abnormal operating conditions such as 

would exist in the instance of a cyber attack. 

Another element of concern is the SCADA system that TransCanada has chosen. 

In testimony before the South Dakota PUC in 2009, Telvent is identified as the 

SCADA system that TransCanada has submitted as part of its permit. In September 

2012, Telvent Canada was itself the victim of a cyber attack, reportedly by a Chinese hacking organization called Comment Group. Comment Group is said to have 

targeted a variety of industrial sector companies including chemical and electric 

companies. Telvet reported that after installing malware, the attackers stole project 

files relating to the OASyS SCADA product. 

The risk associated with Keystone XL can be distinguished from the rest of America’s pipeline infrastructure in other ways as well. Unlike the vast majority of existing pipelines, people are highly aware of Keystone XL and the political controversy 

surrounding it. TransCanada itself reports having already been suffered a denial of 

service attack which they attribute to Anonymous. 

Given all of the above, it is hard to understand how the Secretary of State could 

determine that Keystone XL is in the national interest without significant additional specific information about how TransCanada is mitigating the risk of cyber 

attack that could cause harm to American communities along the pipeline’s path. 

RESPONSES OF DR. JAMES HANSEN TO QUESTIONS

SUBMITTED BY SENATOR ROBERT MENENDEZ

Question. Given that a new nuclear power plant would probably cost more than 

$12 billion, it seems few companies are willing to take the risk to build new plants 

here. This reluctance occurs despite the fact that new nuclear plants receive a production tax credit, and that the Federal Government has agreed to foot some of the 

bill in the case of a catastrophic accident. 

♦ What makes you so bullish on nuclear power when other technologies, with less 

carbon emissions, are attracting much more investment in the United States 

than nuclear power? 

Answer. Your question about cost requires addressing both the cost of current nuclear power and recognition of how we have reached the current high-cost situation. 

Frankly, a clean energy future in the United States requires that the Democratic 

Party recognize that its position on nuclear power, ranging from neglect to outright 

hostility, is in part responsible for that situation and is a major threat to the wellbeing of young people and other life on our planet. My criticism of your party is 

constructive, and I hope you will take it that way. 

Today global fossil fuel CO2 emissions are accelerating rapidly, because the countries that need increased energy have no viable alternative to fossil fuels for baseload electric power. Their energy, to a large degree, is being used to make products 

for us, people in the West, as much manufacturing has moved to these developing 

countries. 

Why was the world unprepared for carbon-free energy needs, when the threat of 

climate change has been known for decades? I am compelled to point out the truth 

of the situation, because I am committed to do as much as I can to minimize undesirable human-made climate change—and providing objective information is the best 

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thing that I can offer. One of the principal reasons for the world’s unpreparedness 

concerns policies about nuclear power. 

Most nuclear power plants operating today are of a technology now about 40–50 

years old. Despite that, these power plants have saved an enormous number of lives 

and reduced carbon emissions to the atmosphere, as my colleague, Pushker 

Kharecha, and I have quantified. 

However, research and development of nuclear power slowed to a crawl in the 

past few decades, in good part because of decisions made in the Carter and Clinton 

administrations. Nevertheless, progress was not entirely prevented and it is still 

possible to minimize the damage that was done. 

The enormous growth of coal use in countries such as China and India needs to 

be replaced with carbon-free energy. ‘‘Renewables’’ can help, but despite large subsidies and mandated use, they provide only a small fraction of energy use, and cannot even match the growth of global energy demand, let alone replace existing fossil 

fuel use, which is the requirement imposed by climate. 

The United States should work together with China and India to develop the 

safest, most economical nuclear power that today’s technologies make possible. 

Indeed, we have an obligation to do that, because we burned a large part of their 

carbon budget, and we are now all in the same climate boat. Furthermore, it is an 

opportunity for us, because these nations must build power plants on a large scale, 

which allows an opportunity to compare alternatives, gain experience, and produce 

a sufficient number of power plants to drive down the unit cost. 

In this way it will be possible to address one of the two principal reasons that 

nuclear power plants are now expensive to construct in the United States. I refer 

to the fact that the time and cost required for construction of a nuclear power plant 

remains high if each new plant has a new design. In contrast, after the oil embargo 

of 1973 France made a policy decision to select one design from then-available technology to produce a fleet of reactors. They constructed these reactors in about 15 

years. As a result their electricity prices are about half those in neighboring Germany. In addition, unlike Germany and several other European nations, they have 

much less concern about Russia’s potentially fickle willingness to provide fossil 

fuels. 

It is uncertain whether technical progress in nuclear technology resulting from 

extensive near-term experience in China can then circle back to the United States. 

If we allow the ‘‘antinuke’’ minority in the United States to dictate policies, there 

is a danger that the United States will become second rate technically, with substantial damage to our economic well-being. There is no fundamental reason that 

should happen. We still have the best university system in the world and potential 

innovation second to no other nation. However, we must foster those capabilities. 

The second major reason that the cost of nuclear power plant construction in the 

United States is high concerns the Nuclear Regulatory Commission. As noted in my 

written testimony to your committee, reforms of the NRC are badly needed. The 

NRC does a good job of regulating. They have capable technical staff, and their resident inspectors do a good job at nuclear plants, including reporting on incidents and 

keeping the nuclear plant operators on their toes. 

In contrast, the nuclear reactor permitting process has become a lengthy bureaucratic lawyer-laden paperwork process that causes delays of years and cost growth 

of billions of dollars. NRC, industry and the public are not adversaries, yet the NRC 

often is, in effect, acting as such. We must fix the permitting process. This probably 

requires removing the permitting function from NRC, and starting over with a new 

organization that is given guidelines and procedures that better serve the Nation’s 

needs. 

A sensible energy policy for the United States would not have us blowing through 

new-found gas resources in a few decades and moving to increasingly polluting and 

destructive mining. Instead we would honestly treat gas as a transition fuel to a 

clean energy future. That future would include the improved safe nuclear power 

that is possible with today’s technology. With an effective energy policy the cost of 

a modern nuclear power plant could be driven down to a fraction of the cost that 

you quote. 

Regarding your specific comment about costs and production tax credit, please 

note that nuclear power receives much less favorable treatment than renewable 

energy: 

(1) Nuclear production tax credit (PTC) of 1.8 cents/kwhr is not indexed for inflation. PTCs for other low carbon energies are indexed. PTC for wind is 2.3 cents/ 

kwhr. 

(2) Nuclear PTC is limited to 8 years, and 6,000 MWe capacity nationwide, so if 

more than a few nuclear power plants are built the amount of the PTC will be 

reduced proportionately. 

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(3) There is a limit on the PTC per facility that will reduce the PTC per kwhr 

for power plants producing more than 1,000 MWe, a major loss for EPR or APWR 

(1,600–1,700 MWe each). 

(4) Plants must be placed in service before 1 January 2021. Thanks to NRC slowness, that practically eliminates any PTC for new nuclear power. 

Regarding your question about investments in renewables, I am surprised that 

you seem to be unaware of why renewables are generating more investment than 

nuclear power. Do you know about ‘‘renewable portfolio standards’’? If government 

cares about young people and nature, why are these not ‘‘carbon-free portfolio standards’’? Who pays the hidden cost of such rules? The cost is passed to all electricity 

users. This is a huge hidden subsidy, reaped by only renewables. There is a complex 

array of other financial incentives for renewables. Their lobbyists threaten to halt 

construction if any of these ‘‘temporary’’ incentive programs end. Incentives include 

the possibility of a 30-percent investment tax credit in lieu of the PTC, providing 

a large ‘‘time-value-of-money’’ advantage over a PTC spread over 8–10 years, accelerated 5-year depreciation, state and local tax incentives, loan guarantees with federal appropriation for the ‘‘credit subsidy cost.’’ 

Nuclear power, in contrast, must pay the full cost of an NRC license review, at a current rate of $272 per professional staff hour, with no limit on the number of 

review hours. The cost is at least $100–$200 million. The NRC takes a minimum 

of 42 months for its review, and the uncertainty in the length of that review period 

is a major disincentive. 

Your question also includes the false implication that these other technologies 

have less carbon emissions than nuclear power. Wind is close to nuclear power in 

low carbon per MWe, but most solar energy technologies have higher carbon emissions per MWhr of electricity produced. 

Question. In your testimony, you state that further nuclear cooperation with 

China is important. From a climate perspective I can understand your argument. 

However, given China’s lack of transparent governance, can we trust that they will 

adequately oversee nuclear safety and protect the health and safety of the public? 

Answer. Are you implying that United States cooperation with China would make 

China’s nuclear reactors less safe?? Are you aware that Russia is more than willing 

to provide their technology to China? Your question turns reality on its head. If the 

United States wishes to make Chinese nuclear plants as safe as possible, we should 

be working with them. 

You seem to be implying that you think there would be nuclear accidents in China 

killing more than 1,000,000 per year. Coal emissions (excluding the present and 

future damage from climate change) now reduce life expectancy more than 5 years 

in China, killing more than 1,000,000 people per year, and also make the years 

prior to death much less healthy and happy. 

The technology of presently operating nuclear reactors in the United States is 40– 

50 years old and would not be built in China. Newer reactors, such as the Westinghouse AP–1000 now being built in China, will shut down in the event of an anomaly 

such as an earthquake and they can cool themselves for days without any external 

power. This technology is already a vast improvement over existing power plants 

in the United States, and still better technologies are possible if we would cooperate 

in the research, development and demonstration. 

Summary 

Globally, nuclear power has an essential contribution to make, if the world is to 

phase off fossil fuels in time to avoid disastrous climate consequences. In the United 

States, nuclear power is essential if we are to avoid massive expansion of ‘‘fracking’’ 

and increasingly destructive fossil fuel mining as the industry goes after sources 

that are harder and harder to reach. 

When the history of our planet is written, the United States will stand in stark 

relief. It remains to be seen whether that bold impression will be positive or negative. At the end of World War II and in years thereafter we stood as a positive 

leader, with generosity to our foes and generosity to our friends in the rebuilding 

of their nations. 

Are we so blind and selfish that we cannot see what is happening now? We 

burned more than twice as much fossil fuel as any other nation (including China, 

even though their population is four times larger). Are we so foolish that we will 

pretend that renewables provide all the energy the world needs, refusing to admit 

the obvious conclusion that this locks our children into fracking, that it locks them 

into tar shale and tar sands, and that it locks the world into coal? 

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sible for the generosities that I mentioned above. If we continue on our current 

path, pretending that we do not understand the consequences, what adjective do you 

think our children will apply to our generation? 

RESPONSES OF HON. KAREN ALDERMAN HARBERT TO QUESTIONS

SUBMITTED BY SENATOR ROBERT MENENDEZ

Question. During the hearing I was a little unclear on your response to my questions concerning climate change and its causes. You eventually stated that ‘‘the climate is warming, without a doubt.’’ Then you added: ‘‘It is caused by lots of different 

things, and you can’t say that climate change is only caused by humans. I think 

the science is what you’re pointing to, and we have a robust debate going on in this 

country, as we should, and those that would say everything is settled sort of undercut the integrity of science. It’s an ongoing discussion.’’ 

♦ To clarify, does the U.S. Chamber of Commerce agree with the overwhelming 

majority of scientists that human activities are the driving force behind climate 

change? Yes or No? 

Answer. The climate is constantly changing, as we have seen since temperatures 

first began being recorded. We now that since the mid-1800s, the earth’s average 

surface temperature has increased slightly, the concentration of greenhouse gases 

in the atmosphere also has increased, and some of the increase in temperature is 

related to the increase in GHGs, though there is a great deal of debate over how 

much. As the recent IPCC reports show, while our knowledge continues to improve, 

there is still a great deal we don’t understand fully. Moreover, no matter one’s view 

of the issue, it is clear that the United States acting unilaterally, or even in concert 

with other developed countries, cannot appreciably slow the growth in global GHG 

emissions because of the rapid increase in emissions from developing and emerging 

economies, which have shown with very little interest in pursuing policies that limit 

their energy choices and slow their economic development. It is also important to 

point out that GHG emissions in the United States have been trending down in 

recent years at a similar, and in some cases faster, rate than in Europe countries 

with cap and trade systems. EPA recently reported that gross GHG emissions in the 

United States dropped 3.4 percent in 2012 from 2011, even as emissions in some 

European countries increased over the same period. 

Question. Your testimony states that ‘‘the greater access to Canadian crude oil 

afforded by Keystone XL would increase the reliability and the diversity of foreign 

supplies of crude oil the United States will continue to need.’’ Does the United 

States have any assurances that the fuels derived from the oil sent through the 

pipeline will stay in the United States and therefore increase our energy security 

and benefit American consumers? 

Answer. Autarky is not a sound energy strategy, and it does not lead to greater 

energy security or lower energy prices for consumers—usually the opposite, in fact. 

Increasing the diversity and reliability of energy supplies to and from the United 

States is a superior approach. 

It is important also to consider a few salient facts about the supply and demand 

balance in the Gulf Coast region (PADD 3). In 2013, refiner petroleum production 

PADD 3 was a little more than 7.5 million barrels per day (MMbbl/d) while petroleum consumption in PADD 3 was considerably less, 5.3 MMbbl/d. That excess production has to go somewhere, and getting refined products to where they are needed 

is a very complex undertaking. There is limited capacity to send refined products 

to the East and West coasts via pipeline, and shipping it by tanker is prohibitively 

expensive because of Jones Act requirements. In many cases, it makes greater economic sense for PADD 3 refineries to export some of this excess product and for 

refineries and terminals in other parts of the country to import product from other 

countries. For example, U.S. refineries in PADD 3 send diesel fuel to Europe (where 

it is in higher demand than gasoline) and European refineries send gasoline to the 

Eastern United Sates. By making the most of each refinery sectors comparative 

advantages, both consumers and our energy security are better served. Forcing refiners to forgo product exports would severely dislocate oil markets here and abroad, 

leading to higher prices, greater market instability, and less security. 

Prohibiting exports of refined product produced from Canadian crude oil also 

would create a tracking nightmare for refiners. Refiners process many different 

types of crude oil. Being able to certify that a specific batch of any refined product 

destined for export was derived entirely from non-Canadian crude oils would be virtually impossible. 

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It should also be pointed out that any restrictions on exports of refined products 

would be a clear violation of World Trade Organization rules. Our energy policy 

should adhere to free trade principles. 

Finally, it is odd that some opponents of the Keystone XL pipeline would even 

consider prohibiting exports of products refined from crude oil from our good neighbor and ally, Canada, while allowing unfettered exports of products refined from 

crude oil from countries like Venezuela or Russia. The justification for such a selfdefeating and clumsy policy is hard to imagine, and it would certainly send the 

wrong signal not only to Canada, but to other U.S. allies as well. 

Restricting exports of products refined from Canadian oil would be bad energy 

security policy, bad economic policy, bad regulatory policy, bad trade policy, and bad 

foreign policy—a lose-lose-lose-lose-lose. 

Question. The Keystone XL pipeline project is an addition to the existing Keystone 

Pipeline system that connects Canada’s 175 billion barrel oil sands resource to U.S. 

refining centers. It would increase capacity from 591,000 bbl/d to more than 1.2 

MMbbI/d. However, given the size of this oil resource, a push for further pipeline 

expansion is inevitable. 

♦ Given that this seems to be an initial step in drastically increasing tar sands 

production do you think opponents concerns about carbon emissions have merit? 

Answer. No. The State Department final report reaffirms what we already knew: 

Canada views its oil sands as a strategic asset, and they will be developed with or 

without Keystone XL or any other pipeline. This is not an assumption, as some 

claim, but an analytical outcome. Canadian oil sands can be produced profitably 

with a crude oil price between $55 and $65 per barrel. There are only two realistic 

scenarios where the cost of a barrel of oil could collapse from today’s price of around 

$100 to such a low level (and even these are exceedingly unlikely): (1) a deep worldwide recession, after which oil sands production would resume (if it even stopped) 

once the price of crude oil recovered sufficiently; or (2) a glut of crude oil appears 

on the world market, in which case oil consumption everywhere would increase very 

sharply, whether supplied from Canada or somewhere else. 

The Canadian Association of Petroleum Producers forecasts that oil sands production will grow from about 1.8 million barrels per day (MMbbl/d) in 2012 to 5.2 

MMbbl/d in 2035. This result does not depend on Keystone XL. Canadian oil producers continue to diversify market access by expanding existing and developing 

new infrastructure to Canada’s East and West coasts, including railway capacity. 

This will continue whether or not Keystone XL is approved. Therefore, stopping 

Keystone XL will have no impact on the development of oil sands. 

State’s report demonstrates that in the context of greenhouse gas (GHG) emissions, approval of the pipeline is the best option. One of the President’s stated 

criteria for approving the pipeline is that it would not contribute to increased greenhouse gas emissions. So what did the report conclude? It found that all of the alternative rail, tanker, and pipeline scenarios it examined have much higher GHG emissions associated with them than the Keystone XL scenario. The report states: ‘‘The 

total annual GHG emissions (direct and indirect) attributed to the No Action scenarios range from 28 to 42 percent greater than for the proposed Project.’’ By the 

president’s own environmental standard, then, Keystone XL should get the green 

light. 

RESPONSES OF HON. KAREN ALDERMAN HARBERT TO QUESTIONS

SUBMITTED BY SENATOR BOB CORKER

Question. At the Keystone hearing, and at other times over the past 5 years that 

the Keystone XL pipeline proposal has been under consideration, the project’s opponents have stated that Keystone XL is being built only to transport Canadian oil 

sands crude to the Gulf of Mexico ports for export. Will crude oil from Keystone XL 

be exported? 

Answer. No. Gulf Coast refineries, which are configured to refine heavy crude oils, 

already have deals in place to take Canadian crude oil. It would make little sense 

for a refinery to import crude oil from Canada, turn around and export it to somewhere else, and then import heavy crude oil from somewhere else to replace the 

Canadian crude oil it just exported. 

According to the U.S. Energy Information Agency (EIA), the United States will 

continue to import large volumes of crude oil and will require petroleum products 

to fuel our economy for decades into the future. As recently as 2012, 40 percent of 

the U.S. crude oil supply was imported. (U.S. Energy Information Agency Annual 

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Energy Outlook 2014 December, 2013.) The United States remains the world’s largest market for petroleum products. 

U.S. refineries process heavy crude oil such as those from Canada, Mexico, and 

Venezuela to produce the fuels we need. According to EIA, imports of Canadian oil 

sands crude are replacing declining heavy oil imports from Mexico and Venezuela 

at a time that their crude oil production is in decline. (U.S. Energy Information 

Agency U.S. Imports of Crude Oil by Country of Origin March 14, 2014.) The Keystone XL pipeline is designed to deliver Canadian crude oil to U.S. refineries in the 

Gulf Coast. The U.S. Gulf Coast has the world’s largest concentration of refineries. 

Many Gulf Coast refineries are specifically configured to handle heavier crude oil 

such as Canadian oil sands crude. 

It makes absolutely no sense for companies to purchase cheaper Canadian crudes, 

ship these overseas, and then import higher priced crudes oil from the Middle East 

and Venezuela for refineries. The oil is critical to these refineries—and it will find 

a way by pipeline or rail to get to those refineries, as demonstrated with the 

increase in rail traffic and new transportation terminal announcements. Gulf Coast 

refineries have consistently said that the domestic U.S. market is their largest market expects that the United States will continue to import between 7 and 7.5 million 

barrels of oil per day through to 2035. 

In addition, according to the Department of States’ Final Supplemental Environmental Impact Statement (FSEIS), under the current market outlooks, exporting 

Canadian crude from Keystone XL is unlikely to be economically justified primarily 

due to transportation costs. Once the Western Canadian crude oil arrives at the 

Gulf Coast, the refiners there have a significant competitive advantage in processing 

it compared to foreign refiners, which would have to incur additional transportation 

charges to have the Canadian crude oil delivered from the Gulf Coast to their location. (U.S. Department of State Keystone XL Final Supplemental Environmental 

Impact Statement; Section 1.4; January 2013.) 

On the issue of crude export from Keystone XL, last fall Transcanada President 

and CEO Russ Girling stated ‘‘Not a drop of this crude oil is going to leave this continent that’s moving through our pipeline. I’ve talked to every one of these refiners. 

I know every one of these producers and they have no plans to export a drop. It 

will all go into U.S. refineries and be refined in the United States.’’ 

Of course, if we don’t approve Keystone XL, Gulf Coast refineries will continue 

to get deliveries of Canadian crude oil, but more Canadian crude oil will go to markets overseas through alternate routes. 

Question. Mr. Brune stated in his testimony that Keystone XL ‘‘would deliver [oil] 

sands to refineries in the gulf that already export most of their refined product, and 

are planning to increase these export[s]. The State Department’s Draft Supplemental EIS acknowledged that Gulf Coast refineries export most of their product.’’ 

How much refined product is exported from the United States? How much from Gulf 

Coast refineries? What is EIA projecting about future exports of refined petroleum 

products from the United States? 

Answer. The U.S. Energy Information Administration (EIA) reports that U.S. 

refineries in 2013 produced just over 19 million barrels per day (MMbbl/d) of refined 

petroleum products. (Data accessed March 17, 2014.) The same year, U.S. product 

imports were about 2.1 MMbbl/d and product exports about 3.5 MMbbl/d for a net 

balance of 1.4 MMbbl/d in product exports. The United States became a net exporter 

of refined products in 2011. 

Refineries in PADD 3 (which includes the Gulf Coast) produced a little more than 

7.5 MMbbl/d of refined petroleum in 2013. PADD 3 product exports were a bit more 

than 2.6 MMbbl/d and product imports were 757,000 bbl/d for a net balance of 1.9 

MMbbl/d in product exports from the region. 

Total gross product exports from PADD 3 accounted for well less than half (just 

35 percent) of PADD 3 refinery output in 2013. The share of PADD 3 refinery output being exported has been trending higher, especially since 2007. PADD 3 refineries, however, have never exported anywhere near half of their output, and are not 

likely to do so anytime soon. 

EIA’s ‘‘Annual Energy Outlook 2014 Early Release’’ estimates that the United 

States will remain a net exporter of refined petroleum products throughout the 

entire forecast period to 2040, when it is estimated that net product exports will 

climb to about 1.8 MMbbl/d (with gross product imports of 2.0 MMbbl/d and gross 

product exports of 3.8 MMbbl/d). 

The State Department confirms that the Keystone XL pipeline will not change 

this trend one way of the other. The section in the Draft Supplemental EIS, to 

which Mr. Brune refers, states that, ‘‘Projections for petroleum product import and 

export volumes have undergone substantive changes between the 2010 and more 

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recent AEO reports,’’ with product exports showing an increasing trend. It is important to note that all of the AEO forecasts cited in the Draft EIS do not include Keystone XL, so Keystone cannot be responsible for the increase in refined product 

exports seen in the AEOs after 2010. The Draft EIS thus reaches the correct conclusion that construction of the Keystone XL pipeline will have no impact on these 

emerging trends: ‘‘It is likely that increasing amounts of WCSB [Western Canadian 

Sedimentary Basin] crudes will reach Gulf Coast refiners whether or not the proposed Project goes forward (products from this processing will be used in both 

domestic markets and for export). As a result, future refined product export trends 

are also unlikely to be significantly impacted by the proposed Project. [emphasis 

added]’’ 

Question. Senator Markey stated that the Energy Department has warned that 

if we approve one more Liquid Natural Gas (LNG) export terminal, it will cost 

Americans $62 billion a year. Is that accurate? If so, should we be building more 

LNG export terminals? 

Answer. While it is difficult to evaluate Senator Markey’s claim absent any knowledge of his assumptions or analysis, it runs counter to the overwhelming body of 

economic analysis that has been conducted on the topic. Any price projection relies 

on determining where supply and demand equalize. Any presumption that exported 

LNG would increase prices rests on a faulty understanding of the resource base 

itself, the potential for global demand, as well as the current environment in which 

producers operate. As natural gas is exported, demand is marginally increased. 

Absent an increase in supply, the price equilibrium would rise. However, there is 

more than sufficient supply to keep pace with the marginal increase in demand, 

thereby keeping the price equilibrium relatively unchanged. 

The U.S. resource base totals more than 100 years of technically recoverable natural gas. That is gas that has been conclusively located by geologists and can be 

extracted with modern engineering practices. The current market glut of natural 

gas has made significant portions of this resource base uneconomical to develop. 

Because the glut befell the industry so quickly, there are hundreds of natural gas 

wells that have been drilled but not yet completed or connected to gathering lines 

to bring the gas to market. As the price of natural gas gradually climbs from its 

historic lows of lows of 2012 more gas becomes economical to produce. Additionally, 

over the past 3 years, we have seen the cost of exploration and production decrease 

which also makes more of the natural gas resource base economical. Moreover, a 

liquefaction train is estimated to take upward of 3 years to complete, allowing more 

than sufficient time for natural gas producers to react to the market signal commencement of construction of a liquefaction terminal sends. 

One can conclude natural gas prices will rise dramatically due to exportation if 

it is incorrectly assumed that global demand is limitless. This is to say that if global 

demand and global supply never reach equilibrium, there would continue to be a 

driver for U.S. producers to export incrementally more natural gas. However, global 

demand is not limitless, and U.S. producers are not the only sources of supply 

needed to fill it. The current global LNG capacity is approximately 37 billion cubic 

feet per day (bcf/day). ICF International estimates global LNG demand will climb 

to 50–65 bcf/day by 2025, producing additional demand for 13–28 bcf/day. ICF estimates that more than upward of 50 bcf/day of new capacity is under construction, 

planned, and proposed without including any new export capacity from the United 

States. Once increased demand is filled by contract there is no economic incentive 

to build additional export capacity. The global demand ensures exports cannot grow 

unchecked. 

It is also worthwhile to put Senator Markey’s claim in further perspective. EIA’s 

analysis of his cap and trade bill in 2009 estimated that it would have cost $65 billion to $295 billion (in 2010 dollars) each year from 2012 to 2020. Moreover, EIA 

estimated that residential natural gas prices would have increased anywhere from 

about 1 percent to 23 percent, natural gas prices for power generation from 10 percent to 92 percent, and motor gasoline prices from 3 percent to 19 percent. ThenRepresentative Markey supported all of these added costs to consumers. 

RESPONSES OF HON. KAREN ALDERMAN HARBERT TO QUESTIONS

SUBMITTED BY SENATOR JOHN BARRASSO

Question. The application for the Keystone XL pipeline has been pending for 

nearly 51⁄2 years. During this time, the Obama administration has conducted five 

separate environmental reviews. In your testimony, you state that: ‘‘The failure of 

the Federal Government thus far to grant a construction permit for the Keystone 

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XL pipeline exemplifies perhaps better than anything the challenges of building energy projects . . . in the United States.’’ You say: ‘‘That has to change if we are to 

. . . put people back to work.’’ 

♦ What kind of message is the administration sending to businesses which want 

to invest in the United States if it cannot permit a pipeline in nearly 51⁄2 years? 

Answer. The seemingly endless Keystone XL permitting saga is symptomatic of 

a much larger problem. It takes an inordinate amount of time to get projects 

approved in the United States. Our energy sector in particular suffers from a 

lengthy, unpredictable, and needlessly complex regulatory maze that delays if it 

does not halt altogether, the construction of new energy infrastructure. 

America traditionally welcomed foreign investment. But looking at the gauntlet 

TransCanada has run through these 5-plus years, foreign investors could be forgiven for asking: ‘‘Is America open for business?’’ Because it is important to signal 

that America still welcomes foreign investment, approving the pipeline clearly is in 

the national interest. 

♦ Isn’t it fair to say that the United States will lose investment and good-paying 

jobs to other countries if it doesn’t start to give businesses more regulatory 

certainty? 

Answer. Yes. Much of our energy infrastructure is increasingly inadequate to 

meet current and projected demand. Providing energy is a long and capital-intensive 

undertaking, and new energy infrastructure projects require long lead times and 

massive amounts—tens of trillions of dollars over the next few decades—of new 

investment. Some of that investment and the jobs that go with it will never happen 

or go elsewhere if the regulatory environment under which companies operate is unreliable and inefficient. Regulatory predictability allows business to plan and invest 

with greater confidence. 

Unfortunately, our energy sector suffers from a lengthy, unpredictable, and needlessly complex regulatory maze that delays, and often halts, the construction of new 

energy infrastructure. Federal and State environmental statutes such as NEPA, 

state siting and permitting rules, and a ‘‘build absolutely nothing anywhere near 

anything’’—BANANA—mentality, routinely are used to block the construction and 

expansion of everything from transmission lines to power plants to pipelines. And 

just because a project is ‘‘green’’ does not mean it fares any better. Indeed, it has 

become too easy for energy projects of any hue to be wrapped up in ‘‘green tape.’’ 

The failure of the Federal Government thus far to grant a construction permit for 

the Keystone XL pipeline exemplifies perhaps better than anything the challenges 

of building energy infrastructure in the United States. This failure to issue a Presidential permit for the project has tarnished America’s image as a ‘‘can do’’ country 

open to foreign investment, a failure that can be difficult to shake from investors’ 

minds. 

Question. In your testimony, you explain that: ‘‘Efforts to stop crude transportation projects like KXL will have no impact on the development of oil sands.’’ You 

go on to say that even the Obama administration has concluded that: ‘‘approval or 

denial of any one crude oil transport project is unlikely to significantly impact the 

rate of extraction in the oil sands.’’ Finally, you state that: ‘‘There is no doubt that 

the oil sands in Alberta will be developed, and the only question is where the oil 

will go.’’ 

♦ Would you please expand upon your comments for the committee? 

Answer. The State Department final report is a reaffirmation of what we already 

knew: Canada views its oil sands as a strategic asset, and their development is not 

dependent on the Keystone XL or any other pipeline. 

Canadian oil sands can be produced profitably with a crude oil price between $55 

and $65 per barrel. There are only two realistic scenarios where the cost of a barrel 

of oil could collapse from today’s price of around $100 to such a low level (and even 

these are exceedingly unlikely): (1) a deep worldwide recession, after which oil sands 

production would resume (if it even stopped) once the price of crude oil recovered 

sufficiently; or (2) a glut of crude oil appears on the world market, in which case 

oil consumption everywhere would increase very sharply, whether supplied from 

Canada or somewhere else. 

The Canadian Association of Petroleum Producers forecasts that oil sands production will grow from about 1.8 million barrels per day (MMbbl/d) in 2012 to 5.2 

MMbbl/d in 2035. This result does not depend on Keystone XL. 

Canadian oil producers continue to diversify market access by expanding existing 

and developing new infrastructure to Canada’s East and West coasts. There are six 

pipelines in one stage of planning or another that would link Alberta oil sands with 

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Canadian and overseas markets. Railway capacity also is growing and can be (and 

will be) scaled up even further if the need arises. 

The State Department’s report draws from all of this the correct conclusion that 

‘‘approval or denial of any one crude oil transport project, including the proposed 

Project, is unlikely to significantly impact the rate of extraction in the oil sands, or 

the continued demand for heavy crude oil at refineries in the United States.’’ Therefore, stopping Keystone XL will have no impact on the development of oil sands. 

Question. In your testimony, you state that: ‘‘Keystone will enhance an already 

deep trading relationship’’ between the United States and Canada. You explain that: 

‘‘For every U.S. dollar spent on Canadian products, Canadians return 89 cents 

through the purchase of U.S. goods and services.’’ You explain that: ‘‘Compared to 

the 27 cent return that we get from [other] energy trade partners like Venezuela, 

the benefits of Canadian trade are obvious.’’ Finally, you state that: ‘‘Canadian oil 

sands . . . already support[ ] tens of thousands of American workers in hundreds 

of companies . . . who are supplying goods and services to oil sands developers.’’ 

♦ Would you please elaborate on how the Keystone XL pipeline will support American workers and American businesses in the long term? 

Answer. The Keystone XL will transport safe and reliable energy to help fuel our 

economy for years to come, and it will increase market access to American as well 

as Canadian crude oil resources. 

The development of Canadian oil sands resources already supports tens of thousands of American workers in hundreds of companies spread throughout the United 

States. The approval of the Keystone XL pipeline will provide one of many outlets 

for Canadian oil sands output and increase the flow of trade between our two countries. The Canadian Energy Research Institute estimated that increased and continued investment in oil sands development and related projects can create more than 

500,000 new U.S. jobs by 2035, with one job being created in the United States for 

every two created in Canada. 

Many states and local communities will benefit from additional tax revenue from 

the project that could be utilized to create additional jobs. In states where the pipeline is built, Transcanada estimates that they will pay approximately $5.2 billion 

in property taxes during the estimated operating life of the entire pipeline (from 

Montana to Texas). This would include $55.6 million in new property tax revenue 

that Transcanada will pay during construction in 17 counties along the pipeline 

route identified in the Department of State’s Final Supplemental Environmental 

Impact Statement (FSEIS, January 2014). A majority of those counties would experience an increase of 10 percent or more in property tax revenue, which could be 

used to build needed projects like schools, roads, and bridges, and pay for teachers, 

fire and police services, and recreation programs. The FSEIS also states that the 

project will contribute $3.4 billion during construction to the U.S. Gross Domestic 

Product (GDP). 

RESPONSES OF GEN. JAMES L. JONES TO QUESTIONS

SUBMITTED BY SENATOR JOHN BARRASSO

Question. In your testimony, you state that: ‘‘Mr. Putin’s incursion in the Crimea 

is . . . about exercising political power through the control of energy, and about 

brandishing the threat of energy scarcity to intimidate and manipulate vulnerable populations.’’ You say that: ‘‘Energy scarcity is a potent strategic weapon. The 

greater the gap between global supply and demand, the more destructive the weapons will become.’’ Finally, you explain that ‘‘The difference between Mr. Putin and 

us . . . is that he wields energy as a weapon to achieve his geostrategic goals, while 

we look to energy flow in free markets as a means of promoting international peace, 

prosperity, and economic stability.’’ 

♦ Would you please explain how ‘‘energy flow in free markets’’ is a means of promoting international peace, prosperity, and economic stability? Please address 

international trade in crude oil, refined petroleum products, and liquefied natural gas specifically. 

Answer. As I survey the economic and security landscape today, I’m not sure we 

face an issue with greater influence on international security than energy, and it 

will remain the flywheel of the international economic system and continue to define 

the global security landscape over the coming years and decades. Nothing, save 

improving the quality of our human capital, can do more to promote U.S. competitiveness, create jobs, and generate tax revenue than harnessing the energy abundance we currently enjoy. This is inclusive of the full spectrum of energy resources 

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servation processes. This is because without access to reliable, affordable, and environmentally responsible energy supplies no nation, the United States included, will 

be able to remain competitive in the global economy of the 21st century. 

I am not the only person who believes this; our very own government departments 

and agencies also see energy abundance as a key driver of global security and prosperity. For example, the U.S. National Intelligence Council’s ‘‘Global Trends 2030’’ 

report refers frequently to ‘‘energy’’ as one of the chief factors slated to drive global 

security over the next 25 years. 

When I speak about the flow of global energy supplies, it is in the context of abundance and the opportunities that it affords us to develop and maintain our status 

as a world leader and steward of good energy policy. Abundance has significant 

implications. If we manage this abundance wisely, it will allow us to: improve economic competitiveness by encouraging manufacturing and chemical companies to 

return from abroad; make us less vulnerable to supply disruptions and price volatility, and; reduce the potential for international friction and conflict. 

In the international context, I believe that an abundance and diversity of energy 

supplies and energy suppliers is critical for bolstering international security, prosperity, and economic stability. The United States learned the hard way in 1973— 

just as Europe and Japan are learning now—that a lack of diversity of energy supplies or energy suppliers can harm economic growth and weaken diplomatic leverage. Dominant energy suppliers like Russia seek to use their energy abundance and 

dominance in regional markets to pursue monopolistic practices which distort the 

prices of energy, limit consumer choice, and even constrain countries’ political 

options. I believe that the North American economies, which are bound together by 

shared free market values and open economies, can contribute to greater international peace, prosperity, and economic stability by sharing its energy abundance 

with the rest of the world and offering other countries greater diversity of energy 

supplies and energy suppliers. 

Question. Do you believe that lifting the restrictions on exports of liquefied natural gas and crude oil from the United States would serve as a means of promoting 

international peace, prosperity, and economic stability? If so, how? 

Answer. I do believe that lifting the restrictions of exports of liquefied natural gas 

and crude oil from the United States would promote international peace, prosperity, 

and economic stability. 

By exporting these abundant resources and sharing them with the world, the 

United States would contribute to increasing the global supply of crude oil and liquefied natural gas. Given the forecasts for continued rising global demand for 

energy, particularly in emerging markets, this would put downward pressure on 

energy prices, which can contribute to the economic prosperity of major energy consuming nations. 

Moreover, the exportation of liquefied natural gas could have particularly positive 

economic and security effects on close U.S. allies like Japan and NATO allies in 

Central and Eastern Europe. My understanding is that unlike the global oil market, 

the liquefied natural gas market is not a global market, resulting in price disparities in key regions of the world. Asia faces some of the highest natural gas prices 

in the world, with Japan in particular struggling with high prices as a result of the 

energy shortages brought about by the Fukushima nuclear disaster. U.S. LNG 

exports to Japan would help bolster that country’s energy security at a time of crisis, while also perhaps contributing to lowering their high energy import bill, which 

is harming that country’s competitiveness and trade balance. 

LNG exports to Central and Eastern Europe would give those allies, which are 

in some cases entirely dependent on Russia and Gazprom for natural gas, an additional source of energy supply. My understanding of the situation is that U.S. LNG 

exports would not only offer these countries an alternative energy supply and security in case of a Russian cutoff of natural gas, but would also give these countries 

greater bargaining power in their negotiations with Russia over natural gas prices. 

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LETTER FROM THE LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA SUBMITTED

BY SENATOR ROBERT MENENDEZ

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PREPARED STATEMENT FROM NATIONAL NURSES UNITED SUBMITTED BY SENATOR

BARBARA BOXER

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Æ 

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