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81–198 2013

IF YOU BUILD IT: THE KEYSTONE XL PIPELINE 

AND SMALL BUSINESS JOB GROWTH 

HEARING 

BEFORE THE

SUBCOMMITTEE ON AGRICULTURE, ENERGY AND 

TRADE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 16, 2013 

Small Business Committee Document Number 113–018 

Available via the GPO Website: www.fdsys.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMER, Missour 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Scott Tipton ..................................................................................................... 1 

Hon. Patrick Murphy ............................................................................................... 2 

WITNESSES 

Mr. Brent Booker, Secretary Treasurer, Building and Construction Trades 

Department, AFL-CIO, Washington, DC ........................................................... 4 

Mr. Peter Bowe, President and CEO, Ellicott Dredges, Baltimore, MD, testifying on behalf of the National Association of Manufacturers ......................... 6 

Mr. Mat Brainerd, President, Brainerd Chemical Company, Tulsa, OK, testifying on behalf of the National Association of Chemical Distributors ............. 8 

Dr. Christopher R. Knittel, William Barton Rogers, Professor of Energy Economics, Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA ....................................................................................... 10 

APPENDIX 

Prepared Statements: 

Mr. Brent Booker, Secretary Treasurer, Building and Construction 

Trades Department, AFL-CIO, Washington, DC ....................................... 22 

Mr. Peter Bowe, President and CEO, Ellicott Dredges, Baltimore, MD, 

testifying on behalf of the National Association of Manufacturers .......... 30 

Mr. Mat Brainerd, President, Brainerd Chemical Company, Tulsa, OK, 

testifying on behalf of the National Association of Chemical Distributors ................................................................................................................. 38 

Dr. Christopher R. Knittel, William Barton Rogers, Professor of Energy 

Economics, Sloan School of Management, Massachusetts Institute of 

Technology, Cambridge, MA ........................................................................ 42 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Dennis Daugaard, Governor, State of South Dakota .................................... 47 

Ports-to-Plains Alliance .................................................................................... 49 

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(1) 

IF YOU BUILD IT: KEYSTONE XL PIPELINE 

AND SMALL BUSINESS JOB GROWTH 

THURSDAY, MAY 16, 2013 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Scott Tipton [chairman 

of the subcommittee] presiding. 

Present: Representatives Tipton, Graves, Luetkemeyer, 

Huelskamp, and Murphy. 

Chairman TIPTON. Good morning. Our hearing will come to 

order. 

I would like to thank all of you for taking the time to be able 

to be here as we examine the potential economic benefits of constructing the Keystone XL pipeline and what it would mean for 

small business job growth. We have an excellent panel with us 

today to discuss this very important issue and I look forward to 

hearing all of their thoughts. 

We hear a lot about ‘‘shovel ready’’ projects, those that can be 

started immediately, putting Americans to work with good paying 

jobs while building the infrastructure necessary to be able to help 

fuel the economy. We also hear a lot about the need to be able to 

adopt an ‘‘all of the above’’ strategy when it comes to energy development in our country that utilizes all of the resources and technologies available in North America to supply us with the affordable energy that we need to be able to grow our economy. Both 

issues are vitally important to our economic future. 

The Keystone pipeline can help us reach those goals. It is good 

for job creation, good for energy security, and as I think we will see 

here today, good for small businesses. 

The potential economic benefits of this pipeline to the American 

economy are tremendous. TransCanada, the company petitioning 

the administration to be able to build the pipeline, estimates that 

it would spend approximately $7 billion to construct the full 

project. The draft supplemental environmental impact study issued 

by the Department of State earlier this year estimated that the 

pipeline would create approximately 42,100 direct and indirect jobs. 

Those are not only construction jobs; those are jobs in lodging, food 

services, transportation, warehousing, and several other segments 

of our economy. 

While individual studies’ findings are not broken down to the impact of large versus small businesses, 99.7 percent of all businesses 

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2 

in the United States are classified as small. TransCanada states it 

has contracts with more than 50 suppliers across the United 

States. Therefore, it is not unfounded to presume construction of 

the pipeline will create thousands of jobs for small businesses. 

A study by the Energy Policy Research Foundation concluded 

that the Keystone expansion would provide net economic benefits 

of $100 million to $600 million annually, in addition to the immediate boost in construction employment. Similarly, a 2009 report 

from the Canadian Energy Research Institute commissioned by the 

American Petroleum Institute predicts that the Keystone XL pipeline will add $172 billion to America’s gross domestic product by 

2035 and will create an additional 1.8 million person-years of employment in the United States over the next 22 years. 

Constructing the Keystone XL pipeline will help ensure an abundant, nearby, and stable supply of oil which will not only enhance 

our national security and make us less reliant on foreign oil imports from unfriendly nations and regions to this country; it could 

have the added economic benefit of keeping domestic fuel prices in 

check which would help ease the financial burden on hard-working 

American families and small businesses. This Committee has held 

several hearings on the importance of affordable energy to the viability of small businesses. Just as important, according to the 

project’s environmental impact statement, construction of the Keystone XL pipeline can accomplish these goals with minimal adverse 

environmental effects. 

At a time when we should be focusing on economic growth and 

energy security, moving forward with this project is simply commonsense. We have a rare opportunity to create thousands of jobs 

immediately, many through small businesses, and do so in a responsible way. Let’s build it. 

Again, I would like to thank all of our witnesses for their participation and their insights. I now recognize the ranking member for 

his opening statement. Mr. Murphy. 

Mr. MURPHY. Thank you, Mr. Chairman. And thank you all for 

being here this morning to discuss such an important topic, and I 

look forward to hearing all of your testimonies this morning. 

The 875-mile Keystone pipeline project, which has the potential 

to transport 830,000 barrels of oil from Canada to refineries in the 

United States, could have substantial impacts on small businesses 

and job creation in both the short term and long term. It is also 

important to address the environmental issues that surround this 

project proposal. 

This pipeline project has been a controversial issue that has generated a great deal of discussion and research, and we have a 

unique opportunity today to clear the misconceptions about the 

benefits and costs of this large project. 

In terms of new jobs the Keystone expansion may create, estimates very widely. TransCanada’s submission to the State Department projects that the pipeline would create more than 40,000 jobs. 

On the other hand, research done by Cornell University shows that 

the project would create between 2,500 and 4,650 in temporary construction jobs, partially because a large portion of the primary material input—steel pipe—probably would not be produced in the 

United States. 

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For small business, the indirect economic effects are key. As 

workers deploy to communities along the pipeline’s path, significant opportunities may be created for local small businesses. In addition, small firms involved in the manufacturing of pipeline components stand to benefit should this initiative receive regulatory 

approval. Taken together, this project represents real benefits for 

small businesses. 

While Keystone’s potential boost to jobs and local businesses has 

been at the center of the discussion, energy prices are another critical factor. While tapping into the new sources of oil from Canada 

seems to carry the promise of low-end gas prices, understanding 

whether the pipeline will have a meaningful impact on prices is a 

critical component of this discussion. 

Finally, such a large fossil fuel development project must include 

a discussion of its potential impacts on the climate, and understanding whether this project would increase or decrease carbon 

emission is important. I am particularly interested in the witnesses’ perspectives on this matter. 

Keystone XL has the potential to bring both jobs and larger energy supplies to the United States. Congress must explore all of the 

fundamental facts of the problems before deciding on whether the 

project can move forward. 

With that in mind I want to thank all of the witnesses and thank 

Chairman Tipton for holding this hearing, and I yield back. Thank 

you. 

Chairman TIPTON. Thank you, Mr. Murphy. 

I would like to take just a moment to be able to explain the timing lights that are in front of you. You will each have five minutes 

to be able to delivery your testimony. The light will start out as 

green. When you get to one minute remaining it will move to yellow, and finally it will turn to red. And as you are all well aware, 

if you see that you will be bodily taken, drawn, and quartered. We 

would appreciate you trying to limit your testimony to that time 

limit but we will have you wrap up as well. 

Our first witness is Mr. Brent Booker, Secretary-Treasurer of the 

Building and Construction Trades Department of the AFL-CIO. A 

graduate of the University of Virginia, he is a member of the Laborers Local 795 New Albany, Indiana, and has worked at Laborers 

International Union of North American Headquarters since 2001. 

He was elected Labor Secretary, Co-Chairman, and President of 

the National Maintenance Agreement Policy Committee in 2009, 

and represented his organization in negotiations with TransCanada 

for the Keystone XL pipeline. 

Welcome to the Small Business Committee, Mr. Booker. Please 

proceed with your testimony. 

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STATEMENTS OF BRENT BOOKER, SECRETARY-TREASURER, 

BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFLCIO; PETER BOWE, PRESIDENT AND CEO, ELLICOTT 

DREDGES; MAT BRAINERD, PRESIDENT, BRAINERD CHEMICAL COMPANY; CHRISTOPHER R. KNITTEL, WILLIAM BARTON ROGERS PROFESSOR OF ENERGY ECONOMICS, SLOAN 

SCHOOL OF MANAGEMENT, MASSACHUSETTS INSTITUTE OF 

TECHNOLOGY 

STATEMENT OF BRENT BOOKER 

Mr. BOOKER. Thank you. On behalf of the two million skilled 

craft professionals in the United States and Canada that comprise 

the 13 national and international unions of the Building and Construction Trades Department, AFL-CIO, I wish to thank you and 

the members of the Committee for holding this hearing today. 

America’s building trades unions emphatically support the construction of the Keystone pipeline. Our unions have been actively 

involved in this project since its inception almost five years ago, 

and we are adamant in our belief that the economic, energy security, and national security benefits associated with the construction 

of this pipeline are too many and too significant to allow it to be 

derailed by a narrow and misguided political agenda being advanced by a small minority of ill-advised environmental groups. 

Simply put, Keystone XL is in the national interest of the United 

States of America. 

For over four years now, the American construction industry has 

been in the throes of a ‘‘depression.’’ While the stock markets and 

the media celebrated the news two weeks ago that the national unemployment rate fell to 7.5 percent in April, little attention was 

given to the fact that the national unemployment rate for construction workers remains above 13 percent. 

For many members of our unions, the Keystone XL project is not 

just a pipeline; it is, in fact, in the most literal sense of the phrase, 

a lifeline. Far too many of them have lost their homes and are 

struggling just to put food on the table. And given the scrutiny this 

project has received, any further delay by the Obama administration would be unconscionable. 

Unfortunately, they must also face the additional emotional burden of having their chosen profession denigrated by a number of 

environmental groups. In its recent Supplemental Draft Environmental Impact Statement (SDEIS), the State Department effectively dismissed the Keystone oppositions’ basic argument: which is 

that the construction of the Keystone pipeline will lead to an increased greenhouse gas emission. And even though the State Department was not obligated to have analyzed any environmental 

impacts outside of the United States, the SDEIS provides a clear 

life-cycle analysis of greenhouse gas production that would be connected to the development of the Canadian oil sands, as well as the 

environmental impact to wildlife, forests, threatened and endangered species, and water resources. In each instance, all key issues 

raised by the SDEIS have been adequately addressed. 

Misguided groups, like 350.org and the Sierra Club, have chosen 

to impose a value judgment that holds a construction job to be of 

lesser value because by its very nature a construction project has 

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a completion date and therefore, that individual job will come to an 

end at some point. They call these jobs ‘‘temporary’’ as a means to 

diminish their importance and validity, and to entice others to join 

their chorus of negativity in the mistaken belief that these jobs 

have no real value to our society. 

It was those types of hard-working professionals who built the 

‘‘Alberta Clipper’’ pipeline project which the Obama administration 

approved way back in August of 2009. Ironically, the Alberta Clipper project just happens to be a pipeline very similar to Keystone 

XL in two compelling areas: (1) both are roughly 1,000 miles long; 

and (2) both are specifically designed to transport Canadian crude 

oil from the oil sands region of Alberta to refineries in America. 

Upon approval of the construction permit for the Alberta Clipper, 

the State Department said, and I quote, ‘‘The department found 

that the addition of crude oil pipeline capacity between Canada and 

the United States will advance a number of strategic interests of 

the United States.’’ 

We could not agree more. 

Additionally, the Keystone XL TransCanada has agreed to implement 57 safety measures above and beyond those mandated by federal agencies relating to the construction, operation, and design of 

the pipeline. Yet, the most effective action they took to ensure safe 

construction of this pipeline was to sign a project labor agreement. 

By embracing a PLA, TransCanada recognized the value realized 

through a partnership with America’s building trades unions, not 

the least of which is the assurance that the project will be built by 

the safest, most highly trained and productive pipeline workforce 

found anywhere in the world. 

And it also bears noting that the family-sustaining wages and 

benefits that will be paid on this project through the PLA will have 

a dramatic effect on local economies with communities all along the 

proposed route. In fact, over 4,000 workers have already performed 

roughly 1 million hours of work on the southern leg of Keystone, 

running from Cushing, Oklahoma to Port Arthur, Texas. And the 

economic impact from the wages and benefits paid through the 

PLA is noticeable. 

KBMT News in Port Arthur did a recent story detailing how the 

construction of the southern leg was providing a boost to the local 

economy, as workers are spending heavily on things like clothing, 

hotels, and restaurants. Additionally, from lumber to sand, and 

from gravel to fuel, massive quantities of materials that are needed 

for the project are being purchased locally up and down the route 

between Cushing and Port Arthur. 

The Keystone PLA is already proving to be a major contributor 

to the local economies along the southern route, and it is also 

structured to ensure safe, quality construction with ‘‘on time, on 

budget’’ results through the steady supply of the world’s safest, 

most highly trained, and high productive skilled workforce found 

anywhere on the globe. 

Our unions, in partnership with our signatory contractors, invest 

roughly $1 billion a year of their own money, not taxpayers’ money, 

to operate approximately 1,900 skilled craft training centers in 

both the United States and Canada. 

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In sum, the Keystone XL project will create tens of thousands of 

good paying jobs here in the United States. It will increase the nation’s energy security by providing a reliable source of crude oil 

from a friendly and stable trading partner. It will further boost the 

American manufacturing resurgence, and it will provide state and 

local governments with new sources of revenue that can help them 

alleviate budgetary problems that will lead to the creation of even 

more jobs. And being a private-funded project will do so without 

any taxpayer dollars. Any further delay by the Obama administration is unacceptable. 

Thank you for inviting me to testify today. I appreciate to hear 

your comments. 

Chairman TIPTON. Thank you very much, Mr. Booker, and we 

would like to recognize that our chairman of the full Small Business Committee, Sam Graves, is here and we certainly appreciate 

you joining us. 

Up next we have Mr. Peter Bowe, President and CEO of Ellicott 

Dredges in Baltimore, Maryland. Patented in 1885, Ellicott is the 

world’s oldest and largest builder of medium-sized cutter suction 

dredges. In his over 30 years at Ellicott, Peter has served as President, Treasurer, Vice President, General Manager, and member of 

the Board of Directors. He received his undergraduate degree from 

Yale College and his MBA from Harvard University. 

Thank you very much for being with us today, Mr. Bowe. Please 

proceed with your testimony. 

STATEMENT OF PETER BOWE 

Mr. BOWE. Good morning, Chairman Tipton, Chairman Graves, 

Ranking Member Murphy. Thank you for having me. 

My name is Peter Bowe. I am here to speak today on behalf of 

my company, Ellicott Dredges and the National Association of 

Manufacturers. 

Ellicott, based in Baltimore, Maryland, is the oldest and largest 

manufacturer of dredging equipment. We built all the dredges used 

in the original construction of the Panama Canal. Our dredges are 

used not just for canals and ports but also for mining and environmental cleanups, like the reclamation of tailing ponds from oil 

sands operations in Alberta. Investment in infrastructure, especially energy infrastructure, accounts for much of our demand, and 

energy development also funds the investment intended to buy our 

equipment. 

Today, we have 200 employees at our plant in Baltimore and a 

second plant in Wisconsin. 

So why do we care about the Keystone pipeline? What does that 

have to do for us? For us, it’s all about jobs. Not the construction 

jobs from the pipeline itself but ongoing jobs every year for decades 

to come, all related to the production of oil from the oil sands deposits. This oil needs the Keystone pipeline. The oil sands in Alberta are one of the largest markets worldwide for dredging equipment. The dredges rehandled the tailings generated by the mining 

process. Tailings are the wet waste, which is a combination of clay, 

sand, and water after the oil-bearing bitumen has been removed. 

All the oil sands projects generate substantial volumes of tailings 

which are deposited into ponds. The producers have been criticized 

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7 

for water usage but now, because of the tailings reclamation process, they recycle 85 to 90 percent of the water used, and the 

dredges are an integral part of the recycling process. 

Alberta government regulations require the producers to reclaim 

these ponds. This is a substantial obligation which requires an investment of hundreds of millions of dollars annual. For example, 

Suncor, just one of the producers, has said it will invest a billion 

dollars in just a two year period before this process. 

I have enclosed in my written testimony a picture of a type of 

dredge that we make. A typical machine can weigh over 500 tons 

or could require us to spend as much as $10 million per machine 

on vendors around the United States and dozens of states. Mostly 

small companies but big ones, too, like Caterpillar. When we make 

a sale from a Canadian oil sands environmental project, we rely on 

these vendors from all across the country to export a product which 

is almost completely American made. At any given time, it would 

not be unusual for us to have 20 percent of our 200 employees 

working on oil sands-related projects. 

But it is not just the dredge business which benefits from oil 

sands. Two-way trade between the U.S. and the province of Alberta 

exceeds U.S. trade with U.K., South Korea, or France. Twenty-five 

hundred U.S. companies export goods and services to Canada in 

support of the oil sands. The value of these exports is supposed to 

be between 8 and 15 billion for the next 25 years. 

Back to the point of how Keystone affects the oil sands business 

which is so important to us. 

There is now a substantial dislocation in the distribution network for oil sands. The result is that oil sands product pricing is 

depressed and selling at a big discount compared to West Texas Intermediate. This discount is hurting the producers, leading them to 

postpone or even cancel some of the oil sands projects. We have 

seen our workload diminished by the impact of this price discount. 

Oil sands production costs vary depending on the project but are 

estimated at $50–$60/barrel. So it does not take much of a discount 

to make a particular project uneconomic. 

A recent Wall Street Journal article from April tells the story 

well. ‘‘Amid a bottleneck of too few pipelines and too much new oil 

across the U.S. Midwest, Canadian producers have started agreeing to steeper and steeper discounts to get their oil to American refiners, but government officials and industry executives and 

analysists expect continued price swings and market pressure until 

more pipelines are built.’’ 

The U.S. State Department’s 2013 Environmental Impact Statement corroborated this conclusion, saying ‘‘These steep crude discounts are a disincentive to producers to proceed with new extraction projects.’’ Growth in domestic U.S. and Western Canadian production has put pressure on the crude logistics system. This discounting in pricing is expected to continue until and unless adequate capacity becomes available to enable crudes to move to the 

U.S. and Canadian markets. Indeed, our Canadian clients are postponing new projects which would have required our equipment. 

One way or the other, Canadians will eventually solve their distribution problems with or without U.S. governmental collaboration. To the extent this process is delayed, the producers will suffer 

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8 

economic loss and their U.S. suppliers, like us, Ellicott Dredges, 

will suffer as well, including diminished employment. We urge you 

to approve that Keystone pipeline expeditiously. We should rely on 

the proposition that Canadians are fully capable of acting as 

custodians of their own environment and that Canadian oil is not 

only environmentally superior to that from say Venezuela but certainly more secure politically compared to our other existing options. 

Thank you for your time this morning. 

Chairman TIPTON. Thank you, Mr. Bowe. 

Our next witness is Mr. Mat Brainerd. Mat is the chairman and 

CEO of Brainerd Chemical Company headquartered in Tulsa, 

Oklahoma. Brainerd is a 54-year-old family-owned company that 

employs 83 people in its Oklahoma and North Carolina facilities. 

The company serves 3,000 customers nationwide and he has been 

recognized as one of the top 100 chemical distributors in the United 

States. He is testifying on behalf of the National Association of 

Chemical Distributors, for which he is currently serving as Vice 

Chairman of the Board. 

Thank you for being here, Mr. Brainerd, and please proceed with 

your testimony. 

STATEMENT OF MAT BRAINERD 

Mr. BRAINERD. Thank you, Chairman Tipton. Thank you, 

Chairman Graves, and thank you, Ranking Member Murphy for allowing me to testify on this important issue. 

I am the CEO and chairman of Brainerd Chemical Company, and 

I am a small businessman. My father started this business in 1959 

and I have been running this business since 1979. We do have 83 

employees, as you just mentioned. We have three facilities in Oklahoma and North Carolina, and we serve 3,000 customers. I am the 

vice chairman of the National Association of Chemical Distributors 

(NACD), on whose behalf I am testifying here today. The average NACD member has 26 employees and $26 million 

in annual sales, and collectively, we provide ingredients to nearly 

a million businesses. NACD members are leaders in health, safety, 

security, and environmental performance through implementation 

of Responsible Distribution, which is a third-party verified management system and a condition of membership. 

Chemical Distributors take title to bulk volumes, break them 

down into smaller volumes, and in many cases, blend them and 

transport them to customers. We are a highly specialized critical 

link in the supply chain. Our industry is the predominant supplier 

of chemicals to small business. 

I am not here to discuss environmental impacts or the best pipeline route, nor am I qualified to do so. I am well qualified to discuss how this pipeline will benefit my company and industry. 

The pipeline would help us in three distinct ways. First, as with 

most industries, chemical distribution benefits from economic 

growth. Second, it would reduce our cost for aromatic and aliphatic 

chemicals, diesel, and rail cars. Third, it improves the economics of 

fracturing, which is an important market to us. 

My written testimony discusses the economic benefits of building 

the pipeline. Here I will just say that economic growth floats all 

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boats and our industry is no exception. I want to focus here on how 

it will reduce costs and improve markets for us. Transporting crude 

is expensive. The pipeline would provide a reliable supply of crude 

from Canada, which would lower refining costs, increase our domestic fuel supply, and create downward pricing pressure. 

The refining process produces vital products besides fuels. Toluene and xylene, for instance, are two of the nine chemicals my 

company buys and distributes and are created by this process. 

Since the beginning of 2012, toluene has averaged about $4.50 a 

gallon and xylene about $3.35 a gallon. In that time, I have purchased more than a million gallons of these two chemicals alone. 

Obviously, any price reductions would significantly lower my supply costs. Similarly, the pipeline should create downward pressure 

on diesel prices. In an industry that depends on trucks to move our 

products to market, fuel costs are very important. As a small businessman, I spend approximately $60,000 per month on diesel to 

move my products to market. If prices dropped just 5 percent, that 

would save $36,000 a year or the equivalent of one full-time employee. 

Diesel also is a cost component of receiving chemicals by rail 

from my suppliers. Next month, my rail shipper is charging a 27 

percent markup for certain goods to defray its costs. I also lease 

railcars. When operating these cars, I must pay a diesel surcharge, 

so any downward pressure on prices help my bottom-line. 

One outgrowth of shale oil expansion is the tremendous demand 

for railcars to ship crude oil to market, creating currently a backlog 

of 42,000 railcars. In my business, prices to lease railcars have doubled solely due to this shortage. If the pipeline is built, it would relieve some of the demand pressure. In my competitive industry, the 

cost savings in chemicals, diesel, and tank cars ultimately passes 

on to my customers. 

The shale oil boom has also created a major market for us because our products are critical to the extraction process. For instance, hydrochloric acid is used to ‘‘acidize’’ wells, which removes 

calcium and mineral deposits to increase flow through that well. 

Since pipelines improve the economics of operating these fields, it 

supports this market and my industry. It is my hope that the efforts of this Subcommittee will expedite permitting the XL pipeline. 

Thank you for allowing me to give this testimony. 

Chairman TIPTON. Thank you very much, Mr. Brainerd. 

I would now like to yield to Ranking Member Murphy for the introduction of this witness. 

Mr. MURPHY. Thank you. 

Dr. Christopher Knittel is the William Barton Rogers Professor 

of Energy Economics at the Sloan School of Management at the 

Massachusetts Institute of Technology. He joined the faculty at 

MIT in 2011, having taught previously at the University of California at Davis and Boston University. Professor Knittel received 

his undergraduate degree in economics and political science from 

the California State University and masters in economics from UC 

Davis and a Ph.D. in economics from UC Berkeley. His research focuses on environmental economics, industrial organization, and applied econometrics. 

Thank you for being with us today. 

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STATEMENT OF CHRISTOPHER R. KNITTEL 

Mr. KNITTEL. Thank you, Chairman Tipton, Chairman Graves, 

Ranking Member Murphy, and the members of the Committee for 

inviting me here today. My name is Christopher Knittel. I am the 

William Barton Rogers Professor of Energy Economics in the Sloan 

School of Management at MIT. I am also the co-director of the Center for Energy and Environmental Policy Research, also at MIT. 

Inevitably, discussions related to oil and greenhouse gas emissions tend to get overblown. Discussions surrounding many of the 

issues behind the Keystone XL pipeline are no different. In my testimony, I will discuss the likely consequences of the Keystone XL 

pipeline along five dimensions: oil prices, greenhouse gas emissions, profits, jobs, and national security. 

First, the effect of the Keystone XL pipeline on oil prices. Here 

the economics are pretty straightforward. Energy economists and 

energy analysts tend to agree that, with few exceptions, the oil 

market is a world oil market That is, when a barrel of oil is 

pumped out of the ground, it competes with supplies of oil across 

the entire globe. The world market is an artifact of the low cost of 

shipping oil. A consequence of this is that it is very difficult for increases in product in any one country to have a long-term impact 

on the price of oil. 

The situation in the Midwest with Midwest oil and Canadian tar 

sands is, however, one exception. Due to pipeline capacity constraints connecting the Midwest and Canada with the Gulf Coast, 

the price of oil selling in Cushing, Oklahoma—known as the Western Texas Intermediate, or WTI—is currently selling at a discount 

compared to a barrel of oil in just about every benchmark location 

in the world. Most notably, the Brent crude prude reflecting the 

price of oil in Europe. The discount has recently fallen below $10 

per barrel, but last year it averaged more than $17 per barrel, and 

has been over $30 per barrel over the last 24 months. 

Because of pipeline limitations, oil produced in both Canada and 

North Dakota cannot make it to the Gulf Coast and must therefore 

be refined in Canada or the Midwest. Refineries are able to get a 

discount on this oil because of the limited options available to oil 

producers. Recent work by Severin Bornstein of UC Berkeley and 

Ryan Kellogg of the University of Michigan shows that because 

pipeline capacity for refined products is not similarly constrained, 

the lower price paid by the refineries is not passed on to consumers. The benefits accrue, instead, to the refineries. 

Building the Keystone and Keystone XL pipelines will push the 

price that producers of North Dakotan and Canadian oil can capture closer, if not fully, to the world price. Therefore, these pipelines will tend to increase oil prices paid by refineries in the Midwest, but the work by Bornstein and Kellogg implies that this will 

not increase the price paid by consumers at the price because they 

are not enjoying that discount currently. 

There will be no appreciable change in the world price of oil, certainly not enough to base policy decisions on. While more supply 

always puts downward pressure on prices, when gauging the size 

of the supply increase it is important to understand the size of the 

market. To put things in perspective, the 800,000 barrels per day 

that will flow over the Keystone XL pipeline represents less than 

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11 

1 percent of the world oil supplies. The increase in oil production 

that results from the pipeline will be even smaller. 

Second, the effect of the Keystone XL pipeline on greenhouse gas 

emissions. Here the economics are also pretty straightforward. 

While some have called the XL pipeline ‘‘game over’’ for the climate, I believe this is simply not true. And this is not because I 

doubt the seriousness of climate change. Much of my academic research promotes policies to reduce greenhouse gas emissions. It 

might seem surprising that the XL pipeline would have little impact on greenhouse gas emissions given how energy intensive Canadian bitumen, or tar sands, is to produce. Tar sands are certainly more energy intensive than the average oil fined in the U.S., 

requiring more energy at the extraction phase, as the bitumen 

must be separated from the sand and water. More energy also 

must be used to upgrade the bitumen for refining. 

No one can deny that this added energy and the greenhouse gas 

emissions associated with this oil. Two numbers are often discussed 

when it comes to the added greenhouse gas emissions. First, the increase in emissions during the production and refining stage of Canadian tar sands compared to the average oil sold in the U.S. is 

roughly 80 percent, according to the State Department and many 

other sources. This number ignores the fact that the majority of 

greenhouse gas emissions associated with the use of oil is when you 

burn the oil or burn the refined product. Here, the State Department estimates that these lifecycle emissions of tar sands are 

roughly 17 percent higher than the average oil sold in the U.S. 

The problem with both of these metrics is that it compares it to 

the average oil. The more relevant comparison is what oil the tar 

sands would replace. A recent Cambridge Energy Research Associates analysis found that Canadian tar sands is actually cleaner on 

a greenhouse gas emissions basis than heavy Californian oil and 

heavy Venezuelan oil. 

The main point is that the policy debate has focused on the 

wrong metrics when it comes to greenhouse gas emissions, focusing 

on the average oil sold in the U.S. rather than the oil that it would 

replace. 

Let me just summarize because as my students will attest I often 

go over time and here is no exception. 

The pipeline will have a big impact on profits and will also have 

an impact on jobs. And the most important component of the jobs 

impact is to realize that the economy is currently under full employment. And even short-term impacts or short-term increases in 

jobs can have very big long-term impacts. This is the argument for 

economic stimulus when the economy is in recession. Here, rather 

than the government doing the stimulus, the pipeline will do it 

itself. 

And with that I will gladly take questions. Thank you. 

Chairman TIPTON. Thank you, Dr. Knittel. And probably worthy of note, your students are the ones who wanted me to add the 

line about being drawn and quartered. 

I do appreciate all of your testimony and I know a number of our 

members make an effort to be here. We have multiple meetings 

that are going on that we are supposed to be at simultaneously, so 

I will defer my questions till the end. 

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12 

Mr. Luetkemeyer, if you would like to proceed with your questions. 

Mr. LUETKEYEMER. Thank you, Mr. Chairman. 

I guess the first question that I have got is with regards to the 

safety of transporting the oil. Is there a problem with safety with 

regards to transporting? Mr. Booker, you build them. 

Mr. BOOKER. The pipeline would be the safest method that you 

could deliver oil. At this distance, this amount of barrels a day, 

there is not a safer way to transport the oil than to put it in a pipeline. 

Mr. LUETKEYEMER. What kind of safety precautions do you 

put in place when you build a pipeline like this? 

Mr. BOOKER. In this particular pipeline they have gone above 

and beyond. They have put 57 additional. Part of that is they have 

sensors all along the route that is going to be monitored 24 hours 

a day. So if there is a drop in pressure at the control center for 

TransCanada, they will be able to shut off the pipeline to mitigate 

any type of spills that would happen. 

Mr. LUETKEYEMER. We have in this country, with the Alaska 

pipeline, we have another pipeline to look at. I think within the 

last years it was built, it was built with a specific purpose, to 

transport oil long distances. What has your experience been with 

regards to that? Are you aware with any problems with regards to 

the Alaskan pipeline? 

Mr. BOOKER. Not that I am aware of. When you look at the alternatives of a pipeline versus what is happening today they are 

putting it on the back of railcars and they are transporting the oil 

in the back of a railcar. And the pipeline is a huge number of times 

more safe than putting it on the back of a railcar. I am not familiar 

with there being any accidents or major spills with the Alaskan 

pipeline. 

Mr. LUETKEYEMER. I thought the Russians have built a big 

pipeline across Russia and Europe to deliver oil over there. How is 

that working out? Do they have any problems with that one? Are 

you aware of any? 

Mr. BOOKER. I am not aware of any. 

Mr. LUETKEYEMER. Okay. 

Mr. Knittel, you talked about greenhouse gas, which kind of 

stirred me here a little bit. Can you elaborate a little bit longer on 

your comments that you made with regards to greenhouse gas? You 

thought that this was a better way to approach? There would be 

less green house gas? If you look at the transportation of other 

methods and the way that oil is refined, is that basically what you 

said? 

Mr. KNITTEL. The main thrust of that point is that the policy 

debate has focused on comparing tar sands with the average oil refined in the U.S., and that is just the wrong metric. The counterfactual or the alternative story that you would like to say is suppose 

we did not have the Keystone XL pipeline so tar sands production 

decreased. The question is what oil will replace that tar sands? 

And it is not the average oil sold in the U.S. It is very likely to 

be Venezuela heavy oil, which actually has about a 17 percent or 

is dirtier than tar sands. 

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The analogy that I was going to use if I had the time was it is 

like me telling my son he cannot have a bag of chips because potato 

chips are worse than his typical food, only to see him put the chips 

away and grab an ice cream sandwich to eat. That is the comparison. The real comparison is what oil will this tar sands oil replace? 

And there is very good reason to believe that it would actually replace oil that is even dirtier on a greenhouse gas emissions basis. 

Mr. LUETKEYEMER. Okay. So we arguing or we are making 

points today about providing jobs, being cleaner, it is a safe way 

to transport the oil. What is the problem with why can we not get 

this done in your estimation? 

Mr. Bowe, do you deal with this every day? 

Mr. BOWE. I did not get into the politics of it but Mr. Booker’s 

comment about the environmental reaction that oil is somehow 

bad, either in general principal it is bad, is not a premise I accept 

myself. 

Mr. LUETKEYEMER. Okay. Mr. Brainerd, what do you think? 

Mr. BRAINERD. You know, all I have to go by is what I listen 

to in the media and it sounds like President Obama has an issue 

with this and he is being pushed on by constituents that have 

given him a lot of money. 

Mr. LUETKEYEMER. Mr. Booker, what do you think? Why can 

we not get this done? You guys have a lot at stake here. You have 

a lot of jobs and it is good for the economy. And Mr. Knittel down 

there, he said there are no greenhouse gas and oil emission problems, environmental problems. 

Mr. BOOKER. No doubt, I agree with the doctor. This is going 

to create good jobs, good paying jobs. The hold up, I will say what 

Mr. Brainerd said. When you look at the media, it boils down to 

politics. It boils down to the environmental movement, calling 

this—taking this as their major issue. And placing pressure on it. 

It is our hope and our wish that at the end of the day we are going 

to side with jobs, creating good jobs for good Americans. 

Mr. LUETKEYEMER. I see my time is up. It looks like we need 

to find a way to diffuse the issue of the environment. It looks like 

Mr. Knittel did a good job of talking about them along the way 

here. So thank you for your testimony today. I yield back. 

Chairman TIPTON. Thank you very much. Ranking Member 

Murphy is also deferring, so Mr. Huelskamp, if you would like to 

proceed with your questions. 

Mr. HUELSKAMP. Thank you, Mr. Ch airman. I appreciate the 

gentleman testifying here. I want to relay a story to you all and 

ask some follow-up questions. 

Myself and many other members or most of the members of the 

Republican Congress have had an opportunity to meet privately 

with the president of the United States, and this is one issue that 

did come up in discussion. And the president was asked for his particular position on Keystone XL. We were hoping we would get a 

little indication from the president that given the changes in the 

proposed route and such that we could move forward on the 

project. What I found interesting was his comment that there are 

two sides on this issue. On one side is about everybody in this room 

and others that would like to see it built, and the president indicated on the other side are quite a few environmentalist groups 

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14 

that are certainly opposed. But what was most interesting was 

when the president said, ‘‘And I am in the middle.’’ Of course, if 

you are in the middle you could probably let the project go forward 

given your administration has a pretty clear position on that other 

than folks down the line, but the president is certainly on one side. 

He is against construction and moving forward. He is against, I 

guess, the creation of those jobs. 

And maybe Mr. Booker would start. What do we need to tell the 

president, and apparently the closest staff to him, what does he 

need to know in order to encourage him to make the right decision 

for America on this project? 

Mr. BOOKER. Our message is simple. It is about creating good 

paying jobs. You know, putting highly skilled people to work to 

build the safest method of transportation for this oil to come down 

from Canada into the United States to market. So it is a jobs message for us. 

Mr. HUELSKAMP. And I appreciate that. And we have been 

talking about jobs for a long time. Of course, the president has as 

well. The economy is not exactly moving forward as any of us 

would hope. That message does not seem to be working with the 

White House. What else can we tell them? I mean, the idea that— 

and I am from Kansas. The pipeline is built to the Kansas border 

and five miles into Nebraska. We are just waiting. We have some 

refinery expansion going on and are waiting for that crude as well. 

What else can we tell the president of the United States? Because 

he single-handedly is the one that is holding up this project. I am 

looking for other suggestions. 

Mr. Brainerd. 

Mr. BRAINERD. I will throw in here for a second. If you want 

to talk about safety, I think Mr. Booker made a good comment. If 

you put it on the pipeline, it is going to be a whole lot safer on the 

pipeline. If you put it in railcars and we have derailments, you 

have a whole lot more environmental issues with heavy crude. And 

the cleanup on that heavy crude we have seen in the Gulf. You understand what that is all about. If you put it in trucks, it is even 

worse. So from a safety standpoint, that pipeline makes the most 

sense. 

From an economic standpoint, what it does for this country in 

economic recovery and growth is huge. What it will do downstream 

for the next 20 years is huge. And as I indicate in my testimony, 

we are the downstream benefactors of that crude, and what we do 

with it is put it in the paints and coatings and cleaning airplanes 

and building the PCs, and it goes on and on and on, and in clothing, and so forth. So the economic benefits just, in my opinion, are 

incredible. 

I heard what Mr. Knittel said with regard to it being only 1 or 

2 percent of this world; however, if we can displace Venezuelan 

crude, we should be doing business with our friends. 

Mr. HUELSKAMP. Other comments? 

Mr. BOWE. I do not think any of us here want to denigrate rail 

traffic. It is certainly important to the country. But again, The Wall 

Street Journal did a story in the last four weeks about a massive 

increase in rail traffic oil spills as the rail is used to move the Balkan oil from North Dakota. They are both relatively safe. Clearly, 

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15 

a pipeline is the safest. I think we all agree with that. So if you 

are trying to make a choice on that, you cannot argue with the 

pipeline alternative. What will happen is there will be more consequences. 

I think in terms of how to persuade the administration, for the 

foreseeable future the transportation industry in this country needs 

liquid petroleum products in one form or another. They cannot be 

displaced and they will not be displaced. And that cost factors into 

everything that we consume, whether you drive a car or not. If you 

consume any product, there are transportation costs built into that. 

So I think we need to acknowledge I do not think it will cause a 

dependence on liquid fuels and say that is not necessarily a bad 

thing. Energy is a big part of economy and our lifestyle. 

Mr. HUELSKAMP. Thank you, gentlemen. I appreciate the testimony. I am just trying to find a way to convince folks that we 

would like more jobs. We would like to help grow the economy. We 

would like to become North American energy independent. And everybody in that room I mentioned all claimed they wanted those 

goals. And here is one thing that we can actually help move to that 

end. I appreciate your input. I appreciate especially Mr. Booker 

being here today and the other gentlemen as well. Thank you. I 

yield back. 

Chairman TIPTON. Thank you, Mr. Huelskamp. 

I now yield to Ranking Member Murphy. 

Mr. MURPHY. Thank you, Mr. Chairman. Thank you all, again, 

for your testimonies. 

Dr. Knittel, you spoke briefly about the environmental impact 

globally. Have you thought at all or done any analysis on the impact to the environment in some of the local communities where 

this pipeline perhaps will be running through? 

Mr. KNITTEL. I have not done specific analysis to that, and I 

certainly believe those to be important. And I think that is one reason why they changed the route in the first place. And again, I believe there are tradeoffs here. My goal in this proceeding is to hopefully interject facts related to both greenhouse gas emissions, how 

it will affect oil prices, gasoline prices, jobs, and national security. 

I think on both sides, things, like I said, tend to get overblown. It 

is not going to have a large impact on greenhouse gas emissions. 

It also would not likely have a big impact on world oil prices or the 

price paid by consumers at the pump. There are local environmental issues that have to be weighed against the benefits, just as 

any investment in fossil fuels. 

The key to the other side of the benefits is that it will raise the 

price that North Dakotan oil producers get for their oil, which will 

have spillover effects on jobs. But I, in no way, want to denigrate 

or reduce the concern or the fact that local environmental issues 

certainly have to be weighed against those benefits. 

Mr. MURPHY. You mentioned greenhouse gases. There again, 

just help me clarify. Some groups have indicated that because of 

the pipeline it will speed up the flow of this fuel south, this oil 

south, and that will increase greenhouse gases into the atmosphere. And I know that this is very tough to calculate. It is sort 

of fungible these numbers. What is your thought on that? Will this 

really add to it because it is getting there quicker? 

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16 

Mr. KNITTEL. Well, there is probably little doubt that it will increase production of tar sands in Canada, but if that comes at the 

reduction of heavy Venezuelan oil then there might actually be a 

benefit in terms of greenhouse gas emissions. Again, climate 

change is one of the most important issues that our country has to 

address. And I think there is a long list of policies that I would encourage policymakers to adopt, but most of those are going to focus 

on finding alternatives to oil in the long run and other fossil fuels 

in the long run. Using the Keystone XL pipeline as somewhat of 

a symbolic argument against oil is probably not an effective use of 

our time in terms of reducing greenhouse gas emissions. 

Mr. MURPHY. So you do not necessarily think that this will not 

bring down oil prices for us domestically. How do you think domestic consumers will benefit from this? 

Mr. KNITTEL. Well, so, as mentioned, you know, currently the 

refineries in the Midwest and also Canada are paying a lower price 

for the oil that they use to refine. In typical cases that would be 

passed on to consumers, but because refined product pipeline capacity is not constrained they are able to shift those refined products throughout the U.S. So they are able to capture those rents 

or those profits from that lower price. So as the pipeline is built, 

what would inevitably happen is it will push the price—the Midwestern and Canada price of oil up towards the world price of oil. 

Because the current discount is not being passed on to consumers, 

the increase in the price paid by the refineries will also not be 

passed on to consumers. So there would be little impact in the price 

that consumers pay at the pump. 

Mr. MURPHY. Mr. Brainerd, we touched briefly on the idea that 

if this oil is not brought south through Keystone XL, that we will, 

in fact, be using Venezuela oil, perhaps, or maybe from somewhere 

else. Explain to me with your chemical company what the effects 

would be if it is Venezuelan versus Canadian versus something 

else. 

Mr. BRAINERD. As far as the products that we get from the 

downstream oil it would not make a difference. The crude that is 

used is refined and cleaned, and whether it has to be cleaned with 

higher solids or heavy oils does not affect us. It really is part of 

the refining process. 

Mr. MURPHY. And what do you expect to have for jobs for your 

own company if Keystone XL were to go through? What would happen? I mean, would you hire? What would happen with your company? 

Mr. BRAINERD. Well, we are back to economic recovery and 

growth. What happens in my industry if—or my business if we 

have a reduction in cost of diesel or reduction in the cost of supply 

of chemicals we buy, that will be passed on to our customers in the 

grand majority of the cases. And the reason for that is we have a 

very competitive marketplace. We are selling commodities, so as 

the price drops it is passed on to the end-user. As the end-user gets 

a better price, you are going to see better economics from that. 

So what I am saying is we are able to, again, create economic recovery and growth. 

Mr. MURPHY. Thank you. 

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17 

Mr. Bowe, it sounds like, from what I understand, if we do not, 

in fact, build this Keystone XL, that Canadians will build pipelines 

east and west out of their country and it will happen. How does 

that affect your company with the dredges? Will you continue to 

supply them? Are you in touch with the Canadians already? Have 

they reached out to you to say, ‘‘Hey, if you all do not get your act 

together and do this that we are going to need your help building 

these dredges and other assets?’’ 

Mr. BOWE. Well, eventually, when oil sands are produced, it will 

create this reclamation demand. So anything that accelerates the 

development of oil sands will lead to the type of work that my company is involved in. I think that the Keystone makes so much 

sense because it is about getting the pipeline to refineries which already exist, which could use it. So the alternatives eventually will 

be decided on, whether that is going to the Asian markets, but that 

has its own other set of problems. It would certainly delay the impact on us. And when and if that happens we will sell dredges, 

whether there is a Keystone pipeline built or not. But in the meantime, we are absolutely hearing from the Canadian construction 

firms that service the oil sands that the oil sands producers are 

having trouble economically and pushing that trouble onto them in 

terms of price pressure on the bids that they have to make or even 

canceling or delaying projects all together. 

Mr. MURPHY. Just out of curiosity, I read a report recently that 

said 74 percent of manufacturers are having shortages finding 

qualified labor for building certain items. Are you seeing that within your company? It sounds like you use a mixed sourcing of small 

businesses up to Caterpillar. 

Mr. BOWE. Yeah. We have a skilled workforce of machinists, 

mechanics, and a lot of engineers. I would say that actually the 

labor market is tight for skilled people already and we hire in Baltimore and the western side of Wisconsin. 

Mr. MURPHY. Thank you. I yield. 

Chairman TIPTON. Thank you, Mr. Murphy. 

I think I would like to start with Mr. Booker and go back to one 

of your first comments that I think is very disturbing. You mentioned 13 percent unemployment among construction workers. And 

I guess coming from my district out in Colorado, my two largest 

communities, Grand Junction and Pueblo, Colorado, have a real 

unemployment level right now sitting around 20 percent. So I truly 

question some of the statistics that we are seeing coming out of the 

federal government in regards to the employment rate dropping in 

this country and seeing some of the recovery going on because it 

may be in isolated areas, but we are seeing people that really need 

to be able to get back to work. 

Mr. Booker, I would like to be able to get your comment. AFLCIO, you deal with a variety of different industries. Has it been 

your experience, been your observation that to the AFL-CIO that 

you have seen improvements in technology, that we are doing 

things safer in an environmentally better way? Do you have a dedicated workforce that wants to be able to do the job right? 

Mr. BOOKER. No doubt about it. You know, since 2008, when 

we went into the recession, at the fourth quarter of 2008, the construction industry has been hit the largest. Statistically, if you look 

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it has been hovering around at least two times what the national 

average has been. The last couple months the construction industry 

unemployment has dropped down a little bit, but those numbers do 

not take into account the hundreds of thousands of people who left 

the construction industry to go find work in other industries. 

The economic impact of this project and other construction 

projects is going to drive the economy back. If it was the first one 

in, it is usually the last one out, but when the construction picks 

up that means the economy is heading in the right direction. 

So we have the people, we have the skills for the people. I said 

in my comments we spend by the building trade unions a billion 

dollars a year on a training infrastructure, at 1,900 training facilities all across the United States and Canada. These people are 

ready to work. We have the people available to work. We just do 

not have the jobs right now. 

Chairman TIPTON. So would it make sense to you if we can create American jobs on American soil to be able to put Americans 

back to work, we do not require any federal funds at all, let us just 

get the job done, the Keystone pipeline XL, would that fit that? 

Mr. BOOKER. Oh, without a doubt. You took the words out of 

my mouth. 

Chairman TIPTON. Great. I appreciate it. And also, just to follow up, and if a few of you would like to make a comment on this 

as well, basically a lot of the decisions that you are seeing right 

now boil down to politics. Do you think it would be advisable to be 

able to recommend to this president, to this Congress, that it is 

about time that we put people rather than politics first and let us 

get back to work? Mr. Booker. 

Mr. BOOKER. Again, you took the words out of my mouth. Put 

the politics aside. Let us look at the facts. Let us look at what this 

project means. Let us look at this being a privately funded project, 

$7 billion investment that is going to create tens of thousands of 

jobs for American workers, highly skilled workers making an honest living, a respectable wage with health care benefits, with pension benefits. This project will create that. So yes, please, let us put 

the politics aside and let us get this thing approved and let us let 

Americans go to work and build the world’s safest pipeline. 

Chairman TIPTON. Mr. Bowe, would you concur with that? 

Mr. BOWE. I would. I think environmentalists are people, too, 

but the trouble is that many of them are extremists who frankly 

would like to see businesses like mine—they would not care if it 

was put out of business because they do not care if we have cars 

and trucks that move goods around this country. And I think the 

majority of people do want that type of activity going on. So we 

should move ahead with this as quickly as we can. 

Chairman TIPTON. Mr. Brainerd. 

Mr. BRAINERD. Thank you, Congressman. 

I think one quick comment. We talked so much about what is 

going on today and what this will do for us today, but we do not 

talk a lot about what it is going to do for the next 20 years. And 

the downstream benefits of this project long term are tremendous. 

The jobs that it is going to put in play now are important, but the 

jobs it is going to put in play long term are also tremendous. 

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19 

Another aspect of the pipeline is that there are two locations— 

Cushing, Oklahoma being one of those—where we are also going to 

get domestic oil that is going to plug into this pipeline that we have 

not otherwise had in the past. And again, I defer to Dr. Knittel as 

he discusses the 1 or 2 percent coming out of Canada. But we are 

also going to be getting this large volume of oil that we are currently trying to figure out how to move out of the Dakotas, out of 

the north, and putting that economically on that pipeline so that 

it can move into the refineries economically. 

I go back to the same thing with diesel. Maybe I am not an economist—and I am not—but as I watch these things happening and 

I am watching how we plug into this pipeline, the infrastructure 

of our country being built, this is how we build recovery. 

Chairman TIPTON. Mr. Knittel. 

Mr. KNITTEL. To address your question, certainly facts should 

always drive policy and we should always put the politics aside. 

And the facts here, there are important facts on both the pro side 

and the con side—the effect on jobs, the effect on profits, the 

shrinking of the WTI Brent price gap. That is the benefit. We do 

have to weigh those against environmental concerns. One of the 

main thrusts of my testimony though is that those are going to 

tend to be more local environmental concerns rather than greenhouse gas emissions. And those are the facts that we want to focus 

on in determining. 

Chairman TIPTON. I would like to go maybe a little bit on the 

environmental end of it. We have some people here representing industry, workers in industry. Do you happen to believe that it is important—do you like clean air? Do you like clean water? 

Mr. BOOKER. Absolutely. I mean, our members every day are 

involved in projects. We certainly endorse the ‘‘all of the above’’ energy strategy. Our members, where they work, they live in those 

towns and they want the clean water and the clean air. We build 

solar plants. We build wind turbines. We build nuclear. We build 

power plants. We build natural gas power plants. We are stewards 

of our environment. We support a clean, healthy, safe environment 

without a doubt. This project, you know, what Dr. Knittel said, it 

does not have the impact that the environmental extremist groups 

are saying that it has. The facts do not point to that. 

Chairman TIPTON. Mr. Bowe. 

Mr. BOWE. I think one constituency that has not spoken today 

is the Canadians. I think speaking for myself, I have faith that the 

Canadian people care at least as much about the environment as 

we do. They have a reputation for that and I think we need to give 

them credit for the efforts they take on their part as it relates to 

the supply of this resource. 

Chairman TIPTON. Mr. Brainerd. 

Mr. BRAINERD. I cannot talk from the refiner’s side; I can only 

talk from the downstream product side, the products coming out of 

the refineries. But from the clean air standpoint, absolutely. We always say give the chemicals to the people who know how to handle 

it so that we do not have the pollution, so that we do not have the 

air emission, so that people who know how to handle the chemicals 

properly are not causing the environmental concerns. 

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20 

Chairman TIPTON. Do you make every effort to do it in an environmentally safe and sound way? 

Mr. BRAINERD. Absolutely. And that is part of the NACD’s responsible distribution commitment and third party verification. We 

do what we are responsibly supposed to be doing with the chemicals and we do it through a third party verification program proving that we are doing this correctly. 

Chairman TIPTON. I appreciate that. I think that is probably 

one of the big challenges we always face. Rather than moving into 

camps of yes and no, we ought to be able to seek those opportunities to be able to create a win-win and this seems to be a scenario 

in which we can actually be able to achieve that. 

Dr. Knittel, I think one of the great opportunities that we get 

from all of our testimony is to be able to learn things, and that is 

the purpose of these hearings. For me, it was remarkable to be able 

to hear that the Canadian tar sands, which by the sound might be 

more harmful or actually safer than some of the oil that we are importing currently from Venezuela, to be able to come in and to be 

able to develop that resource here. 

I do want to move on one other point, I think the importance for 

this company, being able to put our people back to work. Will Canada sell their product one way or the other? 

Mr. Bowe, you mentioned the Canadians. Will they sell that 

product to either the United States or if we do not want to buy it, 

if we are not going to authorize this, will that then head west towards China? 

Mr. BOWE. Well, Dr. Knittel mentioned there is a world market 

for oil, and certainly there is. And the world market takes into account the cost of transportation, the cost of refining. So the Canadian oil sands are a resource looking for a market. And the bottlenecks in the distribution and logistics prevent that from happening, 

so that is somewhat a factor of market economics. As oil prices go 

up, if they do go up globally for whatever reason, then that would 

make the oil sands more economic to get them to China, for example. But because it is a global market, if oil sands is good on the 

market it will tend to reduce prices they otherwise would be. I 

mean, if you were the owner of that resource you would be looking 

to develop it. You would be looking to get it to market. And we 

hope that it happens. If oil prices go lower for whatever reason, 

then they become less economic and that would delay the time period when they might go to any end-use market. 

Chairman TIPTON. I am willing to bet if you build dredges and 

somebody on the East Coast was not willing to buy one, you will 

find a market on the West Coast or down in the Gulf. You will sell 

your product. That has got to be part of the job. 

Mr. BOWE. Most of our business is exports. 

Chairman TIPTON. Most of your business is actually exports. 

And I think when we look at this, talking about some of the environmental impacts, if that pipeline were to be built west rather 

than coming south, then it is going to be put on ships. What is 

going to be the environmental impact as we are burning the fuel 

to be able to transport that over? And who is going to do it and 

develop that and refine that product in a more environmentally 

sound way—the United States of America or China? And we are 

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21 

downwind from China, by the way. So it would probably be a good 

thing to be able to develop that resource here. 

I know we have taken a little more of your time than we probably were scheduled for but I think this is an incredibly important 

topic. When we are looking at really being able to benefit the 

American consumer, I always thought it was very interesting when 

President George H. W. Bush was taking about American moving 

to an ‘‘all of the above’’ strategy, to be able to create American energy security, to develop American resources on our soil, the futures market dropped 10 percent while he was talking. So I am a 

supply guy, and I think if we were creating that here many of us 

that are a little more seasoned that can remember the oil embargo 

by the Arabs back in the ‘70s, when we started moving, under 

Jimmie Carter’s direction to be able to create American security in 

this country, ironically the prices started to come down out of the 

Middle East. If we start to compete as Americans, if we develop 

and work with friendly neighbors with the Canadians, we can develop energy right here and get our people back to work. And I 

think when I am talking to the families in my district, I am seeing 

hearts that are broken right now because moms and dads are worried about being able to provide for their children. 

Mr. Booker, Mr. Bowe, Mr. Brainerd, Dr. Knittel, I appreciated 

your comments, it is time for us to put the politics aside. Let us 

put Americans back to work. The time is now. Let’s build this. Let’s 

get the job done. And if we are talking, going back to Mr. 

Huelskamp’s statement, in terms of what we can do, if you want 

to work with us, contact us and I think the ranking member will 

be with us there as well. Let us bring some of those AFL-CIO 

members here. Let’s bring people that are building some of those 

dredges. Let’s get some of our chemical folks here. Let’s bring in 

some of your students that are probably going to be looking for a 

job when they graduate as well. Let’s meet right here on the capital and let’s send a message right now to this president and this 

Congress. Let’s put America back to work. Thank you, gentlemen, 

for coming. 

I do want to take one moment, a personal privilege here, and she 

has stepped out. So she is going to have to go to the videotape here, 

but Lori Salley, who is on our staff, was just recently married, and 

we certainly want to be able to congratulate here. 

Thank you all for coming. Did you have any further questions 

that you would like to follow up with, Mr. Murphy? 

Mr. MURPHY. Thank you, Mr. Chairman. I just want to thank 

you all again for your time. I certainly learned a lot today and I 

am open for any follow up if anything comes up, and I look forward 

to working with you all in the future. Thank you. 

Chairman TIPTON. Great. Well, as many of you know, H.R. 3, 

the Northern Route Approval Act is scheduled to be on the House 

floor next week. For these reasons and many more, I urge my colleagues to be able to support this very important legislation. 

I ask unanimous consent that members have five legislative days 

to be able to submit their statements and supporting materials for 

the record. 

Without objection, so ordered. This hearing is now adjourned. 

[Whereupon, at 11:08 a.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

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Insert offset folio 22 here 81198.001

Testimonvof Booker 

Buildirlg and f'n' .... :t .... ,-ti .... n 

Before Business 

House 
23 

Mr. Chairman and Members of the Committee, 

On behalf of the two million skilled craft professionals in the 

United States and Canada that comprise the thirteen national and 

international unions of the Building and Construction Trades Department, AFL-CIO, I wish to thank you and the members of this 

Committee for holding this hearing and delving into the economic 

and job creation aspects associated with the construction of the 

Keystone XL pipeline. 

America’s Building Trades Unions emphatically support the construction of the Keystone pipeline which will move oil from deposits 

in Canada to existing refineries in Texas, Oklahoma and the Midwest. Our unions have been actively involved with this project for 

almost 5 years now, and we are adamant in our belief that the economic, energy security, and national security benefits associated 

with the construction of this pipeline are too many and too significant to allow it to be derailed by a narrow and misguided political 

agenda being advanced by a small minority of ill-advised environmental groups. 

Keystone was conceived, designed and built to transport Canadian and U.S. crude oil production to U.S. refineries. Phases I and 

II are currently operating safety, supplying domestic crude oil to 

domestic refineries, which is helping to displace offshore imports 

from dangerous and unfriendly regimes and regions around the 

world. Phase III will be completed by the end of this year, and will 

operate in the same, safe manner as Phases I and II. The Keystone 

XL leg will reduce the cost and improve the safety and efficiency 

in the movement of crude oil in the United States. That, combined 

with jobs, investments, tax revenue and energy security benefits, 

points to an unmistakable conclusion that Keystone XL will be of 

considerable benefit to the U.S. economy and to U.S. consumers. 

Simply put, Keystone XL is in the national interests of the 

United States of America. 

And the men and women that I am privileged to represent are 

the ones that are on the front lines of understanding what this 

project really means for America. 

For over 4 years now, the American construction industry has 

been in the throes of a ‘‘depression.’’ 

I did not say recession, I said depression. 

While the stock markets and the media celebrated the news two 

weeks ago that the national unemployment rate fell to 7.5 percent 

in April, little attention was given to the fact that the national unemployment rate for construction workers remains above 13 percent. 

So, when I say that skilled craft professionals in America are the 

ones that are on the front lines of understanding what this project 

truly means to America, those numbers are the foundation upon 

which I base that observation. 

And yet, those of us who understand the importance of the construction industry continue to scratch our heads over the lack of attention to this national crisis in an industry whose recovery and 

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24 

overall health is, according to a recent report from the St. Louis 

Federal Reserve Bank, and I quote, ‘‘a necessary ingredient for 

strong and sustained recovery of economic activity and a reduction 

in the unemployment rate.’’ 

In other words, as the construction industry goes, so goes the 

U.S. economy. 

But, you wouldn’t know that from watching our reading the 

news. 

With the exception of the first Friday of every month when the 

Department of Labor releases its monthly jobs report, the economy 

and the long-term job disaster that’s been enveloping the country 

for five years now goes virtually unmentioned by the national news 

media. The plight of many millions of Americans who are actually 

out of work, and especially those who work in the construction industry, is apparently not very newsworthy. 

It is hard to believe that what the Center on Budget and Policy 

Priorities calls the ‘‘longest, and by most measures worst economic 

recession since the Great Depression’’ consistently fails to garner 

any attention among the media and many of our nation’s elected 

leaders. 

For many members of our unions, the Keystone XL project is not 

just a pipeline; it is, in the most literal sense of the phrase, a lifeline. Far too many of them have lost their homes and are struggling just to put food on the table. 

And given the unprecedented scrutiny this project has faced, any 

further delay by the Obama Administration would be unconscionable. 

Unfortunately, they must also face the additional emotional burden of having their chosen profession denigrated by a number of 

environmental groups. 

In its recent Supplemental Draft Environmental Impact Statement (SDEIS), the State Department effectively dismissed the Keystone opposition’s basic argument: which is that the construction of 

the Keystone pipeline will lead to increased greenhouse gas emission. And even though the State Department was not obligated to 

have analyzed any environmental impacts outside of the United 

States, the SDEIS provides a clear life-cycle analysis of greenhouse 

gas production that would be connected to the development of the 

Canadian oil sands, as well as the environmental impact to wildlife, forests, threatened and endangered species, and water resources. In each instance, all key issues raised by the SDEIS have 

been adequately addressed. 

In fact, more than 12,000 pages of documents have been published on KXL—including four federal environmental reviews in 

the past five years—and in each instance the conclusion is the 

same: there will be no discernible impact on greenhouse gases 

through the construction of this pipeline. 

So now, after having the validity of their climate change argument debunked by the State Department, the environmental comSBREP-219 with DISTILLER

25 

munity has now resorted to attacking the nature of the work that 

members of our unions have chosen as careers. 

Misguided groups like 350.org and the Sierra Club have chosen 

to impose a value judgment that holds construction jobs to be of 

lesser value because by its very nature a construction project has 

a completion date and therefore that individual job will come to an 

end at some point. They call these jobs, quote ‘‘temporary’’ as a 

means to diminish their importance and validity, and to entice others to join their chorus of negativity in the mistaken belief that 

these jobs have no real value to our society. 

When self-imposed moral arbiters like 350.org or the Sierra Club 

dismiss out of hand the thousands of jobs that will be created 

through the construction of the Keystone XL project, then they are, 

in effect, dismissing the lives, families, careers—and even the basic 

existence—of millions of hard-working Americans who work to construct, repair and advance this great nation. 

And it was those types of hard-working professionals who built 

the ‘‘Alberta Clipper’’ pipeline project which the Obama Administration approved way back in August of 2009. Ironically, the Alberta Clipper project just happened to be a pipeline very similar to 

Keystone XL in two compelling areas: Number One, both are 

roughly 1,000 miles long; and Number Two, both are specifically 

designed to transport Canadian crude oil from the Oil Sands region 

of Alberta, to refineries in America. 

Upon approval of the construction permit for the Alberta Clipper 

pipeline, the State Department said, and I quote, ‘‘The department 

found that the addition of crude oil pipeline capacity between Canada and the United States will advance a number of strategic interests of the United States.’’ 

We couldn’t agree more. And since the Keystone XL pipeline will 

originate in the exact same town as the Alberta Clipper—specifically, Hardisty, Alberta—the conclusions reached by the State Department in relation to the Alberta Clipper should agree to Keystone XL and guide the decision to approve the construction permit. 

Now, I know it may be difficult for hard-core environmental extremists to believe this, but America’s Building Trades Unions actually agree with the notion that our nation needs to begin the 

shift to a less carbon-intense society. After all, a vast portion of our 

members enjoy, embrace and work to protect the natural resources 

of the United States. And we have a significant number of our 

members employed today building solar and wind farms; retro-fitting commercial office buildings to make them more efficient; and 

working to lessen the environmental impact of hundreds of existing 

power plants across the nation. But, we are also realistic to know 

that a complete transition to renewable energy in America will 

take decades. 

The fight over Keystone is not a fight about oil vs. renewable energy. That’s a complete fallacy. The United States will be reliant 

on fossil fuels for decades because renewable energy has not adSBREP-219 with DISTILLER

26 

vanced to the point where it alone can provide base load, affordable, and accessible power for our nation’s growing energy needs. 

So, the fundamental question then becomes: Where do you want 

to get your oil from? The Keystone XL project offers America the 

choice of either importing the oil that we will need from a trusted 

ally like Canada, or to continue to rely on oil supplies in dangerous 

regions of the world that do not share American values. 

When confronted by environmental activists who oppose this 

project, our unions have asked them to pay a visit to a military 

hospital or veteran rehabilitation center and speak to the brave 

men and women of our armed forces who have sacrificed so much 

in Afghanistan and Iraq in order to secure our energy interests in 

that region of the world. Ask those heroes, we say, if they would 

prefer to see America rely upon Canada for crude oil, rather than 

the Middle East. 

Regardless of the negative characterizations and denunciations 

bandied about by the project’s opponents, there remains an indisputable fact that jobs will be created and supported in the extraction and refining of Canadian oil; the construction of the pipeline 

itself; and in the U.S. manufacturing and service sectors. 

And it is worth noting that TransCanada agreed early on to construct this pipeline under a Project Labor Agreement. 

The PLA was signed by TransCanada Corporation, the Laborers 

International Union of North America, the International Brotherhood of Teamsters, the United Association of Plumbers and Pipefitters, the International Union of Operating Engineers, the International Brotherhood of Electrical Workers, and the Pipeline Contractors Association. 

Additionally, TransCanada has agreed to implement 57 safety 

measures above and beyond those mandated by federal agencies relating to the construction, operation and design of the pipeline. 

Yet, the most effective action they took to ensure the safe construction of this pipeline was to sign a project labor agreement. 

By embracing a PLA, TransCanada recognized the value realized 

through a partnership with America’s Building Trades Union, not 

the least of which is the assurance that the project will be built by 

the safest, most highly trained and productive pipeline workforce 

found anywhere in the world. 

But, they also recognized our capacity for effective grassroots advocacy, which we have demonstrated though our efforts here in 

Washington, DC, as well as in cities and towns all along the pipeline route. Whenever there was a field hearing or town hall meeting, rank and file members of our unions were there in force delivering a pro-jobs, pro-Keystone message. 

And it also bears noting that the family-sustaining wages and 

benefits that will be paid on this project through the PLA will have 

a dramatic effect on the local economies of communities all along 

the proposed route. 

In fact, over 4,000 workers have already performed roughly 1 

million hours of work on the southern leg of Keystone, running 

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27 

from Cushing, Oklahoma to Port Arthur, Texas. And the economic 

impact from the wages and benefits being paid through the PLA 

is noticeable. 

KBMT News in Port Arthur did a recent story detailing how the 

construction of the southern leg was providing a boost to the local 

economy, as workers are spending heavily on things like clothing, 

hotels and restaurants. 

Additionally, from lumber to sand, and from gravel to fuel, massive quantities of materials are being purchased locally up and 

down the route between Cushing and Port Arthur. 

In sum, the Keystone PLA is already proving to be a major contributor to the local economies along the southern route. And it is 

also structured to ensure safe, quality construction with ‘‘on time, 

on budget’’ results through the steady supply of the world’s safest, 

most highly trained and highly productive skilled craft workforce 

found anywhere on the globe. 

Allow me to elaborate on that last point for a moment...because 

it is important not only in the context of this project, but it speaks 

to some broader misconceptions about who we are and the contributions America’s Building Trades Unions make not only to our 

industry, but to our society at large. 

Our unions, in partnership with our signatory contractors, invest roughly $1 billion per year to operate approximately 1,900 skilled 

craft training centers in both the United States and Canada. 

By way of example, one of those training centers is located in 

Tulsa, Oklahoma, and is operated by Local 798 of the United Association of Plumbers and Pipefitters. Local 798 is widely regarded 

as ‘‘the pipe-liners local.’’ 

Few industries have seen more rapid or more constant change 

than the pipeline industry. Constantly emerging new technologies 

and ever-changing demands mean constant challenge—not least of 

all for the men and women who must master new technologies and 

meet the demands of the pipelining workplace. Through the most 

extensive and technologically advanced training found anywhere in 

the world, Local 798 is giving its members access to the training 

they need not only to keep pace with industry change, but to ensure the safe and environmentally sound construction of pipelines 

like Keystone XL. 

Local 798’s training is specifically designed to assist its members 

in keeping up-to-date with all the new technologies in welding, fabrication, inspection, bending-engineering and any other areas that 

benefit the industry and, most importantly, ensure the safe construction of pipelines. 

In addition, the Local 798 Training Center collaborates with contractors in developing specific welding procedures for specific jobs, 

and provides welder testing services for any pipeline construction 

job—domestic or overseas, on-shore or off-shore. 

And to be sure, each of the other signatory unions to the PLA 

are similar in their innovative and state-of-the-art approaches to 

skilled craft training and workforce development. 

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28 

These are the types of highly trained skilled craft professionals 

that will be developed to build the Keystone XL pipeline. 

And speaking of highly trained professionals, PLAs like the one 

governing the Keystone project are routinely used to provide career 

training pathways for our nation’s transitioning military veterans. 

Through the ‘‘Helmets to Hardhats’’ program, our unions have provided jobs and apprenticeship opportunities for tens of thousands 

of military veterans over the course of its ten year history. 

And the Keystone project will not only create jobs with familysustaining wages and benefits, but it will also spur an economic 

multiplier effect across the U.S. economy. According to the State 

Department Environmental Impact Statement, construction of the 

Keystone XL pipeline will: 

• Contribute roughly $3.4 billion to our nation’s GDP; 

• Drive the purchase of an estimated $3.1 billion worth of construction materials and support services; 

• Directly employ thousands and thousands of construction 

workers; 

• Produce total expected earnings by the workers on this project 

in the neighborhood of $2 billion. 

• And last but not least, support the creation of tens of thousands of additional jobs throughout the United States. 

And those jobs include ones being created by Siemens, which has 

been manufacturing the heart of the Keystone project—the 237 

electric, and emissions-free, motors that will drive the pumps that 

transport the oil through the pipeline. 

According to Siemens, building these motors required 450 highly 

skilled workers at their plant in Norwood, Ohio. The company recently invested more than $40 million to refurbish and re-tool the 

plant to meet the manufacturing needs of today’s economy. 

Construction of this pipeline will also produce needed government revenue at the federal, state and local levels. And these new 

resources can then provide the wherewithal for state and local governments to invest in new schools and other forms of needed infrastructure improvements. In fact, the Department of State estimates 

that 31 counties across three states will collect a total of $35 million in property taxes. 

To be clear, the Keystone XL project will create tons of thousands of good paying jobs here in the United States and Canada. 

It will increase the Nation’s energy security by providing a reliable 

source of crude oil from a friendly and stable trading partner. It 

will further boost the American manufacturing resurgence. And it 

will provide State and local governments with new sources of revenue that can help them alleviate budgetary problems that will 

lead to the creation of even more jobs. 

And being a privately-funding project, Keystone will accomplish 

all of this without the need for taxpayer dollars. 

The choice is clear and, again, any further delay by the Obama 

Administration is unacceptable. 

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Thank you for inviting America’s Building Trades Unions to express our views before the Committee today. 

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Testimony of Peter Bowe 

President of Ellicott Dredge Enterprises, LLC 

Before the House Committee on Small Business 

Subcommittee on Agriculture, Energy and Trade 

Hearing on: Oil Sands Create US Manufacturing Exports 

May 16, 2013 

Good Morning, Chairman Tipton, and Ranking Member Murphy, 

and members of the Subcommittee on Agriculture, Energy and 

Trade. 

My name is Peter Bowe. I am pleased to be with you here today 

to speak on behalf of my company, Ellicott Dredges, LLC, and the 

National Association of Manufacturers (NAM). 

Ellicott Dredges, based in Baltimore, Maryland, is the oldest and 

largest U.S. manufacturer of dredging equipment. We built all of 

the dredges used in the original construction of the Panama Canal 

over a century ago. Since our founding in 1885 we have built over 

2500 dredges with prices as high as $30 million and as low as one 

hundred thousand dollars. These dredges are used not just for canals and ports, and niche markets like beach restoration, but more 

often for mining and for environmental cleanups like lake 

desiltation or PCB removal, or case in point here, reclamation of 

tailing ponds from oil sands production in Canada. We export over 

half of our sales, selling to over twenty countries a year. Investment in infrastructure, especially energy infrastructure, accounts 

for much of our demand, and energy development often funds the 

investment needed to buy our equipment. 

Today we have 200 employees in the US with factories in Baltimore and Wisconsin as well as two small factories in Europe. We 

employ skilled manufacturing positions, like mechanics and machinists, as well as dozens of degreed engineers. 

So what does the Keystone pipeline have to do with us, and why 

do we care? For us, it’s all about jobs, not construction jobs for the 

pipeline itself, but ongoing jobs every year for decades to come, all 

related to the production of oil from the Alberta oil sands deposits. 

This oil needs the Keystone pipeline. 

The oil sands in Alberta are one of the largest markets worldwide for dredging equipment. Our dredges are used to rehandle the 

tailings generated by the mining process. Tailings are the wet 

waste which is a combination of clay, sand, and water after the oilbearing bitumen has been removed. All the oil sands projects genSBREP-219 with DISTILLER

31 

erate substantial amounts of tailings which are deposited into 

ponds. Oil sands producers have been criticized for water usage, 

but now, thanks to tailings reclamation, they recycle 85% to 90% 

of the water they use, and dredges are an integral part of the recycling process. 

Alberta government regulations require the oil producers to reclaim these ponds, to restore the land to a self-sustaining condition. 

This is a substantial obligation which requires an investment of 

hundreds of millions of dollars annually. For example, Suncor, one 

of over a dozen oil sands producers, has said it will invest a billion 

dollars for tailings reclamation over a two year period. 

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Shown above is a picture of one type of dredge or pumping equipment we make for the oil sand producers. A typical machine can 

weigh over 500 tons. It is carefully designed, with safety and long 

term reliability and efficiency as important considerations. A machine like this could require us to spend as much as $10 million 

on vendors located around the United States like gear boxes from 

Ohio or upstate New York, or electrical equipment from Illinois, or 

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Insert offset folio 32 here 81198.002
33 

steel fabrications from Wisconsin, Kentucky or South Carolina, or 

foundry parts from Pennsylvania, Alabama, Georgia, or Mississippi, or cranes from Kansas. And year in, year out, Caterpillar, 

which provides us with diesel engines, is our single biggest supplier. So we buy from both big and small companies. When we 

make a sale for a Canadian oil sands environmental project, we 

rely on literally hundreds of vendors from across the country to export a product which is almost all American-made—and though I 

am reluctant to admit it, we have a few American competitors also 

serving the same market which add to the favorable economic impact that oil sands development has on American manufacturing 

and American exports. 

At any given time, it wouldn’t be unusual for 20% of our employees to be working on oil sands-related projects. 

It is certainly not just the dredge business which benefits from 

oil sands exploration and development. 

Two way trade between the USA and just the province of Alberta 

is more than with the UK, South Korea or Francs.1

About 2500 US companies export goods and services to Canada 

in support of oil sands—Ellicott Dredges is just one of those.2 The 

value of those exports annually is projected to range from $8b up 

to $15B, for the next 25 years!3

SBREP-219 with DISTILLER

34 

Back to the point of how Keystone XL is likely to affect the oil 

sands business, which is so important to Ellicott’s business: the 

Committee is probably already aware that the type of oil from oil 

sands serves certain specific refineries and that there is now a substantial dislocation in the current distribution network for oil sands 

product. The result of this dislocation is that oil sands product pricing is currently depressed and selling at a big price discount compared to oil price benchmarks such as the West Texas Intermediate 

(WTI) or Brent. 

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Insert offset folio 34 here 81198.003
35 

This discount is hurting the oil producers, leading them to postpone or even cancel oil sands project developments. We have seen 

our workload diminished by the impact of this price discount. Oil 

sands production costs vary depending on the specific project, but 

have been estimated at 50–$60/BBL. It doesn’t take too much of 

discount to make oil sands uneconomic from a market perspective. 

A recent Wall St Journal article tells the tale as well as anyone 

could. (WSJ, April 9/2013) ‘‘Amid a bottleneck of too few pipelines 

and too much new oil across the U.S. Midwest, Canadian producers 

have started agreeing to steeper and steeper discounts to get their 

oil to American refiners, their only foreign buyers. 

But government officials, industry executives and analysts expect 

continued price swings and market pressure until more pipelines 

are built. 

In January and February, Canadian heavy crude at times traded 

as much as $40 cheaper than U.S. benchmark oil. Recently, that 

differential has fallen back down to less than $20 a barrel. Because 

of the Midwest glut, U.S. oil trades at its own discount to international blends. 

There’s still strong demand for Canada’s heavy crude, which 

many U.S. Gulf Coast refiners prize. But getting it to those buyers 

has become extremely difficult at U.S. output increasingly fills up 

the pipelines and storage facilities in between. That’s results in a 

market where refiners, not producers, are calling the shots. 

‘‘At the very core of it [Canadian producers] are competing 

to sell into refiners, and the refiners will just drop their 

prices,’’ said Don Moe, vice president for supply and marketing 

at MEG Energy Corp., a Calgary-based oil-sands producer,’’ 

End of WSJ citation. 

The US State Department’s own 2013 Market Analysis, conducted as part of its Draft Environmental Impact Statement, corroborated this conclusion, that a lack of pipeline capacity is negatively affecting production and new project development.4

That report noted: 

‘‘...a $30 reduction in oil price, (such as) a decrease from $100 to 

$70, would result in all projects with a breakeven above $70 being 

delayed or cancelled’’ ....Sec 1.4–55) and 

‘‘The incremental cost of ...rail versus pipeline is between $2 and 

$7.50’’ (1.4–56) and 

‘‘These steep crude discounts are a disincentive to producers to 

proceed with new extraction projects.’’ (1.4–59) 

They also noted: ‘‘Until late 2010, WTI and Brent oil prices 

moved in parallel with only small differentials between them. Beginning in early 2011, that situation changed. Growth in domestic 

US and Western Canadian production put pressure on a crude logistics system that was designed to take crude oils to the Central 

US rather than out to the Coasts. The discounting has persisted 

into 2013 and is expected to continue unless and until adequate capacity becomes available to enable crudes to move 

to US and Canadian coastal markets.’’ (1.4–58) 

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36 

Our Canadian clients are in fact postponing new projects which 

would have required our equipment for tailings recovery. Best case 

they are leaning heavily on suppliers like us for difficult price concessions to offset some of their logistics costs problems. 

One way or the other, Canadians will eventually solve their distribution problems, with our without US governmental collaboration. To the extent this process is delayed, the producers will suffer 

economic loss, and their US suppliers, like Ellicott Dredges, will 

suffer as well...including diminished employment. 

We urge the Congress and the Administration to approve the 

Keystone pipeline as expeditiously as possible. We should rely on 

the proposition that the Canadians are fully capable of acting as 

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Insert offset folio 37 here 81198.004
37 

custodians of their own environment, and that Canadian oil is not 

only environmentally superior to that from, for example, Venezuela, but is certainly more secure politically compared to our 

other existing options. Thank you for the opportunity to testify this 

morning. I would be happy to answer your questions. 

Footnotes 

1Dan Lederman, South Dakota State legislator, presentation 

for National Conference of State Legislatures, 11/7/11 

2 Canadian Assoc of Petroleum Producers fact sheet, Feb, 

2012 

3See number 1 

4 U.S. Department of State. March 2013. Draft Supplementary Environmental Impact Statement. Website: http:// 

keystonepipeline-xl.state.gov/documents/organization/ 

205654.pdf. Accessed May 13, 2013. 

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38 

Testimony of Mat Brainerd 

CHAIRMAN & CEO, BRAINERD CHEMICAL COMPANY, INC. 

VICE CHAIRMAN, NATIONAL ASSOCIATION OF CHEMICAL

DISTRIBUTORS

ON BEHALF OF THE NATIONAL ASSOCIATION OF CHEMICAL

DISTRIBUTORS

BEFORE A HEARING OF THE

THE SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE OF THE

HOUSE COMMITTEE ON SMALL BUSINESS

2360 RAYBURN HOUSE OFFICE BUILDING

MAY 16, 2013 

Thank you, Chairman Tipton and Ranking Member Murphy, for 

allowing me to testify before your subcommittee on this extremely 

important issue. I am the Chairman and CEO of Brainerd Chemical Company, Inc., and I am a small businessman. Brainerd 

Chemical is a 54 year old company and I have been the owner 

since 1979, when I took over from my father, who started the company in 1959. We have 83 employees at three facilities located in 

Oklahoma and North Carolina, allowing the company to serve 3000 

customers nationwide and become one of the top 100 chemical distributors in the United States. I am an active member of the National Association of Chemical Distributors (NACD) in which I currently serve as Vice Chairman of the Board, having previously 

served as its Treasurer and also Chairman of the Government Affairs Committee. I also serve as Chairman and President of the 

International Council of Chemical Trade Associations. 

I am here today to represent the chemical distribution industry 

on behalf of the National Association of Chemical Distributors. 

NACD and its over 400 member companies are vital to the chemical supply chain providing products to over 750,000 businesses. 

The average member company has 26 employees, $26 million in 

sales, and 3 facilities. They make a delivery every seven seconds 

while maintaining a safety record that is more than twice as good 

as all manufacturing combined. NACD members are leaders in 

health, safety, security, and environmental performance through 

implementation of NACD’s Responsible Distribution® program, a 

third-party verified management practice system established in 

1991 as a condition of membership. 

It is my hope that my testimony here today will help dispel the 

notion that the construction of the Keystone XL pipeline is not of 

concern to small businesses, but solely to the titans of industry in 

the oil and refining industries. This is simply not the case. Small 

businesses like mine and my colleagues in the chemical distribution industry would be directly and beneficially affected by its conSBREP-219 with DISTILLER

39 

struction, leading to reduced costs for both ourselves and, ultimately, our customers. 

Chemical distribution serves the role of taking title to bulk volumes of chemicals, breaking them down into smaller units, in some 

cases blending them, and transporting them to customers. Since we 

transport chemicals, we are appropriately a heavily regulated industry. Thus, we serve a highly specialized and critical function 

and are a critical link in the chain of manufacturing our nation’s 

goods. Of particular importance to this committee, it should be 

noted that, while we serve large manufacturers, our industry primarily is the predominant supplier of chemicals to small businesses. It is through the existence and health of our industry that 

hundreds of thousands of small industrial users and manufacturers 

are able to operate. 

I am not here to discuss environmental impacts or the best 

routes for building the pipeline. Quite simply, these issues are beyond my expertise and area of knowledge. What I am well qualified 

to discuss, however, is how construction of this pipeline will benefit 

my company and the chemical distribution industry. 

The pipeline would transport crude oil from the oil sands region 

of Alberta, Canada, to the existing Keystone Pipeline System in 

Nebraska. It also could accept U.S. crude from the Bakken oil 

fields in Montana and North Dakota. Of particular interest to me, 

a second segment of the Keystone XL pipeline system, the Gulf 

Coast Project, is proceeding separately to connect existing pipeline 

facilities in Oklahoma to refineries in Texas, and is expected to be 

completed in 2013. When completed, the entire Keystone XL pipeline system would ultimately have capacity to transport 830,000 

barrels of crude oil per day to U.S. market hubs. This is an important opportunity for my industry and the country. 

My industry would benefit from building the pipeline in three 

distinct ways. First, like many industries, chemical distribution 

benefits from economic growth generally. Second, building the pipeline would reduce our costs for aromatic and aliphatic chemicals, 

diesel and rail tank cars. Third, it would benefit the economics of 

hydraulic fracturing, which is an important market that many in 

our industry serve. 

Chemical distribution would benefit not only from direct cost reductions, but from economic growth. Much has been written about 

the economic benefits of the pipeline. For instance, the Energy Policy Research Foundation found that ‘‘the Keystone expansion would 

provide net economic benefits from improved efficiencies in both 

the transportation and processing of crude oil of $100 million–$600 

million annually.’’ These transportation cost efficiencies would create a downward pressure on prices for the products created by 

crude oil. A report from the Canadian Energy Research Institute 

(CERI) estimated that as oil sands increases in Canada, economic 

activity quickens and demand for US goods and services increase 

rapidly, indirectly resulting in more than 300,000 new U.S. jobs, as 

well as $40 billion in GDP in 2020. 

Currently, moving crude to U.S. locations is expensive. If Canada 

cannot move its crude economically, it may well seek other marSBREP-219 with DISTILLER

40 

kets; Asia is one potentially attractive market. Many have expressed concern that if we do not construct the pipeline, we could 

lose access to this market permanently. If we do build the pipeline, 

the reliable supply of crude from Canada will result in lower refining costs and more efficient refinery operations. A reliable source 

of heavy crude will increase our domestic fuel supply and reduce 

our exposure to volatility in unstable foreign regions, thus alleviating upward price pressures. 

To understand why the pipeline is directly important to my industry, you need to understand fluid catalytic cracking (FCC), also 

known as ‘‘cat cracking.’’ Cat cracking is one of the most important 

conversion processes used in petroleum refineries. It is widely used 

to convert the high-boiling, high-molecular weight hydrocarbon 

fractions of petroleum crude oils to more valuable gasoline, olefinic 

gases, and other products. The fluid catalytic cracking process 

breaks large hydrocarbon molecules into smaller molecules through 

catalyst, heat and pressure to vaporize and then break the hydrocarbons. There are a number of products that come out of this process, including aliphatics which are formed by the initial breakup of 

the large molecules and are further converted to aromatics such as 

toluene and xylene. 

The reason for walking through this process is to show how 

crude oil becomes a chemical product that I buy and then distribute to my customers. Toluene and xylene, for instance, are two 

of the nine chemicals that my company distributes that are created 

by the cat cracking process. In short, these refineries are my suppliers and my industry’s suppliers. Since the beginning of 2012, 

costs for toluene and xylene have averaged about $4.50 and $3.35, 

respectively. In that time, I have purchased more than a million 

gallons of these two chemicals alone. Obviously, any opportunity to 

lower costs would have an enormous impact on my costs. 

These products are in turn shipped to my customers. The economics of the pipeline is that it should result in increased cracking 

of lower cost crude, combined with reductions in imports from other 

countries such as Venezuela. With increases in the amount of crude 

transported through pipelines, feedstock costs to make toluene and 

other chemicals can be expected to drop. With the increased supply 

available through shifting refining to a source of crude that is 

transported at lower cost, it should put downward pressure on 

prices. Since our industry is fiercely competitive, much of these 

savings will be passed onto our customers. 

Similarly, the pipeline should result in decreased diesel costs. In 

April, national average diesel fuel costs were reported to be $3.93/ 

gallon. In an industry that depends on trucks to move our products 

to market, fuel cost is of tremendous importance to our industry. 

As a small businessman, I spend approximately $60,000 per month 

on diesel to move my products to market. If prices dropped just 5%, 

that would save $36,000 per year, or the equivalent of a full time 

employee. Again, in our competitive industry, some of these savings 

ultimately would be passed onto customers, and ultimately, the 

cost of finished goods. 

SBREP-219 with DISTILLER

41 

The cost of diesel also impacts the cost of receiving chemicals by 

rail from my suppliers. For instance, for this coming June, my shipper will be charging a 27 percent mark-up for certain goods to defray rail diesel costs to move these chemicals from the refiners to 

my facility. Additionally, I lease rail tank cars. When operating 

these cars, I must pay a diesel cost. So any downward pressure on 

diesel prices will help my bottom line. 

The rapid expansion of shale hydraulic fracturing has been a 

boon to the nation. One negative impact to the chemical distribution industry, however, is that this expansion has created tremendous and sudden demand for rail tank cars to service bringing 

crude oil to market due to the lack of a pipeline to serve this function. This demand competes directly with many in our industry’s 

need to ship chemicals from suppliers to their facilities by rail. 

Raid tank car manufacturers have responded to this and been 

building new cars as quickly as possible, but there still remains a 

42,000 rail tank car backlog. The result is that the cost to lease rail 

cars has increased dramatically. In my business alone, prices have 

about doubled solely due to this shortage. If the Keystone XL pipeline is built, there will still be increased demand for rail tank cars 

as compared to before the shale oil boon, but the demand pressure 

will somewhat ease, and consequently, so will the lease price for 

these cars. 

The shale oil boon has also created a strong market for our products. This is now a major market for our products, as our products 

are critical to keeping shale oil flowing in the extraction process. 

For instance, hydrochloric acid is used to ‘‘acidize’’ a well, removing 

calcium and mineral deposits in order to increase flow. Similarly, 

xylene, which I referred to previously, is used as a paraffin breaker, thereby dissolving paraffin and allowing increased flow. 

Surfactants are sometimes used alone or in conjunction with these 

chemicals to lower surface tension and allow minerals or paraffin 

to pass through the well. These are just some of the chemicals I 

and my industry colleagues sell to shale oil producers. A pipeline 

with a receiving station to accept crude from shale oil fields greatly 

benefits the economics of operating this type of field; thus it creates 

a more favorable market for our members of my industry. In this 

instance, the Keystone XL pipeline will be able to accept crude 

from the Bakken oil fields in Montana and North Dakota. 

Mr. Chairman and Ranking Member, thank you again for allowing me to testify today before this subcommittee on behalf of 

NACD. I hope it has provided additional insight on the importance 

of the Keystone XL pipeline to small businesses and the chemical 

distribution industry. 

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STATEMENT OF CHRISTOPHER KNITTEL 

WILLIAM BARTON ROGERS PROFESSOR OF ENERGY 

ECONOMICS 

CO-DIRECTOR, CENTER FOR ENERGY AND 

ENVIRONMENTAL POLICY RESEARCH, 

MASSACHUSETTS INSTITUTE OF TECHNOLOGY 

U.S. HOUSE COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON AGRICULTURE, ENERGY, AND 

TRADE 

‘‘IF YOU BUILD IT: THE KEYSTONE XL PIPELINE AND 

SMALL BUSINESS JOB GROWTH’’ 

MAY 16, 2013 

EMAIL: KNITTEL@MIT.EDU 

PHONE: 617–324–0015 

SBREP-219 with DISTILLER

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1Severin Borenstein and Ryan Kellogg, ‘‘The Incidence of an Oil Glut: Who Benefits from 

Cheap Crude Oil in the Midwest?’’ forthcoming in The Energy Journal. Available at http:// 

ei.haas.berkeley.edu/pdf/working—papers/WP231.pdf. 

Thank you Chairman Tipton, Ranking Member Murphy, and 

members of the Committee for inviting me here today. My name 

is Christopher Knittel. I am the William Barton Rogers Professor 

of Energy Economics in the Sloan School of Management at the 

Massachusetts Institute of Technology, I am the Co-Director of the 

Center for Energy and Environmental Policy Research also at the 

Massachusetts Institute of Technology, and Co-Founder of the E2e 

Project, a joint project between the Center for Energy and Environmental Policy Research and the University of California Energy Institute to study the economics behind energy efficiency. 

I. Introduction 

Inevitably, discussions related to oil and greenhouse gas emissions tend to get overblown. Discussions surrounding many of the 

issues behind the Keystone XL pipeline are no different. In my testimony, I will discuss the likely consequences of the Keystone XL 

pipeline along four dimensions: (1) oil prices, (2) greenhouse gas 

emissions, (3) jobs, and (4) national security. 

II. The effect of the Keystone XL pipeline on oil prices 

Here the economics are pretty straightforward. 

Energy economists and energy analysts tend to agree that, with 

a few exceptions, the oil market is a world oil market. That is, 

when a barrel of oil is pumped out of the ground, it competes with 

supplies of oil across the entire globe. The world market is an artifact of the low cost of shipping oil. A consequence of this is that 

it is very difficult for increases in production in any one country to 

have a long-term impact on the price of oil. 

The situation in the Midwest and Canadian tar sands is, however, one exception. Due to pipeline capacity constraints connecting 

the Midwest and Canada with the Gulf Coast, the price of a barrel 

of oil selling in Cushing, Oklahoma—known as Western Texas Intermediate, or WTI—is currently selling at a discount compared to 

a barrel of oil in just about every other benchmark location in the 

world, most notably the Brent crude price reflecting the price of oil 

in Europe. The discount has recently fallen below $10 per barrel, 

but last year averaged more than $17 per barrel, and has been over 

$30 per barrel during the last two years. 

Because of limitations on pipeline capacity, oil produced in both 

Canada and North Dakota cannot make it out to the Gulf Coast 

and must therefore be refined in Canada or the Midwest. Refiners 

are able to get a discount on this oil because of the limited options 

available to oil producers. Recent work by Severin Borenstein of 

UC Berkeley and Ryan Kellogg of the University of Michigan 

shows that because pipeline capacity for refined products is not 

similarly constrained, the lower price paid by refineries is not 

passed on to consumers. The benefits accrue, instead, to refineries.1

SBREP-219 with DISTILLER

44 

2The Congressional Research Service estimates this to be between 70 to 110 percent higher. 

http://www.fas.org/sgp/crs/misc/R42537.pdf. 3The Congressional Research Service estimates this to be between 14 to 20 percent higher. 

http://www.fas.org/sgp/crs/misc/R42537.pdf. 

Building the Keystone and Keystone XL pipelines will push the 

price North Dakotan and Canadian oil producers can capture closer, if not fully, to the world price. Therefore, these pipelines will 

tend to increase oil prices paid by refiners in the Midwest, but the 

work by Borenstein and Kellogg implies that this will not increase 

the price paid by consumers at the pump. 

There will be no appreciable change in the world price of oil, 

certainly not enough to base policy decisions on. While more supply 

always puts downward pressure on prices, when gauging the size 

of the supply increase it is important to understand the size of the 

market. To put things in perspective, the 800,000 barrels per day 

that will flow over the Keystone XL pipeline represent less than 1 

percent of world oil supplies. The increase in oil production that 

results from the Keystone XL pipeline will be even smaller. 

III. The effect of the Keystone XL pipeline on greenhouse gas emissions 

Here the economics are also pretty straightforward. 

While some have called the Keystone XL pipeline ‘‘game over’’ for 

the climate, I believe it is simply not true. This is not because I 

doubt the seriousness of climate change. Much of my academic research promotes policies to reduce greenhouse gas emissions. It 

might seem surprising that the Keystone XL pipeline would have 

little impact on greenhouse gas emissions given how energy intensive Canadian bitumen, or tar sands, is to produce. Tar sands are 

certainly more energy intensive than the average oil refined in the 

US—requiring more energy at the extraction phase, as the bitumen 

must be separated from the sand and water it is found with. More 

energy must also be used to upgrade the bitumen for refining. 

No one can deny this added energy and the greenhouse gas emissions associated with the oil. Two numbers are often discussed 

when it comes to these added greenhouse gas emissions. First, the 

increase in emissions during the production and refining stage of 

Canadian bitumen compared to the average oil sold in the US is 

roughly 80 percent, according to the State Department and many 

other sources.2 This number, however, ignores the fact that the majority of the greenhouse gas emissions associated with oil use come 

when you burn the refined product. These emissions are the same 

regardless of the source oil. The policy debate should focus on the 

emissions over the oil’s entire life cycle. Here the State Department 

estimates that these ‘‘lifecycle emissions’’ of tar sands are roughly 

17 percent higher than the average oil sold in the US.3

The problem with both of these metrics, however, is that the average oil sold in the US is not the relevant comparison, on both 

accounts. Trying to assess whether the Keystone XL pipeline will 

increase the greenhouse gas emissions worldwide from their current levels, the relevant comparison is that between the emissions 

of the oil from the Canadian tar sands and the oil that it will reSBREP-219 with DISTILLER

45 

4 IHS CERA, ‘‘Oil Sands, Greenhouse Gases, and U.S. Oil Supply: Getting the Numbers 

Right,’’ HHS Cambridge Energy Research Associates, Inc., 2010. Similar conclusions, although 

not as stark, are reached in the Congressional Research Service study. 5http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTIMUSCA2&f=M. 

6http://www.eia.gov/dnav/pet/pet—crd—crpdn—adc—mbblpd—m.htm. 

place, which is not necessarily the average oil refined or sold in the 

US. 

A recent Cambridge Energy Research Associates analysis finds 

that the average Canadian tar sands oil is cleaner than heavy Californian and heavy Venezuelan oil.4 These two sources are the likely 

oil sources that Canadian tar sands would replace. Given this, it 

is possible that the Keystone XL pipeline might actually reduce 

greenhouse gas emissions. 

The main point, however, is that the policy debate has focused 

on the wrong metrics when it comes to greenhouse gas emissions. 

Focusing on the average oil sold in the US is like convincing my 

four-year-old son, Caiden, to not eat a bag of potato chips because 

potato chips are less healthy than the typical food he eats, only to 

see him put the chips away and grab an ice cream sandwich. 

Finally, in the absence of the Keystone XL pipeline, some of the 

oil will leave North Dakota and Canada in some other—less efficient—way. This may be through rail or using inefficient local refineries and shipping the refined products through refined-product 

dedicated pipelines. These inefficiencies have their own greenhouse 

gas consequences. 

IV. The effect of the Keystone XL pipeline on profits 

Here the economics are also pretty straightforward. 

One of the most compelling arguments for building the Keystone 

XL pipeline is that it will increase the profits of oil producers, not 

only in Canada, but also along the entire pipeline route—most notably North Dakota, the second leading oil producing state in the 

country. As I mentioned, currently, oil selling as far south as Cushing, Oklahoma sells at a discount price relative to the world price 

for oil. The farther north you go, the greater the likely discount, 

as these resources get further away from pipeline capacity. 

Currently, Canada exports about 3 million barrels per day to the 

US 5 and North Dakota produces about 800 thousand barrels a 

day.6 Therefore, even today’s roughly $8 price difference reduces 

producer revenues by $30 million a day. Building the Keystone XL 

pipeline would increase the revenues of not only the oil companies 

using the pipeline, but also those of companies getting their oil out 

through alternative methods. This is because once the pipeline is 

built (and even before), the price gap between oil sold in this region 

and the world price will decline, if not be eliminated completely. 

Even production not using the pipeline will be able to command the 

world price. This is a very good reason for building the pipeline. 

Finally, any discussion of policy related to oil production should 

include some discussion of its impact on national security. There is 

the potential for a small benefit from a national security perspective. Increasing the amount of oil we import from Canada can reSBREP-219 with DISTILLER

46 

duce military conflict that is, partially at least, dependent on oil 

production. 

However, in a global oil market where the price of North Dakota 

and Canadian oil will depend directly on world supply, and also realizing that the Keystone XL pipeline is likely to have no impact 

on how much oil our allies import from other countries, the national security benefits are likely to be small. 

VI. Summary 

To summarize, the Keystone XL pipeline relates to many issues 

concerning oil markets. Understanding the effects of the pipeline 

on energy prices, greenhouse gas emissions, and energy security is 

straightforward. The pipeline will push the prices for oil in the 

Midwest and Canada closer to the world price, but these price increases will not be felt by consumers. 

The pipeline will have little impact on greenhouse gas emissions. 

While this seems inconsistent with the fact that Canadian tar 

sands are more energy intensive than the average oil refined in the 

US, the focus on the average oil is misplaced. There is good reason 

to believe that additional supplies of Canadian tar sands will displace even dirtier oil from Venezuela. This is where the policy discussion should focus. 

Finally, I circle back to one of the main topics of the hearing: 

jobs. The pipeline’s effect on jobs is amplified by the fact that the 

economy is still recovering from the Great Recession. When an 

economy is at less than full employment, short-term stimulus 

measures, such as governmental stimulus or capital-intensive 

projects like the Keystone XL pipeline, can have longstanding effects beyond the short-term employment effects tied to the actual 

project. While these are complex and difficult to measure, from a 

timing perspective, there is no better time. 

I would like to thank the entire committee once again for inviting 

me to participate in this discussion. I will gladly respond to any 

questions. 

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STATE OF SOUTH DAKOTA 

DENNIS DAUGAARD, GOVERNOR 

May 15, 2013 

The Honorable U.S. Representative Sam Graves, Chairman 

House Small Business Committee 

2361 Rayburn House Office Building (RHOB) 

Washington, DC 20515 VIA FAX: 202.225.8221 

Dear Chairman Graves, 

Thank you for the opportunity to provide my comments on the proposed Keystone XL pipeline to you 

and your committee members. 

As you know, the U.S. Department of State published the DRAFT Supplemental Environmental Impact 

Statement (EIS) for the Keystone XL pipeline project and accepted comments on the document through 

April 22, 2013. Based on the extensive reviews that have been completed on this project, I believe the 

pipeline can be safely operated in the United Slaies and urge the Department of Stale to finalize the 

EIS and issue the Presidential Permit. 

Much of the land in South Dakota that will be crossed by the pipeline is private property, and 

landowners hold a strong bond to their land. Many landowners have expressed concerns about 

potential impacts to their land, and these concerns must continue to be addressed by TransCanada. 

As a state with an agriculture-based economy, our environment and natural resources constitute the 

livelihood of many South Dakotans. I fully support efforts to enforce TransCanada's promise to protect 

our land. 

At the request of many South Dakotans, I have carefully reviewed this project before offering my 

support. The draft EIS is a major factor in my decision, but is not the only factor that contributed to my 

conclusion. The 2008 South Dakota Legislature, sharing many of the common concerns about the 

project, required the formation of the South Dakota Underground Pipeline Task Force. The purpose of 

the task force was to evaluate the adequacy of existing regulations pertaining to pipelines in South 

Dakota. The task force, after a thorough public review of all aspects of pipeline operation in South 

Dakota, determined existing laws and regulations were adequate to ensure the safe and reliable 

operation of underground pipelines in our state. If you would like to review the task force findings, their 

final report is available via the website of the South Dakota Department of Environment and Natural 

Resources (http://denr.sd.gov/boards/pipeiinetf.aspx). 

In addition to my review and that of the task force, both the Keystone and Keystone XL pipeline projects 

have been thoroughly vetted by the South Dakota Public Utilities Commission (PUC) through its 

permitting process. The process undertaken by the PUC included significant public input, data 

collection, and formal hearings. At the conclusion of the PUC's process, they issued permits for both 

pipelines. In TransCanada's application to the PUC, they estimate between 1,100 and 1,400 workers 

STATE CAPITOL. 500 EA6"T CAPITOL. PIERRE, SoUTH DAKOTA. 57501-5070 • 605-773-3212 
48 

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Representative Sam Graves 

May 15, 2013 

Page 2 

will be employed during construction. It was also estimated that, once in operation, the Keystone XL 

pipeline will generate approximately $10 million per year in property taxes, boosting revenue for 

affected local governments and school districts. Extensive public records from the hearing process for 

both pipelines are available via the website of the PUC (http://puc.sd.govl). 

TransCanada has also conducted emergency response exercises in September 2010 and 2012 near 

Yankton, South Dakota. Furthermore, TransCanada has responded in a timely and appropriate 

manner to four minor pump station releases on the existing Keystone pipeline in South Dakota. The 

exercises and the response to these releases have shown that TransCanada is prepared to respond to 

a release from its pipeline. 

There has been much focus by President Obama and the U.S. Congress on growing our national 

economy and creating jobs. South Dakota shares those goals. One avenue we are pursuing is to use 

the opportunity created by the success of North Dakota's oil and gas production. However, one of the 

limiting factors for oil and gas development in the region is the lack of pipelines to move crude oil to 

market. The Keystone XL pipeline, through the Bakken Marketlink, helps alleviate this problem by 

moving up to 100,000 barrels per day of crude oil from the Williston Basin to U.S. refining markets. The 

Keystone XL pipeline will provide additional capacity our region needs to maximize oil and gas 

production. In light of the federal governmenfs recent report, which substantially increased the 

estimate for recoverable oil in the Williston Basin, the need for a new pipeline is even greater. 

It has been said this pipeline will benefit only foreign companies and not the United States. I 

respectfully disagree. Having reliable sources of affordable energy is what powers our economy and 

allows people in the United States to enjoy a high quality of life. If we fail to secure this source of crude 

oil now, other countries, perhaps those with environmemal comrols substandard to our own will 

certainly do so. 

Every barrel of oil we produce domestically or obtain from close allies, such as Canada, is better for our 

economy and our national security. The Keystone XL pipeline is in our nation's interest, not only 

because of the positive impacts the project will bring to our economy and security, but also because the 

necessary regulations are in place to protect the land and waters of our great nation. 

Thank you again for the opportunity to provide these com merits to you and your committee on this very 

important national issue. 

Sincerely, 

!J~a Dennis D8Uga::;! ~ 

DD:nn 
49 

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April 18, 2013 

U.S. Department of State 

Attn: Genevieve Walker, NEPA Coordinator 

2201 C Street NW, Room 2726 

Washington, D.C. 20520 

Dear Ms. Walker: 

We are writing to strongly support TransCanada's proposed Keystone Xl pipeline and urge you to swiftly 

finalize the draft SEIS. Keystone Xl will be critical to improving American energy security and boosting 

our economy, and I strongly encourage its expeditious approval. 

Our communities are members of the Ports-lo-Plains Alliance, a grassroots coalition of cities, counties, 

businesses, economic development organizations and chambers of commerce from a ten-state, 2,300 

mile long transportation and economic development corridor that stretch from Texas to Alberta, 

Canada. 

Keystone XL has undergone one of the most thorough environmental assessments ever conducted. In 

this latest environmental review, the State Department again concludes that Keystone XL will not 

Significantly affect the environment. With over 57 additional mitigation measures to be undertaken by 

TransCanada, Keystone XL is much safer, more efficient, and more reliable than other modes of crude oil 

transport examined by the State Department. 

Opponents have argued that Keystone Xl will increase greenhouse gas emissions through increased oil 

sands production. However the draft SEIS notes that not building the pipeline would not significantly 

limit oil sands development or u.s. consumption of heavy oil. If the pipeline is not completed, that oil 

would simply be transported by rail or other greenhouse gas generating means rather than through a 

pipeline. 

Keystone XL will provide tremendous economic benefits for our country, our region in particular. As the 

draft SEIS outlines, the project will support over 42,100 jobs during the construction phase and will 

generate over $5 billion in economic activity, including $2.05 billion in worker salaries. For local 

governments along the pipeline corridor, $65 million in tax revenue will help fund necessary 

limon Office 

P.O. Bo)( 9 

limon, CO 80828 

P: 303.586.1787 

F: 719.775.9073 

www.portstopiains.com 

lubbock Office 

5401 N MlK Blvd., Unit 395 

lubbock, TX 79403 

P: 806.775.2338 

Fax: 806.775.3981 
50 

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Support for Findings of the Supplemental Environmental Impact Statement for 

the Keystone XL Pipeline 

April 18, 2013 

Page 2 

infrastructure projects, education, and medical services. Furthermore the development of Alberta's oil 

sands will have a significant economic impact on the U.S. For every two jobs created in the oil sands, 

one is created in the United States, as our number one trading partner relies heavily on American-made 

equipment and expertise. It will also provide improved access to domestic oil supplies from the Bakken 

Formation in North Dakota and Montana. 

Keystone XL will also allow America to end its dependence on oil from the Middle East and Venezuela by 

improving access to North American supplies. Relying upon regimes that are in many cases unstable and 

unfriendly to the United States is simply bad energy and national security policy. We have seen the 

shocks to our economy from oil price spikes caused by turmoil in these regions. It is much preferable to 

develop stable, secure domestic and Canadian sources. 

As leaders from the region that the Keystone XL pipeline will traverse, we applaud the thoroughness of 

the approval process. The State Department draft EIS and the Nebraska Department of Environmental 

Quality Supplemental EIS both find no significant environmental concerns that should prevent the 

construction of this valuable project. We also know that TransCanada will construct the Keystone XL 

with industry best practices that will meet or exceed all existing pipeline regulatory standards. 

The Keystone XL pipeline is clearly in the nation's interest and will be a valuable tool in strengthening 

our national security and energy security. Therefore, we respectfully request that upon completion of 

this review period, the Department of States move expeditiously to approve the pipeline and grant 

TransCanada the Presidential Permit it needs to proceed. 

Sincerely, 

Limon Office 

P.O. Box 9 

Limon, CO 80828 

P: 303.586.1787 

F: 719.775.9073 

www.portstoplains.com 

Lubbock Office 

5401 N MLK Blvd., Unit 395 

Lubbock, TX 79403 

P: 806.775.2338 

Fax: 806.775.3981 
51 

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Brad Bekkedahl 

Ports-to-Plains Board / City Commissioner 

Ports-to-Plains Alliance / City of Willison 

Williston, NO 58801 

Steve Burgess 

Ports-to-Plains Board 

Lincoln County 

Limon, CO 80828 

Chris Cornell 

Advisory Board / Business Development 

Ports-to-Plains Alliance / Reece Albert, Inc. 

San Angelo, TX 76903 

lane Danielzuk 

Chair, Board of Directors 

Heartland Expressway Association 

Gering, NE 69341 

John Friess 

Ports-to-Plains Board Member 

Ports-to-Plains Alliance 

Sonora, TX 76950 

Beverly Haggard 

Ports-to-Plains Board / City Council 

City of lamar 

lamar, CO 81052 

Duffy Hinkle 

Vice President of Membership & Marketing 

Ports-to-Plains Alliance 

lubbock, TX 79403 

John Bertsch 

Chair, Board of Directors 

Ports-to-Plains Alliance 

Plainview, TX 79403 

Sid Cauthorn 

Ports-to-Plains Board Member / President/CEO 

The Bank & Trust 

Del Rio, TX 78841 

Jacque Daly 

Executive Assistant 

Ports-to-Plains Alliance 

lubbock, TX 79407 

Richard David 

Ports-to-Plains Board / President/CEO 

AmarilioEDC 

Amarillo, TX 79101 

Tim Garwood 

Board Member 

Heartland Expressway Association 

Alliance, NE 69301 

Travis Hiner 

Board Member 

Heartland Expressway Association 

Scottsbluff, NE 69361 

Marlin Johnson 

Communications Director 

Heartland Expressway Association 

Scottsbluff, NE 69361 
52 

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Joe Kiely 

Vice President of Operations 

Ports-to-Plains Alliance 

limon, CO 80828 

Todd McKee 

Ports-to-Plains Board Treasurer / President & Chief lending 

Officer 

Peoples Bank 

lubbock, TX 79424 

Michael Reeves 

President 

Ports-to-Plains Alliance 

Lubbock, TX 79403 

Cathy Shull 

Ports-to-Plains Board 

Ports-to-Plains Alliance 

Fort Morgan, CO 80701 

Mike Fladeland 

Domestic Energy Advocate 

Bismark, ND 58501 

Laura Allen 

County Judge 

Va I Verde Cou nty 

Del Rio, TX 78840 

Justin Bennett 

Former County Commissioner 

Union County 

Clayton, NM 88415 

Cal Klewin 

Executive Director 

Theodore Roosevelt Expressway 

Bowman, ND 58623 

Penny Peryatel 

Ports-to-Plains Board Member / President 

Northern New Mexico Gas 

Raton, NM 87740 

Gaynelle Riffe 

Ports-to-Plains Board Member / Co-Owner 

Stratford Grain Company 

Stratford, TX 79084 

David Drovdal 

State Representative 

North Dakota District #39 

Arnegard, ND 58835 

Nancy Johnson 

Representative District #37 

Dickinson, ND 58601 

MarkJ. Barr 

County Judge 

Howard County 

Big Spring, TX 70720 

Lynn Brackel 

County Commissioner 

Bowman County 

Bowman, ND 58623 
53 

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Mike Brown 

County Judge 

Tom Green County 

San Angelo, TX 76903 

Sill Coleman 

County Judge 

Hale County 

Plainview, TX 79072 

Carla Garner 

County Judge 

Sutton County 

Sonora, TX 76950 

Tom Head 

County Judge 

Lubbock County 

Lubbock, TX 79401 

Greg King 

County Commissioner 

lincoln Cou nty 

Limon, CO 80828 

Bill Nyby 

County Commissioner 

Sheridan County 

Plentywood, MT 59254 

Milton Pax 

County Commissioner 

Moore County 

Dumas, TX 79029 

Terri Seth Carter 

County Judge 

Sherman County 

Stratford, TX 79084 

W.B. Crooker 

Former County Commissioner 

Howard County 

Big Spring, TX 79720 

Walter Hall 

County Commissioner 

Union County 

Clayton, NM 88415 

Beth Innis 

Auditor 

Williams County 

Williston, NO 58802 

Sandy McCarthy 

County Commissioner 

Box BuUe County 

Alliance, NE 69301 

Bob Paintin 

County Comissioner 

Cheyenne County 

Kit Carson, CO 80825 

Rowdy Rhoades 

County Judge 

Moore County 

Dumas, TX 79029 
54 

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Van Robertson 

County Commissioner 

Union County 

Clayton, NM 88415 

Linda Svihovec 

Auditor 

McKenzie County 

Watford City, ND 58854 

Duane Nygaard 

Commissioner 

Roosevelt County Commission 

Wolf Point, MT 59201 

Gene Veeder 

Commissioner 

McKenzie County Commission 

Watford City, ND 58854 

Paul Alexander 

City Council 

City of San Angelo 

San Angelo, TX 76904 

Emsley Baker 

Mayor 

City of New Deal 

New Deal, TX 79350 

Marilyn Baxter 

Mayor 

Town of Eads 

Eads, CO 81036 

Kurt C. Schlegel 

County Commissioner 

Elbert County 

Kiowa, CO 80117 

Gary McDonald 

Commissioner 

Roosevelt County Commission 

Wolf Point, MT 59201 

Jim Shanks 

Commissioner 

Roosevelt County Commission 

Wolf Point, MT 59201 

Dora Alcala 

Former Mayor 

City of Del Rio 

Del Rio, TX 78840 

Jim Andersen 

Board of Trustees 

Town of Limon 

Limon, CO 80828 

John Baker 

Mayor 

CityofTahoka 

Tahoka, TX 79373 

Del Beattie 

Board of Trustees 

Town ofUmon 

Limon, CO 80828 
55 

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Coby Beckner 

City Commissioner 

Town of Clayton 

Clayton, NM 88415 

Eugene Carter 

Mayor 

City of Hale Center 

Hale Center, TX 79041 

Julie Coonts 

Mayor 

Town of limon 

limon, CO 80828 

Wendell Dunlap 

Mayor 

City of Plainview 

Plainview, TX 79072 

Charlotte Farmer 

City Council 

City of San Angelo 

San Angelo, TX 76903 

Unda Hawthorne 

Board of Trustees 

Town ofUmon 

Limon, CO 80828 

Kendall Hirschfeld 

City Council 

City of San Angelo 

San Angelo, TX 76903 

Ronald 0, Carey 

Mayor 

City of Boise City 

Boise City, OK 73933 

Jack Chosvig 

Mayor 

Town of Clayton 

Clayton, NM 88415 

Tommy Duncan 

Mayor 

City of Big Spring 

Big Spring, TX 70720 

Douglas W, Ellison 

Mayor 

City of Medora 

Medora, NO 58645 

Paul Harpole 

Mayor 

City of Amarillo 

Amarillo, TX 79101 

Jack Hendricks 

Board ofTrustees 

Town ofUmon 

Limon, CO 80828 

Lyn James 

President 

Bowman City Commission 

Bowman, ND 58623 
56 

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Ross W. James Mike Kelly 

Mayor Board of Trustees 

City of Tulia Town of Urn on 

Tulia, TX 79088 Limon, CO 80828 

Tom Martin Scott Martinez 

Former Mayor Mayor 

City of lubbock City of O'Donnell 

lubbock, TX 79424 O'Donnell, TX 79351 

Ed Mayo Randy Meininger 

Mayor Mayor 

City of Gering City of Scottsbluff 

Gering, NE 69341 Scottsbluff, NE 69361 

Dwain Morrison Alvin New 

City Council Mayor 

City of San Angelo City of San Angelo 

San Angelo, TX 76904 San Angelo, TX 76904 

Dave Nix Glen Robertson 

Mayor Mayor 

City of lamesa City of lubbock 

Lamesa, TX 79331 lubbock, TX 79457 

Brent Sanford Pat Sims 

Mayor Mayor 

Watford City City of Dumas 

Watford City, NO 58854 Dumas, TX 79029 

Roger 1. Stagner Darrell Stephens 

Mayor Mayor 

City of lamar City of Abernathy 

lamar, CO 81052 Abernathy, TX 79311 
57 

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Patricia Vice 

Mayor 

City of Genoa 

Genoa, CO 80818 

Bob Churchwell 

Administrator 

City of Burlington 

Burlington, CO 80807 

Michael Dane 

Assistant City Manager 

City of San Angelo 

San Angelo, TX 76902 

Pete Kampfer 

City Manager 

City of Raton 

Raton, NM 87740 

Dave Stone 

Town Manager 

Town of Limon 

Limon, CO 80828 

Jerry Webster 

City Administrator 

City ofTahoka 

Tahoka, TX 79373 

Christine Allen 

Director of Foreign Trade Zone 

lubbock Economic Development Alliance 

Lubbock, TX 79401 

Trevor Williams 

Board of Trustees 

Town of Limon 

Limon, CO 80828 

Michael Cypert 

City Manager 

City of Abernathy 

Abernathy, TX 79311 

Joshua Jones 

City Manager 

City of Hale Center 

Hale Center, TX 79041 

Aaron M. Smith 

City Manager/Economic Development Director 

City of Tulia 

Tulia, TX 79088 

Fred Vera 

City Manager 

City of lamesa 

lamesa, TX 79331 

Ashley Alderson 

Executive Director 

Bowman County Development Corporation 

Bowman, NO 58623 

Alan Anderson 

Commissioner 

NO Dept. of Commerce 

Bismarck, NO 58501 
58 

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Gaylon Baker 

Executive Director 

Stark Development Corporation 

Dickinson, ND 58601 

Tonya Brown 

President 

Sonora EDC 

Sonora, TX 76950 

Tom Clark 

Executive Director 

Metro Denver EDC 

Denver, CO 80202 

Kari Cutting 

Vice President 

North Dakota Petroleum Council 

Bismarck, ND 58502 

Bob Donnell 

Executive Director 

Roswell-Chaves County EDC 

Roswell, NM 88202 

Blaise Emerson 

Executive Director 

Black Hills Local Council of Local Governments 

Rapid City, SD 57701 

Preston Gibson 

Chairman 

Economic Development Council of Colorado 

Denver, CO 80236 

10 

Bart Bradford 

Housing Development 

Plentywood, MT 59254 

Kevin Carter 

Executive Director 

Plainview Hale County Industrial Foundation 

Plainview, TX 79072 

Deb Cottier 

Director 

Nebraska Northwest Development Corp 

Chadron, NE 69337 

William Davis 

President 

Eagle Pass Chamber of Commerce 

Eagle Pass, TX 78853 

Mike Duran 

Executive Director 

Lamesa EDC 

Lamesa, TX 79331 

Blaise Emerson 

Executive Director 

Black Hills Community Economic Development 

Rapid City, SD 57701 

Bonnie Helm 

Director 

McHenry County JDA 

Towner, ND 58788 
59 

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Chelsie Herian 

Executive Director 

Box Butte Development Corporation 

Alliance, NE 69301 

Shawn Kirkpatrick 

Executive Director 

levelland EDC 

levelland, TX 79336 

Bill lavers 

Executive Director 

Development Corporation of Snyder 

Snyder, TX 79549 

Kristen Moudy 

Business Development Specialist 

Canadian-Hemphill County EDC 

Canadian, TX 79014 

North Dakota Association of Oil and Gas Producing Counties 

Bismarck, ND 58501 

John Phillips 

President 

Economic Development of North Dakota 

Beulah, ND 58523 

Thomas C. Rolfstad 

Director 

Williston Economic Development 

Williston, ND 58802 

11 

Chuck Karpf 

Executive Director 

Panhandle Area Development District 

Gering, NE 69341 

Frank H. larson 

President 

Del Rio Area Development 

Del Rio, TX 78842 

Arleene loyd 

Director of Business Retention and Expansion 

Odessa Economic Development 

Odessa, TX 79761 

lisa Nolder 

Executive Director 

Prowers County Development Inc. 

lamar, CO 81052 

John Osborne 

President 

lubbock Economic Development Alliance 

lubbock, TX 79401 

Dan Redd 

CEO 

Borger Economic Development Corp. 

Borger, TX 79008 

Mike Running 

Executive Director 

Dumas EDC 

Dumas, TX 79029 
60 

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Stephanie Salazar 

President & CEO 

Broomfield Economic Development Corp. 

Broomfield, CO 80021 

Benjamin Snow 

President 

Rapid City Economic Development Partnership 

Rapid City, SD 57701 

Jack Taylor 

Executive Director 

S.P.I.R.I.T. 

liberal, KS 67905 

Harvey T. Thompson 

SPIRIT 54 

Liberal, KS 67901 

lorie Vincent 

Executive Director 

The High Ground ofTexas 

Stratford, TX 79084 

Pamela Welch 

Executive Director 

Midland Development Corporation 

Midland, TX 79701 

John Zimmerman 

Board Member 

SPIRIT 54 

Hutchinson, KS 67504 

12 

Bob Sivertsen 

President 

Highway 2 Association 

Havre, MT 59501 

Jack Taylor 

Contract Director 

SPIRIT 54 

liberal, KS 67901 

Terri Thiel 

Executive Director 

Dickinson Convention & Visitors Bureau 

Dickinson, ND 58601 

Marilyn Thompson 

Board Member 

SPIRIT 54 

Liberal, KS 67901 

Terry Wegman 

Executive Director 

Big Spring EDC 

Big Spring, TX 79720 

Shawn Wenko 

Assistant Director 

Williston Economic Development 

Williston, ND 58801 

Sandra Adams 

President 

lamesa Chamber of Commerce 

Lamesa, TX 79331 
61 

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AI Arreola 

Executive Director 

Del Rio Chamber of Commerce 

Del Rio, TX 78840 

Gilberto Cisneros 

President/CEO 

Chamber of the Americas 

Denver, CO 80215 

Kelvin Hullet 

President 

Bismarck-Mandan Chamber 

Bismarck, ND 58501 

Eddie McBride 

President 

Lubbock Chamber of Commerce 

Lubbock, TX 79401 

Linda Morris 

Executive Director 

Plainview Chamber of Commerce 

Plainview, TX 79072 

Kristine Olsen 

President 

Dalhart Area Chamber of Commerce 

Dalhart, TX 79022 

Greater North Dakota Chamber 

Bismarck, ND 58502 

13 

Sam Cartwright 

President/CEO 

Moore County Chamber of Commerce 

Dumas, TX 79029 

Del Rio Hispanic Chamber of Commerce 

Del Rio, TX 78840 

Terry L. Johnson 

President 

Belfield Area Chamber of Commerce 

Belfield, ND 58622 

Gary Molberg 

President/CEO 

Amarillo Chamber of Commerce 

Amarillo, TX 79101 

Phil Neighbors 

President/CEO 

San Angelo Chamber of Commerce 

San Angelo, TX 76903 

Debbye Valverde 

Executive Director 

Big Spring Area Chamber of Commerce 

Dumas, TX 79720 

Jack Albert 

CEO 

Reece Albert, Inc. 

San Angelo, TX 76903 
62 

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Roger Albert 

President and CFO 

Reece Albert, Inc. 

San Angelo, TX 76903 

Shirley Bentrup 

SJB Consulting 

Dickinson, NO 58602 

Shirley Brentrup 

Rural Development Consultant 

SJB Consulting 

Dickinson, NO 58601 

Linda Byerly 

Vice President 

Byerly Computer Services 

Willison, NO 58801 

Roger Cable 

Director of Business Development 

Oftedal Construction, Inc 

Casper, WY 82604 

Fritz Carlan 

Manager - Grandview Meats 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SO 57717 

Randy Gaebe 

GO! 

Bowman, NO 58623 

14 

David Benth 

President 

Riverside Rentals 

Willison, NO 58801 

Anne Boothe 

Economic Development Professional 

Triangle Communications 

Malta, MT S9538 

Joe Bunnell 

Owner - Northern Hills Recycling Center 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SO 57717 

Rex Byerly 

President 

Byerly Computer Services 

Willison, NO 58801 

Ken Callahan 

Energy Services Manager 

Montana Dakota Utilities 

Williston, NO 58801 

Fritz Carlan 

Owner - Badlands Security, LLC 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SO 57717 

Tracey Gallagher 

Owner - Scissors 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SO 57717 
63 

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Jon Geyerman 

President 

NJ&A, Inc. 

Willison, ND 58801 

Russ Hanson 

Executive Vice President 

AGC of North Dakota 

Bismarck, ND 58502 

Dixon Hitch 

President 

Hitch Aviation, Inc. 

Malta, MT 59538 

Bruce Houle 

President 

Culberson State Agency, Inc. 

Culberson, MT 59218 

Max Howorth 

Former Executive 

Shell Oil Company 

Sonora, TX 76950 

Craig Knapp 

Owner - Dairy Queen 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SD 57717 

Mike McBain 

President 

laredo Cotton Transfer, Inc. 

laredo, TX 78040 

15 

Elizabeth Grindstaff 

Manager of Marketing & Sales 

Texas-Pacifico Railroad 

San Angelo, TX 76904 

David Hettler 

CPA 

Ehler & Hettler 

Lubbock, TX 79423 

Thom Hood 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SD 57717 

Melana Howe 

CEO 

Howe Enterprises 

Hettinger, ND 58639 

Glen M. Jameson 

Reservoir and Evaluations Engineer 

Consultant 

Denver, CO 80227 

Jo Kralicek 

Sales Executive 

Bakken Publications 

Bismarck, ND 58501 

Diane Paulson 

Owner 

Paulson Premium Seed 

Bowman, ND 58623 
64 

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Les Paulson 

Owner 

Paulson Premium Seed 

Bowman, NO 58623 

Sonia Shannon 

Assistance Secretary of the Corporation 

Central 57 Importers & Exporters 

Eagle Pass, TX 78852 

Steve Stenehjem 

CEO 

First International Bank & Trust 

Watford City, NO 58854 

Jake Stuart 

Agent 

Phillips County Insurance 

Malta, MT 59538 

BobWiffier 

Private Business 

Bowman, NO 58602 

Eric Wilke 

President 

Todd's Technology Store, Inc. 

Malta, MT 59538 

Paul Armes 

President 

Wayland Baptist University 

Plainview, TX 79072 

16 

Michael Queen 

VP Corporate Safety and Health 

Universalpegasus International 

Houston, TX 77081 

Ross Simser 

President 

Phillips County Insurance 

Malta, MT 59538 

Blaine Steven 

Owner 

Windshield Doctor 

Willison, NO 58801 

Vicky Theil 

Mark Hill & Associates 

Member of Belle Foursche Chamber of Commerce 

Belle Fourche, SO 57717 

NancyWiffier 

Private Business 

Bowman, NO 57523 

Randy Younger 

President 

First National Bank of Hugo/Limon 

Limon, CO 80828 

Donna Davis 

Associate Professor of Marketing 

Rawls College of Business - Texas Tech University 

Lubbock, TX 79409 
65 

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Greg Fulton 

President 

Colorado Motor Carriers Association 

Denver, CO 80216 

Brian Kimberly 

Director of Business Development 

Reese Technology Center 

Lubbock, TX 79413 

Bill Miller 

Executive Director 

Reese Technology Center 

Lubbock, TX 79413 

Deanette Piesik 

CEO-Train NO 

Williston State College 

Williston, NO 58801 

Darren Boras 

President 

Lethbridge Chamber of Commerce 

Lethbridge, AB TlJ2E1 

lindsay Dodd 

Chair 

Edmonton Chamber of Commerce 

Edmonton, AB T5J1P7 

Robin Grayston 

President 

Spruce Grove & District Chamber of Commerce 

Spruce Grove, AB TlX3B4 

17 

H. David Jones 

Transportation Planning Director 

Lubbock Metropolitan Planning Organization 

Lubbock, TX 79401 

John King 

Vice President for University Relations 

Lubbock Christian University 

Lubbock, TX 79407 

Tim Pierce 

Executive Director 

South Plains Association of Governments 

Lubbock, TX 79452 

Todd Banks 

Executive Director 

Sherwood Park & District Chamber of Commerce 

Sherwood Park, AB T8B1M6 

Lynn Carolei 

President 

SI. Albert & District Chamber of Commerce 

St. Albert, AB T8N6L5 

John Gilchrist 

President 

Stony Plain & District Chamber of Commerce 

Stony Plain, AB T7Z1 V5 

Cindy Guy 

President 

Leduc Chamber of Commerce 

Leduc, AB T9E7K9 
66 

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Brenda Johnson 

Spruce Grove & District Chamber of Commerce 

Spruce Grove, AB T7X3B4 

Ray Knudsen 

Senior Engineer/Treasurer/Director 

LeanOptions Consulting 

Regina, SK S4S6J9 

Gayle Langford 

President 

Red Deer Chamber of Commerce 

Red Deer, AB T4NSY6 

Medicine Hat Chamber of Commerce 

Medicine Hat, AS TlASN9 

Tanya Oliver 

Executive Director 

Sonnyville & District Chamber of Commerce 

Sonnyville, AS T9N2G7 

Dan Pearcy 

CEO 

Grande Prairie & District Chamber of Commerce 

Grande Prairie, AS T8V7X9 

Nick Sanders 

President 

Fort McMurray Chamber of Commerce 

Fort McMurray, AS T9H2J9 

18 

Yousra Jomha 

President 

High River & District Chamber of Commerce 

High River, AS TlV1M9 

Ken Kobly 

President & CEO 

Alberta Chambers of Commerce 

Edmonton, AS TSJ2Z2 

Ed Mah 

Past President 

Drumheller & District Chamber of Commerce 

Drumheller, AS TOJOYO 

Len Mitzel 

Former Member of Legislative Assembly 

Eastern Alberta Trade Corridor 

Etzikom, AS TOKOWO 

Gord Olson 

President 

High Prairie and Area Chamber of Commerce 

High Prairie, AS TOG lEO 

Lutz Perschon 

CAO 

Cypress Cou nty 

Dunmore, AS TlSOK3 

Dwayne Stoesz 

President 

Sylvan Lake Chamber of Commerce 

Sylvan Lake, AS T4S1S6 
67 

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Jackie Stratton 

President 

Rimbey & District Chamber of Commerce 

Rimbey, AB TOC2JO 

19 

Pat Tenney 

Executive Director 

lIoydminster Chamber of Commerce 

lIoydminster, AB T9VOY8