39–006 

113TH CONGRESS REPT. 113–482 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

NORTH AMERICAN ENERGY INFRASTRUCTURE ACT 

JUNE 19, 2014.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. UPTON, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 3301] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 3301) to require approval for the construction, connection, operation, or maintenance of oil or natural gas pipelines or 

electric transmission facilities at the national boundary of the 

United States for the import or export of oil, natural gas, or electricity to or from Canada or Mexico, and for other purposes, having 

considered the same, report favorably thereon with an amendment 

and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 4 

Background and Need for Legislation .................................................................... 4 

Hearings ................................................................................................................... 8 

Committee Consideration ........................................................................................ 8 

Committee Votes ...................................................................................................... 9 

Committee Oversight Findings ............................................................................... 13 

Statement of General Performance Goals and Objectives .................................... 13 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 13 

Earmark, Limited Tax Benefits, and Limited Tariff Benefits ............................. 13 

Committee Cost Estimate ....................................................................................... 13 

Congressional Budget Office Estimate ................................................................... 13 

Federal Mandates Statement ................................................................................. 14 

Duplication of Federal Programs ............................................................................ 14 

Disclosure of Directed Rule Makings ..................................................................... 14 

Advisory Committee Statement .............................................................................. 14 


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Applicability to Legislative Branch ........................................................................ 14 

Section-by-Section Analysis of the Legislation ...................................................... 15 

Changes in Existing Law Made by the Bill, as Reported ..................................... 16 

Minority, Additional, or Dissenting Views ............................................................ 19 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘North American Energy Infrastructure Act’’. 

SEC. 2. FINDING. 

Congress finds that the United States should establish a more uniform, transparent, and modern process for the construction, connection, operation, and maintenance of oil and natural gas pipelines and electric transmission facilities for the import and export of oil and natural gas and the transmission of electricity to and from 

Canada and Mexico, in pursuit of a more secure and efficient North American energy market. 

SEC. 3. AUTHORIZATION OF CERTAIN ENERGY INFRASTRUCTURE PROJECTS AT THE NATIONAL BOUNDARY OF THE UNITED STATES. 

(a) AUTHORIZATION.—Except as provided in subsection (c) and section 7, no person 

may construct, connect, operate, or maintain a cross-border segment of an oil pipeline or electric transmission facility for the import or export of oil or the transmission of electricity to or from Canada or Mexico without obtaining a certificate 

of crossing for the construction, connection, operation, or maintenance of the crossborder segment under this section. 

(b) CERTIFICATE OF CROSSING.— 

(1) REQUIREMENT.—Not later than 120 days after final action is taken under 

the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to a cross-border segment for which a request is received under this section, the relevant official identified under paragraph (2), in consultation with 

appropriate Federal agencies, shall issue a certificate of crossing for the crossborder segment unless the relevant official finds that the construction, connection, operation, or maintenance of the cross-border segment is not in the public 

interest of the United States. 

(2) RELEVANT OFFICIAL.—The relevant official referred to in paragraph (1) is— 

(A) the Secretary of State with respect to oil pipelines; and 

(B) the Secretary of Energy with respect to electric transmission facilities. 

(3) ADDITIONAL REQUIREMENT FOR ELECTRIC TRANSMISSION FACILITIES.—In the 

case of a request for a certificate of crossing for the construction, connection, 

operation, or maintenance of a cross-border segment of an electric transmission 

facility, the Secretary of Energy shall require, as a condition of issuing the certificate of crossing for the request under paragraph (1), that the cross-border 

segment of the electric transmission facility be constructed, connected, operated, 

or maintained consistent with all applicable policies and standards of— 

(A) the Electric Reliability Organization and the applicable regional entity; and 

(B) any Regional Transmission Organization or Independent System Operator with operational or functional control over the cross-border segment 

of the electric transmission facility. 

(c) EXCLUSIONS.—This section shall not apply to any construction, connection, operation, or maintenance of a cross-border segment of an oil pipeline or electric transmission facility for the import or export of oil or the transmission of electricity to 

or from Canada or Mexico— 

(1) if the cross-border segment is operating for such import, export, or transmission as of the date of enactment of this Act; 

(2) if a permit described in section 6 for such construction, connection, operation, or maintenance has been issued; 

(3) if a certificate of crossing for such construction, connection, operation, or 

maintenance has previously been issued under this section; or 

(4) if an application for a permit described in section 6 for such construction, 

connection, operation, or maintenance is pending on the date of enactment of 

this Act, until the earlier of— 

(A) the date on which such application is denied; or 

(B) July 1, 2016. 

(d) EFFECT OF OTHER LAWS.— 

(1) APPLICATION TO PROJECTS.—Nothing in this section or section 7 shall affect the application of any other Federal statute to a project for which a certifiVerDate Mar 15 2010 09:50 Jun 20, 2014 Jkt 039006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6621 E:\HR\OC\HR482P1.XXX HR482P1

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cate of crossing for the construction, connection, operation, or maintenance of 

a cross-border segment is sought under this section. 

(2) NATURAL GAS ACT.—Nothing in this section or section 7 shall affect the 

requirement to obtain approval or authorization under sections 3 and 7 of the 

Natural Gas Act for the siting, construction, or operation of any facility to import or export natural gas. 

(3) ENERGY POLICY AND CONSERVATION ACT.—Nothing in this section or section 7 shall affect the authority of the President under section 103(a) of the Energy Policy and Conservation Act. 

SEC. 4. IMPORTATION OR EXPORTATION OF NATURAL GAS TO CANADA AND MEXICO. 

Section 3(c) of the Natural Gas Act (15 U.S.C. 717b(c)) is amended by adding at 

the end the following: ‘‘No order is required under subsection (a) to authorize the 

export or import of any natural gas to or from Canada or Mexico.’’. 

SEC. 5. TRANSMISSION OF ELECTRIC ENERGY TO CANADA AND MEXICO. 

(a) REPEAL OF REQUIREMENT TO SECURE ORDER.—Section 202(e) of the Federal 

Power Act (16 U.S.C. 824a(e)) is repealed. 

(b) CONFORMING AMENDMENTS.— 

(1) STATE REGULATIONS.—Section 202(f) of the Federal Power Act (16 U.S.C. 

824a(f)) is amended by striking ‘‘insofar as such State regulation does not conflict with the exercise of the Commission’s powers under or relating to subsection 202(e)’’. 

(2) SEASONAL DIVERSITY ELECTRICITY EXCHANGE.—Section 602(b) of the Public 

Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a–4(b)) is amended by 

striking ‘‘the Commission has conducted hearings and made the findings required under section 202(e) of the Federal Power Act’’ and all that follows 

through the period at the end and inserting ‘‘the Secretary has conducted hearings and finds that the proposed transmission facilities would not impair the 

sufficiency of electric supply within the United States or would not impede or 

tend to impede the coordination in the public interest of facilities subject to the 

jurisdiction of the Secretary.’’. 

SEC. 6. NO PRESIDENTIAL PERMIT REQUIRED. 

No Presidential permit (or similar permit) required under Executive Order 13337 

(3 U.S.C. 301 note), Executive Order 11423 (3 U.S.C. 301 note), section 301 of title 

3, United States Code, Executive Order 12038, Executive Order 10485, or any other 

Executive Order shall be necessary for the construction, connection, operation, or 

maintenance of an oil or natural gas pipeline or electric transmission facility, or any 

cross-border segment thereof. 

SEC. 7. MODIFICATIONS TO EXISTING PROJECTS. 

No certificate of crossing under section 3, or permit described in section 6, shall 

be required for a modification to the construction, connection, operation, or maintenance of an oil or natural gas pipeline or electric transmission facility— 

(1) that is operating for the import or export of oil or natural gas or the transmission of electricity to or from Canada or Mexico as of the date of enactment 

of the Act; 

(2) for which a permit described in section 6 for such construction, connection, 

operation, or maintenance has been issued; or 

(3) for which a certificate of crossing for the cross-border segment of the pipeline or facility has previously been issued under section 3. 

SEC. 8. EFFECTIVE DATE; RULEMAKING DEADLINES. 

(a) EFFECTIVE DATE.—Sections 3 through 7, and the amendments made by such 

sections, shall take effect on July 1, 2015. 

(b) RULEMAKING DEADLINES.—Each relevant official described in section 3(b)(2) 

shall— 

(1) not later than 180 days after the date of enactment of this Act, publish 

in the Federal Register notice of a proposed rulemaking to carry out the applicable requirements of section 3; and 

(2) not later than 1 year after the date of enactment of this Act, publish in 

the Federal Register a final rule to carry out the applicable requirements of section 3. 

SEC. 9. DEFINITIONS. 

In this Act— 

(1) the term ‘‘cross-border segment’’ means the portion of an oil or natural gas 

pipeline or electric transmission facility that is located at the national boundary 

of the United States with either Canada or Mexico; 


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1Statement before the Council of the America’s, May 7, 2014. 

(2) the term ‘‘modification’’ includes a reversal of flow direction, change in 

ownership, volume expansion, downstream or upstream interconnection, or adjustment to maintain flow (such as a reduction or increase in the number of 

pump or compressor stations); 

(3) the term ‘‘natural gas’’ has the meaning given that term in section 2 of 

the Natural Gas Act (15 U.S.C. 717a); 

(4) the term ‘‘oil’’ means petroleum or a petroleum product; 

(5) the terms ‘‘Electric Reliability Organization’’ and ‘‘regional entity’’ have 

the meanings given those terms in section 215 of the Federal Power Act (16 

U.S.C. 824o); and 

(6) the terms ‘‘Independent System Operator’’ and ‘‘Regional Transmission Organization’’ have the meanings given those terms in section 3 of the Federal 

Power Act (16 U.S.C. 796). 

PURPOSE AND SUMMARY

H.R. 3301, the ‘‘North American Energy Infrastructure Act,’’ was 

introduced by Rep. Upton (R–MI) and Rep. Green (D–TX) on October 22, 2013. H.R. 3301 would eliminate the need for oil and gas 

pipelines and electric transmission lines that cross the U.S. border 

to Canada or Mexico to obtain a Presidential Permit. The legislation replaces the system of Executive Orders that pertain to approvals for cross-border oil and natural gas pipelines and transmission lines. Developers of oil pipelines and transmission lines 

will now have to obtain a ‘‘certificate of crossing’’ for cross-border 

projects. Cross-border natural gas pipelines would still have to receive section 3 approvals under the Natural Gas Act (NGA). 

BACKGROUND AND NEED FOR LEGISLATION

The three largest countries in North America, the United States, 

Canada, and Mexico, are undergoing an energy transformation that 

is not only reshaping policies and long-held beliefs in their own respective countries, but also around the globe. As Secretary of State 

John Kerry recently stated, ‘‘Today, it’s clear, the world’s new energy map is no longer centered in the Middle East, but in the Western Hemisphere.’’ 1 Oil and gas production in the U.S. and Canada 

has surged rapidly in less than a decade. Mexico is implementing 

new reforms to energy policies that would allow for the nation’s 

vast energy potential to be tapped. As fast as energy production 

has grown in North America over the past decade, production may 

grow even faster in the decade to come. 

The ability of the U.S., Canada, and Mexico to allow for greater 

trade and utilization of energy resources is key. In order for the 

U.S. to fully benefit from the energy renaissance that is underway 

in North America there must be a recognition that cross-border energy projects are in the best interest of our nation and should be 

encouraged, not discouraged by regulatory roadblocks. Recognizing 

the commitments and the benefits that are part of the North American Free Trade Agreement (NAFTA), Congress must act to reassure both the private industry here at home and in Canada and 

Mexico that a modern, transparent, and predictable regulatory 

process for approving cross-border oil and natural gas pipelines and 

transmission lines is a priority. 

Oil and natural gas pipelines and electric transmission facilities 

that cross the national boundaries of the United States must receive approval from the Federal government, similar to other types 


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2 CRS Report, ‘‘Proposed Keystone XL Pipeline: Legal Issues,’’ March 21, 2013. 3CRS Memorandum, ‘‘Presidential Permitting of Border Crossing Energy Facilities,’’ at Table 

3 (Aug. 16, 2013). 4The U.S. and Canadian transmission systems are physically interconnected at over 35 points 

with linkages stretching across the border from the Pacific Northwest to New England. Canada 

is currently the United States’ largest foreign supplier of electricity, with exports to the U.S. 

typically representing anywhere from 5–10% of Canada’s total production. In 2012, electricity 

exports from Canada totaled 57,864,640 megawatt-hours. 5DOE, Office of Electricity Delivery and Energy Reliability, ‘‘Pending Applications.’’ 6 16 U.S.C. § 824a(e). 

7 In addition, concurrence is required from both the Secretary of Defense and the Secretary 

of State before a Presidential Permit can be issued. 

of border crossing facilities (e.g., communication cables, bridges, 

border entry facilities, and railroads). The current approval process 

for oil and natural gas pipelines and electric transmission facilities 

are set forth in a series of Executive Orders created in an ad hoc 

fashion over multiple Presidential administrations. Congress’ authority to regulate foreign commerce ‘‘is plainly enumerated by the 

Constitution,’’ and can decide how the approval of cross border facilities is carried out.2 Since Congress has yet to exercise its authority to regulate these projects, it has been left to the President 

to authorize these approvals under the President’s inherent constitutional authority to conduct foreign affairs. Currently, one must 

apply for a Presidential Permit, not only for a new project, but for 

any existing project that previously has been approved and undergone a change in ownership or modification. 

CROSS-BORDER ELECTRIC TRANSMISSION LINES

The U.S. currently has over 40 cross-border electric transmission 

lines carrying power between the U.S. and Canada and the U.S. 

and Mexico.3 The majority of these interconnections are located at 

the northern border, which has facilitated enhanced system reliability, fuel diversity, and efficiencies in system operation, particularly for the New England and Midwest regions.4 Each of these facilities has been issued a Presidential Permit and obtained an export authorization from the Secretary of Energy. There are 5 applications for Presidential Permits pending before the Department of 

Energy (DOE).5

Under the current process to construct and operate an international cross-border transmission facility, any person seeking to 

construct and operate such facilities must first obtain the following 

from the Secretary of Energy: 

(1) a Presidential Permit pursuant to Executive Order 10485 

(September 3, 1954), as amended by Executive Order 12038 

(February 3, 1978); and 

(2) an export authorization pursuant to section 202(e) of the 

Federal Power Act.6

Executive Order 12038 provides that, before a Presidential Permit may be issued, the action must be found to be consistent with 

the public interest. The two criteria used by DOE to determine if 

a proposed project is consistent with the public interest are: 

(1) the environmental impact of the project, consistent with 

the National Environmental Policy Act of 1969 (NEPA); and 

(2) the impact of the project on electric reliability.7

With regard to export authorizations, DOE will grant the authorization unless it finds that the proposed transmission ‘‘would impair the sufficiency of electric supply within the United States or 


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816 U.S.C. § 824a(e). 

9 10 C.F.R. § 1021.410 (Appendix B4.12). 

10See, e.g., ITC Transmission, ‘‘Presidential Permit,’’ Order No. PP–230–4 (Feb. 24, 2012) 

(DOE issuance of Presidential Permit with CE for electric transmission line and related facilities 

crossing U.S.-Canadian border); AEP Texas Central Company, ‘‘Presidential Permit,’’ Order No. 

PP–317 (Jan. 22, 2007) (DOE issuance of Presidential Permit with CE for electric transmission 

line crossing U.S.-Mexico border); Detroit Edison Company, ‘‘Presidential Permit,’’ Order No. 

PP–221 (April 27, 2000) (DOE issuance of Presidential Permit with CE for electric transmission 

line crossing U.S.-Canadian border). 11See, e.g., Sharyland Utilities, L.P., ‘‘Presidential Permit,’’ Order No. PP–285 (Jan. 21, 2005) 

(DOE issuance of Presidential Permit with FONSI for electric transmission line crossing U.S.- 

Mexico border); Northern States Power Company, ‘‘Presidential Permit,’’ Order No. PP–231 (Feb. 

6, 2002) (DOE issuance of Presidential Permit with FONSI for electric transmission line crossing U.S.-Canadian border). 12 CRS Memorandum, ‘‘Presidential Permitting of Border Crossing Energy Facilities,’’ at Table 

1 (Aug. 16, 2013). 13 15 U.S.C. § 717e. 14 15 U.S.C. § 717f. 

would impede or tend to impede the coordination in the public interest of facilities subject to the jurisdiction of the Commission.’’ 8

DOE must also comply with NEPA before granting authorization 

to export electric energy. 

With respect to evaluating cross-border electric transmission facilities, the Department of Energy’s regulations specifically provide 

that the construction of transmission lines less than 10 miles (or 

less than 20 miles if within an existing right of way) are eligible 

for a categorical exclusion (CE) under NEPA.9 DOE has utilized 

the CE designation in approving numerous cross-border projects.10

For transmission facilities outside the 10 or 20 mile threshold, 

DOE often reaches a conclusion of ‘‘Finding of No Significant Impact’’ (FONSI) given the limited scope of the project review at the 

national boundary.11

CROSS-BORDER NATURAL GAS PIPELINES

The U.S. currently has 50 operating cross-border natural gas 

pipelines between the U.S. and Canada (29) and the U.S. and Mexico (21).12 There are 2 additional natural gas pipeline projects in 

Arizona and Texas that have Presidential Permit applications currently pending. 

Under the current process to construct and operate an international cross-border natural gas pipeline, any person seeking to 

construct and operate such facilities must obtain from the Federal 

Energy Regulatory Commission (FERC): 

(1) a Presidential Permit pursuant to Executive Order 10485 

(September 3, 1954), as amended by Executive Order 12038 

(February 3, 1978), and 

(2) an authorization under section 3 of the NGA for a crossborder import and export facility.13 Section 3 applications are 

sometimes filed in conjunction with section 7 applications, 

which are for interstate natural gas pipelines.14

Executive Order 12038 provides that, before a Presidential Permit is issued, there must be a finding that the action is consistent 

with the public interest. The criteria used for determining if an application is consistent with the public interest is identical to the 

criteria for approving applications for the siting, construction, and 

operation of import and export facilities under section 3 of the 

NGA. 

For ‘‘border facilities’’ subject to Presidential Permit and NGA 

section 3 review, discretion is given to FERC on a project-by-project 


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15Discussions with FERC staff, May 2, 2014. 16See e.g., Bakken Hunter, (approved April 24, 2014), Houston Pipe Line (approved March 20, 

201), and NET Mexico (approved November 8, 2013). 17 15 USC § 717b. 18 CRS Memorandum, ‘‘Presidential Permitting of Border Crossing Energy Facilities,’’ at Table 

2 (Aug. 16, 2013). 19Department of State, Bureau of Energy Resources ‘‘Pending Applications.’’ 

basis to determine the exact scope of the project review, and therefore the exact parameters of the Presidential Permit and section 3 

application. FERC looks for a physical feature on a project, such as 

a valve or meter on the interior side of the U.S. border, as an endpoint for what may be considered to lie within the Commission’s jurisdiction and therefore subject to its review procedures. From the 

physical feature, the border crossing facilities would be construed 

to extend to either the U.S./Canada or U.S/Mexico border.15 In reviewing recent FERC Orders issuing a Presidential Permit and 

granting section 3 authorization, the segment of the project deemed 

jurisdictional ranged from just less than three miles in length to 

another project that was 703 feet.16

Additionally, applicants must obtain from DOE an authorization 

to import or export natural gas under section 3 of the NGA for a 

nation with whom the U.S. has a free trade agreement (FTA).17

For applications to FTA countries, such as Canada and Mexico, 

DOE is required to grant these requests ‘‘without modification or 

delay.’’ 

CROSS-BORDER OIL PIPELINES

The U.S. currently has 19 operating cross-border oil pipelines between the U.S. and Canada (17) and the U.S. and Mexico (2).18

There are currently 7 pending applications for Presidential Permits 

for either new or existing cross-border oil pipelines.19

Under the current process to construct and operate an international cross-border oil pipeline, any person seeking to construct 

and operate such facilities must obtain a Presidential Permit pursuant to Executive Order 13337 from the Department of State. 

Under Executive Order 13337, the Secretary of State is to approve 

cross-border oil pipelines that have been determined to ‘‘serve the 

national interest.’’ Although the Department of State will not necessarily evaluate the same factors for each application for a Presidential Permit, its evaluation considers such things as the environmental impacts of the proposed project (associated closely with 

compliance with NEPA), stability of trading partners from whom 

the U.S. obtains crude oil, and the security of transport pathways 

for crude oil supplies to the U.S., and the economic benefits to the 

U.S. 

The current processes established by Executive Order create a 

number of problems. First and foremost, a lack of statutory guidance allows for a shifting standard of how projects are to be approved, the manner in which they are approved, and which agency 

or official makes the final decision on the approval for both new 

projects and existing projects. A lack of certainty creates a chilling 

effect on private investment for these projects. Also, given the constructs of the Executive Orders and the ultimate determination of 

the projects being left to the President, it is highly unlikely that 


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20See ‘‘Keystone XL: Reviewability of Transboundary Permits in the United States,’’ Kathy 

Parker, Colorado Journal of Environmental Law and Policy, 2013. 21See e.g., Bakken Hunter, (approved April 24, 2014), Houston Pipe Line (approved March 20, 

201), and NET Mexico (approved November 8, 2013). 

a decision by the President can be challenged in court.20 This all 

puts cross-border oil pipeline projects at a distinct disadvantage to 

comparable projects that do not have to receive Presidential Permit 

approvals. 

H.R. 3301 would eliminate the need for oil and gas pipelines and 

electric transmission lines that cross the U.S. border to Canada or 

Mexico to obtain a Presidential Permit. The legislation replaces the 

system of Executive Orders that pertain to approvals for cross-border oil and natural gas pipelines and transmission lines. Developers of oil pipelines and transmission lines would now be required 

to obtain a ‘‘certificate of crossing’’ for the cross-border segment of 

projects that cross the international boundary of the U.S. The definition of the cross-border segment, and thus what may be considered jurisdictional for the purposes of the certificate of crossing review, would be consistent with FERC’s established procedures for 

review of NGA section 3 applications.21 The relevant official would 

issue the certificate of crossing unless it is found that the construction, connection, operation, or maintenance of border facilities comprising the cross-border segment is not in the public interest of the 

United States. Consistent with FERC’s procedures, the cross-border 

segment would be identified as the segment spanning from the 

international boundary to a physical feature within close proximity, 

such as a valve or meter. Cross-border natural gas pipelines still 

would be required to receive section 3 approvals under the NGA. 

These projects also still would have to comply with all applicable 

federal, State, and local siting and environmental laws necessary 

for constructing and operating these projects. 

HEARINGS

The Subcommittee on Energy and Power held a hearing on H.R. 

3301, North American Energy Infrastructure Act, on October 29, 

2013. The Subcommittee received testimony from: 

• Mr. Jeff C. Wright, Director, Office of Energy Projects, Federal Energy Regulatory Commission; 

• Mr. Mark Mills, Senior Fellow, Manhattan Institute; 

• Mr. David Mears, Commissioner, Department of Environmental Conservation, State of Vermont; 

• Mr. Paul C. Blackburn, Attorney, Regulatory Consultant, 

Blackcreek Environmental Consulting; 

• Mr. Jim Burpee, President and CEO, Canadian Electricity 

Association; 

• Ms. Mary J. Hutzler, Distinguished Senior Fellow, Institute 

of Energy Research; and, 

• Mr. John H. Kyles, Senior Attorney, Plains All American 

Pipeline, L.P., on behalf of the Association of Oil Pipe Lines. 

COMMITTEE CONSIDERATION

On November 19 and 20, 2013, the Subcommittee on Energy and 

Power met in open markup session and forwarded H.R. 3301, as 

amended, to the full Committee by a roll call vote of 19 yeas and 


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10 nays. On May 7 and 8, 2014, the Committee on Energy and 

Commerce met in open markup session and ordered H.R. 3301 favorable reported to the House, as amended, by a roll call vote of 

31 yeas and 19 nays. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Upton to order H.R. 3301 favorably reported to the House, as 

amended, was agreed to by a roll call vote of 31 ayes and 19 nays. 

The following reflects the recorded votes taken during the Committee consideration: 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee made findings that are reflected 

in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

H.R. 3301 would eliminate the need for oil and gas pipelines and 

electric transmission lines that cross the U.S. border to Canada or 

Mexico to obtain a Presidential Permit. The legislation replaces the 

system of Executive Orders that pertain to approvals for cross-border oil and natural gas pipelines and transmission lines. Developers of oil pipelines and transmission lines will now have to obtain a ‘‘certificate of crossing’’ for cross-border projects. Cross-border natural gas pipelines would still have to receive section 3 approvals under the Natural Gas Act. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 3301 

would result in no new or increased budget authority, entitlement 

authority, or tax expenditures or revenues. 

EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI of the 

Rules of the House of Representatives, the Committee finds that 

H.R. 3301 contains no earmarks, limited tax benefits, or limited 

tariff benefits. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

MAY 29, 2014. 

Hon. FRED UPTON, Chairman, Committee on Energy and Commerce, 

U.S. House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3301, the North American 

Energy Infrastructure Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Megan Carroll. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 


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H.R. 3301—North American Energy Infrastructure Act 

H.R. 3301 would make changes to permitting requirements for 

pipelines and other energy infrastructure at international borders. 

In particular, the bill would eliminate the existing requirement on 

sponsors of such infrastructure to obtain a Presidential permit. Instead, H.R. 3301 would require sponsors of oil pipelines and electric 

transmission projects that cross international borders to obtain a 

certificate of crossing from either the Secretary of State or the Secretary of Energy. Under H.R. 3301, sponsors of natural gas pipelines would not be required to obtain a certificate of crossing. 

CBO estimates that implementing H.R. 3301 would have no significant net effect on the federal budget. Relative to current law, 

we expect that any changes to administrative costs incurred by 

agencies responsible for regulating energy infrastructure would not 

exceed $500,000 in any year, assuming the availability of appropriated funds. Enacting H.R. 3301 would not affect direct spending 

or revenues; therefore, pay-as-you-go procedures do not apply. 

H.R. 3301 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Megan Carroll. The estimate was approved by Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

DUPLICATION OF FEDERAL PROGRAMS

No provision of H.R. 3301 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULE MAKINGS

The Committee estimates that enacting H.R. 3301 specifically directs no rule makings within the meaning of 5 U.S.C. 551 to be 

completed. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 


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SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 provides the short title for the legislation, the ‘‘North 

American Energy Infrastructure Act.’’ 

Section 2. Finding 

Section 2 includes a congressional finding that the U.S. should 

establish a more uniform, transparent, and modern process for the 

construction and operation of oil or gas pipelines and electric transmission facilities for the import or export of oil, gas, or electricity 

to or from Canada and Mexico, in pursuit of a more secure and efficient North American energy market. 

Section 3. Authorization of certain energy infrastructure projects at 

the national boundary of the United States 

Section 3(a) creates a new approval process for oil pipelines and 

electric transmission facilities that cross the national boundary of 

the U.S. between Canada or Mexico. Specifically, no person may 

construct, connect, operate, or maintain a cross-border segment of 

an oil pipeline or electric transmission facility for the import or export of oil or the transmission of electricity to or from Canada or 

Mexico without obtaining a ‘‘certificate of crossing.’’ 

Section 3(b)(1) provides that, within 120 days after final action 

under the National Environmental Policy Act, the relevant agency 

is required to issue a certificate of crossing for the cross-border segment unless the relevant agency finds that the construction of the 

cross-border segment is not in the public interest of the U.S. 

Section 3(b)(2) establishes that the Secretary of State will be responsible for the issuance of a certificate of crossing for oil pipelines and the Department of Energy for electric transmission facilities. 

Section 3(b)(3) provides that for electric transmission facilities, 

approval is contingent upon compliance with applicable Electric Reliability Organization, Regional Transmission Organization, and 

Independent System Operator policies and standards. 

Section 3(c) provides that no other approvals are necessary under 

any current Executives Orders. This approval process does not 

apply to any oil or gas pipelines or electric transmission facilities 

that (1) are operating across the national boundary at the date of 

enactment; (2) have previously received a Presidential Permit; (3) 

have previously been approved under this process; or (4) have an 

application pending on the date of enactment until the application 

is denied or until July 1, 2016. No future approvals are needed 

under this process for modifications or changes of ownership. The 

restriction in section 3(c)(4) shall apply equally to a pending Presidential Permit application that is withdrawn and then subsequently re-submitted for the same project (or a substantially similar project) for purposes of being covered under the Act. 

Section 3(d) provides that all other Federal statutes, including 

environmental laws and permits, sections 3 and 7 of the Natural 

Gas Act, and section 103(a) of the Energy Policy and Conservation 

Act, are not affected. 


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Section 4. Importation or exportation of natural gas to Canada and 

Mexico 

Section 4 repeals the requirement under section 3(c) of the NGA 

that approval is needed from DOE for the export or import of natural gas to or from the U.S., Canada, or Mexico across the boundary of the U.S. 

Section 5. Transmission of electric energy to Canada and Mexico 

Section 5 repeals the requirement under section 202(e) of the 

Federal Power Act requiring an export authorization from DOE to 

transmit electric energy from the U.S. to a foreign country. 

Section 6. No Presidential Permit required 

Section 6 provides that no Presidential Permit (or similar permit) 

required under various Executive Orders shall be necessary for the 

construction, connection, operation, or maintenance of an oil or natural gas pipeline or electric transmission facility. 

Section 7. Modifications to existing projects 

Section 7 provides that neither a certificate of crossing under section 3 nor a Presidential Permit described in section 6 are required 

for a ‘‘modification’’ to the construction, connection, operation, or 

maintenance of an oil or natural gas pipeline or electric transmission facility. 

Section 8. Effective date; rulemaking deadlines 

Section 6 establishes a July 1, 2015 effective date for sections 3 

through 7. For the respective agencies responsible for carrying out 

the provisions in section 3, notices of proposed rulemaking are to 

be published in the Federal Register no later than 180 days after 

the date of enactment, and final rules are to be published in the 

Federal Register no later than 1 year after the date of enactment. 

Section 9. Definitions 

Section 9 sets forth definitions for the following terms: cross-border segment, modification, natural gas, oil, Electric Reliability Organization, and Independent System Operator, and Regional Transmission Organization. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

NATURAL GAS ACT 

* * * * * * * 

EXPORTATION OR IMPORTATION OF NATURAL GAS; LNG TERMINALS

SEC. 3. (a) * * * 

* * * * * * * 


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(c) For purposes of subsection (a), the importation of the natural 

gas referred to in subsection (b), or the exportation of natural gas 

to a nation with which there is in effect a free trade agreement requiring national treatment for trade in natural gas, shall be 

deemed to be consistent with the public interest, and applications 

for such importation or exportation shall be granted without modification or delay. No order is required under subsection (a) to authorize the export or import of any natural gas to or from Canada 

or Mexico. 

* * * * * * * 

FEDERAL POWER ACT 

* * * * * * * 

PART II—REGULATION OF ELECTRIC UTILITY COMPANIES 

ENGAGED IN INTERSTATE COMMERCE 

* * * * * * * 

INTERCONNECTION AND COORDINATION OF FACILITIES; EMERGENCIES; 

TRANSMISSION TO FOREIGN COUNTRIES

SEC. 202. (a) * * * 

* * * * * * * 

ø(e) After six months from the date on which this Part takes effect, no person shall transmit any electric energy from the United 

States to a foreign country without first having secured an order 

of the Commission authorizing it to do so. The Commission shall 

issue such order upon application unless, after opportunity for 

hearing, it finds that the proposed transmission would impair the 

sufficiency of electric supply within the United States or would impede or tend to impede the coordination in the public interest of facilities subject to the jurisdiction of the Commission. The Commission may by its order grant such application in whole or in part, 

with such modifications and upon such terms and conditions as the 

Commission may find necessary or appropriate, and may from time 

to time, after opportunity for hearing and for good cause shown, 

make such supplemental orders in the premises as it may find necessary or appropriate.¿ 

(f) The ownership or operation of facilities for the transmission 

or sale at wholesale of electric energy which is (a) generated within 

a State and transmitted from that State across an international 

boundary and not thereafter transmitted into any other State, or 

(b) generated in a foreign country and transmitted across an international boundary into a State and not thereafter transmitted into 

any other State, shall not make a person a public utility subject to 

regulation as such under other provisions of this part. The State 

within which any such facilities are located may regulate any such 

transaction øinsofar as such State regulation does not conflict with 

the exercise of the Commission’s powers under or relating to subsection 202(e)¿. 

* * * * * * * 


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PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 

* * * * * * * 

TITLE VI—MISCELLANEOUS 

PROVISIONS 

* * * * * * * 

SEC. 602. SEASONAL DIVERSITY ELECTRICITY EXCHANGE. 

(a) * * * 

(b) PERMIT.—Notwithstanding any transfer of functions under 

the first sentence of section 301(b) of the Department of Energy Organization Act, no permit referred to in subsection (a)(1)(B) may be 

issued unless øthe Commission has conducted hearings and made 

the findings required under section 202(e) of the Federal Power Act 

and under the applicable execution order respecting the construction, operation, maintenance, or connection at the borders of the 

United States of facilities for the transmission of electric energy between the United States and a foreign country. Any finding of the 

Commission under an applicable executive order referred to in this 

subsection shall be treated for purposes of judicial review as an 

order issued under section 202(e) of the Federal Power Act.¿ the 

Secretary has conducted hearings and finds that the proposed 

transmission facilities would not impair the sufficiency of electric 

supply within the United States or would not impede or tend to impede the coordination in the public interest of facilities subject to the 

jurisdiction of the Secretary. 

* * * * * * * 


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1The executive branch authority to issue presidential permits for cross-border energy project 

derives from the President’s constitutional authority to conduct foreign affairs. See Congressional Research Service, Presidential Permits for Border Crossing Energy Facilities (Oct. 29, 

2013) (R43261). 

MINORITY, ADDITIONAL, OR DISSENTING VIEWS 

H.R. 3301 would substantially weaken the process for federal approval of oil and natural gas pipelines and electric transmission 

lines that cross the U.S. border with Canada or Mexico. The new 

process established by the bill effectively exempts such projects 

from environmental and safety review under the National Environmental Policy Act (NEPA) by narrowing NEPA applicability to just 

the sliver of the project actually crossing the border. The process 

created by the bill also tips the scale in favor of approving controversial projects by establishing a rebuttable presumption of approval. H.R. 3301 would allow a project that is found not to be in 

the public interest under the current permitting process to reapply 

under the new weaker process, thereby reviving the Keystone XL 

tar sands pipeline if the Administration disapproves the pending 

application. The bill would exempt all modifications to existing 

cross-border pipelines, including major expansions of pipelines, 

from any requirement for federal review or approval. In addition, 

the bill allows for unlimited exports of liquefied natural gas (LNG) 

to any destination in the world as long as the LNG first goes 

through Canada or Mexico. 

The effect of these changes would be allow large and long-lived 

cross-border energy projects to be approved with no understanding 

or consideration of their environmental impacts or to be exempted 

from any permitting requirement at all. The public, including communities and landowners directly affected by the projects, would 

have little or no information and no opportunity to object or request mitigating action, except to the extent provided under limited 

state laws in some states. 

II. CURRENT PERMITTING PROCESS FOR TRANSBOUNDARY ENERGY

PROJECTS

Proposed oil pipelines, natural gas pipelines, and electric transmission lines that cross the U.S. boundary with Mexico or Canada 

are required to obtain presidential permits pursuant to executive 

orders.1 Additional statutory requirements apply to trans-boundary 

natural gas pipelines and electric transmission lines, as well as to 

exports of natural gas and electricity commodities. 

A. Oil Pipelines 

In order to construct and operate an oil pipeline that crosses the 

U.S. boundary with Canada or Mexico, an applicant must obtain a 

presidential permit. The President has delegated the authority to 

permit cross-border oil pipeline projects to the State Department 


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2 Exec. Order No. 11423, 33 Fed. Reg. 11741 (Aug. 16, 1968); Exec. Order No. 13337, 69 Fed. 

Reg. 25299 (Apr. 30, 2004). 3 National Environmental Policy Act of 1969, Pub. L. No. 94–83; U.S. Department of State, 

Draft Environmental Impact Statement for the Keystone XL Oil Pipeline Project, at 1–1 (Apr. 

16, 2010) (online at keystonepipeline-xl.state.gov/documents/organization/182325.pdf). 4 Exec. Order No. 13337, § 1(c), 69 Fed. Reg. 25299 (Apr. 30, 2004). 

5 Exec. Order No. 10485, 18 Fed. Reg. 5397 (Sept. 3, 1953). 

pursuant to Executive Orders 11423 and 13337, which require an 

affirmative finding that a project is in the national interest.2 Prior 

to making the national interest determination, NEPA requires the 

State Department to prepare, with notice and public comment, an 

environmental impact statement that assesses impacts on the environment that would result from a project and evaluates alternatives that would avoid or minimize adverse environmental effects.3 Executive Order 13337 recognizes that these complex decisions involve matters within the expertise of multiple federal agencies, and it provides specified federal agencies 90 days to comment 

on the application.4

B. Natural gas pipelines and exports 

In order to construct and operate a natural gas pipeline that 

crosses the U.S. boundary with Canada or Mexico, an applicant 

must obtain a presidential permit from the Federal Energy Regulatory Commission (FERC). Under Executive Order 10485, FERC is 

authorized to issue a presidential permit if it finds the project ‘‘to 

be consistent with the public interest’’ and receives favorable recommendations from the Secretary of State and Secretary of Defense.5 FERC may set conditions on a permit to protect the public 

interest. 

A cross-border natural gas pipeline must also obtain FERC approval under section 3 of the Natural Gas Act. FERC is required 

to grant an application unless it finds that the proposed export will 

not be consistent with the public interest. Under FERC’s regulations, an applicant applies for the Natural Gas Act approval and 

the presidential permit simultaneously in a single application package. One environmental review is performed for the entire submission. 

An entity seeking to export natural gas as a commodity through 

a pipeline or as liquefied natural gas must obtain approval from 

the Department of Energy (DOE). Under section 3 of the Natural 

Gas Act, DOE is required to grant an application to export natural 

gas to a country without a free trade agreement with the United 

States unless it finds that the proposed export will not be consistent with the public interest. For export to countries with a free 

trade agreement (including Canada and Mexico), the Natural Gas 

Act requires DOE to deem such applications consistent with the 

public interest and grant them without modification or delay. 

C. Electric transmission lines and electricity exports 

A presidential permit is required in order to construct and operate an electric transmission line that crosses the U.S. boundary 

with Canada or Mexico. Under Executive Order 10485, DOE is authorized to issue a presidential permit if it finds the project ‘‘to be 

consistent with the public interest’’ and receives favorable recommendations from the Secretary of State and Secretary of DeVerDate Mar 15 2010 09:35 Jun 20, 2014 Jkt 039006 PO 00000 Frm 00020 Fmt 6604 Sfmt 6604 E:\HR\OC\HR482P1.XXX HR482P1

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6 Id. 

7 U.S. Department of Energy, Interpretative Guidance on the Requirements of 10 C.F.R. 

§ 205.322 (Jun. 2, 2011). 8Federal Power Act § 202(e); 16 U.S.C. 824 a(e). 

fense.6 DOE makes the public interest determination ‘‘by evaluating the electric reliability impacts, the potential environmental 

impacts, and any other factors that DOE may also consider relevant to the public interest.’’ 7 An environmental analysis is required to comply with NEPA. DOE may set conditions on a permit 

to protect the public interest. 

Under section 202(e) of the Federal Power Act, the transmission 

of electricity from the U.S. to another country requires approval 

from DOE. DOE is required to approve an application unless it 

finds that the proposed transmission of electricity would ‘‘impair 

the sufficiency of electric supply within the United States or would 

impede or tend to impede the coordination in the public interest of 

[electric] facilities.’’ 8 DOE may set conditions on the approval. 

III. SECTION-BY-SECTION ANALYSIS OF H.R. 3301

Several sections in H.R. 3301 raise significant concerns. During 

full Committee markup, Chairman Fred Upton (R–MI) and Rep. 

Gene Green (D–TX) offered an amendment that substantially 

changed the language of the introduced bill but failed to address 

many of the concerns that had been raised by the minority. The 

committee accepted the amendment by a voice vote. 

A. Section 3 

Section 3 of the bill, as amended, establishes a new permitting 

process for applicants seeking to construct, connect, operate, or 

maintain a cross-border segment of an oil pipeline or electric transmission facility for the purpose of importing or exporting oil or electricity from Canada or Mexico. This replaces the existing requirement that an entire trans-boundary project, not just a segment, obtain a presidential permit. 

Under the new process, the responsible federal agency—the Department of Energy for electric transmission lines and the Department of State for oil pipelines—must issue a ‘‘certificate of crossing’’ for the cross-border segment of an oil pipeline or electric transmission facility within 120 days of final action under NEPA, unless 

the agency finds that the segment ‘‘is not in the public interest of 

the United States.’’ Unlike the existing process, this provision establishes a rebuttable presumption of approval, tipping the scale in 

favor of the project. Instead of requiring an agency to affirmatively 

find that a project is in the public interest, it shifts the burden of 

proof to opponents of the project to show that it is not in the public 

interest. 

A ‘‘cross-border segment’’ is defined as the portion of the project 

‘‘that is located at the national boundary.’’ This language limits the 

requirement for federal approval to just a sliver of a much larger 

project—only that portion that physically crosses the border—and 

makes it more difficult for an agency to deny the application as 

contrary to the public interest. 

Section 3 temporarily excludes from the new permitting process 

any project with permit approval pending on the date of enactment. 


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The exclusion ends when a pending project is denied, or, for any 

still-pending project, on July 1, 2016. Pending projects would become subject to the new permitting process when the exclusion 

ends, and any project that is denied a presidential permit before 

July 1, 2016, would be able to reapply under the new process. 

This has significant implications for the Keystone XL tar sands 

pipeline and other projects with pending applications for presidential permits. If a decision to issue a presidential permit for Keystone XL has not been made by July 1, 2016, the pipeline would 

then proceed under the new process, and it likely would be approved by November 1, 2016. If President Obama finds that the 

Keystone XL pipeline is not in the public interest and denies the 

presidential permit, then under this bill, TransCanada could reapply under the new weaker process. 

At the full Committee markup of H.R. 3301, Ranking Member 

Henry Waxman offered an amendment to keep projects with pending permit applications under the existing process. In introducing 

the amendment, Ranking Member Waxman noted that the bill’s 

supporters assert that H.R. 3301 is not intended to fast-track approval of the Keystone XL pipeline. He explained that his amendment would ensure that the bill’s text reflects those assurances. 

The amendment was defeated by a vote of 16–27. 

Section 3 also effectively exempts cross-border projects from 

meaningful environmental review under NEPA by dramatically 

narrowing the focus of that review. Under the bill, the approval 

process, and hence the NEPA review, applies only to ‘‘a cross-border segment’’ of a much larger project. These trans-boundary pipelines and transmission lines are multi-billion dollar infrastructure 

investments that can stretch hundreds of miles and last for decades. Before making decisions about whether to approve such 

projects, federal agencies should be required to carefully consider 

their potential impacts on the environment and on communities 

along their routes. Cross-border projects pass through private property and sensitive lands and over important aquifers. They transport hazardous substances that, if spilled or ignited, can cause serious damage. They also have implications for climate change. Tar 

sands pipeline projects, such as Keystone XL, would facilitate more 

rapid expansion of the tar sands, the dirtiest source of crude available with respect to carbon pollution. Yet, despite NEPA, almost 

none of these impacts would be documented or considered under 

H.R. 3301’s narrow definition of the project to be approved. 

During full Committee markup of H.R. 3301, Rep. John Dingell 

(D–MI) offered an amendment to ensure that the complete length 

of cross-border projects would be subject to full environmental review under NEPA. The amendment was defeated by a vote of 21– 

29. 

B. Section 4 

Section 4 of the bill amends section 3 of the Natural Gas Act to 

eliminate the requirement to obtain DOE authorization for the export or import of natural gas to or from Canada or Mexico. 

This significantly alters the current approval process for LNG exports. Under current law, if a company seeks to export natural gas, 

it must first obtain approval from the Department of Energy. For 


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9 House Committee on Energy and Commerce, Subcommittee on Energy and Power, Testimony 

of Michael Knotek, Deputy Under Secretary for Science and Energy, U.S. Department of Energy, 

Hearing on H.R. 3301, the ‘‘North American Energy Infrastructure Act,’’ 113th Cong. (Oct. 29, 

2013). 10 House Committee on Energy and Commerce, Subcommittee on Energy and Power, Testimony of Jeff C. Wright, Director, Office of Energy Projects, Federal Energy Regulatory Commission, Hearing on H.R. 3301, the ‘‘North American Energy Infrastructure Act,’’ 113th Cong. (Oct. 

29, 2013). 

countries without a free trade agreement with the United States, 

DOE examines whether the proposed export is in the public interest. For countries with a free trade agreement with the United 

States, including Canada and Mexico, DOE is required to deem export applications consistent with the public interest and grant 

them without delay. DOE testified that these applications are relatively simple filings, with DOE quickly responding within two to 

four weeks of a request.9 These approvals can include conditions, 

such as prohibitions against simply using Canada or Mexico as a 

pass-through before shipping the gas to another country. 

The bill amends current law to completely exempt a company exporting natural gas to Canada or Mexico from any approval at all. 

This unnecessary change could have significant consequences. 

Under the bill, DOE would no longer be able to include any conditions on the approvals. As a result, this bill allows unrestricted exports of LNG to Canada or Mexico, and from there it could then 

be re-exported to any other country. These unlimited LNG exports 

through Canada and Mexico would no longer be subject to any 

DOE approval, review, or conditions. There would be no public interest determination or analysis of impacts on domestic natural gas 

prices or American consumers and manufacturers. 

During full Committee markup of H.R. 3301, Rep. Jerry McNerney (D–CA) offered an amendment to strike section 4 of the bill. 

The amendment was defeated by a voice vote. 

C. Section 5 

Section 5 of the bill repeals section 202(e) of the Federal Power 

Act, which requires approval from DOE for the transmission of 

electricity from the U.S. to another country. According to the Federal Energy Regulatory Commission, the repeal of section 202(e) 

could have serious unintended consequences. The career Director of 

FERC’s Office of Energy Projects testified that ‘‘repeal could have 

an unintended potentially adverse effect on the Commission’s ability to ensure non-discriminatory open access transmission service 

over the U.S. electric transmission grid.’’ 10 Owners of transmission 

lines between the U.S. and Canada or Mexico ‘‘thus could discriminate in providing service, or even deny service outright.’’ Mr. 

Wright explained: ‘‘Foreign generators could be denied access to 

United States markets, or required to pay discriminatory changes 

to access those markets, and U.S. generators could be denied access 

to foreign markets, or be required to pay discriminatory charges to 

access those markets.’’ Thus, the bill could significantly disrupt 

electricity and transmission markets by undermining the basic 

rules governing those markets. 


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11 Id. 12 Enbridge Energy, Application of Enbridge Energy, Limited Partnership for an amendment 

to the August 3, 2009 Presidential Permit for Line 67 to increase the operational capacity of pipeline facilities at the international boundary between Canada and the United States (Dec. 21, 

2012) (online at www.state.gov/documents/organization/202645.pdf ). 

D. Section 6 

Section 6 of the bill eliminates the current requirement to obtain 

a presidential permit for the construction, connection, operation, or 

maintenance of an oil or natural gas pipeline or electric transmission facility, or any cross-border segment thereof. Instead, those 

wishing to construct, connect, operate, or maintain a cross-border 

segment of an oil pipeline or electric transmission facility must obtain approval under the new process described in section 3. 

Applicants for cross-boundary natural gas pipelines do not have 

to obtain approval under the new process but still must obtain approval from FERC under sections 3 and 7 of the Natural Gas Act. 

As a result, eliminating the presidential permit requirement for 

trans-boundary natural gas pipelines would not accelerate the permitting of such projects. Under existing law, the FERC approval 

process proceeds simultaneously with the presidential permitting 

process, which generally takes less time than the statutory approval. At the October 29, 2013, Energy and Power Subcommittee 

hearing on H.R. 3301, the career Director of FERC’s Office of Energy Projects testified that the bill ‘‘would not speed up the process’’ for natural gas pipelines.11

E. Section 7 

Section 7 of the bill provides that applicants do not have to obtain a certificate of crossing under section 3 or a presidential permit for pipeline or transmission line ‘‘modifications.’’ Section 9 of 

the bill defines ‘‘modifications’’ to include ‘‘reversal of flow direction, change in ownership, volume expansion, downstream or upstream interconnection, or adjustment to maintain flow (such as a 

reduction or increase in the number of pump or compressor stations.’’ This exemption applies to modifications of any cross-border 

energy facility that is operating as of the date of enactment or that 

has received a presidential permit under the existing process or a 

certificate of crossing under the new process. 

As a result, controversial modifications to existing cross-border 

pipelines or transmission lines would not require federal approval 

and would not be subject to any environmental review under 

NEPA. 

Many modifications, as defined by this bill, could have environmental impacts just as significant as those resulting from an entirely new project. For example, Enbridge has submitted an application to the State Department to amend its presidential permit to 

allow the expansion of the Alberta Clipper tar sands pipeline from 

450,000 barrels per day (bpd) to 880,000 bpd.12 The pipeline runs 

from Hardisty, Alberta to a border crossing in North Dakota, and 

continues for 327 miles through North Dakota and Minnesota to 

Superior, Wisconsin. The Alberta Clipper expansion project is highly controversial due to concerns about increased dependence on tar 

sands crude and local impacts, including spills. This expansion also 


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13See, e.g., Pipeline plan to send crude from Montreal to Maine raises ire in NewμEngland, Financial Post (May 22, 2013); Natural Resources Defense Council, Going in Reverse: The Tar 

Sands Oil Threat to Central Canada and New England (Jul. 3, 2013) (online at www.nrdc.org/ 

energy/going-in-reverse.asp). 14State of New Hampshire, Governor Hassan Calls on Federal Government to Protect NH from 

Potentially Dangerous Tar Sands Oil Pipeline (Apr. 22, 2013) (online at www.governor.nh.gov/ 

media/news/2013/pr–2013–04–22–tar-sands.htm); State of Vermont, Gov. Shumlin Calls for New 

Federal Review of Proposed Tar Sands Pipeline Route (Jun. 20, 2013) (online at governor.vermont.gov/blog-gov-shumlin-urges-sec-john-kerry-pipeline-review); National Wildlife Federation, Vermont Towns Protect Wildlife and Vote No’ on Tar Sands (Mar. 6, 2014) (online at 

blog.nwf.org/2014/03/vermont-towns-protect-wildlife-and-vote-no-on-tar-sands/). 

would significantly increase the carbon pollution associated with 

the pipeline. 

Pipeline reversals also carry substantial environmental risks 

that should be evaluated before approval. For example, the 600,000 

bpd Portland-Montreal pipeline currently carries light sweet crude 

from Maine to Montreal, but it is widely expected that the pipeline 

will soon apply for authorization for a reversal.13 Reversal of this 

pipeline would complete a project to bring tar sands crude from 

Canada through New Hampshire and Vermont to Portland, Maine, 

where it would be loaded onto tankers for further transport. The 

Portland-Montreal pipeline reversal is highly controversial due to 

concerns about increased dependence on tar sands crude and local 

impacts, including the impact of a spill on local economies that are 

dependent on tourism linked to outdoor recreation. The Governors 

of New Hampshire and Vermont have written to the State Department to request a thorough environmental review, and 42 towns 

and municipalities have passed resolutions opposing the project.14

During full Committee markup of H.R. 3301, Rep. Peter Welch 

(D–VT) offered an amendment to limit the permit exemption for 

modifications to only ‘‘minor modifications,’’ such as a change in 

ownership. Rep. Welch withdrew the amendment after Chairman 

Upton committed to working with Rep. Welch to try to address his 

concerns. 

For the reasons stated above, we dissent from the views contained in the Committee’s report. 

HENRY A. WAXMAN. BOBBY L. RUSH. 

Æ 


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