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82–179 2013

H.R. 3, THE NORTHERN ROUTE APPROVAL ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 10, 2013 

Serial No. 113–26 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

(III) 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

STEVE SCALISE, Louisiana 

Vice Chairman 

RALPH M. HALL, Texas 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

LEE TERRY, Nebraska 

MICHAEL C. BURGESS, Texas 

ROBERT E. LATTA, Ohio 

BILL CASSIDY, Louisiana 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

EDWARD J. MARKEY, Massachusetts 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 2 

Prepared statement .......................................................................................... 2 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 3 

Prepared statement .......................................................................................... 4 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 5 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 7 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 8 

WITNESSES

Alexander Pourbaix, President, Energy and Oil Pipelines, Transcanada ........... 10 

Prepared statement .......................................................................................... 14 

Anthony Swift, Attorney, Natural Resources Defense Council ............................ 29 

Prepared statement .......................................................................................... 31 

Keith Stelter, President, Delta Industrial Valves, Inc. ........................................ 37 

Prepared statement .......................................................................................... 39 

David Mallino, Jr., Legislative Director, Laborers International Union of 

North America ...................................................................................................... 46 

Prepared statement .......................................................................................... 48 

Mark Jaccard, Professor and Research Director, Simon Fraser University ....... 54 

Prepared statement .......................................................................................... 56 

SUBMITTED MATERIAL

Articles submitted by Mr. Stelter ........................................................................... 97 

H.R. 3 ........................................................................................................................ 102 

(1) 

H.R. 3, THE NORTHERN ROUTE APPROVAL 

ACT 

WEDNESDAY, APRIL 10, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND POWER, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:05 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Ed Whitfield 

(chairman of the subcommittee) presiding. 

Members present: Representatives Whitfield, Scalise, Hall, 

Shimkus, Pitts, Terry, Burgess, Latta, Cassidy, Olson, McKinley, 

Gardner, Griffith, Barton, Upton (ex officio), Rush, McNerney, 

Tonko, Engel, Green, Capps, Barrow, Matsui, Christensen, Dingell, 

Waxman (ex officio), and Jackson Lee. 

Staff present: Nick Abraham, Legislative Clerk; Gary Andres, 

Staff Director; Charlotte Baker, Press Secretary; Mike Bloomquist, 

General Counsel; Sean Bonyun, Communications Director; Allison 

Busbee, Policy Coordinator, Energy & Power; Patrick Currier, 

Counsel, Energy & Power; Tom Hassenboehler, Chief Counsel, Energy & Power; Jason Knox, Counsel, Energy & Power; Nick 

Magallanes, Policy Coordinator, CMT; Brandon Mooney, Professional Staff Member; Mary Neumayr, Senior Energy Counsel; Andrew Powaleny, Deputy Press Secretary; Chris Sarley, Policy Coordinator, Environment & Economy; Phil Barnett, Democratic Staff 

Director; Greg Dotson, Democratic Staff Director, Energy and Environment; Caitlin Haberman, Democratic Policy Analyst; and Alexandra Teitz, Democratic Senior Counsel, Environment and Energy. 

Mr. WHITFIELD. I would like to call this hearing to order this 

morning, and I will be introducing our witnesses after the opening 

statements. Before we actually start the hearing formally, I wanted 

to make a little presentation as just a note of my sympathy to the 

Chairman of the full committee, Mr. Upton. I don’t know if some 

of you may remember that Louisville beat Michigan in the NCAA 

championship game. And so I just hope that this would make him 

feel a bit better, this—— 

Mr. UPTON. You know, this is a true story. A couple people asked 

about where you were yesterday because you missed an important 

meeting on the chair, vice chair meeting. You missed the first of 

three votes on the House Floor. And I said have you talked to 

Whitfield? And he said I did. I gave him some food little bit earlier 

this afternoon but I haven’t given him the antidote yet. But now 

I know what the antidote is, Maker’s Mark. 

2 

Mr. WHITFIELD. Yes, well, that particular product is made in my 

district—— 

Mr. UPTON. Yes. 

Mr. WHITFIELD. So we just wanted to help make you feel better. 

Mr. UPTON. I think that that may have. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. But I want to thank all of you for being here 

today on this very important hearing. We are going to be discussing H.R. 3, the Northern Route Approval Act, which would remove the federal delays that continue to block the Keystone XL 

pipeline expansion project. 

Keystone pipeline has become a household name across the country. Unfortunately, this is far from the first hearing on the topic 

and far from the first bill designed to grant Keystone its long overdue federal approval. But this project is too important to give up 

on, and we again offer legislation to green-light it. 

Remember, TransCanada first made an application on this 

project in September 2008, almost 5, 6 years ago. Our first legislative attempt to approve Keystone was criticized by some as unnecessary on the grounds that the Obama Administration was already 

committed to make a final decision by the end of the year, and by 

that year, I mean 2011. Well, the bottom line is we still do not 

have a final decision. 

Next, we were told that a dispute over a portion of the route 

through Nebraska needed to be addressed. Early this year, the governor of Nebraska notified the President that the intrastate issues 

have been resolved. And the Secretary of State’s office, through 

their Supplemental Environmental Impact Statement, have noted 

that this project would not have negative environmental impacts. 

So to be truthful, at this point we believe that the Administration has continued to delay this because we invited to testify today 

someone from the U.S. Department of State, the Bureau of Land 

Management, the U.S. Fish and Wildlife Service, the U.S. Army 

Corps of Engineers, and U.S. EPA, and no one would agree to 

come. 

But throughout all of the delays, two things have not changed. 

The Nation still faces unacceptable levels of unemployment. This 

project would provide employment. And we know, going into the 

summer, we are going to have higher gasoline prices. This would 

provide additional oil for our consumers. 

So to put it in a nutshell, any energy project today basically 

turns out to be a fight between environmentalists and people who 

want to expand and make available energy independence in America. We have a unique opportunity to be energy independent in 

America. And there are more safeguards put on this pipeline than 

any that has been proposed to be built ever. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

Today, we will be discussing H.R. 3, the ‘‘Northern Route Approval Act,’’ which 

would remove the federal delays that continue to block the Keystone XL pipeline 

3 

expansion project. The Keystone XL pipeline has become a household name across 

the country. Unfortunately, this is far from the first hearing on the topic and far 

from the first bill designed to grant Keystone XL its long-overdue federal approval. 

But this projectis too important to give up on, and we again offer legislation designed to green-light it. 

The timeline of this project is a bit ironic. Our first legislative attempt to approve 

Keystone XL was criticized by some as unnecessary on the grounds that the Obama 

administration was already committed to making a final decision by the end of the 

year—and by year I mean 2011. As we all know, that did not happen. 

Next, we were told that a dispute over a portion of the route through Nebraska 

needed to be addressed prior to any presidential decision. But early this year, the 

Governor of Nebraska notified the president that the intra-state issues have been 

resolved. And following the first Environmental Impact Statement released in August 2011, the latest Supplemental Environmental Impact Statement from the State 

Department that incorporates the Nebraska re-route, concludes that the project 

would have limited adverse environmental impacts. 

At this point, we are led to believe that the administration has come up with a 

new excuse for further delays. But unfortunately we are unlikely to learn about it 

today since none of the federal agencies we asked to testify accepted our invitation. 

For the record, we asked the following agencies to attend: The U.S. Department of 

State, the Bureau of Land Management, the U.S. Fish and Wildlife Service, the U.S. 

Army Corps of Engineers, and the U.S. Environmental Protection Agency. However, 

we are pleased that an excellent group of non-governmental experts are with us 

today, and we look forward to hearing theirperspectives. 

Throughout all of the delays two things have not changed—the nation still faces 

unacceptable levels of unemployment as well as high gasoline prices. Keystone XL 

would help address both. Whether you are an unemployed welder or a low-income 

mom struggling to afford each fill-up at the pump, the delays are particularly unfair 

to the least fortunate among us. Little wonder the American people overwhelmingly 

favor this project- Democrats, Republicans, and Independents. America is a nation 

of builders, and the American people want to see Keystone XL built. 

Yet, the approval process has dragged on for over four years and there is still no 

clear end in sight. And even if the president does eventually approve the pipeline, 

there is a real risk of litigation from environmental groups creating additional years 

of delays. The Northern Route Approval Act addresses all of these potential impediments and expeditiously approves the project. 

I might add that this year marks the 40th anniversary of the Trans-Alaska Pipeline Authorization Act of 1973. Much like Keystone XL, the Alaska pipeline was 

held up for several years by federal red tape. It took an act of Congress to remove 

the roadblocks and finally approve the project. 40 years later, we now know that 

the Alaska pipeline has been a tremendous success, delivering over 16 billion barrels of oil to the American market while creating jobs and amassing an excellent 

environmental and safety record. 

In retrospect, it seems ridiculous that the Alaska pipeline was nearly prevented 

from being built. And it is just as ridiculous that Keystone XL is taking this long. 

Once again, it is time for Congress to act. 

By passing H.R. 3, we will soon see the 20,000 direct jobs and 100,000 indirect 

jobs, and then the million barrels per day of much-needed oil flowing from Canada 

to refineries in the Midwest and Gulf Coast. 

I’d like to thank my friend Lee Terry of Nebraska for his leadership on this issue 

and for his sponsorship of H.R. 3. I hope that this bipartisan Keystone bill is the 

last one that will be necessary to start the project and that the next thing we hear 

about regarding the Keystone XL pipeline is the sound of thousands of workers 

building it. 

# # # 

Mr. WHITFIELD. So with that, at this moment, I would like to 

yield such time as he may consume, the gentleman from Nebraska 

who introduced H.R. 3, Lee Terry. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. Well, thank you, Mr. Chairman, for holding this 

hearing. 

4 

We have been involved with this issue for now over 2 years in 

this committee. What is interesting is that not until Congress got 

involved did the Administration even begin to move the process at 

the State Department. And of course, with one of the bills that actually passed and was signed into law, we know that they stalled 

the process when the State Department recommended denial and 

the President in fact denied the permit in January of 2012. 

So here we are, April 2013, still mired in the process. My bill 

H.R. 3 puts an end to that. The bill declares that no presidential 

permit shall be required for the project and deems the final Environmental Impact Statement of August 26, 2011, along with the 

additional work of the Nebraska DEQ of January 2013, as sufficient. 

The additional provisions of the bill will ensure the pipeline is 

built. History is a great educator. In 1973, Congress passed, and 

President Nixon signed into law, the transatlantic Alaska pipeline. 

Authorized to ensure that because of the ‘‘extensive governmental 

studies already made of this project and the national interest in 

early delivery of North Slope oil to domestic markets, the transAlaska pipeline be constructed promptly without further administrative or judicial delay or impediment.’’ Sound familiar? That is 

what we are saying now. 

In effect, Congress ended the paralysis by analysis and greenlighted the project. Keystone XL is the trans-Alaska pipeline of our 

day. We need to cement our relationship with our best trading 

partner and friend in Canada, and secure our national security interests and energy security interests by approving this pipeline. 

And I yield back. 

[The prepared statement of Mr. Terry follows:] 

PREPARED STATEMENT OF HON. LEE TERRY

Mr. Chairman - 

Thank you for holding this hearing today. As you know, I have been involved in 

this issue for close to two years. What is interesting is that not until Congress got 

involved did the Administration even begin to move the process at the State Department. Of course, we all know that they also stalled the process when they recommended to the President that he deny the pipeline application in January 2012. 

So hear we are—April 2013, still mired in process. 

My bill, HR 3, puts an end to that. 

The bill declares that no presidential permit shall be required for the project and 

deems the Final EIS of August 26, 2011 along with the additional work of the Nebraska DEQ of January 2013 sufficient. The additional provisions of the bill will ensure the pipeline gets built. 

History is a great educator. In 1973, Congress passed and President Nixon signed 

the Trans-Alaska Pipeline Authorization Act to ‘‘to insure that because of the extensive governmental studies already made of this project and the national interest in 

early delivery of North Slope Oil to domestic markets, the trans-Alaska pipeline be 

constructed promptly without further administrative or judicial delay or impediment. In affect, Congress ended paralysis-by-analysis and green-lighted the project. 

Keystone XL is the Trans-Alaska pipeline of our day. We need to cement our relationship with our best trading partner. 

Mr. WHITFIELD. At this time I would like to recognize the gentleman from Illinois, Mr. Rush, for a 5-minute opening statement. 

5 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. Thank you, Mr. Chairman. And Mr. Chairman, I 

watched the game on Monday night and anecdotally, I thought of 

this hearing and I thought of my colleagues on the other side and 

I think that the one thing that Mr. Pitino showed that he could adjust his game according to the dictates of the game, and I see my 

Republican friends cannot adjust their game to the dictates of what 

is happening to the American people. And so where Mr. Pitino is 

going to the Hall of Fame, my Republicans on the other side there 

will be inducted into the hall of shame for their refusal to have 

hearings with scientists on climate change. 

Mr. Chairman, we can appreciate, I am sure those on the other 

side can appreciate the irony that we are here today for the umpteenth time debating a bill that will circumvent the ongoing State 

Department review process mandating any approval of the Keystone pipeline, and limit citizens’ abilities to file lawsuits against 

the project. Shame. And while at the same time, Exxon and Mobil 

are still scrambling to clean up the Pegasus oil spill in Mayflower, 

Arkansas, which ruptured on March 29 while carrying crude oil 

from my home State of Illinois to the Gulf Coast intention. Shame. 

Currently, it is still unclear exactly why the Pegasus leak occurred. But yet my Republican colleagues are here trying to force 

through another major pipeline project before the American people 

even have the answers for what caused the most current oil spill. 

Shame. 

Mr. Chairman, let me state the obvious, that the timing of this 

hearing does very little to bolster the majority side’s arguments for 

circumventing the review process and forcing through another 

major pipeline project. Shame. I must admit that this subcommittee would be much better served by holding hearings on 

issues that affect American families and consumers. From farmers 

on the plains and the Midwest States of America who have seen 

record drought and crop loss, to the business owners and homeowners on the Gulf and mid-Atlantic Coast who have seen their 

homes and their livelihoods engulfed in regular floods, to the firefighters who have been fighting severe wildfires in Colorado, Arizona, and California over this past year. 

Mr. Chairman, as you know, Ranking Member Waxman and I 

have sent to you two dozen letters to you and Chairman Upton, 

since May 2011 requesting that this subcommittee hold hearings 

into the science of climate change and the likely impacts of raising 

temperatures so that members of this body can better understand 

the nature of the threat that faces this Nation. 

In your March 14 response, you and Chairman Upton state that 

‘‘in the 112th Congress, the Committee frequently addressed climate change issues and that the Committee heard from more than 

30 witnesses, including climate scientists, who testified concerning 

climate change-related matters.’’ Mr. Chairman, however, your letter to me and Mr. Waxman failed to acknowledge that out of the 

dozens of hearings and 30-plus panelists that have testify before 

this subcommittee, the vast majority of those invited represented 

electric utilities, coal companies, oil refineries, and chemical manuVerDate Nov 24 2008 10:52 Sep 17, 2013 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-26 CHRIS
6 

facturers. Mr. Chairman, not one unbiased, unaffected scientist 

was ever invited to testify to any hearings. 

Today, we have scheduled only one hearing dedicated to learning 

about the actual science of climate change and that was held way 

back in 2011 and only after so many Democrats decided to exercise 

our right and demand a minority hearing under House Rule 11. 

Mr. Chairman, everybody in this room understands that the bill before us will never, ever see the light of day. So why are we here? 

With that, I yield back the balance of my time. 

Mr. WHITFIELD. Thank you, Mr. Rush. 

At this time I recognize the Chairman of the full committee, Mr. 

Upton, for a 5-minute opening statement. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Well, thank you, Mr. Chairman. When my friend Mr. 

Rush started talking about change, I thought maybe it was the 

change that we went from 56 votes in the Senate to now 62 votes 

in support of the Keystone bill as was illustrated with the vote on 

the budget as one of the amendments last month. 

Today, we take an important step in support of the Keystone XL 

pipeline. It is called jobs and affordable energy. And I want to remind folks that one of our goals is to develop a North American 

Energy Independent Plan so that we are not at the mercy of the 

Middle East or countries like Venezuela. In much of this country, 

gas prices have more than doubled since January ’08, and this Administration has predicted that the average gas prices are going to 

be over $4.15 very soon. Our most vulnerable cannot afford these 

prices on top of an already weak economy that only created 98,000 

jobs last month. 

The President said last year that he would do whatever it takes 

to create U.S. jobs. Well, here is a $7 billion construction project 

with more than 20,000 direct jobs and 100,000 indirect jobs, and 

after more 4 years, what are we waiting for? As policymakers, our 

job is to ensure that America can take full advantage of our Nation’s valuable resources by unlocking the power of our innovators 

and entrepreneurs. 

This committee has embarked on a path to explore this new era 

of North American energy abundance and rapid technological innovation. And the ability to successfully unlock these resources will 

lead to increased American prosperity and less energy imports from 

geopolitically unstable regions of the world. 

We should be measuring our energy policy proposals by whether 

they help contribute to increasing American energy self-sufficiency. 

Do they help to reduce volatility from foreign sources, keep costs 

low for consumers, help maintain or contribute to a diverse energy 

supply portfolio, and are protective of the environment? By those 

standards, I am happy to say that this bill, H.R. 3, passes the test. 

We have all heard the unemployment numbers associated with 

this project and the tens of thousands of direct and indirect jobs 

that will be created, but today, I am pleased to welcome somebody 

who will help put a face to those numbers, Keith Stelter of Delta 

Industrial Valves in Niles, Michigan. Delta’s made-in-America 

valves and jobs that go with them, which I have witnessed, are an 

7 

important part of Keystone XL energy. But these jobs don’t happen 

unless the pipeline gets built. 

This pipeline will also include a number of state-of-the-art features that will make it the safest oil pipeline in existence. The 

pipeline would incorporate some 57 additional safety standards 

proposed by the Pipeline and Hazardous Materials Safety Administration and adhere to the strongest new pipeline safety standards 

that were signed into law by President Obama last year, the product of legislation that I helped developed along with my colleague 

John Dingell and supported by every member of this committee. 

Even the Obama Administration’s State Department concluded in 

its EIS that the project poses minimal environmental risk. Not 

building Keystone elevates risk as tankers and trains have significantly higher spill rates than pipelines. 

The project has broad bipartisan support in the House and the 

Senate with nearly 100 cosponsors and enjoys broad public support 

as well among Republicans and Democrats. It is time for Congress 

to come together and help make this legislation a reality. This important bill takes the lessons that we learned from the trans-Alaskan pipeline when it was met with unnecessary roadblocks. Just as 

the TAP pipeline was a game changer in the ’70s, the Keystone 

project will be a game changer in our pursuit of North American 

energy independence. 

I want to particularly thank Chairman Whitfield for his tireless 

efforts, Lee Terry and the other cosponsors on both sides of the 

aisle. And I would yield my balance of my time to—who was seeking time—Joe Barton. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Today, we take an important step in support of the Keystone XL pipeline, its jobs 

and affordable energy. I want to remind folks that one of our goals is to develop 

a North American energy independence plan to ensure we are not at the mercy of 

the Middle East or countries like Venezuela. 

Gas prices have more than doubled in many parts of the country since January 

2009, with numerous communities enduring $4 a gallon today and prices are expected to only go up this summer. Our most vulnerable cannot afford these prices 

on top of an already weak economy that only created 88,000 jobs last month. The 

president last year declared that he’d do ‘‘whatever it takes’’ to create U.S. jobs. 

Well, here’s a $7 billion construction project that will put thousands of Americans 

back to work. After more than four years—what are we waiting for? 

As policymakers, our job is to ensure America can take full advantage of our nation’s valuable resources by unlocking the power of our innovators and entrepreneurs. The committee has embarked on a path to explore this new era of North 

American energy abundance and rapid technological innovation. The ability to successfully unlock these resources will lead to increased American prosperity and less 

energy imports from geopolitically unstable regions of the world. 

We should be measuring our energy policy proposals by whether they help contribute to increasing American energy self-sufficiency. Do they help to reduce volatility from foreign sources, keep costs low for consumers, help maintain or contribute to a diverse energy supply portfolio, and are protective of the environment? 

By those standards, I am happy to say H.R. 3 passes the test overwhelmingly. 

We have all heard the employment numbers associated with this project, the tens 

of thousands of direct and indirect jobs that will be created, but today I am pleased 

to welcome somebody who will help put a face to those numbers, Keith Stelter of 

Delta Industrial Valves in Niles, Michigan. Delta’s made-in- America valves and the 

jobs that go with them are an important part of the Keystone XL story. But these 

jobs can’t happen unless Keystone XL gets built. 

8 

Keystone XL will also include a number of state-of-art features that will make it 

the safest oil pipeline in existence. The pipeline would incorporate 57 additional 

safety standards proposed by the Pipeline and Hazardous Materials Safety Administration and adhere to stronger new pipeline safety standards that were signed into 

law, the product of legislation I helped develop along with my colleague Rep. John 

Dingell. Even the Obama administration’s State Department concluded in its Environmental Impact Statement (EIS) that the project poses minimal environmental 

risks. Not building Keystone elevates risks as tankers and trains have significantly 

higher spill rates than pipelines. 

The project has broad bipartisan support in the House and Senate and enjoys 

broad public support as well. It is time for Congress to come together and help make 

Keystone a reality by approving the Northern Route Approval Act. This important 

bill takes the lessons we learned when the Trans-Alaskan Pipeline was met with 

unnecessary roadblocks. Just as the Trans-Alaskan Pipeline was a game changer in 

the 1970s, the Keystone XL project will be a game changer in our pursuit of North 

American energy independence. 

I would like to thank my friend Ed Whitfield and his subcommittee’s tireless efforts to break the administration’s four-year long impasse and approve Keystone XL. 

I also would like to thank my friend Lee Terry for his sponsorship of this bipartisan 

and commonsense bill. 

# # # 

Mr. BARTON. Which I support what the chairman just said and 

I want to yield to Mr. Barrow of Georgia. 

Mr. BARROW. Well, I thank you, Mr. Barton. I thank the Chairman for convening this hearing. I am proud to be an original cosponsor of this legislation. Every day we don’t act on this project 

the United States becomes more dependent on countries that don’t 

like us for the transportation energy that we absolutely need. And 

we are missing out on the opportunity to put thousands of people 

to work here in America. 

Critics believe that this project will only make us more dependent upon oil as our primary source of transportation energy in this 

country, but you can’t be more dependent on something than we already are dependent upon oil. The only issue here is whether or 

not we are going to become dependent on countries that are friendly to us, to allies and commercial partners, or become more dependent on folks who are rivals of ours who do not like us. 

In that light I am proud to support this legislation. It is good for 

this country, it is great for the economy, and I look forward to moving this legislation forward. Thank you, sir. And I yield back the 

balance of my time. 

Mr. WHITFIELD. The gentleman’s time has expired. At this time 

I recognize the gentleman from California, Mr. Waxman, for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman. Today, this subcommittee is holding a hearing on legislation to make climate 

change worse by giving preferential treatment to TransCanada’s 

Keystone XL tar sands pipeline. I believe this would be a terrible 

mistake. 

Step outside today. The temperature is going to be around 90. 

The normal high temperature for April 10th in the District of Columbia is 65, according to the National Oceanic and Atmospheric 

9 

Administration. This isn’t an isolated incident. Last year alone, the 

United States broke or tied 34,000 high temperature records. 

We know climate change is happening now, and the costs are beginning to mount. The Government Accountability Office added climate change to its high risk list, due to the huge financial exposure 

it poses for the United States. In 2011 and 2012, our country experienced weather and climate disasters from Hurricane Sandy, to 

droughts, to floods, to all sorts of problems that affected not only 

our farmers but the coastal areas all over this country. And if you 

add up the costs of these disasters, it came to around $188 billion. 

These disasters aren’t over. We are going to expect far more disasters in the future. 

So faced with a climate change issue, this committee, you would 

expect, would be holding hearings and trying to work together on 

legislation. But that is not what we are doing. We won’t even hold 

a hearing on the science of this issue. Look at the record of this 

committee. In the last Congress, the House Republicans voted to 

say that climate change was a hoax. They voted 53 times to block 

any action on climate change. They voted to defund research. They 

voted to block action by the EPA to control pollution, to prevent energy efficiency measures from going into effect, and to stop the Administration from encouraging developing countries to do their part 

to address this serious international global issue. 

Well, this is a problem. And we asked the Republicans to hold 

a hearing with the experts, because they have said over and over 

again the science is not clear. But they won’t bring in the scientific 

experts to talk about the matter. 

They say we need a North American energy independence. Well, 

part of our energy independence is to be independent of using oil. 

And we could fuel our motor vehicles by electricity and hybrids and 

other sources, natural gas. Instead, we want to develop more oil. 

Well, we are going to need oil for the foreseeable future and I 

wish we didn’t need as much of it, but why do we need the source 

of oil to be from the dirty tar sands of Canada? Just to get the tar 

sands out of the ground and ready to go through a pipeline, it goes 

through an enormous process that takes a lot of energy to make 

the oil available to go through the pipeline. And if we do not agree 

to import this tar sands oil, Canada is going to find a difficulty in 

what to do with it because they can’t get it to the coast of Canada 

to take it to China. They want to take it through the United States 

in a pipeline, with all sorts of problems that pipelines offer, and 

then bring it to the Gulf of Mexico where it likely will be, taken 

on freighters to China to help them with their demand for oil. 

They say we are going to need more oil—that is right. But market economics actually tell us that the most competitive oil will be 

produced. Tar sands oil is expensive to extract, land-locked, and 

highly polluting. Producers are already facing lower prices for their 

product because of transportation constraints. Absent the Keystone 

XL pipeline, getting tar sands to market will cost more, and tar 

sands will be less competitive with the alternatives. Thos alternatives now include a lot more U.S. shale oil from the Bakken and 

other areas. 

So I think it would be a mistake to agree to the tar sands pipeline. But this decision is under consideration right now by the 

10 

State Department under the Obama Administration. Rather than 

let them make a deliberate decision—and I hope they don’t make 

a decision that I would disagree with—this committee would like 

to legislate a special earmark to help this particular project. No 

other project is going to get this special treatment. In this committee, the oil people get special treatment. Those who are worried 

about climate change don’t even get a chance to be heard from. 

Our job is to do something about problems that are going to affect the future of our country, our children, and grandchildren. 

This committee is absent without leave on the issue of climate 

change. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time I would like to introduce the witnesses that we have 

with us today. First of all, I want to thank all of you for joining 

us on this important hearing as we explore ways for America to be 

more energy independent. First of all, we have with us today Mr. 

Alexander Pourbaix, who is the president of the Energy and Oil 

Pipeline at TransCanada. We have Mr. Keith Stelter, who is the 

president of Delta Industrial Valves. And I passed over Mr. Swift, 

but Mr. Swift is with us, Anthony Swift, who is the attorney for 

Natural Resources Defense Council. And then we have Mr. David 

Mallino, who is the legislative director for the Laborers International Union of North America. And then we have Dr. Mark 

Jaccard, who is professor and research director at Simon Fraser 

University. 

So thank all of you for being with us this morning, and I am 

going to recognize each one of you for a period of 5 minutes for 

your opening statement. And there is a little box on the table that 

will turn red when your time has expired so you can be aware of 

that, not that we won’t let you finish, but Mr. Pourbaix, we will 

recognize you first for 5 minutes for your opening statement. 

STATEMENTS OF ALEXANDER POURBAIX, PRESIDENT, ENERGY AND OIL PIPELINES, TRANSCANADA; ANTHONY SWIFT, 

ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL; 

KEITH STELTER, PRESIDENT, DELTA INDUSTRIAL VALVES, 

INC.; DAVID MALLINO, JR., LEGISLATIVE DIRECTOR, LABORERS INTERNATIONAL UNION OF NORTH AMERICA; AND 

MARK JACCARD, PROFESSOR AND RESEARCH DIRECTOR, 

SIMON FRASER UNIVERSITY 

STATEMENT OF ALEXANDER POURBAIX 

Mr. POURBAIX. Thank you, Mr. Chairman. 

I would like to thank this subcommittee for the opportunity to 

testify once again today on behalf of TransCanada, the developer 

of the Keystone XL pipeline project, and the operator of the Keystone pipeline system. 

We are very excited to be developing the $14 billion Keystone 

pipeline system, which will link securing growing supplies of U.S. 

and Canadian crude oil with the largest refining markets in the 

United States, thereby significantly improving North American energy security. 

The first two phases of the Keystone pipeline system already are 

in service with the capacity to deliver almost 600,000 barrels a day 

11 

of crude oil to U.S. refineries every day. To date, the existing Keystone system has safely delivered over 400 million barrels of oil, 

meeting a vital market need. 

In 2008, TransCanada filed its presidential permit application 

with the State Department for the proposed 830,000 barrel-a-day 

Keystone XL pipeline. The State Department conducted a comprehensive environmental review over the next 3 plus years, concluding with a final EIS in August 2011. The final EIS concluded 

that, first, the project would have no significant impacts to most resources along the proposed project corridor; second, the project 

would be safer than any other typically constructed domestic oil 

pipeline system; and third, construction and operation of the pipeline would not constitute a substantive contribution to U.S. or global carbon emissions. 

Before completing its national interest review however, the Administration announced last January that it was denying 

TransCanada’s application because it could not complete its review 

by the deadline imposed in the 2011 payroll tax legislation. Last 

May, TransCanada re-filed its presidential permit application to 

allow construction of the northern leg of the XL pipeline from the 

U.S.-Canada border to Steele City, Nebraska. The application 

maintained the previously studied and approved project route 

through Montana and South Dakota. 

In Nebraska, we committed to reroute the pipeline to move it out 

of the Sandhills region. Following completion of the public review 

process established by the Nebraska Legislature in January of this 

year, Governor Heineman approved the new route, which is incorporated in our pending State Department application. In June, the 

State Department announced its intent to prepare a Supplemental 

Environmental Impact Statement for KXL. The State Department 

is now conducting a public comment period on the March 1, 2013, 

draft SEIS which continues through the 22nd of this month. 

As we understand the State Department review process, a number of further procedural steps are expected to follow upon completion of the current public comment period. It appears now that a 

decision on the pending presidential permit application could be 

many more months down the road. I would like to express 

TransCanada’s appreciation for the sentiments behind the recently 

proposed Northern Route Approval Act. 

This morning, I would just like to very briefly highlight the need 

for, and the benefits of, the Keystone XL pipeline. The project is 

fundamentally about meeting the needs of U.S. crude oil refiners, 

enhance U.S. consumers for a reliable and sustainable source of 

crude oil to supplement or replace declining foreign supplies without turning to greater reliance on Middle East sources. The primary purpose of the Keystone XL project is to transport heavy 

crude oil from Western Canada for delivery to Cushing, Oklahoma, 

and Gulf Coast refineries. 

In addition, the proposed KXL project would provide needed 

transportation capacity for Bakken and midcontinent crude oils. 

There can be little dispute that these purposes enhance U.S. energy security at a critical juncture. The need for the project is 

clearly demonstrated by the existing firm long-term contracts for 

more than 500,000 barrels a day of western Canadian crude oil to 

12 

be transported through the Keystone XL pipeline in the Gulf Coast 

project to Texas refineries. 

Keystone has also made available up to 100,000 barrels a day of 

capacity on the proposed project for domestic U.S. crude oil produced in the Bakken area of Montana and North Dakota, and has 

signed long-term contracts to transport 65,000 barrels per day of 

Bakken production. 

I should also point out that by transporting crude oil from growing, secure North American basins in Canada, Montana, North Dakota, Oklahoma, and West Texas to the U.S. refining market, Keystone could serve as part of the solution to higher U.S. consumer 

energy prices by increasing crude oil supply to the United States 

and improving the perception of future U.S. supply availability. 

Construction and operation of the Keystone XL project would 

provide significant economic benefits with no government subsidy 

or expenditures. The project is privately funded and financed and 

is shovel-ready, waiting only for the pending presidential permit 

decision. 

The March 2013 draft SEIS recognizes a wide range of socioeconomic benefits that would be derived for construction and operation of the project, including the following: construction of the 

project would contribute approximately 3.4 billion to U.S. GDP. 

Construction contracts, materials, and support purchased in the 

U.S. would total approximately 3.1 billion. Approximately 10,000 

construction workers engaged for 4- to 8-month seasonal construction periods would be required to complete the proposed project. A 

total of 42,100 jobs throughout the United States would be supported by construction of the proposed projects. And total earnings 

of workers supported by the proposed project would be approximately 2.05 billion. 

The Keystone pipeline system is subject to comprehensive pipeline safety regulation under the jurisdiction of the U.S. Department 

of Transportation Pipeline and Hazardous Materials Safety Administration. To protect the public and environmental resources, Keystone is required to construct, operate, maintain, inspect, and monitor the pipeline in compliance with the PHMSA regulations, as 

well as relevant codes and standards. 

Above and beyond the PHMSA regulations, Keystone has agreed 

to comply with 57 additional special conditions developed by 

PHMSA for the XL project. Taking these 57 special conditions into 

account, the draft SEIS specifically recognizes that these measures 

provide for an additional safety factor on the proposed project that 

exceeds those typically applied for in domestic oil pipeline projects. 

Finally, I wanted to reiterate that the XL project has undergone 

a thorough and comprehensive environmental review over the last 

4 plus years. After all of this review, the March 2013 draft Supplemental EIS yet again concluded that ‘‘the analyses of potential impacts associated with construction and normal operation of the proposed project suggest that there would be no significant impacts to 

most resources along the proposed project route.’’ 

With respect to carbon emissions, a draft SEIS found that it is 

unlikely the proposed project would have a substantial impact on 

the rate of western Canadian oil sand development and that if the 

13 

project were approved, there be no substantial change in global 

GHG emissions. Thanks for the time. 

[The prepared statement of Mr. Pourbaix follows:] 

14 


82179.001

TESTIMONY OF ALEX POURBAIX 

PRESIDENT, ENERGY AND OIL PIPELINES, TRANSCANADA CORPORATION 

HOUSE COMMITTEE ON ENERGY AND COMMERCE 

SUBCOMMITTEE ON ENERGY AND POWER 

APRIL 10, 2013 

Good morning. My name is Alex Pourbaix. I am President, Energy and 

Oil Pipelines for TransCanada Corporation. In my position, I am responsible for 

TransCanada's oil pipeline business, as well as the Company's power and nonregulated gas storage businesses. 

I would like to thank the Subcommittee for the opportunity to testify once 

again today on behalf of TransCanada, the developer of the Keystone XL 

Pipeline Project and the operator of the Keystone Pipeline System. As I have 

previously testified, TransCanada is a leader in the pipeline industry with more 

than 60 years of experience in the responsible development and reliable 

operation of North American energy infrastructure. Our network of wholly owned 

natural gas pipelines extends more than 40,000 miles, tapping into virtually all of 

the major natural gas supply basins in North America and has the capacity to 

move 20% of the natural gas produced daily in North America. TransCanada is 

one of the largest providers of gas storage and related services on the continent 

with approximately 406 billion cubic feet of storage capacity. Moreover, 

TransCanada owns, or has interests in, over 11,000 megawatts of power 

generation in Canada and the United States, which is enough electricity to power 

approximately 12 million homes. Now with the Keystone Pipeline System, 

TransCanada is developing one of North America's largest oil delivery systems. 
15 


82179.002

TransCanada serves the vitally important role of safely and responsibly delivering 

energy to North American consumers who need it for their daily lives. 

TransCanada is excited to be developing the $14 billion Keystone Pipeline 

System, which will link secure and growing supplies of U.S. and Canadian crude 

oil with the largest refining markets in the United States, thereby improving North 

American energy security. While we expect North America to significantly reduce 

its reliance on oil over the coming decades, it would be unrealistic and 

irresponsible to ignore the reality that the United States will remain dependent on 

imported oil for decades. In the meantime, it is critical to the economic and 

energy security of the continent that reliable crude oil supplies be available and 

accessible from North American sources. 

In June 2010 TransCanada commenced commercial operation of the first 

phase of the Keystone Pipeline System, which extends from the crude oil 

marketing supply and pipeline hub at Hardisty, Alberta, Canada to the refining 

and market centers at Wood River and Patoka, Illinois. TransCanada received a 

Presidential Permit from the U.S. Department of State in 2008, authorizing the 

international boundary crossing for the initial phases of the Keystone Pipeline 

System, after a thorough and complete 23-month review. 

Subsequently, TransCanada constructed the Keystone Cushing Extension 

of the Keystone Pipeline System from Steele City, Nebraska to Cushing, 

Oklahoma. The Cushing Extension went into service in February 2011. Cushing 

is a major crude oil marketing and pipeline hub serving numerous Midwest 

2 
16 


82179.003

refineries. Together, these first two phases of the Keystone Pipeline System 

have the capacity to deliver almost 600,000 barrels of crude oil to U.S. refineries 

and the Cushing hub every day. To date, the Keystone system has safely 

delivered over 400 million barrels of oil to those refineries, meeting a vital market 

need. 

On September 19, 2008 TransCanada filed its Presidential Permit bordercrossing application with the State Department for the proposed Keystone XL 

Pipeline. As originally proposed, Keystone XL was an approximate 1,700-mile, 

36-inch crude oil pipeline designed to begin at Hardisty, Alberta and extend 

southeast through Saskatchewan, Montana, South Dakota and Nebraska. It 

incorporated the Keystone Pipeline Cushing Extension through Nebraska and 

Kansas to serve markets at Cushing, Oklahoma before continuing through 

Oklahoma and Texas to terminate in the Texas Gulf Coast refining centers. 

When fully constructed, Keystone XL will have a nominal capacity to transport up 

to 830,000 barrels of oil per day of Canadian and U.S. crude oil production. 

Following our 2008 application, the State Department conducted a 

comprehensive, multi-agency environmental review over the next three-plus 

years. This review inclUded numerous public meetings, hundreds of thousands 

of public and agency comments, and publication of a Draft Environmental Impact 

Statement, a Supplemental Draft EIS, and a Final EIS. The August 2011 Final 

EIS concluded that the project would have no significant impacts to most 

resources along the proposed Project corridor. (FEIS at p. 3.15-1). It also 

concluded, in consultation with the Pipeline and Hazardous Materials Safety 

3 
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82179.004

Administration (PHMSA), that the project would be safer than any other typically 

constructed domestic oil pipeline system. QQ.) Further, the Final EIS concluded 

that construction and operation of the pipeline would not constitute a substantive 

contribution to U.S. or global carbon emissions. (jQ. at p. 3.14-44). 

Subsequent to issuance of the Final EIS, the State Department 

commenced a National Interest review of the Project, which included a series of 

public meetings along the pipeline route and here in Washington. Just as the 90-

day National Interest period was approaching its close last January, the 

Administration announced that it was denying the Presidential Permit application 

solely because it could not complete its review by the deadline imposed by 

Congress in the 2011 payroll tax legislation. 

In February 2012, TransCanada responded by informing the State 

Department that what had been the 485-mile Cushing to U.S. Gulf Coast portion 

of the Keystone XL Project had its own independent value to the marketplace 

and would be constructed as the stand-alone Gulf Coast Project, rather than as 

part of the Presidential Permit process. As the President recognized when he 

visited TransCanada's Cushing pipe yard last spring, the Gulf Coast Project is a 

critically important addition to the U.S. pipeline infrastructure, which helps to 

relieve the significant bottleneck of crude oil at Cushing and the related pricing 

dislocations, caused by existing pipeline capacity limitations. The Gulf Coast 

Project represents an opportunity to reduce U.S. dependence on foreign offshore 

oil supplies by increasing the availability of domestic production to Gulf Coast 

refineries. The market need for the Gulf Coast Project is demonstrated by 

4 
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82179.005

binding shipper contracts to transport crude oil from Cushing to Nederland and 

Houston. 

After receipt of the necessary permits and approvals last summer, 

TransCanada began construction of the Gulf Coast Project in August 2012. 

Notwithstanding several unfortunate episodes of civil and criminal disobedience 

spearheaded by anti-oil activists, construction of the Gulf Coast Project is 

approximately 60 percent complete and the project remains on schedule to be 

placed in service by the end of this year. 

In the meantime, TransCanada re-filed its application with the State 

Department almost one year ago for a Presidential Permit to allow construction of 

the northern leg of the Keystone XL Pipeline, extending approximately 875-miles 

from a point on the international boundary near Morgan, Montana to Steele City, 

Nebraska. The re-filed application maintained the previously-studied project 

route in Montana and South Dakota. Those two States have already granted 

their respective state approvals of the Project, pursuant to their legislated formal 

state review processes. In Nebraska, Keystone committed to re-route the 

pipeline to move out of the controversial "Sandhills" region, following the state 

environmental agency's public review process as established by the Nebraska 

Legislature. 

In April 2012, TransCanada proposed a new route across a portion of 

Nebraska to avoid the Sandhills region. We participated in the Nebraska review 

process throughout 2012, as did Nebraska agencies, the State Department, and 

5 
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82179.006

hundreds of Nebraska citizens. In January of this year, following release of a 

favorable Final Evaluation Report by the Nebraska Department of Environmental 

Quality, Governor Heineman approved the new route and transmitted his 

approval to the State Department. TransCanada has formally incorporated that 

re-route into its pending State Department application. 

Upon receipt of TransCanada's May 2012 Presidential Permit application, 

the State Department announced its intent to prepare a Supplemental 

Environmental Impact Statement (SEIS). While changes to the previously 

studied Project were largely limited to the proposed reroute in Nebraska, the 

State Department conducted another comprehensive, multi-agency review and 

issued a 4-volume Draft Supplemental EIS last month, which covers a multitude 

of topics. Currently, the State Department is conducting a public comment period 

on the Draft SEIS, which continues through April 22, and which includes yet 

another public meeting scheduled to be held next week in Nebraska. 

As we understand the State Department review process, a number of 

steps are expected to follow upon completion of the current public comment 

period. First, the Department will review and address the comments on the Draft 

SEIS. Based on prior comment periods, it is expected that there will be hundreds 

of thousands of comments submitted. Then, the Department will issue a final 

Supplemental EIS. At that point, the Department is expected to re-initiate the 

National Interest review with an as-yet undefined time frame. That is followed by 

the issuance of a Record of Decision and a National Interest Determination. At 

that point, a number of agencies (many of whom have been participants in the 

6 
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82179.007

ongoing reviews since 2008) will have the opportunity to comment on the 

issuance of a Presidential Permit. If no agency objects within 15 days, the State 

Department is free to issue a Permit. If there is an objection, it is addressed 

through interagency consultation. If that consultation fails, the entire matter is 

referred back to the President for a decision. Accordingly, it appears that a 

decision on the pending Presidential Permit application is many more months 

down the road. 

I would like to express TransCanada's appreciation for the sentiments 

behind the recently proposed Northern Route Approval Act, which would remove 

the requirement for a Presidential Permit for KXL and grant the additional federal 

approvals and authorizations needed for construction. We believe the legislation 

contains a number of important findings that highlight and confirm the importance 

of the Project to the energy security and economic well-being of the United 

States. We particularly appreciate the Committee scheduling this hearing, which 

serves to call attention to the need for a prompt decision on this application and 

which creates an environment for reasonable and thoughtful discussion of issues 

critical to the nation's economic and energy security. 

I would like to briefly make a number of points that I believe highlight the 

need for the Keystone XL Project and for prompt action on the pending 

Presidential Permit application. 

7 
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82179.008

ENERGY SECURITY 

The Keystone XL Project is fundamentally about meeting the needs of 

U.S. crude oil refiners - and hence U.S. consumers -- for a reliable and 

sustainable source of crude oil to either supplement or replace reliance on 

declining foreign supplies, without turning to greater reliance on Middle Eastern 

sources. There can be little dispute that this purpose enhances U.S. energy 

security at a critical juncture. 

As the recent State Department Draft SEIS recognizes, the primary 

purpose of the Keystone XL project is to provide the infrastructure necessary to 

transport heavy crude oil from Western Canada to the interconnect with the 

existing Keystone system at Steele City, Nebraska for onward delivery to 

Cushing, Oklahoma and the Gulf Coast refineries. Equally important, the 

proposed Keystone XL project would provide needed transportation capacity for 

domestically produced Bakken and Midcontinent crude oils that could access the 

pipeline, respectively, at Baker, Montana and at Cushing. 

The recent Draft SEIS confirms that there is existing demand by Gulf 

Coast area refiners for stable sources of crude oil. As the Draft SEIS recognizes, 

currently, refiners in the Gulf Coast area obtain heavy crude oil primarily via 

waterborne foreign imports, but the reliability of those supplies is uncertain 

because of declining production and political uncertainty associated with the 

major traditional suppliers, notably Mexico and Venezuela. Moreover, the 

additional supply of light crude from formations like the Bakken is expected to 

8 
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82179.009

enable domestic refiners to reduce their imports of more expensive light and 

possibly medium gravity sweet imported waterborne crude oil. 

The need for the project is clearly demonstrated by the existing firm, longterm contracts for approximately more than 500,000 barrels per day of Western 

Canadian crude oil to be transported through the Keystone XL Pipeline and the 

Gulf Coast Project to Texas refineries. An additional 155,000 barrels per day 

that is currently delivered to Cushing on the existing Keystone Pipeline would be 

transferred to Keystone XL, freeing up capacity on the Keystone Mainline to 

deliver more barrels to Midwest refineries. Keystone has also made available up 

to 100,000 barrels per day of capacity on the proposed project for domestic U.S. 

crude oil produced in the Bakken area of Montana and North Dakota and has 

signed, long-term contracts to transport 65,000 barrels per day of Bakken 

production. These existing contracts not only demonstrate the demand for the 

project but also underlie its financial viability. 

I should also point out that by transporting crude oil from growing, secure 

North American basins in Canada, Montana, North Dakota, Oklahoma, and West 

Texas to the U.S. refining market, Keystone XL could serve as part of the 

solution to higher U.S. energy prices by increasing crude oil supply to the United 

States and improving the perception of future U.S. supply availability. The price 

of gasoline for much of the U.S. is heavily affected by the refining economics of 

Gulf Coast refiners because they supply a significant proportion of U.S. gasoline 

demand. 

9 
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82179.010

Specifically the Keystone XL Project could playa role in moderating high 

gasoline prices by: (i) providing capacity for North American production that is 

comparable in volume to nearly half of U.S. Persian Gulf imports; (ii) creating 

new crude oil supply access to Gulf Coast refiners who are vulnerable to OPEC 

supply disruptions; (iii) providing supply diversity that is comparable in size to 

recent supply disruption events; (iv) signalling domestic producers to continue to 

grow production by reducing the risk of constrained market access; (v) sending a 

powerful message to Canadian producers to continue to bring crude to the 

United States instead of to foreign countries; and (vi) reducing the risk of future 

United States supply uncertainty, which reduces the trading activity that puts 

upwards pressure on crude oil prices. 

ECONOMIC IMPACT 

Construction and operation of the Keystone XL Project would provide 

significant economic benefits, with no government subsidy or expenditures. The 

Project is privately funded and financed and is shovel-ready, waiting only for the 

pending Presidential Permit decision. 

The March 2013 Draft SEIS recognizes a wide range of socioeconomic 

benefits that would be derived from construction and operation of the KXL 

project. The DSEIS found that construction of the proposed project would 

generate temporary, positive socioeconomic impacts as a result of local 

employment, taxes, spending by construction workers, and spending on 

construction goods and services. The following are some examples of the 

benefits found in the State Department's review: 

10 
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82179.011

• Construction of the proposed Project would contribute approximately $3.4 

billion to U.S. GOP if implemented. 

• Construction contracts, materials, and support purchased in the US would 

total approximately $3.1 billion. 

• Approximately 10,000 construction workers engaged for 4- to 8-month 

seasonal construction periods (approx. 5000-6000 per construction 

period) would be required to complete the proposed Project. (When 

expressed as average annual employment, this equates to approximately 

3900 jobs). 

• A total of 42,100 jobs throughout the United States would be supported by 

construction of the proposed Project. 12,000 would be in the Project area 

states. 1000 more jobs would be associated with construction of the 

related Bakken Marketlink Project. 

• Total earnings supported by the proposed Project would be approximately 

$2.053 billion. An additional $59.4 million would be associated with the 

Bakken Marketlink Project. 

• Effects on minority and low-income populations would generally be small 

and short term. Risks associated with potential releases would not be 

disproportionately borne by minority or low-income populations. 

• Total estimated property taxes from the proposed Project in the first full 

year of operation would be about $34.5 million, spread across 31 counties 

in three states. Other sales, use, and fuel taxes would accrue during two 

years of construction: 

o South Dakota - $45.6 million 

o Nebraska - $ 16.5 million 

o Kansas - $2.7 million 

o Montana - some additional tax revenue will accrue. 

• Construction camps could generate a total of about $2 million in tax 

revenues. 

SAFETY 

The Keystone Pipeline system is subject to comprehensive pipeline safety 

regulation under the jurisdiction of the U.S. Department of Transportation, 

Pipeline and Hazardous Materials Safety Administration (PHMSA). To protect 

11 
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82179.012

the public and environmental resources, Keystone is required to construct, 

operate, maintain, inspect, and monitor the pipeline in compliance with the 

PHMSA regulations at 49 CFR Part 195, as well as relevant industry standards 

and codes. These regulations specify pipeline material and qualification 

standards, minimum design requirements, required measures to protect the 

pipeline from internal and external corrosion, and many other aspects of safe 

operation. 

Above and beyond the PHMSA regulations, Keystone has agreed to 

comply with 57 additional Special Conditions that go beyond the existing PHMSA 

regulations that have been developed by PHMSA for the Keystone XL Project. 

Keystone has agreed to incorporate these special conditions into its design and 

construction, and its manual for operations, maintenance, and emergencies 

required by 49 CFR 195.402. These 57 Special Conditions address issues 

including (0 steel properties; (ii) pipe manufacturing standards and quality control 

and assurance; (iii) pipe welding standards; (iv) puncture resistance; (v) pipe 

testing; (vi) corrosion resistant coating; (vii) construction practices; (viii) depth of 

cover for the pipeline; (ix) computerized monitoring of the pipeline in operation; 

(x) internal inspection of the pipeline by special tools ("pigs"); (xi) special 

corrosion avoidance measures and monitoring; (xii) pipeline marking and 

patrolling; (xiii) pipeline assessment during its in-service life; and (xiv) special 

PHMSA reporting and recordkeeping requirements. PHMSA has the authority to 

inspect and enforce any items contained in the pipeline operator's manual; 

making the 57 Special Conditions legally enforceable by PHMSA. 

12 
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82179.013

The State Department took these 57 Special Conditions into account in 

the Draft SEIS. The Draft SEIS specifically recognizes that U[t]hese measures 

provide for an additional safety factor on the proposed Project that exceeds those 

typically applied to domestic oil pipeline projects." (DSEIS at p. 4.13-64). The 

additional design standards represented by the 57 special conditions enable the 

entire length of the pipeline system to have a degree of safety similar to that 

which is required in a High Consequence Area (HCA) as defined in 49 CFR Part 

195.450. Based on its comprehensive review of the Project, the State 

Department's Draft SEIS further concludes that "(s]pills associated with the 

proposed Project that enter the environment are expected to be rare and 

relatively small." (DSEIS at p. 4.16-5). 

In the event of a disruption, Keystone has a sophisticated series of 

overlapping computerized leak detection systems that can quickly detect loss of 

pressure in the pipeline. The pipeline can be quickly shut down remotely from 

the Operational Control Center and emergency response personnel, pre-staged 

along the length of the pipeline route, can be quickly deployed with all necessary 

response assets. As required by the PHMSA regulations, Keystone must 

prepare a comprehensive emergency response plan and submit it to PHMSA for 

approval prior to commencing operations. 

COMPREHENSIVE REVIEW PROCESS/LIMITED ADVERSE ENVIRONMENTAL IMPACTS 

Finally, I want to reiterate that the Keystone XL Project has undergone a 

thorough and comprehensive environmental review over the past four-plus years. 

This multi-agency review has now included thousands of pages of information 

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82179.014

submittals, hundreds of thousands of public comments, numerous public 

meetings, and no less than four draft, supplemental, and final environmental 

impact statements. After all of this review, the March 2013 Draft Supplemental 

EIS yet again concludes that "[t]he analyses of potential impacts associated with 

construction and normal operation of the proposed Project suggest that there 

would be no significant impacts to most resources along the proposed Project 

route .... " 

With respect to carbon emissions, the Draft SEIS found that Western 

Canadian crude oils, as would likely be transported through the proposed 

Project, are on average somewhat more GHG-intensive than the crudes they 

would displace in the U.S. refineries. However, the DSEIS further found that it is 

unlikely that the proposed Project construction would have a substantial impact 

on the rate of Western Canadian oil sands development. Even when considering 

the incremental cost of non-pipeline transport options, should the proposed 

Project be denied, a 0.4 to 0.6 percent reduction in WCSB production could 

occur by 2030, and should both the proposed Project and all other proposed 

pipeline projects not be built, a 2 to 4 percent decrease in WCSB oil sands 

production could occur by 2030. Further, the DSEIS found that if the project 

were approved there would likely be no substantial change in WCSB imports to 

PADD 3 with or without the proposed Project in the medium to long-term and, 

most significantly, there would be no substantive change in global GHG 

emissions. 

14 
28 


82179.015

Based on this record, I would suggest that it is time to bring this process to 

a close and proceed expeditiously to a final approval of the Keystone XL 

Pipeline. The project will reduce the United States' reliance on higher-priced 

foreign oil and replace it with stable, secure supplies from both Canada and the 

U.S. It will create high paying American jobs, inject billions of dollars into the 

U.S. economy, and pay millions in taxes for decades to come. This project is 

needed - the benefits are clear - and time is of the essence to move forward. 

Thank you and I would be pleased to address any questions that you may 

have. 

15 
29 

Mr. WHITFIELD. Yes. Thank you, Mr. Pourbaix. And the lights 

evidently are not working so I let him go over quite a bit, so you 

all take your time. 

Mr. Swift, you are recognized for 5 minutes. 

STATEMENT OF ANTHONY SWIFT 

Mr. SWIFT. Thank you. Chairman Whitfield, Ranking Member 

Rush, and members of the committee, thank you for today’s opportunity to testify on Congressman Terry’s proposal. 

My name is Anthony Swift. I am an energy policy analyst with 

the Natural Resources Defense Council. NRDC is a national, nonprofit organization dedicated to protecting public health and the 

environment. 

The Keystone XL tar sands pipeline is a lynchpin for the expansion of tar sands production in Canada. On this point, market analysts, the tar sands industry, and the environmental community 

agree. Industries plan to triple tar sands production by 2030, and 

the significant environmental impacts of that plan simply cannot 

take place without the approval of Keystone XL. Alternative proposals will not allow the same level of tar sands expansion, and the 

associated climate emissions is a Keystone XL pipeline. 

Pipelines to the West and East Coast are stalled by entrenched 

public and First Nations opposition. Several proposals would require the use of aging pipelines to move tar sands to communities 

in sensitive watersheds. After the rupture of the Pegasus pipeline 

in the Arkansas community of Mayflower, the risks of these 

projects is becoming more apparent to the public. 

In its draft environmental review of Keystone XL, while the 

State Department acknowledged that tar sands is significantly 

more carbon-intensive over its lifecycle than conventional crude, 

the agency mistakenly suggested that rail could provide an economic alternative to Keystone XL. We should remember the State 

Department made a similar prediction in 2011. We now know the 

agency’s conclusions and underlying assumptions were wrong. Two 

years later, they continue to be wrong. A cornerstone of State’s conclusion that rail is a feasible alternative to Keystone XL is the example of rail use by oil producers in North Dakota. From 2009 to 

2013, North Dakota producers increased their use of rail to move 

light crude from a few thousand barrels a day to over half-a-million 

barrels per day. Now, over 2⁄3 of North Dakota’s total production 

moves by rail. 

As they turn to rail, North Dakota’s domestic light oil producers 

have even rejected major pipeline proposals. The dramatic increase 

of crude by rail in the United States and southern Canada is almost entirely light crude moving from the Bakken oil fields. It is 

not northern Alberta’s tar sands. Data from the U.S. Energy Information Administration shows that no more than 21,000 barrels per 

day, less than 1 percent of Canadian tar sands and conventional 

heavy crude, moved by rail to U.S. refineries and markets in the 

Gulf Coast in December of 2012. 

There are two major reasons why tar sands producers haven’t 

turned to rail to move their product to market. First, it is significantly more expensive for them to do so; and second, they have significantly tighter profit margins than Bakken light crude proVerDate Nov 24 2008 10:52 Sep 17, 2013 Jkt 037690 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-26 CHRIS
30 

ducers. Tar sands diluted bitumen is significantly more expensive 

to move by rail than Bakken light crude. After all, northern Alberta is about 1,000 miles farther from refineries than North Dakota. 

Moreover, moving heavy tar sands by rail has additional complications. Producers can’t fit as much heavy crude on a rail car. 

Specialized real cars are required. Specialized on-loading and offloading facilities are required. And by and large, they are not being 

built to handle tar sands. All of these factors increase the cost of 

moving a barrel of tar sands to the Gulf Coast refineries by rail. 

That is why the rate producers are actually paying to move tar 

sands to the Gulf by rail is twice that of what State estimated. 

New tar sands projects have very tight margins. Some have breakeven costs above $100 a barrel. Many of these projects won’t move 

forward with substantially higher transportation costs. 

In addition to its impacts on climate, Keystone XL would endanger critical jobs on ranches and farms in the Plains States in order 

to transport tar sands to the Gulf Coast where can be refined and 

then exported internationally. I want to make the point that the 

State Department has indicated Keystone XL would have no impact on gasoline prices, and in fact, it will increase oil prices in the 

Midwest by significant margins. 

In exchange for 35 permanent jobs, Keystone XL would pose a 

permanent risk to American communities, sensitive water resources, and the agricultural industry. We need to protect those 

jobs, not put them at risk for the type of tar sands blowout that 

has poisoned nearly 40 miles of the Kalamazoo River in Michigan 

or the recent spill in Arkansas which sent up to 420,000 gallons of 

tar sands oil flowing through the community of Mayflower. 

The substantial risks of the Keystone XL tar sands pipeline outweigh its marginal benefits. Keystone XL is a lynchpin for tar 

sands expansion and the substantial climate pollution associated 

with it. The pipeline would threaten American communities, lands, 

and water resources in order to transport tar sands to the Gulf 

where it can be refined and exported internationally. 

Simply stated, Keystone XL is not in the Nation’s interest and 

should be rejected on that basis. NRDC thanks you for the opportunity to present its views and I would be pleased to answer any 

and all of your questions. 

[The prepared statement of Mr. Swift follows:] 

31 


82179.016

Summary of Testimony by Anthony Swift, Natural Resources Defense Council 

The Keystone XL tar sands project would pipe some of the dirtiest oil on the planet through the 

breadbasket of America to be shipped overseas through the Gulf of Mexico. Financial analysts, 

industry commentators, and the environmental community agree that Keystone XL is a lynchpin 

for tar sands expansion and the carbon pollution associated with it. Rail has proven a feasible 

transportation option for light crude from the Bakken formation of North Dakota and southern 

Canada. However, despite greater market pressures to move tar sands to the Gulf Coast than 

those faced by Bakken producers, rail continues to be a marginal transportation option for heavy 

tar sands producers in northern Alberta. 

• In January 2013, when over two thirds of light Bakken production moved to refinery 

markets by rail, less than 2% of Albertan tar sands and conventional heavy crude 

production was transported by rail. 

• Rail is a significantly more expensive option for northern Alberta tar sands producers -

tar sands projects are 1000 miles farther from refinery markets, less heavy tar sands can 

be loaded onto rail cars than light crude, and tar sands by rail requires specialized rail 

cars, onloading and offloading terminals. 

• Many new tar sands projects do not have sufficient margins to profitably internalize an 

additional $10 to $20 per barrel cost associated with rail transport. 

The substantial risks of the Keystone XL tar sands pipeline outweigh its marginal benefits. 

Keystone XL would enable a substantial expansion of tar sands expansion and substantial 

climate pollution associated with it. The pipeline would endanger critical jobs on ranches and 

farms in the Great Plains states in order to transport tar sands to the Gulf Coast where it can be 

refined and exported. In exchange for 35 permanent jobs, Keystone XL would pose a pennanent 

risk to American communities, sensitive water resources, agricultural industry and climate. 

1 
32 


82179.017

Anthony Swift 

Natural Resources Defense Council 

Testimony to the US Congress Subcommittee on Energy and Power hearing entitled 

"H.R. 3, the Northern Route Approval Act." 

April 10, 2013 

Chairman Whitfield, Ranking Member Rush and members of the Committee, thank you for 

today's opportunity to testifY on Congressman Terry's proposal. My name is Anthony Swift. I 

am a policy analyst for the Natural Resources Defense Council (NRDC). NRDC is a national, 

nonprofit organization of scientists, lawyers and environmental specialists dedicated to 

protecting public health and the environment. Founded in 1970, NRDC has more than 1.2 

million members and online activists worldwide, serviced from offices in New York, 

Washington, Los Angeles, San Francisco, Chicago, and Beijing. 

Keystone XL is critical for tar sands expansion and associated climate emissions 

The Keystone XL tar sands pipeline is a lynch pin for the expansion of the tar sands bitumen 

production in Canada. On this point, market analysts, voices in the Albertan tar sands industry, 

and the environmental community agree. Industry's plan to triple tar sands production by 2030, 

and the significant environmental impacts associated with that plan, cannot take place without 

the approval of the Keystone XL tar sands pipeline as a major avenue to the needed new markets 

for tar sands crude. I 

Alternative pipeline and rail tar sands transportation proposals will not allow for the same level 

of tar sands production expansion and the associated climate emissions as the Keystone XL 

1 Canadian Association of Petroleum Producers (CAPP), Crude Oil, Forecasts, Markets and Pipelines, June 2012, pg. 

38, http://www.capp.ca/forecast/Pages/default.aspx. 

2 
33 


82179.018

pipeline. As analysts at the CIBC bank in Canada have observed, tar sands oil producers in 

Alberta need every proposed tar sands infrastructure project - including Keystone XL - to move 

forward in order to meet industry production expansion goals.: For the following reasons. many 

of these proposed tar sands transportation projects are unlikely to move forward. 

Pipelines to the west and east coasts arc stalled by entrenched public and First Nations 

opposition.3 Many of these proposals will require the use of aging pipelines to move tar sands 

through communities and sensitive watersheds. 4 After the rupture of the Pegasus pipeline in the 

Arkansas community of Mayflower, the risks of these projects is becoming more apparent to the 

communities they would cross. 

In its most recent draft supplemental environmental impact statement, while the State 

Department acknowledged that tar sands is significantly more carbon intensive over its lifeeycle 

than conventional crude, the agency mistakenly suggested that rail could provide an 

economically feasible alternative to Keystone XL. 5 

The State Department made the prediction that tar sands by rail was on the verge of rapid 

expansion in 2011.6 State's forecast proved inaccurate then and its 2013 !(Jrecast on the viability 

of rail continues to be substantively flawed. For the reasons laid out here, rail does not provide 

an economically feasible alternative for the Keystone XL tar sands pipeline. 

2 Vanderklippe, Nathan. "Glut of Cheap Crude Raise Doubts Over Oil Sands Expansion." Globe and Mail 17 August 

2012. http://www.theglobeandmail.com/globe-investor/pipelines-glut-of-cheap-crude-raise-doubts-over-oilsa nds-expa n sion/ a rticle448 5891/. 

3 Nathan Lemphers, The Climate Impacts of the Proposed Keystone XL Oilsands Pipeline, January 17, 2013, pgs. 8-9, 

http://www.pembina.org/pub/2407 . 

4 The proposed reversal of the Portland Montreal pipeline through New England and TransCanada's conversion of 

its natural gas pipeline system through its east coast both require the use of pipeline systems which are over fifty 

years old. 

S The State Department found that the crudes expected to be transported on Keystone XL were likely to be up to 

19 percent more greenhouse gas intensive on a well-to-wheel basis when compared to reference crudes. State 

Department, Draft Supplemental Environmental Impact Statement, Appendix W: Life-Cycle Greenhouse Gas 

Emissions of Petroleum Products from WCSB Oil Sands Crudes Compared with Reference Crudes, pg. 60, March 1, 

2013, httP1L~mfl!,J~jfleliDe-xl.staleJiQliLQQ.<;uments/organization/205563.pdf. 

6 EnSys, Keystone XL - No Expansion Update, August 12, 2011, pgs. 52-53, 75, www.keystonepipelinexl.state .gov / docu ments/ organ ization/182263 .pdf. 

3 
34 


82179.019

A cornerstone o[State's conclusion that rail is a feasible alternative to Keystone XL is the 

example of rail use by oil producers in North Dakota and Montana. However, although over the 

last three years producers oflight crude in the Bakken oilfields have responded to price discounts 

and transportation constraints by turning to rail to move their crude to market, this same scenario 

does not apply in the Canadian tar sands. 

From 2009 to 2013, transport of oil by rail in North Dakota increased from a few thousand 

barrels a day to over haIfa million.7ln January 2013, over two thirds oflight crude produced in 

North Dakota was transported to refineries by rail. 8 As they turned to rail, domestic light oil 

producers have even rejected major pipeline proposals - including Oenok's 200,000 barrel per 

day Bakken pipeiine.9 When analysts talk about the upsurge ofraii transport in the United States 

and southern Canada, this is what they're referring to an enormous expansion of light crude 

from the Bakken. 

However, a similar expansion has not occurred in Alberta's tar sands despite the need for 

additional transportation infrastructure. Data from the Energy Information Administration show 

that about 35,000 bpd of Canadian tar sands and conventional heavy crude - Of less than 2%-

moved to US refineries markets in the Gulfand East Coasts by rail in December 2012. 10 

The answer does not seem to be pricing discounts. From 2009 to 2012, producers of tar sands 

faced the same price discounts that Bakken producers did, if not greater ones. 11 There are two 

major reasons why tar sands producers haven't turned to rail to move their product to market. 

7 North Dakota Pipeline Authority, U.S. Williston Basin Rail Export Estimates, April 1, 2013, 

http://ndpipelines.files.wordpress.com/2012/04/ n d pa ·website·data 13 .xlsx. 

8 Justin Miller, Wayzata firm to expand N.D. rail terminal for Bakken crude oil, Star Tribune, March 15, 2013, 

http://www.startribune.com/business/198551531.html?refer=y . 

9 Chicago Tribune, Oenoek Update 1: Cancels 200,000 bpd Bakken Project, Nov. 1, 2012, 

http://articles.chicagotribune . com/20 12 -11· 2 7/ news/sns·rt ·oneo k-ba kke npi peline-u pdate-111e8mrbzd20121127_1_ overla nd -pa ss·pipeli ne-ba kken ·crude-exp ress-pipel ine·on eok-pa rtn ers-I p. 

10 Company level import data from December 2012 shows that 21,000 bpd of heavy Canadian crude (API below 25) 

processed in Gulf Coast refineries after having crossed a potential rail port while 14,000 bpd to have Canadian 

crude was processed in East Coast refineries after having crossed a potential rail port. U.s. Energy Information 

Administration, Company Level Imports, http://www.eia.gov/petroleum/imports/companylevel/. 

11 Anthony Swift, On the wrong track: Rail is not an alternative to the Keystone XL tar sands pipeline, March 6, 

2013, http://switchboard.nrdc.org/blogs/aswift/on_the_wronLtrack_rai Us_not. h tm I. 

4 
35 


82179.020

First, it is significantly morc cxpensive for them to do so, and second, they have significantly 

tighter profit margins than Bakken producers. 

Tar sands diluted bitumen is significantly more expensive to move by rail than Bakken light 

crude. There are a number of reasons for this: 

• The tar sands are about 1,000 miles farther away from refinery markets than the Bakken 

oil fields. 

• Trains moving light crude can carry nearly 30% more crude than trains moving heavy tar 

sands diluted bitumen. le 

• Moving tar sands requires specialized rail offloading tenninals, onloading terminals and 

heated rai I cars. 13 

All of these factors increase the cost of moving a barrel of tar sands to Gulf Coast refineries. 

Shipping a barrel of tar sands diluted bitumen to the Gulfis currently costing tar sands producers 

$31 a barrel. 14 Moving it by pipeline only costs $8 to $9.50 a barrel. I 5 

Tar sands producers also have much tighter margins than conventional Bakken producers. Tar 

sands crude is a lower value commodity than Bakken light crude. In addition, it has significantly 

higher production prices. With breakeven production costs ranging from $60 a barrel to over 

$100 a barrel - and increasing by each year - new tar sands projects cannot profitably bear 

significantly greater transportation costs associated with rail. 16 

12 Light crude train cars can move up to 700 barrels while heavy train cars can only move 550 barrels. Doug Wilkins, 

Integrated Midstream Solutions, TO Securities 'Crude By Rail Forum, pg. 11, October 2, 2012. 

"Id. 

14 Nicole Mordant, Analysis: Crude-by-rail carves out long-term North American niche, Reuters, Nov. 4, 2012, 

http://www.reuters.com/article/2012/11/04/u5-railways-oil-northamerica-idU5BRE8A30AX20121104. 

15 State Department, Supplemental EIS, Market Analysis, 1.4-49, 50, March 1, 2013. 

16 Energy Conservation Resources Board, 5T98-2012 Alberta's Energy Reserves 2011 and Supply/Demand Outlook 

2012-2021, pg. 3-30, June 2012; Pembina Institute: January 28,2013 "Beneath the Surface" Report (Pg. 57) 

http://www.pembina.org/pub/2404; Kalusa, Marin. "Oil Price Differentials: Caught Between the Sands and the 

Pipelines." Forbes 6 June 2012. Web. http://www.forbes.com/sites/energysource/2012/06/21/oil-pricedifferentials-caught-between-the-sands-and-the-pipelines/3/ 

5 
36 


82179.021

Infrastructure is needed for tar sands expansion, and it is clear to most observers that the permit 

decision for Keystone XL plays a critical role in the future oftar sands production and the 

greenhouse gas emissions associated with it. Producing tar sands generates at least three times as 

much carbon as conventional crude. The Environmental Protection Agency (EPA) estimates that 

simply replacing the conventional crude with tar sands from Keystone XL would increase U.S. 

carbon emissions by as much as 27.6 million metric tons C02e - equivalent to the tailpipe 

emissions of nearly 6 million cars. I? The first step in addressing climate change is to stop 

making the problem worse - and that means rejecting the Keystone XL tar sands pipeline and the 

higher carbon em issions associated with it. 

The substantial risks of the Keystone XL tar sands pipeline outweigh its marginal benefits. 

Keystone XL would enable a substantial expansion of tar sands expansion and substantial 

climate pollution associated with it. The pipeline would endanger critical jobs on ranches and 

farms in the Great Plains states in order to transport tar sands to the Gulf Coast where it can be 

refined and exported. In exchange for 35 permanent jobs, Keystone XL would pose a permanent 

risk to American communities, sensitive water resources and agricultural industry. 18 We need to 

protect those jobs, not put them at risk of the kind oftar sands blowout that has poisoned nearly 

40 miles ofthe Kalamazoo River in Michigan or the recent spill in Arkansas, which sent up to 

420,000 gallons oflar sands oil flowing through the community ofMayflower. 19 

The Keystone XL tar sands pipeline would undermine U.S. efforts to reduce its carbon 

emissions, threaten communities and sensitive water resources, and increase refinery emissions 

in the Gulf Coast in order to provide tar sands producers a means of exporting their product on 

the international market. This tradeoff is not in the nation's interest. TransCanada's application 

to built the Keystone XL pipeline should be rejected. 

17 Environmental Protection Agency, Comments to Draft Environmental Impact Statement (DEIS), June 6, 2011, 

http://www.bilateralist.com/wp-content!uploads/2011/06/keystone-xl-projeet-epa-comment-Ietter20110125.pdf; EPA, Greenhouse Gas Equivalency Calculator, http://www.epa.gov/cleanenergy/energyresou rees/ ea leu lator. htm I. 

18 State Department, Draft Supplemental Impact Statement Executive Summary, pg. 13-14, March 1, 2013. 

19 National Response Center, Report 104298, March 30, 2013, 

http://www.nrc.uscg.mil/reports/rwservlet?standard_web+inc_seq=1042498. 

6 
37 

Mr. WHITFIELD. Thank you, Mr. Swift. 

Mr. Stelter, your recognized for 5 minutes. 

STATEMENT OF KEITH STELTER 

Mr. STELTER. Thank you. I have never done anything like this 

before. I am not an expert at anything, just ask my wife. 

I think Mr. Upton probably invited me here because, as we have 

gotten to know each other, I am in a kind of unique position. We 

are a manufacturer of American-made valves that are used in oil 

production. I also am a person who holds patents on valve design 

so I know the technology. I also probably spent more time in Alberta, Canada, at the oil sands than possibly everybody else in this 

room combined, other than my associate from that region. 

I guess I would just say that, first and foremost, the Canadians 

are completely perplexed and stymied why—I am just talking 

about the general public and the executives of the companies and 

such, why America is just thumbing their nose at this ability to 

have this crude. One of the guys said it would be like if you owned 

a catering company and your best friend was throwing a wedding 

and he chose an enemy of both of you to do the catering for your 

daughter’s wedding instead of your friend. 

The need for crude oil is not going to go away anytime soon. I 

do agree that it is in everybody’s best interest to get away from it 

for many reasons, but that is technology that needs to be developed 

and brought forward. 

I can tell you as a member of the private sector, when things are 

in demand and when the technology is there, we will grab a hold 

of it and run with it. If other sources of power were available and 

were practical and consumers wanted them, we would be all over 

it. 

My company has benefited as a manufacturer. We started out 

back in the oil sands back in the early ’90s when it was really just 

a handful of crazy guys that had gone up there and had this idea 

of getting the oil out of this frozen tundra. Now they have developed it. If you have looked at my testimony, they are the worldlow producer cost-per-barrel if not one of the. I am not exactly sure 

on a month-by-month basis. 

If the XL pipeline doesn’t go through, the oil sands production 

companies are not going to close up and go away. China wants that 

oil. Like I say, I am up there constantly. PetroChina is making investments, they are up there lobbying, they are buying out entire 

oil production facilities, and they are also buying portions of others. 

They will get pipelines put in to the West Coast; there is no doubt 

about that. I mean it is a done deal if we don’t do the XL pipeline. 

Knowing manufacturing, I can tell you that companies like mine, 

with the help of Mr. Upton and other people in the government, 

are taking steps to make our plants more efficient, whether it is 

the lighting we use. We have gone away from toxic chemicals with 

our cooling for our machining. I can tell you that our counterparts 

in Asia and China in particular are not doing those things. 

So I guess to call a lesser of two evils, if somebody is going to 

get their hands on that crude oil and use it, which they are, I think 

it is in our best interest that companies in America who are trying 

38 

to do the right thing, are trying to be more efficient, are able to 

get a hold of that. 

I will comment also that in the time I spent up there and in just 

the last few years, a majority of the products that we sell up in the 

oil sands region are going into the environmental portion as opposed to the direct production of oil sands oil crude. Their recent 

thing is tailings reclamation. Back in the ’70s, ’80s, and such up 

until the early 2000s, basically the oil sands companies, tar sands 

companies were just pumping their tailings out in these big ponds 

and kind of just leaving them. They would put some air cannons 

out there to keep birds from landing on them or animals going 

through them. 

But the Canadian Government has gotten very strict and now 

they are the fast track thing called the tailings reclamation. And 

because of that, they are reclaiming these large oil tailings reclamation ponds and they have gotten to the point where they have 

to—before they go and extract from an area, they take pictures of 

it and they literally—I have seen this—they have to go and replant, replace dead trees in that area, and when you go by there 

now, you would never know that anything ever took place there as 

far as oil production. 

The technology is sound for the pipeline. As I mentioned, I hold 

some patents in valve design, own a company that manufactures 

them. Like anything else, the problem is in the maintenance. If you 

buy a tire, if the technology of that tire is sound, if you put it on 

your car and run it for 100,000 miles and don’t rotate it or anything, it is going to blow out. And the same is true of a pipeline. 

You know, it is the problem with every—I can’t say every, but 

every one I have ever seen—pipeline problem has been a maintenance issue where they weren’t maintained properly or something 

has caused the earth to shift and cracked the pipeline. But the 

technology is sound. 

[The prepared statement of Mr. Stelter follows:] 

39 


82179.022

BEFORE THE COMMITTEE ON ENERGY AND COMMERCE 

SUBCOMMITTEE ON ENERGY AND POWER 

HEARING ON "H.R. 3, THE NORTHERN ROUTE APPROVAL ACT." 

APRIL 1O,TH 2013 

TESTIMONY OF KEITH F. STELTER, CO-OWNER OF DELTA INDUSTRIAL 

VALVES, INC. 

SUMMARY OF TESTIMONY 

• BRIEF BACKGROUND OF MYSELF AND MY COMPANY 

• HISTORY AND CURRENT STATUS OF CANADIAN OIL SANDS 

PROJECTS 

• IMPACT OF KEYSTONE XL PIPELINE DELAYS ON US AND CANADIAN 

COMPANIES 

• CHINA'S INCREASING INVOLVEMENT IN CANADIAN NATURAL 

RESOURCE PRODUCTION 

• PERSONAL OPINIONS AND REQUESTS 
40 


82179.023

BEFORE THE COMMITTEE ON ENERGY AND COMMERCE 

SUBCOMMITTEE ON ENERGY AND POWER 

HEARING ON "H.R. 3, THE NORTHERN ROUTE APPROVAL ACT." 

APRIL 1O,TH 2013 

TESTIMONY OF KEITH F. STELTER, CO-OWNER OF DELTA INDUSTRIAL 

VALVES, INC. 

Good Morning, 

My name is Keith Stelter, and I am the president and co-owner of Delta Industrial 

Valves, Incorporated, located in Niles, Michigan. 

We are an American manufacturer of industrial valves, with a focus on producing the 

highest quality, AMERICAN MADE valves from AMERICAN parts and components. 

I have been with the compalJY basically from its start in the mid-1980's. I was initially 

hired as a salesman, and after about a year was promoted to general manager, then 

President about a year after that. 

I have served the company in that capacity since then, and was blessed (along with my 

business partner Mr. Mark Johnson) to have the opportunity to purchase the company in 

2003. 
41 


82179.024

Prior to my coming to Delta Industrial, I worked for several companies in technical sales 

and engineering. 

I grew up on a small, family farm in Baroda, Michigan, where I was taught to work hard, 

and to take advantage of every opportunity to learn and better myself through honest 

effort. 

Delta Industrial Valves, has also been very blessed in that we have been able to grow and 

prosper for the past ten years through careful, controlled expansion of our sales 

throughout the world. A significant amount of this growth has occurred in the oil sands 

producing area of Western Canada, where the high quality of Delta Industrial Valve's 

products are both needed and appreciated by the valve users there. 

Not only has this increased business helped Delta Industrial Valves, directly, but because 

of our growth we have also been able to increase our purchases of goods and services 

with other companies in our area (which has been seen a substantial decline in 

manufacturing and jobs in general). Companies from large corporations like Parker 

Hannifin down to small, two or three man shops in our town have seen their orders with 

us double or triple in the past few years because of our increased business in the 

Canadian oil sands. 

The specific reason for my testimony this morning is my concern regarding the continued 

delay in building the Keystone XL pipeline from Western Canada to the US. I have been 

making regular business trips to Western Canada since the early 1990's. I have seen the 

oil producing companies there go from a group of "crazy" speculators whose cost of 

production for a barrel of oil was four or five times the production cost of OPEC, to being 
42 


82179.025

the world's low cost producer of crude oil, with all of the "major players" in the oil 

business now involved. 

Up until a few years ago these oil companies were growing at a tremendous rate, with 

large, billion-dollar projects taking place as quickly as logistically possible given the 

limited access to manpower and materials (such as valves) in the Alberta area. 

But when the US Government failed to move forward with the Keystone XL pipeline 

many ofthe large projects were put on hold or cancelled. MANY US companies were 

hurt by this, including Delta Industrial. We had just moved from our 25,000 square foot 

manufacturing facility to a "new" 90,000 square foot plant, and had begun to fill it with 

additional equipment, and more importantly, the WORKERS to operate that equipment. 

We were lucky in that both Mr. Johnson and myself are very conservative financially, 

and had managed to purchase the larger facility and equipment without incurring any 

additional debt. Many other companies who supply the oil sands with goods and services 

were not as fortunate and had to either lay off workers or close entirely because of the 

projects that were cancelled or delayed due to the US not moving forward with the 

Keystone XL pipeline. 

Delta Industrial was also blessed that we were able to find new business in other parts of 

the world where we had not been selling our valves previously and therefore didn't have 

to layoff any workers or scale back on production. 

Although Delta Industrial Valves are not actually used IN oil pipelines, our valves are 

used extensively in the facilities on both ends of the pipelines. So the completion of the 

Keystone XL pipeline is very important to us and MANY MANY other American 

companies! Jfthe Keystone XL pipeline can be built, I would see my company probably 
43 


82179.026

doubling in size over the next ten years because of the oil sands projects that were 

cancelled or put "on hold" being brought to life again. 

But the bigger picture that needs to be realized and understood by the current 

administration and congress is that because of what the Canadians perceive as the US 

"thumbing their nose" at Canada, Canada has allowed PetroChina to become more and 

more involved in the oil sands. I have included new articles that detail PetroChina's 

increased foothold in the Alberta oil sands. As the US continues to delay the Keystone 

XL pipeline, the Canadians feel both justified and obligated to allow PetroChina to invest 

more and more, to the point where PetroChina now fully owns several oil producers in 

the Alberta area, in addition to making very significant investments in natural gas 

producing operations in Canada as well. 

This is (or should be) VERY concerning to the US government, the current 

administration, and also the US population in general! Especially since this is an alarming 

trend that started a decade or so ago with the Chinese purchase of several large mining 

operations in Canada that produce a significant amount of the world's natural resources 

such as Copper and Nickel. 

Everyone knows that China has money to spend, and the US has a hard enough time 

competing with them for things like minerals and oil that are VITAL to our national 

security and economy, without HELPING them by insulting our Canadian neighbors .... 

Because of the perceived American attitude regarding the Keystone XL pipeline, several 

plans are currently moving forward for updated and new pipelines across Western 

Canada, so that the oil sands crude can be moved to Vancouver for transport via tanker 

ship to China. 
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Although I understand the environmentalist's concerns regarding the Keystone XL 

pipeline, I'm sure that data would show that both the number and severity of 

environmental issues involving crude oil are much higher for oil that is transported via 

tanker trucks, tanker rail cars, and tanker ships than oil that is transported via pipeline. 

I'm frankly amazed that the Canadian people would allow the Vancouver harbor to be 

used for oil loading and transport due to it's beautiful and somewhat "pristine" nature. 

So it seems like a very logical decision to complete the Keystone XL pipeline for 

economic, national security, AND "big picture" environmental reasons. 

Both Delta Industrial and also me personally feel that the entire world needs to 

concentrate on new technologies that will eventually move away from our dependency on 

crude oil. But unfortunately that technology just doesn't exist right now. Things like 

hybrid cars are getting better, but are still not practical for many people in the US. 

Especially in Northern climates. And when things like corn or soybeans are used in place 

of petroleum for plastic production, some data appears to show that MORE oil is used to 

produce the corn or beans than is saved. 

We have learned that "legislating away" things like incandescent light bulbs without first 

having practical new technology available to replace it just doesn't work. 

So until new, legitimate, cost effective technologies are discovered, crude oil will 

continue to be high in demand not only in America, but all over the world. 

I believe that I speak not only for myself and my company, but also for thousands and 

thousands of other US companies, along with millions of Americans who struggle with 

the double edged sword of disappearing manufacturing jobs and ever higher oil prices. 
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Personally I blame the current administration for many of these problems, especially the 

delay in moving forward with the Keystone XL pipeline. But I also realize that there is 

plenty of blame to go around. 

So in closing I would like to thank the committee and especially Mr. Upton for this 

opportunity to testify, and humbly ask that the committee do whatever possible to 

facilitate the Keystone XL pipeline for the good ofthe American people. 
46 

Mr. WHITFIELD. Well, thank you very much, Mr. Stelter. 

And Mr. Mallino, you are recognized for 5 minutes. 

STATEMENT OF DAVID MALLINO, JR. 

Mr. MALLINO. Thank you, Mr. Chairman. 

On behalf of the 500,000 members of the Laborers International 

Union of North America, I would like to thank you, Ranking Member Rush, and all the members of the subcommittee for allowing 

me to testify today on the union’s behalf. 

My union strongly supports the construction of the Keystone XL 

pipeline. The benefits of this privately funded infrastructure project 

are too great to allow it to be derailed by environmental extremism. 

The Keystone XL will create millions of hours of work with good 

wages and benefits for the union construction workers who build 

this pipeline. 

For many members of LIUNA, this project is not just a pipeline; 

it is in fact a lifeline. The construction sector was hit particularly 

hard by the recession with unemployment in the industry reaching 

over 27 percent in 2010. Joblessness in construction remains far 

higher than any industry or other sector of the economy. It is nearly double the national unemployment rate with over 1 million construction workers currently sidelined. Too many Americans are out 

of work and the Keystone XL pipeline will change that dire situation for thousands of them. 

TransCanada has executed a project labor agreement with 

LIUNA and four other construction unions, guaranteeing that this 

pipeline will be built with the best-trained, highest-skilled construction workers in the world. Regardless of the characterizations 

by the project’s opponents, it is indisputable that jobs will be created and supported by the building of this pipeline. These jobs will 

have a ripple effect of consumer spending that will have a positive 

impact on the States and communities where the pipeline is going 

to be located. 

Unfortunately, some of the pipeline’s opponents have resorted to 

attacking the nature of the work that our members have chosen as 

careers. They have imposed a value judgment that holds these construction jobs to be of a 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 

temporary in order to diminish their importance and they recruit 

others to join in a chorus of negativity in the mistaken belief that 

these jobs have no real value to society. To attack the project, they 

have called these jobs dirty and dangerous. 

The fact of the matter is construction is in fact a dangerous occupation, and when not perform by trained workers, it can lead to unacceptable levels of environmental harm. However, when construction is performed by well-trained union workers, it is less dangerous and can be conducted in a more environmentally sensitive 

manner. 

Construction of this pipeline will also produce needed government revenue at the federal, state, and local levels. These new resources can help our state and local governments protect their communities from harmful budget cuts that have led to layoffs and 

elimination of much-needed services. 

47 

The Keystone XL pipeline will be the safest pipeline in the world, 

as you have heard. The 57 special conditions that have been mentioned before have a degree of safety higher than any typically constructed domestic oil pipeline under the current regulations. 

Additionally, in order to address environmental concerns about 

the Nebraska Sandhills and the Ogallala Aquifer, TransCanada rerouted 195 miles of the pipeline. The Nebraska governor, Dave 

Heineman, once an opponent of the pipeline because of environmental concerns, recently sent a letter to the President approving 

TransCanada’s new 195-mile reroute. 

If the Keystone XL pipeline is not built, Canadian producers will 

seek alternatives to the American markets. This oil will not remain 

in the ground. Producers will find ways to move it to market. Denial of a presidential permit of the Keystone XL increases the likelihood that American markets will miss the opportunity to secure 

long-term commitments for this North American resource. 

The Laborers support H.R. 3, the North American Route Approval Act, a bipartisan bill which will clear away the remaining 

roadblocks preventing construction of the pipeline. As mentioned, 

similar legislation was necessary to allow construction of the transAlaska pipeline which has been a great boon for our members in 

particular, as well as other unions that worked on the project. 

If opponents of American jobs succeed in preventing the Keystone XL pipeline from being built, the socioeconomic benefits of 

this project will not be realized. No local, state, or federal revenues 

will be generated by the construction and operation of the pipeline, 

and there will be no additional income to property owners and 

businesses along the pipeline route. And critically important to 

LIUNA and our members, the jobs that will be created by this massive private investment will be lost. 

I appreciate the opportunity to testify and I will be happy to try 

to answer any questions you may have. 

[The prepared statement of Mr. Mallino follows:] 

48 


82179.029

Testimony of David L. Mallino 

Director, Legislative Department 

Laborers' International Union of North America 

Before the Subcommittee on Energy and Power 

Committee on Energy and Commerce 

US House of Representatives 

Northern Route Approval Act 

H.R.3 

April 10, 2013 
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Mr. Chairman -

On behalf of the 500,000 members of the Laborers' International Union of North America 

(LIUNA), I would like to thank you and Ranking Member Rush and the members of the 

subcommittee for allowing me to testify today. 

LIUNA strongly supports the construction of the Keystone XL pipeline which will move oil 

from deposits in Canada to existing refineries in Texas and Oklahoma. Our union has been 

involved with this project for 4 years and we believe that the benefits of this pipeline are too 

many to allow it to be derailed by environmental extremists. This project will create millions of 

hours of work hours for the members of our unions, with good wages and benefits. 

For many members of the Laborers, this project is not just a pipeline; it is in fact, a life-line. The 

construction sector has been particularly hit hard by the economic recession. The unemployment 

rate in the construction industry reached over 27% in 20 I 0, and joblessness in construction 

remains far higher than any industry or sector, with over I million construction workers currently 

unemployed in the United States. Too many hard-working Americans are out of work, and the 

Keystone XL Pipeline will change that dire situation for thousands of them. 

TransCanada has executed a Project Labor Agreement (PLA) with the Laborers, International 

Union of Operating Engineers, the United Association of Plumbers and Pipefitters, United 

Brotherhood of Teamsters, and the International Brotherhood of Electrical Workers that will 
50 


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cover the construction of the Keystone XL. The construction industry desperately needs the 

massive infusion of private capital generated by the Keystone XL Pipeline. 

Regardless of characterizations by the project's opponents, it is indisputable that jobs will be 

created and supported in the extraction, transportation and refining of this oil, as well as, in the 

manufacturing and service sectors. While economic experts may disagree as to the scale of the 

impact, there is no dispute that the construction and maintenance of the Keystone XL will have a 

ripple effect of consumer spending that will have a positive impact on the states and 

communities where the pipeline will be located. 

Unfortunately, some of the pipeline's opponents have resorted to attacking the nature of the work 

that members of unions have chosen as careers. They have imposed a value judgment that holds 

construction jobs to be of a 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 "temporary" in order to diminish their importance and recruit others to join in a chorus 

of negativity in the mistaken beliefthat these jobs have no "real" value to society. 

To further attack the project, they have characterized these jobs as dangerous and "dirty." The 

fact of the matter is, construction is in fact a dangerous occupation and when not performed by 

trained workers can lead to unacceptable environmental harm. However, when construction is 

performed by well-trained union workers, it is less dangerous and conducted in a more 

environmentally sensitive manner. 
51 


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Construction of this pipeline will also produce needed government revenue at the federal, state, 

and local levels, These new resources can help our state and local governments protect their 

communities from harmful budget cuts that have led to layoffs and the elimination of much 

needed services. 

Many of the pipeline's opponents do not understand the importance of the jobs impact that the 

Keystone XL Pipeline will have. They hide behind unfounded and unrealistic expectations that 

if the project is not built, the development of these oil deposits will cease. According to the US 

State Department's very first Environmental Impact Statement (FEIS), "[t]he proposed Project is 

not likely to impact the amount of crude oil produced from the oil sands." With or without the 

Keystone XL Pipeline, there will likely be little or no effect on the production of oil sands from 

Western Canada. 

The fact is that refineries in the Gulf Coast will continue to seek supplies of heavy crude oil. The 

failure to secure a long-term energy supply from our Canadian allies will cause these facilities to 

continue to rely on oil supplied by unstable, foreign regimes where environmental regulations 

scarcely exist and oil profits are used to oppose the United States economic and security 

interests. 

The Keystone XL pipeline will be the safest pipeline in the world. The 57 special conditions 

developed by the Pipeline and Hazardous Materials Safety Administration and the State 

Department - and voluntarily agreed to by TransCanada - have a degree of safety greater than 

any typically constructed domestic oil pipeline system under current regulations. 
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Additionally, in order to address environmental concerns about the Nebraska Sandhills and the 

Ogallala Aquifer, TransCanada rerouted 195 miles of the pipeline. Nebraska Governor Dave 

Heineman, once an opponent of the pipeline because of environmental concerns, recently sent a 

letter to President Obama approving TransCanada's new 195-mile re-route. It should also be 

noted that about 85% of oil the spills from inland pipelines goes to containment areas around 

breakout tanks or to solid ground. This minimizes the environmental impact of these 

unfortunate spills as compared to discharges or spills that occur at sea. 

If the Keystone XL Pipeline is not built, Canadian producers will seek alternatives to American 

markets. This oil will not remain in the ground; producers will find ways to move the oil to 

market. Several projects are in the planning and permitting phases that would allow the 

movement of this valuable energy resource to Canadian ports for shipment to China and other 

Asian markets. Denial of a Presidential Permit to the Keystone XL increases the likelihood that 

American markets will miss the opportunity to secure long-term commitments for this North 

American resource, which could be lost forever to China. 

The Laborers support H.R. 3, The Northern Route Approval Act, a bipartisan bill which will 

clear away all remaining roadblocks preventing construction of the Keystone XL pipeline. This 

legislation will eliminate the need for a Presidential Permit, address other necessary federal 

permits, and limit litigation designed to further impede that construction of this important energy 

infrastructure project. Similar legislation was necessary to allow construction of the TransAlaska Pipeline. 
53 


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If the opponents of American jobs succeed in preventing the Keystone XL Pipeline from being 

built, the socioeconomic benefits of the project will not be realized: No local, state, or federal 

revenue will be generated by the construction and operation of the pipeline. There will be no 

additional income to property owners and businesses along the pipeline route. And, critically 

important to our unions, the jobs that will be created by the massive private investment will be 

lost. Our organization believes that the Keystone XL Pipeline must be built. 

Thank you for your allowing me to testify before you today. 
54 

Mr. WHITFIELD. Thank you, Mr. Mallino. 

Dr. Jaccard, you are recognized for 5 minutes. 

STATEMENT OF MARK JACCARD 

Mr. JACCARD. Thank you, Mr. Chairman. 

The State Department assumes that denying Keystone XL will 

not slow development of the Alberta oil sands, yet a great deal of 

evidence contradicts this assumption. And ironically, much of the 

evidence comes not from environmentalists but from industry analysts, Canadian politicians, and even the oil sands producers themselves. Quite simply, plans to triple oil sands production over the 

next two decades cannot be realized without increased pipeline capacity. In addition to Keystone XL, two key proposals to ship Alberta bitumen across the province of British Columbia are the 

northern gateway of Enbridge and the Trans Mountain expansion 

of Kinder Morgan. 

I happen to live in Vancouver, British Columbia, where I am a 

professor of energy economics, former chair of the Utilities Commission, and a frequent advisor on energy and climate policy. Industry analysts now rate the probability of these two projects at 

below 50 percent and with good reason. Aboriginal bands along the 

overland routes and on the coast where oil tanker traffic would increase dramatically are strongly opposed. And because these native 

bands have never signed treaties to extinguish their land title, they 

have a powerful legal position in the Canadian courts. 

Just as important, there is strong public opposition in B.C. to 

both projects. The city of Vancouver opposes the use of its port to 

export oil. And the provincial opposition party vows to stop northern gateway if it forms the next government. It has a 20-point lead 

in the opinion polls and the election is next month. 

So if we ask if denial of Keystone XL will slow oil sands development and the carbon pollution it causes, the answer is a resounding yes. Without these three projects, oil sands expansion will be 

slowed as producers scramble to develop less effective, more costly 

alternatives. 

But this is not the most important question to ask when considering a project like Keystone XL. We must have the honesty and 

political courage to ask a more important question. We must ask 

what we must be doing today to slow the global rise of carbon pollution and ask what role the decision about Keystone XL can play 

in this difficult but hugely important challenge. It is not an easy 

question. Oil industry executives don’t want to talk about it. They 

prefer to discuss jobs and wealth from extracting more fossil fuels 

from the Earth’s crust. But rising carbon pollution in our atmosphere is a classic tragedy of the commons. Since each source of carbon pollution is only some percentage of the whole, each polluter 

argues that it may as well continue, even expand. 

China says it should burn coal as long as North America still 

burns fossil fuels. Canada says it should develop oil sands as long 

as China still burns coal. Next, with this logic, Venezuela will 

argue it should develop all of its enormous deposits of heavy oil. 

Given the incredible amount of fossil fuels in the Earth’s crust, scientists have been quite clear that this game’s end state is a dramatically hotter, more unstable planet than the one we have based 

55 

our economies on. A planet we are hurtling toward with great momentum. 

And if we are honest about this tragedy of the commons conundrum, U.S. political leaders know that domestic efforts to reduce 

carbon pollution are meaningless if they are not taken in concert 

with serious efforts by others. Yet Canada and the province of Alberta in particular are not doing their share. And this is very unpopular in a large percentage of the Canadian population. 

In 2009, President Obama stressed the urgency of U.S. action as 

part of a global effort, and on that basis, set a target for the U.S. 

to reduce its emissions by 2020 to 17 percent below their 2005 

level. Independent sources now confirm the U.S. is on track to 

achieve this target. In solidarity, the Canadian Government promised to achieve the same target for 2020. But last year, the Canadian auditor general reported that emissions in 2020 are likely to 

be 7 percent higher rather than 17 percent lower. And the main 

reason, not surprisingly, is the projected oil sands growth. 

The Keystone XL decision provides the ideal opportunity for the 

U.S. Government to signal to its allies, trading partners, and the 

rest the world that the climate tragedy of the commons cannot be 

addressed if we are not pulling together. It cannot be addressed if 

we accelerate the extraction of fossil fuels from the Earth’s crust. 

It cannot be addressed if countries like Canada are free-riding on 

the efforts of countries like the U.S. 

In denying Keystone XL, the U.S. Government would simply explained to Canada that it is extremely concerned with rising carbon 

pollution and with the fact that it is incurring costs to keep its pollution reduction promises and expects other countries to meet their 

promises, too. It would also explain that it will next be talking to 

other countries like China about free-riding on U.S. efforts. 

In solving this extremely difficult global climate tragedy of the 

commons, we should expect nothing less from the world’s most 

powerful Nation. 

Thank you. I will be pleased to answer questions. 

[The prepared statement of Mr. Jaccard follows:] 

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Asking the wrong question about Keystone XL 

Dr. Mark Jaccard 

Simon Fraser University, Vancouver 

Testimony to the US Congress Subcommittee on Energy and Power hearing entitled 

"H.R. 3, the Northern Route Approval Act." 

April 10, 2013 

Summary 

The Draft Supplemental Environmental Impact Statement of the US State Department assumes 

that denying the Keystone XL pipeline will not appreciably slow development of the Alberta oil 

sands and the carbon pollution it produces. There is considerable evidence that contradicts this 

finding. Notably, the lowest cost and highest volume method of transporting oil sands product is 

via pipelines, yet the other two major proposed pipelines from the oil sands - both of them 

crossing British Columbia - are unlikely to be approved. Denial of Keystone XL and both of 

these two pipelines will definitely slow development of the oil sands. 

This is an important step in addressing increasing carbon pollution in our atmosphere, but it must 

be combined with many such acts in North America and the rest of the world. Decisions about 

projects like Keystone XL are of little use unless they are leveraged to greater effect. In this case, 

the US government should note that it cannot support oil sands expansion while the Canadian 

government is not making the effort necessary to achieve its 2020 emission reduction target - a 

target that the US is on course to achieve. 

Scientists calculate the global carbon budget that would prevent global temperatures from rising 

more than 2 °C above pre-industrial levels, and from this energy analysts estimate the economic 

viability of fossil fuel resources, like the oil sands. In 2012, researchers at the MIT Joint Program 

on Science and Policy of Global Change published a paper showing the oil sands as non-viable if 

global emissions fall enough to prevent a 2 °C increase, the very target to which President 

Obama and other world leaders are committed. Disallowing Keystone XL is an important first 

step in keeping our promises to ourselves and our children. 
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Will Keystone denial reduce oil sands development? 

The Draft Supplemental Environmental Impact Statement of the US State Department assumes 

that denying the Keystone XL pipeline will not appreciably slow development of the Alberta oil 

sands and the carbon pollution it produces. There is considerable evidence that contradicts this 

assumption, and its importance is noted by industry analysts, Canadian politicians and even the 

oil sands producers themselves. 

Quite simply, in the absence of Keystone XL, oil sands producers will find it more difficult to 

profitably get their product to market. Over the next two decades, the oil sands industry is 

considering plans to triple its production. To move forward, these projects require a significant 

expansion of low cost transportation infrastructure. They have potential alternatives to Keystone 

XL, but these are more costly and more difficult to scale-up to the capacity of Keystone XL, and 

each faces significant impediments. 

Because of their large capacity and low cost, pipelines are preferred. Thus far, the two major 

pipeline proposals that might compensate for the denial of Keystone XL would ship Alberta 

bitumen through British Columbia (BC) and then by oil tanker to refineries in Asia and 

elsewhere. One is the Northern Gateway pipeline proposal of En bridge, which would be a new 

pipeline from the oil sands straight west to the north BC coast. The other is the proposal of 

Kinder Morgan, which would significantly expand the existing Trans Mountain pipeline from 

Edmonton to Vancouver. Both of these would involve a dramatic increase in oil tanker traffic on 

the Be coast, in the lattcr case through the port of Vancouver. 

The Northern Gateway pipeline proposal is opposed by aboriginal bands along its route and on 

the coast, and their land rights in BC have a strong standing in the courts (most have not signed 

treaties that extinguished their land claims). Just as important, BC will have a provincial election 

in May. The main political opposition has a significant lead in opinion polls (almost 20 points for 

the past several months) and has promised to do everything it can to stop Northern Gateway 

should it be elected, and should the project be approved by the Canadian federal government. As 

2 
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a new government, it could launch its own environmental assessment, and afterwards impose 

stringent conditions that would effectively render the project infeasible. 

The Trans Mountain pipeline expansion proposal is opposed by key municipal governments in 

the Vancouver metropolitan region, including the city of Vancouver. These municipal political 

leaders reflect the strong concerns of a significant percentage of their voters about the risks of 

pipeline ruptures and oil tanker accidents. Since governments at the provincial and federal level 

are dependent on voter support in the region, political enthusiasm for the project is unlikely. 

Again, aboriginal bands along the route and on the coast oppose the project and vow to fight it in 

the courts. Thus far, most opposition to bitumen transport through BC has focused on the 

Northern Gateway. If the project is cancelled. this opposition would shift its focus to the Trans 

Mountain expansion proposal. 

Industry analysts have noted that these pipelines through BC have less than a 50% chance of 

being built. If they and Keystone are not built, industry watchers agree that oil sands output will 

be reduced from what it otherwise would have been. 

This is not to say, however, that oil sands producers will stop pursuing new means of getting 

their product to market. Facing significant discounts for their product, some oil sands producers 

have turned to rail as a temporary solution. However, rail alternatives are more complicated and 

costly, and extremely difficult to scale-up to the level of throughput that would fully compensate 

for the absence of Keystone and either ofthe BC pipelines. Also, efforts to expand the use of rail 

for transporting bitumen will create its own counter pressure from concerned citizens along rail 

right-of-ways and trans-shipment hubs. 

More recently, TransCanada is exploring the option of transforming its west-to-east mainline 

from natural gas to bitumen. This proposal would require the conversion of a half century old 

natural gas pipeline right-of-way to move oil sands bitumen - a plan that will generate more 

public scrutiny following the rupture of the repurposed Pegasus pipeline in Arkansas. Moreover, 

TransCanada's plan would require the construction of a pipeline along new right-of-ways 

through Quebec and New Brunswick. This would not equate to all of the oil sands development 

3 
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that would have been enabled by Keystone XL and either of the BC pipelines, and it would again 

trigger a reaction as provincial governments along the way were presented with public concerns 

similar to those in BC. It must be remembered that opinion polls show that at least 40% of 

Canadians oppose oil sands expansion. Opposition toward oil sands infrastructure in Quebec, 

where new pipeline right of ways and construction would be required, is particularly strong. 

What should we be asking about Keystone XL? 

In the short to medium term, the denial of Keystone XL will help to slow development of the oil 

sands. As a growing source of carbon emissions, slowing the expansion of oil sands is an 

important step. But this act alone is not enough to stem the rapid rise of human carbon pollution. 

It must be combined with many such acts in North America and the rest of the world. And that's 

why the decision about Keystone XL must be made in consideration of a far broader, far more 

important question. 

The earth's atmosphere is a global commons, and as such it is threatened by the well-known 

"tragedy ofthe commons" that humans have faced in many other situations. And what we know 

about these situations is that a single act is never enough. If you reduced your cod catch on the 

Grand Banks 30 years ago, and this was not required of everyone, others would still decimate the 

cod stock - which is exactly what happened. If your factory stopped spewing harmful effluent 

into a nearby lake, the five neighboring factories would still pollute the lake - in the absence of 

an effluent restriction or fee. If you alone switched to transit for your commute to work, this 

would not eliminate urban smog caused by other vehicles. All of these are obvious 

manifestations of the tragedy of the commons and the solution it requires: we must prevent 

actions that individually seem modest, but that cumulatively impose significant costs on us and 

our children. 

In the case of the atmosphere, we must soon decrease and ultimately stop its use as a dumping 

ground for carbon dioxide and other greenhouse gases if we are to avoid locking-in to risky, and 

certainly costly, levels of global warming. This is an extremely tall task - as three decades of 

failure show. It's a tall task because this particular tragedy of the commons is global- everyone 

4 
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on the planet can access the atmosphere for dumping carbon pollution. We have enough 

challenges dealing effectively with tragedies of the commons within a single political jurisdiction 

-like reducing urban smog or protecting a local lake from effluent. The difficulty is magnified 

exponentially when it requires cooperation among the countries of the world - like preventing 

the decimation of an ocean fish stock. 

Because of this broader imperative, the more important question to ask about the Keystone XL 

decision is not what its incremental effect on emissions might be, but rather what its cumulative 

effect could be if used as a lever to influence other decisions affecting carbon pollution. 

President Obama, Secretary of State Kerry, and other US political and corporate leaders have 

stressed the urgency of US action as part of a global effort to reduce carbon pollution. On this 

basis, the president has set a target to reduce US greenhouse gas emissions by 2020 to 17% 

below their 2005 levels. In 2009, the Canadian government shifted its own 2020 target so that it 

was identical to that of the US. Canada also adopted US vehicle fuel efficiency standards and 

like the US is reducing the use of coal to generate electricity, primarily because of policies of the 

Ontario government. 

But the similarities end there. For the US is on pace to achieve its target, while Canada is most 

definitely not. Last year Canada's Auditor General relied on Environment Canada forecasts to 

report that total emissions in 2020 were likely to be 7% above rather than 17% below 2005 

levels. 1 The main reason for the inability of Canada to meets its common target with the US is 

the rapidly rising emissions from its increasing oil sands production, emissions that would 

continue to increase ifnew pipelines allow significant expansion of the oil sands by 2020. 

US political leaders know that domestic efforts to reduce carbon pollution are meaningless if 

they are not realized in concert with efforts by other countries. The focus on Keystone XL has 

illustrated the problems with Canada's currently weak climate policies. The US government can 

and should express its concern that Canada, its biggest trading partner, is not keeping its promise 

I Auditor General of Canada, Commissioner of the Environment and Sustainable Development, 2012, Report to the 

House a/Commons. 

5 
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to reduce emissions on pace with the US, especially considering how Canada is its largest source 

of foreign imported oil. Until there is a credible federal climate policy in Canada, and a strong 

likelihood that such a policy would lead to comparable emission reductions in Canada, the U.S. 

administration should deny approval of the Keystone XL pipeline. 

What is the future of the oil sands and associated infrastructure with a 2 °C constraint 

A US government decision to reject Keystone XL would be a start at tackling the global 

challenge of our atmospheric tragedy of the commons. But much more is needed. 

Climate scientists, economists focused on sustainable energy like me, and many others rightfully 

concerned about global warming know that we cannot be building long-lived infrastructure that 

causes carbon pollution and still hope to prevent dangerous levels of global warming. And this is 

why we must ask what should happen to the oil sands, and associated infrastructure like 

Keystone XL, in a world in which the international community acts to prevent a 2 °C increase of 

the average global temperature from pre-industrial levels - a threshold that scientists find 

significantly increases the likelihood of catastrophic climate change in this century. Fortunately, 

many leading independent researchers are doing these calculations - repeatedly. 

Several recent research papers in the journals Science and Nature have calculated the carbon 

budget for not exceeding a 2 ° C increase. One example is the 2013 paper by Rogelj et al. 2 Like 

other papers, it shows that global greenhouse gas emissions, of which carbon dioxide is by far 

the most important, should be falling by 2020, and declining rapidly to mid-century so that 

global emissions in 2050 are 50-75% lower than today. 

The connection between this global carbon budget and the economic viability offossil fuel 

resources like the oil sands has also been studied. A 20 I 0 report by the International Energy 

Agency includes scenarios that estimate how global carbon emission constraints would affect the 

2 Rogclj, McCollum, O'Neill and Riahi, 2013, "2020 emission levels required to limit warming to below ZOC," 

Nature Climate Change, V.3, April, 405-412. 

6 
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output from various conventional and unconventional oil resources.3 Since unconventional oil 

resources have higher production costs, they are most vulnerable to a declining global demand 

for oil as we reduce carbon pollution. In other words, investments to significantly increase the 

total oil production from a combination of US shale oil, Canadian oil sands and Venezuelan 

heavy oil are inconsistent with the 2°C limit. This does not mean shutting down production of 

shale oil and oil sands today. But it clearly means not expanding production facilities and not 

building major new pipelines to support this expansion. 

In some cases, independent researchers have even assessed the economic prospects for individual 

fossil fuel developments under carbon constraints. In the case of the Alberta oil sands, 

researchers at the MIT Joint Program on the Science and Policy of Global Change published a 

paper in 2012 by Chen et al. in the journal Energy Policy.4 While that study did not test a 

scenario in which global emissions fe\l enough to prevent a 2°C increase, it did test a lessconstraining scenario in which emissions fell about 30% by 2050. In other words, this is closer to 

a 4°C increase scenario - one that many climate scientists describe as catastrophic. Yet even in 

this less-constraining scenario for carbon pollution, the oil sands are found to be non-viable and 

production ceases by mid-century. If we act to prevent dangerous climate change - to which 

President Obama says he is committed - there is definitely no need for new pipelines to the oil 

sands, and even existing ones may be in peril over the coming decades as production stagnates. 

Acting on the right question 

If countries had started to reduce carbon pollution when this necessity was first acknowledged by 

a group of world leaders in 1988, when each G7 country committed to a reduction target, and if 

these countries had succeeded in the coming decade in globalizing their effort - again, probably 

by a combination of financial support to developing countries and the threat of trade measures to 

prevent free-riders (carrots and sticks) - the transition away from a carbon polluting path would 

have been much easier. Initially low carbon po\lution levies in the range of $5-$10 per ton of 

CO2 pollution from fossil fuels would have risen in modest increments of say $5 per year to a 

3 International Energy Agency, 2010. World Energy Outlook. 

4 Chan, Reilly. Paltsev and Chen. 2012, "The Canadian oil sands industry under carbon constraints," Energy 

Journal, V.50, 540-550. 

7 
63 


82179.042

level of about $120 per ton today. With this pollution constraint, an economy like China might 

not have grown at 10% per year, but energy-economy models predict that its growth would still 

have been well above 5% per year, while avoiding the dramatic increase in its carbon pollution 

to its current leading level in the world. And the effect over a long-time period on the growth rate 

ofOECD economies would have been negligible, while their carbon pollution would have fallen 

substantially. 

Unfortunately, we have procrastinated - badly. And this leaves us in a situation in which instead 

of allowing private companies and individuals to decide what investments to make in a world 

that has a rising price on carbon pollution (and in which that pollution is declining), we have to 

responsibly rule out investments that they would not be making had we not procrastinated. Under 

the circumstances, that is the only responsible way to act. If corporations won't rule out carbon 

polluting investments of their own accord (in spite of their marketing claims of being 

"sustainable" and adhering to principles of "corporate social responsibility), we must ask 

governments to prevent such investments. In the specific case of the oil sands, we must ask 

governments not to allow investments that make it easier to increase their contribution to carbon 

pollution, whether in North America or elsewhere. This means denying Keystone XL. 

8 
64 

Mr. WHITFIELD. Thank you, Dr. Jaccard. And thank all of you for 

your testimony. 

At this time, the members of the panel will be asking questions, 

and I will recognize myself for 5 minutes. 

I think Dr. Jaccard did make a good point and that is, as we 

know in America, for example, our CO2 emissions are the lowest 

they have been in 20 years, and yet we know China and some other 

countries’ CO2 emissions continue to increase dramatically. And it 

is difficult to talk about any energy project today anywhere without 

a discussion about the impact on climate change. 

And many of you may have read the five-page article in the most 

recent issue of the Economist in which it talks about climate 

change scientists are puzzled that the temperature rise has been 

flat for the last 10 years even though carbon dioxide emissions are 

going up significantly in most other countries around the world except in the U.S. and maybe some in Europe. 

So there are some interesting developments coming right now on 

this issue, and one of the problems we have in the U.S., we feel 

like that we don’t have to take a backseat to anyone on the good 

job that we have done with the environment. But the question is 

China talks a good game but they are burning more fossil fuels 

now than ever, and here in the U.S., we are the only country in 

the world that technically you cannot even build a new coal-fired 

plant in this country if the greenhouse gas regulations are finalized, which they will be soon, and so we are sort of shooting ourselves in the foot. 

But this is about Keystone pipeline and our ability to be energy 

independent. So Dr. Pourbaix, one question I would like to ask 

you—we had a hearing on this a year or so ago and one of the 

members raised an interesting point and was talking about that 

they estimated 800,000 tons of steel would be used in this project. 

And this member had indicated that he was upset because he understood that TransCanada was not going to be buying U.S. steel, 

not buying steel produced in the U.S. He specifically pointed out 

that they would be coming from an Indian multinational company 

called Welspun Corporation, and also a Russian company. And this 

member said that he would feel a little bit better if just one small 

amount of the steel for this project would be coming from America. 

Would you address that issue? Would there be steel coming from 

America if this project is approved? 

Mr. POURBAIX. Sure, I would be happy to, Chairman. 

In order to be in a position to build this pipeline, we had to start 

the procurement of pipe for the pipeline years ago, and we have 

procured approximately 75 percent of the pipe for this project from 

North American suppliers mixed between a Canadian supplier in 

Saskatchewan and a supplier in Arkansas. And we would have procured more, but at the time, those were the two companies that 

had the ability to produce steel with the very sophisticated specifications we require. Since that time, we have announced a number 

of expansions to the Keystone XL project and 100 percent of the 

pipe for those projects, 40,000 tons, has been sourced directly from 

American suppliers. 

Mr. WHITFIELD. And you all have already purchased the steel? 

Mr. POURBAIX. Yes. 

65 

Mr. WHITFIELD. And could you share with us the amount of 

money that that cost roughly? 

Mr. POURBAIX. It would be in the ballpark of somewhere between 

probably 1 1⁄2 and $2 billion. 

Mr. WHITFIELD. Two billion? 

Mr. POURBAIX. Yes. 

Mr. WHITFIELD. And one thing about Keystone, there is not any 

government money involved in the Keystone project, is there? 

Mr. POURBAIX. No, not at all. 

Mr. WHITFIELD. It is all private dollars? 

Mr. POURBAIX. Yes. 

Mr. WHITFIELD. OK. Now Mr. Mallino, you had mentioned in 

your testimony that the labor unions had signed a project labor 

agreement with TransCanada. That is the case, right? 

Mr. MALLINO. It is. And also, can we get a couple more heat 

lamps on me? If my mom is watching and if I am not truly crimson 

she will be disappointed if I can’t even out the red in my face. 

TransCanada has been a great partner in this and the project 

labor agreement was executed probably close to 2 years ago and it 

will guarantee that the construction on the U.S. portion of this 

pipeline will be built 100 percent union. And there are five unions 

totally involved. 

Mr. WHITFIELD. How many jobs would you anticipate that would 

bring? 

Mr. MALLINO. Well, this has been an issue and I don’t take up 

too much of the time. In the construction sector, we talk about 

hours because depending upon how many people you have on a job, 

you can get it done much more quickly. 

Mr. WHITFIELD. Right. 

Mr. MALLINO. It will be millions of hours for the laborers. 

Mr. WHITFIELD. OK. 

Mr. MALLINO. Right now, we have done about a half-a-million on 

the Southern Gateway project just in the last 6 months of last year. 

There is probably an equal number down there on that project. 

Mr. WHITFIELD. OK. 

Mr. MALLINO. Keystone XL is a multiple of that. 

Mr. WHITFIELD. OK, thanks. Mr. Rush, you are recognized for 5 

minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

Dr. Jaccard, I am in kind of a difficult position. Maybe you can 

help me out. It seems as though the environmental community of 

which I have had a lot of respect for and a lot of collaboration with 

over the years, it seems to me that they are really downplaying the 

impact in importance of jobs as it relates to this particular issue. 

And I represent a district that is struggling economically, 

multigenerational unemployment, and it seems as though there is 

no concern or any contemplation of the problems that my constituency and other constituencies across the country have in terms of 

economic plight. Where do the environmentalists place as a priority 

on this particular project the creation of jobs? 

Mr. JACCARD. Thank you. I don’t represent environmental community, but I am an economist who studies how economies respond 

to different kinds of policies. Ten years ago, I wrote a book called 

‘‘Sustainable Fossil Fuels.’’ I wrote that book because I have nothVerDate Nov 24 2008 10:52 Sep 17, 2013 Jkt 037690 PO 00000 Frm 00071 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-26 CHRIS
66 

ing against any fossil fuel. I actually believe that fossil fuels are 

a very valuable resource for humanity. I just refuse to close my 

eyes to the impacts of carbon pollution if we burn those fossil fuels 

and don’t capture the carbon. 

Mr. RUSH. Thank you. Thank you. 

Mr. JACCARD. And so therefore—— 

Mr. RUSH. Thank you. I—— 

Mr. JACCARD. I looked at the jobs. There are a lot of jobs created 

in capturing carbon, burying it, in making alternatives to fossil 

fuels. 

Mr. RUSH. Thank you. Mr. Swift, will you answer that, my question? 

Mr. SWIFT. Yes. Well, in the United States, the environmental 

jobs, green jobs, have been one of the fastest-growing sectors in the 

U.S. economy. It was one of the only sectors that grew during the 

recession. If you look at the dollar investment in clean energy generates about three to four times as many jobs as a dollar invested 

in the fossil fuel industry. And these are the sort of jobs that tend 

to be jobs that stay with us, that are manufacturing jobs, jobs that 

allow us to export the solutions to the energy dependence or oil dependence issue that United States—— 

Mr. RUSH. Thank you, very much. Thank you. 

Mr. Mallino, how many of the jobs that is now in the southern 

sector of this project that is currently operating, what is the percentage of minority participation in terms of contracts and also 

jobs? 

Mr. MALLINO. You know, we have answered this question for you 

in the past, Congressman. We responded for the record last time 

we don’t track those numbers, but our union reflects the communities where we are located. So in areas where there is high diversity, our union is very diverse. In areas of low diversity, we are not 

as diverse. We reflect the communities where our locals are located, 

but we don’t track that number. 

Mr. RUSH. All right. Mr. Pourbaix, do you track those numbers? 

Mr. POURBAIX. We do try to track those numbers, and my experience is that on the southern leg of the Gulf Coast it does depend 

by community, but I had asked for this information a day or so ago 

and I saw ranges. Depending on what community, it was anywhere 

between 12 percent minority participation in the workforce and 55 

percent minority participation in the workforce. So we do have significant minority participation in the southern leg. 

Mr. RUSH. All right. Mr. Chairman, I yield back. 

Mr. WHITFIELD. Thank you, Mr. Rush. At this time I recognize 

the gentleman from Texas, Mr. Barton, for 5 minutes. 

Mr. BARTON. Thank you. Thank you, Mr. Chairman. 

I don’t think it is a secret that I am a proponent and supporter 

of the Keystone pipeline, so it is somewhat redundant for me to ask 

too many questions. So I would point out, though, that people like 

me that support hydrocarbon development don’t deny that the climate is changing. I think you can have an honest difference of 

opinion on what is causing that change without automatically 

being either all in that it is all because of mankind or it is all just 

natural. I think there is a divergence of evidence. 

67 

I would point out that if you are a believer in the Bible, one 

would have to say the great flood is an example of climate change. 

And that certainly wasn’t because mankind had overdeveloped hydrocarbon energy. 

So in any event, I would ask the gentleman from the Canadian 

Government if you agree with the professor at the other end of the 

table that if we don’t do Keystone that these projects won’t be developed that get the oil to the west coast of Canada and onto Japan 

and China. Do you agree that it is Keystone or nothing, or do you 

think that the energy will be developed and sent somewhere? 

Mr. POURBAIX. I think I would disagree with that that characterization and the similar characterization made by Mr. Swift. In fact, 

I mean, I think what we are seeing, the reason that there has been 

so much more rail transport out of the Bakken is that there were 

very few existing pipelines and so rail was the only option. Until 

very recently in Alberta, the existing pipelines had the capacity to 

take away that oil. 

As those pipelines are reaching capacity—and I am speaking 

with the senior people in these oil companies on an almost daily 

basis and all of them are executing on strategies to build more rail 

terminals and to move more oil by rail. The typical number that 

we see quoted is $15 a barrel to get that oil from the oil sands to 

the U.S. Gulf Coast. I would also add that comes with a three 

times higher emission of greenhouse gas to move a barrel of oil by 

rail than by pipeline and a much significantly higher risk of a spill 

by doing it that way. 

So in fact if the oil is going to be produced and is going to be 

moved by rail, which I think the evidence is clearly in favor of that, 

by denying the Keystone XL permit, you are almost certainly going 

to increase global GHG as these rail sources proliferate. And that 

is exactly what we are seeing right now. And if you talk to the 

major Canadian rail companies, they see it as their largest area of 

growth is moving oil out of the oil sands to U.S. markets. 

Mr. BARTON. Of what we call the Keystone pipeline, which is not 

a legal term, it is just a general term, how much of that is either 

in existence or already permitted and in the process of being built? 

Mr. POURBAIX. So we have already—we call it base-Keystone 

that has been service since 2010. That was a project that was in 

the range—it is about a $7 billion project that is moving 600,000 

barrels of oil a day to Cushing and refining markets in the Midwest. We are presently building the southern leg of what was originally Keystone XL from Cushing to the Gulf Coast, and all of that 

is soon to be in service. The only thing we are here—— 

Mr. BARTON. How many miles is that? 

Mr. POURBAIX. Oh, gee. I would probably get it wrong, but it 

would be of the—— 

Mr. BARTON. This is the government. It doesn’t have to be exact. 

I mean—— 

Mr. POURBAIX. I mean probably if you add it all up, it is probably 

somewhere in the range of over 2,000 miles of pipe. 

Mr. BARTON. You got about 2,000 either built or being built. How 

much is in question in this permit that we are—— 

Mr. POURBAIX. Just that portion from the Alberta border to Nebraska, and so probably about 800 miles. 

68 

Mr. BARTON. So about 2⁄3 of it is built—— 

Mr. POURBAIX. Yes. 

Mr. BARTON [continuing]. Or ready to be built and about 1/3 is 

under debate. 

Mr. POURBAIX. Exactly. 

Mr. BARTON. OK. Mr. Chairman, my time is up but I must think 

we are going to change minds in this hearing. Those of us that are 

for it are going to be for it, and those of us that are against it are 

going to be against it. I would hope that we would schedule a vote 

and bring it to the floor and let’s get it out of committee and get 

to the floor and have a vote and send it to the Senate. 

Mr. WHITFIELD. Thank you. At this time, I recognize Mr. 

McNerney for 5 minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. I want to thank the 

panel for your testimony today. It is even and well-balanced and 

I want to thank the chairman for inviting a balanced panel this 

morning. 

Mr. Swift, how do you believe construction of the Keystone pipeline would affect domestic gas supply and domestic gas prices? 

Mr. SWIFT. Well, the important thing to understand is Keystone 

XL is really a pipeline intended to get oil out of the U.S. Midwest 

and to the Gulf Coast. And so what Keystone XL will do is it will 

divert oil from the Midwest where it can be refined in the Gulf 

Coast increasing oil prices in the Midwest. And one thing to understand about the Gulf Coast refineries is there—sorry about that. 

The Gulf Coast refineries where Keystone XL would bring the oil 

are exporting a significant amount of their refined product. Nearly 

3 million barrels a day was exported from Gulf Coast refineries in 

December of 2012. 

Mr. MCNERNEY. Anyone else care to answer that question, how 

Keystone will affect domestic gas prices? 

Mr. POURBAIX. I would be happy to—— 

Mr. MCNERNEY. Sure. 

Mr. POURBAIX [continuing]. Give a brief comment on that. Mr. 

Swift did make an accurate characterization with respect to right 

now, because there is a lack of pipeline takeaway capacity in the 

U.S. Midwest, recently, crude oil prices in the U.S. Midwest have 

been lower than they have been on the Gulf Coast. That is being 

solved by our Gulf Coast project. Enbridge has a project; Enterprise 

has a project. That bottleneck is being removed. This Keystone XL 

project we are talking about today is only from Alberta to Cushing. 

So it is not going to exacerbate or change that problem, but that 

differential between Gulf Coast prices and Midwest prices is going 

to be removed in any event by the projects that are under construction. 

And one other point I would say is the fact that there has been 

lower-priced oil in the Midwest has not led to lower gas prices for 

Midwest consumers; it has led to higher margins for refiners that 

have been benefiting by that. So to suggest that any of those 

projects will increase gasoline prices would be incorrect. 

Mr. MCNERNEY. Or to lower them? 

Mr. POURBAIX. I would just say on balance what Keystone is 

doing is adding another source of supply to a finite demand. And 

it has been a long time since I took economics, but typically, when 

69 

you add incremental supply to a finite demand, the impacts should 

be to reduce prices. But I don’t think anyone is suggesting that it 

would be a very significant reduction. 

Mr. MCNERNEY. Thank you. 

Mr. Swift, how much more carbon is emitted per unit of gasoline 

produced and sold to a consumer from tar sands versus conventional oil? 

Mr. SWIFT. I think the State Department’s estimates were somewhere in the up to 17 percent as far as the lifecycle emissions for 

a unit of gasoline and—— 

Mr. MCNERNEY. Does that include the energy required to get the 

oil out of the ground? 

Mr. SWIFT. I believe it does. I believe it does. But much of that 

is from the production side of things. 

Mr. MCNERNEY. Anyone else care to answer that question? 

Mr. POURBAIX. Just one quick comment I would say on that is 

that the range I think they had given was somewhere between 

about 12 and 17 percent. They base that analysis on a barrel of oil 

sands oil versus the average barrel of oil refined in the U.S. It is 

worth noting that those Gulf Coast refineries that Keystone is targeting are presently configured and run heavy oil so they will not 

be replacing a barrel of Canadian heavy with a barrel of light. 

They will be replacing it with a barrel of Venezuelan heavy or some 

other heavy, in which case that percentage, I would argue, would 

be smaller. 

Mr. MCNERNEY. Thank you. 

Mr. Jaccard, I assume that you believe that global warming is 

caused to a large degree by human activity. 

Mr. JACCARD. I believe in listening to scientists. 

Mr. MCNERNEY. Thank you. One of the things in your written 

testimony that was brought out was that in order to achieve a less 

than 2 degree Celsius change in global temperatures, the Keystone 

pipeline needs to be a part of that, whether it is prevented or not. 

Could you comment on that? 

Mr. JACCARD. That Keystone needs to be part of it. What I would 

like to say is that I am involved in a lot of analysis of what happens to global energy markets to meet the constraints of 2 degrees 

Celsius that scientists and political leaders have talked about. And 

when we run those, you don’t expand oil sands in Canada, you 

don’t expand the Venezuela heavy oil, and that means it doesn’t 

mean shutting down the oil sands. It would run for decades, but 

you are not trying to triple production. And that means projects 

like Keystone and the projects in British Colombia I mentioned are 

not part of that feasible future. And in my testimony I refer to a 

study by MIT researchers that just focused on the Alberta oil 

sands. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. WHITFIELD. At this time I recognize the gentleman from 

Texas, Mr. Hall, for 5 minutes. 

Mr. HALL. I thank you, Mr. Chairman. 

Mr. Pourbaix, I have a question to ask you but I first want to 

just note that the chairman introduced in the record the impact of 

climate change, and we have been debating that here for years. 

And Dr. Jaccard says he believes in listening to the scientists. 

70 

Well, we have listened too much to the scientists. And the liberal 

press doesn’t always report it to the people what the scientists on 

either side say. They say more. We need more work, more investigation, more hearings. And we have sent 22 bills over to the Senate. One of them got through and the President vetoed it. 

And Mr. Barton says he doesn’t deny that the climate is changing. It is changing so none of us deny that. We know we have to 

keep an eye on that. We know we have to be aware of it, but I will 

tell you who is keeping an eye on it, it is the taxpayers of this 

country. We spent $34 billion and we haven’t changed one iota. So 

that makes me think I am more concerned about global warming 

than I am global freezing. 

And the testimony and all the acts of this Congress has been to 

look at it, be aware of it, listen to scientists that come here under 

oath to tell the truth. 

So my question to you, Mr. Pourbaix, in your written testimony— 

I am not going to allude to you that you didn’t tell the truth at 

all—in your written testimony, though, you mentioned that 60 percent of the southern pipeline segment is complete. And would you 

give some of the examples of the economic impact that that is having? 

Mr. POURBAIX. I think it is important to remember that that 

small portion of what was originally the Keystone XL pipeline is 

in and of itself a 2–1/2 to $3 billion pipeline. We have put 5,000 

construction workers directly to work working on that project and 

the pipe, the pumps, the consumables, all of that equipment that 

is required for that project was largely sourced from American 

sources, and so all of those spinoff benefits are accruing to the communities that supplied that equipment. 

Mr. HALL. Tell me specifically how is that affecting Texas? 

Mr. POURBAIX. I don’t have the specific data right in front of me, 

but obviously the lion’s share of that project is in the State of 

Texas so a large part of those economic benefits would be accruing 

in the State of Texas. 

Mr. HALL. By the way, are you exercising eminent domain in 

Texas at this time? 

Mr. POURBAIX. TransCanada—— 

Mr. HALL. Are you purchasing any land in the State of Texas at 

this time? 

Mr. POURBAIX. We have purchased massive quantities. We have 

purchased easements which give us the right to go on property. 

Over 99 percent of those easements were negotiated—— 

Mr. HALL. Does that easement require you to have the landowners’ right in offering letting you go on the property? 

Mr. POURBAIX. Yes, absolutely. And in 99—— 

Mr. HALL. Well, that is not the way it is occurring in my family. 

I live in the smallest county in Texas and you are going right 

through the middle of it. 

Mr. POURBAIX. Yes. 

Mr. HALL. I support the bill’s overall thrust. I support telling the 

President that we don’t agree with him on crossing the State on 

the international boundary because of the influence that this 

amount of money and jobs would mean to all of us. 

71 

But when they talk about ANWR, little ANWR is just 19 million 

acres and we want to drill on 2,000 acres. If that runs at 19 million 

acres, it is like saying drop a silver dollar in Yankee Stadium and 

it ruins the whole outfield. That is outrageous. What it has done 

is cost the American taxpayers $34 billion and we haven’t changed 

one iota of global warming. Do you agree with that? 

Mr. POURBAIX. I—— 

Mr. HALL. If we have changed it, tell me where you have 

changed it. 

Mr. POURBAIX. No, I think it is a fact that the efforts to date 

have had relatively little impact on the global temperature. I have 

seen a number of studies done on Keystone that if Keystone were 

denied and were not built, it would have—or sorry, if the oil sands 

were not developed, it would have an impact of less than somewhere in the range of 5⁄100 of 1 percent. 

Mr. HALL. And I will yield back my time in a minute, but I just 

have to say that the only changes I have noted is the change in 

Al Gore’s deposits at the bank and a bunch of scientists that come 

here and testify for money. I yield back. 

Mr. TERRY [presiding]. Thank you, Mr. Hall. At this time we recognize the full committee ranking member, Mr. Waxman. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

Dr. Jaccard, I appreciate your thoughtful testimony today. Some 

supporters of the Keystone XL pipeline acknowledge that using oil 

from the tar sands produces much more carbon pollution than conventional oil. And they recognize this extra carbon pollution will 

make climate change worse. Some, none on this committee, but 

some. 

But they argue that building the Keystone XL pipeline to move 

this tar sands oil won’t make climate change worse. The argument 

is that the oil companies will carry out their plans to triple production of the tar sands whether or not Keystone XL is built. But oil 

companies can only do that if they have real alternatives to Keystone XL. They can’t expand the tar sands if they can’t get oil to 

the market. And right now, that is a big problem for the oil industry. 

So this is a key question. Is Keystone XL necessary to tar sands 

expansion plans? If yes, then building the pipeline will produce 

more carbon pollution and make climate change worse. Is there any 

way that tar sands producers can realize their plans to triple production levels without building new pipelines or figuring out other 

ways to get the tar sands oil to market? 

Mr. JACCARD. I don’t believe so, not when we are talking tripling. 

Yes, of course, you can move some by rail and so on but that will 

have its own challenges about allowing massive amounts of rail 

transport of oil even as Mr. Pourbaix talked about what those risks 

and impacts are. So if you stop building pipelines—and it won’t 

just be Keystone but it is in my own jurisdiction—that is how you 

slow down climate change. 

Mr. WAXMAN. Yes. The State Department draft environmental 

analysis acknowledges that the Keystone XL pipeline could affect 

the climate. It finds that if currently proposed pipeline projects 

were blocked, tar sands production would be lowered. But the analysis also finds that this effect would be small. That is because the 

72 

State Department assumes that if Keystone XL and other proposed 

pipelines are not built, producers will move all the tar sands oil on 

trains instead. 

So let’s look at whether these assumptions are realistic. The first 

key question is will Canada build other pipelines to the west coast 

of Canada? A few years ago the State Department assumed that 

if we didn’t approve the Keystone XL pipeline, the oil would simply 

go west to China. Dr. Jaccard, how good does that assumption look 

now? 

Mr. JACCARD. One can’t be certain, but as I stated in my testimony, the odds are against it right now. 

Mr. WAXMAN. Why? 

Mr. JACCARD. The reasons that I mentioned is that there is a lot 

of opposition in British Columbia. When one says that Canadians 

support developing the oil sands, yes, in Alberta they support that, 

and yes, there is some support elsewhere in the country, but there 

many regions of the country where they don’t support that. And 

British Columbia is where that is much more difficult to find that 

support. And opposition to pipelines crossing British Columbia is 

very strong and being manifested politically. 

Mr. WAXMAN. The State Department basically agreed with that. 

Instead, the State Department assumed that tar sand producers 

would use the railroads to get the tar sands the Gulf, but my understanding is that this analysis is also flawed. Mr. Swift, is moving all of this tar sands oil by railroads really a viable option, and 

if not, why not? 

Mr. SWIFT. It isn’t. And the reason why not, I mean, one way to 

evaluate this, the Bakken production and tar sands, they have 

been under the same market pressure to move by rail. Tar sands 

producers haven’t been able to manage it and it is because there 

are a lot of unique challenges to moving tar sands by rail that light 

oil doesn’t have and northern Alberta is a lot farther away. So simply stated, it is far more expensive and tar sands producers don’t 

have the margins to afford it. 

Mr. WAXMAN. The rail option is economic for Bakken oil, but not 

for tar sands. Tar sands crude requires specialized railcars and 

loading and offloading equipment, must travel further and is heavier, meaning less can be moved per car. Current rail costs for tar 

sands are $31 a barrel versus $8 to $9.50 a barrel for pipeline. And 

new tar sands projects have high breakeven costs, so substantially 

higher transportation costs are going to make them much less attractive. Is that your—— 

Mr. SWIFT. That is correct. 

Mr. WAXMAN. Now, approving the Keystone XL tar sands pipeline is key to getting tar sands oil to market. Without Keystone XL, 

producers won’t be able to triple the production of tar sands oil. So 

approving Keystone XL would give the green light to a huge 

amount of additional carbon pollution. We can’t vastly expand use 

of the dirtiest oil and avoid catastrophic climate change. The only 

responsible action is to say no to Keystone XL tar sands pipeline. 

I hope the Obama Administration and others, Secretary Kerry at 

the State Department understand this and don’t use this well-it-isgoing-to-happen-anyway rationale because it is just not accurate 

73 

according to you, Mr. Swift, and Dr. Jaccard. Is that a fair statement? 

Mr. JACCARD. Yes. 

Mr. SWIFT. Yes. 

Mr. WAXMAN. Thank you, Mr. Chairman. I yield back. 

Mr. TERRY. Thank you, Mr. Waxman. And I recognize the vice 

chairman of the subcommittee, Mr. Scalise. 

Mr. SCALISE. Thank you. I want to thank Mr. Terry as well for 

your leadership on the Keystone pipeline and trying to get this approved. 

You know, when you look at the jobs number that just came out 

last week, again another weak jobs report, more people unemployed, millions of Americans who have given up looking for work 

because the economy is so weak, and yet literally with the stroke 

of a pen, President Obama can create more than 20,000 new jobs 

in America by approving the Keystone pipeline. And it is just that 

simple, just with his signature. This doesn’t require an act of Congress. 

Unfortunately, we are here today because, for whatever reason, 

for more than 4 years the President has refused to approve the 

Keystone pipeline. And you are talking about a program that not 

only would create 20,000 direct American jobs, studies show that 

over 100,000 new jobs to be created in America. Billions of dollars 

of private investment would be spent in America, and then when 

you talk about America’s energy security, there would be about a 

million barrels a day of oil coming from a friend in Canada that 

we don’t have to buy from Middle Eastern countries who don’t like 

us. It is not like America’s demand for oil has dropped just because 

the President said no to the Keystone pipeline. We still use the 

same number of barrels of oil a day than if he would have approved 

it yesterday. 

The problem is, the gas prices are going up every day; people are 

paying more at the pump in part because of volatility in the Middle 

East. Our trade deficit is up because we send billions of dollars to 

Middle Eastern countries who don’t have a great trade relationship 

with us. 

When you talk about approving the Keystone pipeline, there are 

many advantages to doing it. Of course, the first is the great impact to jobs and the reduction of threats to our energy security. But 

if you look at the trading relationship we have with Canada—Canada is a great friend. There is no reason for the President to be 

harming our relationship with Canada by stringing them out for 

years, bowing to radical environmentalists, when everybody else 

who looks at this, everybody who is impartial that looks at this 

says it should have been done years ago. The Keystone pipeline 

should have been approved years ago. 

But if you look at our relationship with Canada, if we are trading 

those same barrels of oil with Canada instead of these Middle Eastern countries who don’t like us, we get about .85 or .90 on the dollar back from every dollar we send to Canada in trade. And that 

same dollar that goes over to Middle Eastern countries, we get less 

than .50 on the dollar back. 

So again, we are using the same amount of oil. The question is 

who are we going to get it from? Are we going to get from Canada, 

74 

who has got a great trade relationship with us, who has got a great 

historical relationship with us right across the border, or are we 

going to continue to send billions of dollars to Middle Eastern countries who don’t like us, who use that money against us? That is the 

question before us. And so it boggles most people’s minds when 

they look at this from a commonsense perspective and say why 

does the President continue to say no to Keystone? 

So that is why we are here today. Without action from Congress, 

it can be done. But for whatever reason, if the President doesn’t 

want to do it, when the Congress has addressed this issue before, 

it has been large bipartisan votes in support. This is not a partisan 

issue. I think the fact that you look at the panelists today that 

have been here to support it, these aren’t traditional Republican 

groups or Democrat groups. These are people that understand the 

economic impact. 

I want to ask you, Mr. Stelter, because you talked a little bit in 

your testimony about what the delays mean to jobs in America. 

You know, if you can expand on that. I mean we have heard about 

businesses that have either closed down or have had to delay operations that are waiting, that would do great in America, American 

businesses not even Canadian businesses, American businesses 

that are being hurt every day by inaction from the President. Can 

you expand on that and give some examples? 

Mr. STELTER. As I mentioned in my testimony, my company has 

been blessed in that we have been able to expand into other parts 

of the world that we weren’t selling to previously to stave off layoffs or cutbacks. But I know some of our competitors, big American 

companies, Tyco International, DeZURIK, some of the big players 

in the pipeline industry and labor, even though there is still a high 

demand up in that area for labor, it is definitely scaled back because of the delays and cancellations of a lot of these projects. 

Mr. SCALISE. And that is a shame. There is no reason for those 

jobs to be lost. We could have those jobs today, as I mentioned earlier. 

I want to ask you, Mr. Pourbaix, there has been some suggestion 

that this oil is just going to sit there and if the American President 

just waits a couple more years, then Canada is just going to sit and 

do nothing with this valuable asset that they have. I have also 

heard reports to the contrary that China aggressively wants to get 

this oil. China wants those jobs. China wants that energy security 

that America would be denied if the President doesn’t approve Keystone. Can you talk to what happens if the President doesn’t say 

yes to Keystone? Does it just sit there in the ground or is there potential that this goes to another country and they benefit from it? 

Mr. POURBAIX. No. I have said this many times, but the oil sands 

are truly the economic engine that will be driving Canada’s economy for the next 50 years. The Canadian Government has been exceedingly supportive of our project and all the other projects to get 

the oil out of the country. We are in a great situation that we have 

production far in excess of our needs and that oil will be developed; 

it will get to market. You have already heard me talk about if it 

can’t get by pipe, it is going to get by rail. 

I would take exception to a characterization that these pipeline 

projects will not be approved by the regulators. In Canada, the regVerDate Nov 24 2008 10:52 Sep 17, 2013 Jkt 037690 PO 00000 Frm 00080 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-26 CHRIS
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ulator for pipelines is the National Energy Board. It is a federal 

agency. That same federal agency approved the Canadian portion 

of Keystone XL years ago, approved the base Keystone, and the Canadian federal government has gone on record repeatedly saying 

that they are in support of both the western projects and projects 

to take oil east. 

So I think it is absolutely clear that the oil sands are going to 

be developed and this oil is going to get to markets. The only question is what market is it going to get to? 

Mr. SCALISE. Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. The gentleman’s time has expired. At this time 

I recognize the gentleman from Texas, Mr. Green, for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. First of all, Mr. Mallino, 

I want to thank you for being here and all our panel. You mentioned that similar legislation was necessary to allow construction 

of the trans-Alaska pipeline back in the 1970s. Could you elaborate 

on that? 

Mr. MALLINO. I was a child back then, Congressman. I have been 

doing this for 20 some years but I wasn’t around. So I would have 

to get much more specifics and have to get back to you on it. 

Mr. GREEN. OK. That is close enough. I was actually a state legislator in Texas in the ’70s, but I did not remember that Congress 

had to step in and approve the trans-Alaska pipeline. 

Mr. MALLINO. I think what the Congress had to do was step in 

and kind of clear up some of the final regulatory hurdles. But 

again, I am not an expert on it. 

Mr. GREEN. It sounds like what we are trying to do here. 

Mr. MALLINO. Exactly. 

Mr. GREEN. So we are not breaking new ground by this particular legislation. 

Dr. Jaccard, I visited the oil sands last summer and I learned 

that in 2007 the province of Canada actually begin regulating large 

industrial sources of greenhouse gas emissions immediately requesting each unit to reduce their GHG output by 12 percent. And 

per the March 2012 statistic, over 34 million tons of emissions have 

been avoided. They have also indicated that the province will revisit this in the near future to strengthen the standard and update 

the law. 

From your testimony, Canada as a nation hasn’t made the decision but obviously the province of Alberta has. Has British Columbia taken that kind of stance on GHG? 

Mr. JACCARD. Yes. British Columbia—and I helped with the work 

on those policies—has a carbon tax across the board now of $30 per 

ton of CO2. And also we have a requirement that no electricity be 

generated that produces greenhouse gases even though we have 

very cheap coal and gas. 

Mr. GREEN. OK. Let me interrupt. 

Mr. JACCARD. Alberta—— 

Mr. GREEN. I only have 5 minutes. 

Mr. JACCARD. Yes. 

Mr. GREEN. How much electricity is British Colombia produced 

by hydropower? What percentage? 

Mr. JACCARD. About 93 percent but—— 

Mr. GREEN. Pardon? Pardon? 

76 

Mr. JACCARD [continuing]. Ninety-three percent—— 

Mr. GREEN. OK. 

Mr. JACCARD [continuing]. But we have the cheapest natural gas 

and coal in the country. 

Mr. GREEN. Oh, I understand. But if 93 percent of your electricity comes from hydropower and obviously in Texas we don’t 

have that topography benefit that some places have. But I understand that—— 

Mr. JACCARD. We won’t allow any—— 

Mr. GREEN [continuing]. It is easier to not use natural gas and 

export it because most of their electricity comes from hydro, just 

like British Columbia. But Alberta has made an effort to control 

the GHG in their province. 

Mr. JACCARD. The regulation as I have studied it carefully basically tracks what our normal efficiency gains that have happened. 

The actual cost on a per-ton-of-CO2 basis is about $1 or $2, effectively close to zero. 

Mr. GREEN. OK. Well, since you have studied this—and I know 

the refineries that are my area, typically, we import heavier crude 

from Venezuela, from all over the world. Do you know of any of our 

importing countries that we have that have done what Alberta has 

done? Let’s take Venezuela as an example. 

Mr. JACCARD. If you mean a dollar per ton of CO2 or $2, no. But 

it is inconsequential. 

Mr. GREEN. Well, obviously it is not. And so that is our decision 

and I appreciate your opinion. Again, the question—— 

Mr. JACCARD. The number of $1 or $2 is from the Canadian Association of Petroleum Producers. 

Mr. GREEN. Well, another question for both you, Doctor, and Mr. 

Swift, I actually represent refineries where most of the oil sands 

product would go. And the fact that the refineries will continue to 

seek supplies and heavier crude whether Keystone XL is approved 

or not, the problem is that the failure to secure long-term energy 

supply from Canada will only cause these facilities to purchase oil 

from unstable foreign countries that do not have anywhere near 

the environmental regulations that Alberta does. Is that correct, 

Mr. Swift? 

Mr. SWIFT. The 2010 incident report actually suggested that Venezuela imports into the Gulf were going to decline either way. 

Mr. GREEN. Well, and I agree with you. Venezuela is losing production just like Mexico. But again, the question is, are those countries that we are going to import from have stronger standards or 

even equal standards of what Alberta has? 

Mr. SWIFT. Well, we are seeing those imports being replaced by 

domestic production. I mean, Eagle Ford shale, there have been 

plants that actually replace heavy production capacity with light 

production capacity. Our imports are declining independent of Keystone XL. 

Mr. GREEN. Well, but they would even decline more if we had 

TransCanada pipeline. 

Mr. Pourbaix, as a pipeline developer and operator working in 

western Canada, do you agree with Mr. Mallino and Mr. Swift’s assessment that neither of the two eastern pipelines through British 

Columbia will be built? 

77 

Mr. POURBAIX. No, as I said, I believe there is a very high likelihood that Canada’s National Energy Board will find a need for 

those pipelines and will approve those pipelines. 

Mr. GREEN. Well, I have to admit coming from Houston, Texas, 

that we have a Houston company that has an interest in one of 

those pipelines so we either get the crude oil to our refineries or 

I guess we will send it to Asia through Kinder Morgan has that 

pipeline. So Mr. Chairman, thank you for your time. 

Mr. WHITFIELD. At this time I recognize the gentleman from Nebraska, Mr. Terry, for 5 minutes. 

Mr. TERRY. Thank you. Mr. Pourbaix, I appreciate you being here 

again. 

Besides the need to obtain a presidential permit, which is the 

basis of H.R. 3, can you discuss some of the other outstanding permitting issues? 

Mr. POURBAIX. The obvious biggest issue is the presidential permit. We do require some other federal approvals, key among them 

would be some issues with respect to migratory birds and endangered species and water crossing, those type of issues. 

Mr. TERRY. And what specific permits are required for those? 

Take crossing waterways—— 

Mr. POURBAIX. We—— 

Mr. TERRY. Who do you have to get a permit from? 

Mr. POURBAIX. That is the Army Corps of Engineers. And we require a permit that will allow us to cross any major wetlands or 

water bodies. 

Mr. TERRY. Then for which agency would permit any endangered 

species issues? 

Mr. POURBAIX. That is Fish and Wildlife. 

Mr. TERRY. Yes. I appreciate that. And if TransCanada fails to 

receive any one of those permits, what impact would it have on the 

construction of the pipeline? 

Mr. POURBAIX. Well, we are not able to proceed with the construction of the pipeline until we are in receipt of all those required 

federal permits. So it would continue to remain on hold until we 

received those permits. 

Mr. TERRY. So in that regard, what litigation has TransCanada 

already faced in federal courts over the construction of this pipeline? 

Mr. POURBAIX. I don’t have the exact number of lawsuits but the 

opponents of this project have long come to the conclusion that ultimately delay means denial. So generally, their strategy has been 

at every possible stage in the process to put legal claims up against 

the project. To this point, we have won every one that has been 

brought against us, but there have been many, many legal suits 

filed. 

Mr. TERRY. And you participate anymore? 

Mr. POURBAIX. I fully anticipate there will be many more. 

Mr. TERRY. What is your basis of your feeling that there would 

be many more? 

Mr. POURBAIX. Just the fact that our opponents—they truly are 

focused on a strategy of delay with the view that eventually either 

the project proponents or the shippers will give up. 

78 

Mr. TERRY. Yes, the opponents have not been shy about saying 

that they have petitions sitting on their desk ready to file. 

Mr. POURBAIX. Yes, absolutely. 

Mr. TERRY. Now, could these lawsuits and others that have yet 

to be filed if the presidential permit is approved, seriously delay or 

impact this pipeline? 

Mr. POURBAIX. You know, this is nothing new. Our opponents 

have brought these same suits in all major pipeline and energy infrastructure projects, and in all cases that we have been involved 

in, we have been able to succeed in all of those legal cases and we 

would expect we will succeed in these. So once we receive the presidential permit, we will commence construction and fight the lawsuits. 

Mr. TERRY. All right. Since I represent Omaha, Nebraska, that 

has a history with rail, in fact, we grew into a corporate town because of the railroad—— 

Mr. POURBAIX. Yes. 

Mr. TERRY [continuing]. They have told me that even with the 

Keystone pipeline, and they as Union Pacific and BNSF, have said 

that even with the pipeline, they still expect to be hauling from 

both the Bakken and Alberta oil sands. Can you tell us your understanding of how, even with the pipeline, the rails and trucks would 

still be involved? 

Mr. POURBAIX. You know, there will always be a role for trucking 

and rail in moving oil around. They serve a legitimate purpose. The 

point that I have always taken is that as the distances get very 

long and the volumes to be moved get very large, the benefits of 

pipelines become very apparent with respect to their cost-benefit. 

It is much cheaper to move oil through pipelines. Their safety 

record is higher, there is less likelihood of spill, and there is significantly less greenhouse gas emissions when you move large volumes 

of oil a long distance. So there will still be real movements and 

truck movements to get oil to those main collection points where 

the pipelines can take it away from. 

Mr. TERRY. All right. Thank you, and I yield back. 

Mr. WHITFIELD. The gentleman yields back. 

At this time I recognize the gentleman from Michigan, Mr. Dingell, for 5 minutes. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. 

My question is for Anthony Swift. Mr. Swift, most of these will 

be yes or no because of our limited amount of time. Is there currently an open comment period for draft Supplemental Environmental Impact Statement regarding the Keystone XL pipeline? Yes 

or no? 

Mr. SWIFT. Yes. 

Mr. DINGELL. When does this period end? 

Mr. SWIFT. At the moment I believe it is April 21. 

Mr. DINGELL. OK. Is the draft Supplemental Environmental Impact Statement currently open for public comment, the same as the 

one referenced in H.R. 3? Yes or no? 

Mr. SWIFT. Yes. 

Mr. DINGELL. Now, this legislation deems approval of certain 

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rior, and Defense and prohibits EPA from being involved in providing input for permits under the Clean Water Act. Is that so? 

Mr. SWIFT. Yes. 

Mr. DINGELL. Are we certain that all the information has been 

gathered to justify issuing these permits? Yes or no? 

Mr. SWIFT. No. 

Mr. DINGELL. All right. Mr. Chairman, never have the American 

people being comforted by the words I am from the government 

and I am here to help. President Bush established a process to 

issue these types of permits and I believe that allowing the public 

to know how this project will affect their communities is simple 

common sense. 

I would point out that they were going to go through in Nebraska 

over a very, very, very sensitive aquifer and they found out that 

it posed enormous risk. That information was not available to the 

public. And as a House author of NEPA, on which I labored long 

and hard, I can tell you that it was created to create transparency 

so that the people would know the impact of a project and what 

it would be on their communities. 

However, this bill will circumvent that transparency even as a 

public comment period is in progress and is only going to create 

more delays. Instead of allowing the process to properly play out, 

Congress is choosing to rush the Administration without allowing 

the established process to run its course. This has already caused 

us trouble on one occasion. And now, by rushing the Administration to make a decision at the beginning of last year, they were 

forced to start this process back again at square one further delaying a final decision. 

I repeatedly said that I support the building of this pipeline. I 

believe it is in the national interest. It is also in the national interest that we should comply with the law, should know the facts, and 

should see that the permits are properly issued and that they reflect the need for us to address the public interest. That is why we 

passed the Clean Water Act, why we passed Endangered Species, 

and why we passed the National Environmental Policy Act. 

Now, I would much rather see the manufacturing, construction, 

and other jobs that are going to be created in this construction to 

go down south through the United States rather going west to 

China where the oil will be processed and spent and burned in a 

very dirty way. However, the bill that we have passed already, this 

bill would do exactly the opposite. It circumvents the established 

process and potentially opens the process and the project to a 

plethora of lawsuits where the lawyers are going have a wonderful 

time delaying the process and the construction even further. 

Instead of legislating the permitting process where it is not needed, this committee should instead be focusing on comprehensive energy legislation and on supervising the processing of this to see 

that it goes forward properly. As I have observed, the Keystone 

pipeline, in my opinion, should be a useful part of our national energy strategy and not be given into litigation of this kind. It should 

be viewed as an opportunity to make technological advances, 

changes in the economy, to gather new information, and we should 

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icy, including spurring a large number of things like nuclear, renewable, and fossil fuel. 

Let us stop helping where it is not needed. The bill is a solution 

to a problem that does not exist. I very much want to support the 

pipeline. I believe it is in the national interest. But you are compelling me and many other Americans to oppose this legislation and 

to oppose the construction of the pipeline because you do not choose 

to do it in a proper way in conformity with the law. These unnecessary changes that you are making to hasten the process are counterproductive in the extreme, and I beg the committee not to engage in this kind of silly activity. 

Mr. WHITFIELD. Thank you, Mr. Dingell. 

At this time I recognize the gentleman from Texas, Dr. Burgess, 

for 5 minutes. 

Mr. BURGESS. I thank the Chairman for the recognition. 

Mr. Pourbaix, did I pronounce that correctly? 

Mr. POURBAIX. Yes, sir. 

Mr. BURGESS. Let me just ask you, you heard Chairman Emeritus Dingell just speak about this. Do you feel rushed? Do you feel 

like we are rushing you? I feel like it is Groundhog Day. I mean 

every time I come into the subcommittee, Mr. Chairman, we are 

talking about the Keystone pipeline. It has been like that for 2–1/ 

2 years. 

Mr. POURBAIX. I think it is without dispute that the environmental review process for this process has been certainly the most 

involved, the longest certainly in any experience I have ever had 

with energy infrastructure projects. We have had dozens of public 

hearings. We have had hundreds of thousands of pages of public 

comment in testimony. I don’t think anyone could argue that every 

material issue related to this project has not been exhaustively 

analyzed. 

Mr. BURGESS. Let me just tell you one of the things that troubles 

me. Texas is my home State. March 22 of last year, President 

Obama went to Cushing, Oklahoma, and said he wanted the pipeline built from here to the Gulf of Mexico, meaning Oklahoma to 

the Gulf of Mexico. So your company has been doing that work. It 

has not been without some anxiety at home, and I will admit that. 

There are people who have had their lands disrupted by the placement of the pipeline. But OK. It is in the national interest and the 

interest for our economy to get this going and Texans, we are understanding of energy issues and the necessity of getting energy to 

market. 

But here is the problem that I have. Why is it OK to build the 

pipeline from Oklahoma to the Gulf of Mexico, disrupt the lives of 

hard-working Texans, when the Administration apparently never 

had any intention of completing the other part of the pipeline that 

would actually make it economically relevant and economically 

beneficial to the Nation? 

Mr. POURBAIX. Yes. 

Mr. BURGESS. We have asked Texans to give of their land for the 

pipeline and yet the Administration still seems immobile in its 

ability to make a decision for the betterment of the country. Am 

I missing something here? 

81 

Mr. POURBAIX. No. And I think at the time the President denied 

the permit early last year, TransCanada took the initiative. We 

saw the opportunity to sever the southern portion from the larger 

Keystone XL application because there was an independent need in 

the industry to reconnect Cushing to the U.S. Gulf Coast. So we 

took that opportunity. That was not something that the Federal 

Government encouraged. It was an opportunity we saw to take that 

portion of the project that had independent utility and remove it 

from this presidential permit application process. 

One comment I would just say on your comment about the land, 

there is no company that takes those issues with right-of-way and 

landowners more serious than TransCanada. In Texas alone, more 

than 99 percent of our landowners we reached voluntary negotiated 

easements and did not have to go to any eminent domain procedure. We are down to literally a handful of landowners. 

Mr. BURGESS. And I appreciate that. I appreciate the fact that 

this was a privately instigated and funded venture but still, the 

President want to Cushing, Oklahoma, and with 200 invited 

guests, did a photo op in March of last year. It was an election 

year, you may recall. And I have always felt a little bit of unease 

by the willingness of the Administration to capitalize on, hey, I am 

here for creating jobs in America, building in America, and all the 

right things, and yet, really if America is going to capitalize on the 

promise of delivering this energy where it can be refined in Mr. 

Greene’s district, the rest that pipeline has to be built. 

You know, I don’t know that I am smart enough to do this. We 

will have the GDP figures coming out for the first quarter of this 

year. Last quarter of last year was pretty disappointing. I will just 

submit if you were to subtract the Texas component to the GDP for 

this quarter we just finished and the last quarter, I wouldn’t be at 

all surprised if the country was not still in a recession with negative growth in two successive quarters, which is the definition. It 

is Texas’ forward-leaning activities in the energy field that have 

really prevented the recession from being so much more desperate 

in the entire country. 

When people talk about the re-industrialization of America, they 

need to look at what is happening in the shale plays in north Texas 

and south Texas. It has been a game-changer. And if we really 

were serious about re-employing Americans, this is where we 

would concentrate our efforts. 

I thank you for your indulgence, Mr. Chairman. I will yield back 

the balance of my time. 

Mr. WHITFIELD. The gentleman yields back. 

At this time I recognize the gentlelady from California, Ms. 

Capps, for 5 minutes. 

Mrs. CAPPS. Thank you, Mr. Chairman. 

And thank you, each of you, for your testimony. After multiple 

hearings and markups on this committee in recent years, this is an 

issue that we are all very familiar with. And that is why I must 

say that I am disappointed that one of our first legislative hearings 

is again on this well-vetted issue when there are so many other important issues that we could be considering. 

I continue to have serious concerns about this legislation and the 

potentially devastating impacts of the Keystone pipeline on public 

82 

health and the environment. Of course, one of the main issues in 

this discussion is jobs, and rightfully so. There is no denying that 

construction of the pipeline will create temporary jobs. And these 

jobs are still desperately needed, especially in the construction industry. 

But as policymakers, I believe we must also look at the big picture. When we are facing estimated job losses of 750,000 due to sequestration, creating a few thousand temporary jobs, though helpful, does not constitute the comprehensive jobs legislation our Nation needs right now. It is our responsibility to pursue policies that 

advance the long-term interests of our Nation as a whole. Doubling 

down on limited fossil fuels is a dead-end policy that pollutes our 

planet and only delays the inevitable, especially considering the serious impacts Keystone could have on public health and the environment. 

As our witnesses have testified, development of oil sands is even 

more carbon-intensive than traditional oil development. So this is 

a big step in the wrong direction. To me it makes far more sense 

to focus on promoting the development of clean renewable technologies we all know we are going to need down the road. These 

new technologies reduce our dependence on oil, but also create 

quality long-term jobs that cannot be shipped overseas. 

I see this all the time on my district in the central coast of California. Local companies like Infinity Wind, REC Solar are harnessing clean renewable energy sources to create jobs and strengthen economic growth. So Dr. Jaccard, or Jaccard. How do I say it? 

Mr. JACCARD. Jaccard. 

Mrs. CAPPS. Jaccard. In your testimony, you focus on the environmental and economic impacts of developing the Alberta oil 

sands and how the Keystone pipeline plays into that. And I have 

a second question to ask as well. Could you briefly discuss some of 

the economic and environmental benefits of developing clean and 

renewable energy resources compared to fossil fuels? Make a comparison for us if you will. 

Mr. JACCARD. Yes. Well, in California certainly I follow the numbers. I don’t have numbers at the tip of my finger for California but 

I do for British Columbia because when we passed the rule of clean 

electricity, it meant that two coal plants and a natural gas plant 

that were going to be built in the 2007 to 2011 period were not 

built. Instead, we develop run-of-the-river hydro, a small-scale 

hydro, wind, and wood waste power and they produced three times 

as many jobs. 

Mrs. CAPPS. Perfect. Thank you very much. 

I have a question for you, Anthony Swift. Jobs are obviously critical to economic growth, but we must remember that environmental and public health are also critical to a strong workforce and 

resilient economy. In 1969, my home district was a victim to one 

of the worst oil spills in the United States history offshore. So I 

know firsthand that local communities bear the brunt of industrial 

accidents for a long time after they occur. 

The proposed pipeline would cut straight through America’s 

heartland, putting numerous communities at risk. These farmers 

and ranchers depend on clean soil and clean water to grow the 

crops and raise their livestock that are feeding our entire Nation. 

83 

A spill here could have devastating effects on local wildlife, public 

health, the economy, and our Nation’s food supply. 

Mr. Swift, would you elaborate on this, and what are some of the 

economic impacts a spill could have on the communities along the 

pipeline? 

Mr. SWIFT. Certainly. There are over 500,000 agricultural jobs 

along the pipeline and they depend on clean water, clean lands. 

And we have learned, unfortunately, through two major spills, one 

in Kalamazoo, Michigan, and another in Arkansas, that tar sands 

spills have significantly different and longer-term impacts. In Kalamazoo, Michigan, nearly 3 years after that spill of 800,000 gallons 

of tar sands and nearly $1 billion in cleanup activities, 38 miles of 

that river are still contaminated. And spill responders don’t think 

that they are going to build up at the river back to the state it was 

before the spill. So tar sands pipelines and tar sands spills pose 

unique and pretty dramatic risks to sensitive waterways and the 

places they crossed it. Regulators have not got a handle over it. 

Mrs. CAPPS. And if I could ask you very briefly, with a few seconds left, to discuss some of the differences between the safe use 

of tar sands, if there is such a thing, that would flow through the 

Keystone pipeline, and the crude that we normally know. Would 

you go into the difference on that? 

Mr. SWIFT. Yes. Tar sands is being moved as something called 

diluted bitumen. And bitumen is basically solid at room temperature. It has to be mixed with light petrochemicals and is moved as 

a thick substance through the pipeline. You know, the State Department estimated that frictional heating on Keystone XL will 

send the temperature to between 130 and 150 degrees in some 

places. We have learned in California that high-temperature pipelines are much more likely to spill. And when a spill occurs, the 

light stuff gases off, and if the heavy stuff, the heavy bitumen tar, 

hits a water body, it sinks below the water body. And at that point 

spill responders have a very difficult time either containing it or 

cleaning it. 

Mrs. CAPPS. So tar sands and conventional crude are very different—— 

Mr. SWIFT. Dramatically different, yes. 

Mr. WHITFIELD. At this time I recognize the gentleman from 

Texas, Mr. Olson, for 5 minutes. 

Mr. OLSON. I thank the chair, and good afternoon and welcome, 

witnesses. I represent a suburban Houston district, so as you can 

imagine, the Keystone XL pipeline coming into the Port of Houston 

and the Port of Port Arthur is very important to my State. And we 

are all entitled to have our own opinions, but none of us are entitled to have our own facts. So before I start my questions, I just 

want to reiterate a few facts that seem to be forgotten in this debate. 

Fact number one, Canadian oil from Alberta is already coming 

to the United States. The Keystone pipeline, Mr. Pourbaix, I think, 

called it the base Keystone pipeline. That pipeline is bringing over 

500 million barrels a day for our country right now. The Alberta 

clipper is bringing about 450,000 barrels a day to Superior, Wisconsin. 

84 

Fact number two, there are 25,000 miles of pipeline over the 

Ogallala Aquifer right now, 25,000, 2,000 over Nebraska. 

Fact number three, this Canadian oil will be brought to market. 

Either it comes to the United States or it goes to China or India 

or some other country. White House Press Secretary Jay Carney 

echoed my reasons to support Keystone XL when he said last year, 

‘‘moving oil from the Midwest to the world-class, state-of-the-art refineries on the Texas Gulf Coast will modernize our infrastructure, 

create jobs, and encourage Americans’ energy production. We look 

forward to working with TransCanada.’’ I inserted Texas there, just 

a literary preference. But those are the facts. 

Mr. Pourbaix, TransCanada now is almost halfway done with the 

southern leg of the pipeline through East Texas. Can you please 

describe the steps that you are taking to ensure the safety of his 

pipeline? 

Mr. POURBAIX. Sure. I mean right off the bat I think it is very 

important to understand that the Keystone pipeline system is truly 

a state-of-the-art pipeline system. It uses modern high-strength 

steel, fusion bond epoxy coating, multiple redundant leak detection 

technologies. 

You heard me say this in my prepared statements, but in addition to following federal code, we have voluntary agreed to follow 

57 additional special conditions. Those are things like reduced 

spacing of isolation valves, burying the pipe deeper, doing more inspections. All major river crossings where it is feasible to do so, we 

are in fact doing horizontal directional drill. So we are 20 to 40 feet 

below the bottom of the river in bedrock, so we don’t ever have to 

worry about the kind of problems that occurred at Kalamazoo or 

the Yellowstone problem that Exxon had. I mean these modern 

pipelines have incredible records with respect to spill and safety, 

and we are building the most modern pipeline ever built in the 

U.S. 

Mr. OLSON. So again, in your opinion, the Keystone XL pipeline 

is designed to be the safest pipeline in the history of the world? 

Mr. POURBAIX. Yes, and you don’t have to take my word for it. 

That is actually the finding of the Department of State in the Environmental Impact Statements. 

Mr. OLSON. And a question for you, Mr. Mallino, in your opening 

statement you said the Keystone XL is not a pipeline, it is a lifeline. And you mentioned that opponents say that many of these 

jobs being created are going to be temporary. Can you explain how 

a lifeline is not a temporary job? 

Mr. MALLINO. In our industry, our members work job-to-job. The 

job starts, the job ends. Sometimes you go on to the job, off the job, 

and go do something else and come back to that job. Not just your 

pay but the way your benefits package is structured, the way you 

earn your health insurance, the way you earn your pension credits 

are determined by the number of hours you work in a given quarter. So without a project that creates hours, whether it is a highway project, a bridge project, an infrastructure project for energy, 

water, without projects, our members don’t work, and if our members don’t work, they don’t earn a living and they don’t earn benefits. And in that sense it is a lifeline. A temporary job has been 

used to dismiss these jobs and that is unfortunate because it truly 

85 

doesn’t take into account how the construction industry works. It 

is done in a very derogatory way by people who want to dismiss 

the importance of these jobs. 

Mr. OLSON. One final question for you, sir. What is the salary 

range of these lifeline jobs and the educational level necessary to 

have these jobs? Because I made $75,000 max as a pilot in the 

United States Navy. That is over all my training and all these 

things—I suspect that those salaries are in that range. Can you 

comment—— 

Mr. MALLINO. It varies by craft so depending upon what your 

skill set is and which union craft you work for, it would vary. In 

some parts of the country our pipeline workers make about 20 

bucks an hour plus a benefits package. In other parts of the country that is much, much higher. If you are with the operating engineers who may still be back in the back of the room somewhere, 

their benefits package is structured and salary are structured entirely different. Their salary and benefits are going to be much 

higher. So it depends upon what you are doing on the project. But 

they are good jobs and they are some of the best jobs in the construction industry. 

Mr. OLSON. And I am out of time. So just to sum up, 800,000 

barrels a day, 20,000 good-paying jobs, energy security, national security. I yield back. 

Mr. WHITFIELD. At this time I recognize the gentlelady from the 

Virgin Islands, Ms. Christensen, for 5 minutes. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. 

There is a lot that really bothers me about the bill we are considering today but one is that I am concerned that the committee is 

proposing to give one project a regulatory earmark. And I don’t see 

why one particular project owned by a foreign corporation should 

get special treatment. My constituents in the U.S. Virgin Islands 

are American citizens. We are experiencing extremely high energy 

price spikes in a community with limited resources. My constituents are suffering. 

While help is being offered, there is no special legislation for the 

Americans in the U.S. Virgin Islands or support for my bill, H.R. 

92. But the subcommittee is proposing to move yet a third bill in 

2 years granting special treatment to TransCanada’s Keystone XL 

pipeline and has held four hearings on this project in the same period. 

As a physician, I am also concerned about how the Keystone XL 

tar sands pipeline would affect public health. Of course, crude oil 

pipelines can directly harm public health when there is an accident. We are reminded of the pictures of oil flowing down the 

streets of Mayflower, Arkansas, and Mr. Swift, I believe, talked 

about Kalamazoo, Michigan. So despite Mr. Pourbaix’s—— 

Mr. POURBAIX. Pourbaix. 

Dr. CHRISTENSEN [continuing]. Pourbaix’s testimony, 

TransCanada’s safety record doesn’t provide a tremendous amount 

of reassurance that Keystone XL would operate without accidents. 

The Keystone XL tar sands pipeline threatens human health in 

other ways as well. I understand that low-income and minority 

communities near the refineries in Houston and Port Arthur, 

Texas, already have a 50 percent higher chance of contracting leuVerDate Nov 24 2008 10:52 Sep 17, 2013 Jkt 037690 PO 00000 Frm 00091 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-26 CHRIS
86 

kemia and other diseases linked to pollution. These communities 

are worried that refining more tar sands crude will add to the pollution that is already harming their health. 

So Mr. Swift, let me ask you. Are these communities right to be 

concerned and does the State Department’s analysis adequately address the impacts on those communities, minority and poor communities? 

Mr. SWIFT. To the first question I would answer yes. Tar sands 

bitumen has some of the dirtiest crude in the world both in carbon 

emissions but it also has higher sulfur content, much higher heavy 

metal content. The sort of emissions that you expect from refining 

these complicated, heavy, high sulfur bitumen would be at the top 

of the scale. And the State Department did not adequately address 

the impact of these increased emissions on communities in the refinery areas. They basically assumed that these refineries would be 

processing oil either way and so they didn’t really evaluate how 

much more pollution would be generated by these refineries if Keystone XL goes through. 

Mrs. CHRISTENSEN. And we were refining up to about a year-anda-half ago Venezuela heavy crude and our toxic emissions inventory was out of the roof in the Virgin Islands. So I suspect it will 

be the same. 

And Dr. Jaccard, we know that Keystone XL pipeline will exacerbate climate change, as you stated, and that also has devastating 

health impacts. So could you also please speak to this? And also 

if granting special treatment to TransCanada will benefit our constituents and do those benefits really outweigh the harm? 

Mr. JACCARD. Right. The point I was trying to make is that it 

is very difficult to deal with climate change so you have to have 

political courage to say we start here and we have to push for 

things to happen in Canada, things to happen in China. There is 

no other way to solve it. When you do that, what you are trying 

to do is prevent acidification of oceans, dramatic changes in extreme weather events, and all sorts of problems with ecosystems as 

well, which all come back to human health types of issues. And the 

science is very clear on this. 

Mrs. CHRISTENSEN. I agree. And coming from a place that is 

prone to natural weather disasters and also where we rely on our 

reefs for food, and for recreation, the acidification of the oceans is 

very devastating to communities like mine. So thank you for your 

answers and I yield back the balance of my time. 

Mr. WHITFIELD. Thank you, Dr. Christensen. At this time I recognize the gentleman from West Virginia, Mr. McKinley, for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

I have heard several comments today here, Mr. Chairman, about 

these temporary jobs. And quite frankly, I come from the construction industry, 47 years. I started in construction in ’65. I never 

thought of my job back then as being a temporary job. That was 

my way of life and the people I worked with. So I find it almost 

a demeaning, demoralizing comment when people make that statement that these are just temporary jobs. I disagree with that. 

So having vented a little bit on that, I want you to know I am 

just one of two engineers in Congress and I concur that there is 

87 

global warming and there is climate change. The issue, however, 

I think, still has to be debated, is it manmade or is it natural cyclical? I am not convinced that I am going to join the chorus of those 

that are trying to build a consensus around manmade. 

And because of that, I am troubled by the fact that we are holding back because the Administration believes it is manmade. He is 

holding back 20,000 jobs in this market. A thousand more jobs likely would occur afterwards doing maintenance and taking care of 

the line. I can remember the testimony over the last 2 plus years 

of how many things we have talked about, how many more jobs all 

because we are focused on an ideology. 

So I am asking Mr. Swift and Dr. Jaccard, when I have talked 

with climatologists, they often will refer to, in trying to address 

this issue, they say go back to the Bering Strait. And I would like 

to hear from your perspective. The Bering Strait 25,000 years ago, 

the ocean levels dropped 150 feet, 50 some meters. We weren’t 

using the Keystone pipeline, we weren’t driving too many SUVs, 

and we weren’t creating electricity with coal, but there was a natural cyclical change in the globe that caused the temperatures to 

be at such a level that the water levels dropped all in the oceans 

all across the waters. Can you enlighten me or tell me where the 

paleoclimatologists are wrong on that? That the—— 

Mr. JACCARD. Yes. 

Mr. MCKINLEY [continuing]. Waters dropped so that the 

landmass became exposed and people from Asia came over and 

populated North America? 

Mr. JACCARD. Yes. I am sorry. 

Mr. MCKINLEY. Go ahead, please. 

Mr. JACCARD. I feel that I would be arrogant to pick and choose 

among the science that I wanted to believe that was convenient for 

me and that was inconvenient for me. So when I take the body of 

climate science, which I read very carefully, it will tell you that climate has changed over long time periods in the past and sometimes accelerated. And the climate science also says we are making 

something happen very quickly, that we are causing it. And we are 

acidifying the oceans as well, so I don’t know what you pick or 

choose from what the climate scientists are telling you. I have read 

the reports. I interact with leading scholars in the world who are 

very honest people, who don’t have any particular agenda, and they 

are saying, climate, we are causing the change. We can do something about it. 

Mr. MCKINLEY. I would concede that there are people that agree 

with you. But there is a document floating around right now, 

32,000 scientists that disagree with you on that. So I am still torn 

over it because, here, we are still arguing over this. Science has not 

been determined. The conclusion is not determined yet. But yet, we 

are holding up 20,000 jobs in America where people want to go to 

work. That is their livelihood and we are holding it up because we 

have got an ideological base, a disagreement. I am troubled with 

that. I really am. 

Yes, I can talk about the Bering Strait. We can talk about the 

Medieval warming period. What caused that? Again, I don’t think 

there were too many SUVs, I don’t think we were burning much 

coal there, or gas or oil to create electricity, but yet we had the 

88 

globe heated up, Earth heated up. I am somewhat more in that 

field. I am leaning that way more—is this a natural, cyclical issue? 

And could man be contributing? Of course we could be. I agree with 

you, we could be. But are we the one causing it? And what are the 

ramifications of it? There are too many disagreements on that. I 

am hoping sometime in the balance of this year that will have 

some opportunities to discuss global warming more. But in the 

meantime, why are we costing 20,000 jobs to people that could be 

working? 

Mr. JACCARD. So we create jobs as we reduce carbon pollution, 

just as we did as we reduced acid pollution and urban smog and 

so on. So I am sorry. I have seen so much evidence I can buy that 

we can’t create jobs while reducing carbon pollution and maybe 

even use more fossil fuels while doing it. But the—— 

Mr. MCKINLEY. Are you with this pool of Lisa Jackson that said 

that we create, what is it, one job for every million dollars in EPA 

standards, making it the more rigid the standard is that we are 

going to create a job and that and so therefore—or one-and-a-half 

jobs for every million dollars spent on enforcement? Is that—— 

Mr. JACCARD. Is this talking about the historical analysis? 

Mr. MCKINLEY. Are you a disciple of that school? 

Mr. JACCARD. I haven’t read that. I am talking about historical 

analysis that I have been involved in. 

Mr. MCKINLEY. OK. I am sorry, my time is up. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time, I recognize the gentleman from New York, Mr. 

Engel, for 5 minutes. 

Mr. ENGEL. Well, thank you. Thank you very much, Mr. Chairman. 

Gentlemen, I am an anomaly here because I see both sides of the 

coin, and to tell you the truth, I am torn. I have a lot of environmental concerns but I also have concerns about energy independence. I am the ranking member on the Foreign Affairs Committee, 

I was the founder of the Oil and National Security Caucus, and I 

think it would be important if we could safely develop this, that 

North America become energy independent. So I kind of see both 

sides. I have some questions as to why we want to circumvent the 

process here. There is a process. And jump the gun and say that 

this project should be done. 

But I think the larger issue is how do we guarantee or try to 

guarantee that America is energy independent and at the same 

time try to guarantee that our environment is not despoiled. It is 

kind of hard to me to see everybody there, but let me ask Mr. 

Pourbaix. Why cannot we guarantee that the oil that is refined in 

Texas stay in the United States? I mean you have heard here 

today, and we always hear colleagues express concerns—— 

Mr. POURBAIX. Yes. 

Mr. ENGEL [continuing]. That if we are going to take the chance 

of the oil pipeline—and it is always a chance. I mean I know there 

are safeguards and this is new technology and everything else. I 

am willing to kind of go with it but I would like to know that if 

we are taking the risk we get the benefit and that the oil isn’t simply going to come down the pipeline, be refined in Texas, and get 

exported to China. 

89 

Mr. POURBAIX. Yes. 

Mr. ENGEL. So why can we get a guarantee, maybe 100 percent 

of it can’t stay but maybe we can get some kind of percentage that 

gives Americans a guarantee that we are taking the chance but it 

is a worthwhile chance to take? 

Mr. POURBAIX. Yes. Well, I guess I would have a couple of comments on that. The first is that the draft supplemental EIS went 

into great detail in examining this issue and came to the conclusion 

that it was highly unlikely that Keystone XL would be an export 

pipeline. And so I think you have that side of it. 

I think, when you think about exports, it is very important to understand that the U.S. Gulf Coast is the largest refining center. It 

has about half of the refining capability in the U.S., but the U.S. 

itself typically needs more gasoline and less diesel. When you refine a barrel of oil you get a certain component of oil and of diesel, 

certain of gasoline. The U.S. needs more gasoline. So to get enough 

gasoline, it tends to produce an excess of diesel which it then tends 

to import to Europe because Europe needs respectively more diesel 

than it gets gasoline. So I think you have to be careful about unintended consequences of putting in place any kind of hard and fast 

rules. 

Mr. ENGEL. Well, let me just say—I am sorry to interrupt 

but—— 

Mr. POURBAIX. Yes. Yes. 

Mr. ENGEL [continuing]. Five minutes is not a lot of time. You 

know, if my constituents knew, for instance, that by having this 

pipeline they would get a reduction a year down the line or 2 years 

down the line, of a dollar a gallon in their gasoline—— 

Mr. POURBAIX. Yes. 

Mr. ENGEL [continuing]. People would see something tangible. 

Mr. POURBAIX. Yes. 

Mr. ENGEL [continuing]. But people are very skeptical and so am 

I to a degree, as to if we are looking at—if we are talking about 

making North America energy independent, which is obviously 

something we would all like to see—— 

Mr. POURBAIX. Yes. 

Mr. ENGEL [continuing]. Then what would be the benefit to the 

taxpayers who are taking this kind of risk if in fact, we are getting 

more oil but we are then exporting more oil as well? So it is the 

same equation. Technically, we could be energy independent but we 

are exporting oil as well. 

Mr. POURBAIX. I understand the issue. I think the important 

point, though, is once the pipeline system is set up where this oil 

is going to the Gulf Coast refineries, it is entirely open to the U.S. 

Congress should they choose at some point in the future—for example, if there was a war and there was a requirement to keep that 

oil or those refined products in the country, the only place that oil 

can go is where it is being pipelined to. So just by having that infrastructure, the U.S. has the comfort that they have that energy 

independence and that energy security. 

Mr. ENGEL. Can somebody also—and perhaps you are the one, 

Mr. Pourbaix, or anybody else, the pipeline we are told by people 

who oppose it—they are saying it has to come through the United 

States because Canada doesn’t want to allow it to come west and 

90 

go out to the Pacific Ocean on the West Coast. Can anybody answer? Has it been answered? I didn’t know. 

Mr. POURBAIX. I mean, I would be happy to just—the practical 

reality is the U.S. Gulf Coast is the largest refining center on the 

planet and the refiners are largely configured to run heavy crude 

that the oil sand production out of Canada is overwhelmingly 

heavy crude. So it was natural to connect the large supply with the 

large demand. And that is why it goes the direction it goes. And 

I think that is the most rational and economic place for it to go. 

But if it can’t go to the U.S., then it will go to China, it will go 

to India. 

But I mean I think from the Canadian Government’s perspective, 

from the Alberta government’s perspective, the view is the right 

place for it to go is the Gulf Coast. 

Mr. ENGEL. Mr. Swift, I see you shaking your head no. 

Mr. SWIFT. Yes. We know it is not going to China in large volumes because a) China doesn’t have the heavy crude processing potential to process Canadian tar sands; and b) there is a small pipeline going West through British Columbia. It is about 300,000 barrels a day. And we know that 99 percent of the crude on that pipeline is going to the U.S. So if there was an interest by China to 

receive this crude, it would be buying it from the pipeline they already have going to the West Coast and they are not. 

So this argument that it is either the U.S. or China is a false 

one. And you look at the pipeline going through, Keystone XL 

through the U.S. to the Gulf Coast, the fact of the matter is, I believe, the number is 600,000 barrels of gasoline was exported from 

Gulf Coast refineries and the State Department indicated that over 

half of the refined products from the refineries getting oil from 

Keystone XL would likely be exported internationally. So it is not 

an issue. This is not energy that is going to benefit primarily the 

American consumer. 

Mr. WHITFIELD. The gentleman’s time has expired. 

I might also add that the Department of Energy did a study as 

well that was significantly lower on what they estimate the exports 

would be. 

But, Mr. Griffith, I will recognize you, the gentleman from Virginia, for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. I appreciate the opportunity. I appreciate the witnesses being here today. 

I do have a lot to get through so I apologize if I seem short at 

times. I would say in response to the answer to Mr. McKinley’s 

question by Dr. Jaccard, in your written testimony you indicated 

that China might not have grown at 10 percent per year but energy 

economic models predict this growth would still have been well 

above 5 percent while avoiding the dramatic increase in carbon pollution. So you do acknowledge that using a lot of fuel does in fact 

create jobs. Would that not be correct? Yes or no, please. 

Mr. JACCARD. It would have created more jobs in that same scenario. 

Mr. GRIFFITH. Well you—— 

Mr. JACCARD. It would have been more labor-intensive. 

Mr. GRIFFITH. Well, your testimony was that there economic 

growth is 5 percent—— 

91 

Mr. JACCARD. About economic growth. 

Mr. GRIFFITH. Right. 

Mr. JACCARD. But it would be more labor-intensive, more jobs. 

Mr. GRIFFITH. Right. That being said, I think that at times, particularly in regard to Keystone XL pipeline, we are straining out 

the gnat while swallowing the camel. I would compliment you, Dr. 

Jaccard, that you at least pay attention to the camel. And I point 

to your work with the China Council on International Cooperation 

on Environment and Development, of which you were the co-chair 

of the 2009 task force for sustainable use of coal. 

Mr. JACCARD. Yes. 

Mr. GRIFFITH. And while today we are talking about the XL pipeline, I support the pipeline. I also support the use of coal. There 

is some really interesting data in there. And I would point to the 

data out of that report, 2009, which I have a copy of it and read 

through while listening to the testimony that China has increased 

its production of coal 43 times since 1949, that it passed the U.S. 

as being the world’s number one coal producer in 1996, that Chinese coal profits are now over 100 billion yuan a year, that 2002 

saw them having an 11-fold increase in those profits. 

And then I am going to take a couple of quotes out of here because I think it is instructive long-term to what we are dealing 

with. Nevertheless, the energy efficiency and pollution control of 

the coal power industry in China is still behind the most advanced 

level in the world. For example, the fraction of power capacity 

within unit scales smaller than 100 megawatts is 24.8 percent in 

2007 while it is only 7 percent in the USA in 2007. The average 

coal consumption per unit, coal-powered electric supply in China 

2008 is 11 percent higher than that of Japan in 2005, and the 

emissions of sulfur dioxide and oxygen dioxide per unit of electric 

supply of coal power in China in 2007 is 30 percent and 150 percent higher than the U.S. respectively. I go on in later quote on the 

same page—I am on page 13 of 47—‘‘normally, thermal efficiency 

designed for boilers is between 72 and 80 percent, which is close 

to the design level of developed countries. But in reality, most of 

the actual thermal efficiencies are between 60 to 65, 10 to 15 percent lower than identified thermal efficiency of boilers. Some boilers only have efficiency of 30 to 40 percent actual application, 

which is 30 to 50 percent lower than that of developed countries.’’ 

3.5 billion tons of coal are mined China, just under a billion in 

the U.S. And so I think it is instructive because I don’t believe that 

the Chinese are going to—while you paid attention in the report 

and suggested some reforms, I don’t believe that the Chinese are 

going to take away jobs in order to make everything better and 

more efficient. And I would also submit to you that in that same 

report on page 19, beginning at the bottom of that page—and I am 

going to edit this a little bit. There are five recommendations or 

five problems. One, the existing laws, regulations, and policies are 

insufficient, mostly stating principles without practical value; four, 

the existing regulations and policies are issued by different government offices resulting in ineffective supervision on environmental 

protection work. Five, the existing regulations and policies have no 

means of encouraging the widespread use of key techniques for sustainable development of the coal industry. 

92 

I have a solution for China’s problem and that is that we use our 

energy in this country and our energy in North America, and we 

bring those jobs to the United States because we do it much more 

efficiently, and the bottom line is we can do it with less pollution 

in this country. There is a NASA study that says that the pollution 

from China takes about 10 days to get from the Gobi desert, where 

actually camels, I think, still exist in an indigenous state, all the 

way to the eastern shore of Virginia. 

Folks, we have got to bring those jobs back. Keystone XL pipeline 

is one way to do it. We reduced the world’s carbon footprint by 

doing so because the Chinese are using a whole lot more by being 

less efficient. They are using a whole lot more energy to produce 

the same goods that we could produce if we were allowed to use 

our resources in this country. Wouldn’t you agree with me, Mr. 

Stelter? 

Mr. STELTER. Yes, I would. 

Mr. GRIFFITH. Thank you very much. I yield back. 

Mr. WHITFIELD. Thank you very much. 

At this time I recognize the gentleman from New York, Mr. 

Tonko, for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair, and thank you to the witnesses for inspiring interesting discussion here this morning. 

When we consider actions that drive climate change, I believe 

that we can’t just focus on short-term emissions. We also have to 

consider how major infrastructure investments impact a sustained, 

long-term, carbon emissions agenda. Investment in a pipeline of 

this size would only be worthwhile if oil were going to move 

through it for decades, perhaps 30 to 50 years. Dr. Jaccard, could 

you please talk about the Keystone XL pipeline in that context? 

Mr. JACCARD. In the context of infrastructure? 

Mr. TONKO. Of infrastructure and long-term carbon emissions. 

Mr. JACCARD. Oh, absolutely. So one thing is when you put that 

infrastructure in place, you are committing yourself to pollution for 

a long time to come into the future. And Mr. Pourbaix might agree 

with me that pipeline economics change—I used to regulate pipelines—once you have already built them. In other words, even if 

the economics change, people don’t need nearly as much return to 

keep a pipeline operating as opposed to initially building it. 

Mr. TONKO. So that being said, with the Keystone XL line, are 

we committing ourselves to many years of high emissions and creating a major incentive for further tar sands production? 

Mr. JACCARD. Absolutely. That is exactly what you are doing. 

Mr. TONKO. Then how would a comprehensive climate policy help 

avoid that? 

Mr. JACCARD. A comprehensive planet policy would make sure 

that just as the Chinese told me that they wouldn’t act unless the 

U.S. was acting. How else would they act? So you have to have a 

situation where what they said very clearly, we will act if the U.S. 

acts and starts to pressure—encourage us to act. And in fact, when 

there were times when it looked like the U.S. would act, that is 

when I helped the Chinese develop a renewable portfolio standard, 

eliminate coal subsidies, and several other policies. And so simply, 

you have to have a situation where the most powerful country in 

the world takes a first step, creating jobs as well, but takes a first 

93 

step and then starts to push other countries to go in the same direction. It doesn’t happen any other way. 

Mr. TONKO. Thank you. Our highest priority undeniably is bringing about more jobs, needing more jobs and requiring many more 

jobs. Is the Keystone XL tar sands pipeline addressing that jobs 

policy? 

Mr. JACCARD. I might leave this to Mr. Swift because of the specifics, but I have already given testimony that moving away from 

a carbon pollution future, which doesn’t necessarily meaning stop 

using fossil fuels, is a job-intensive future. It is a false idea that 

you trade one off against the other. 

Mr. TONKO. So thank you. And Mr. Swift, how many permanent 

jobs do you quantify that Keystone XL would create according to 

the State Department? 

Mr. SWIFT. The State Department found that Keystone XL would 

create 35 permanent jobs. 

Mr. TONKO. And I understand there would also be several thousand construction jobs over 1 to 2 years? 

Mr. SWIFT. That is right. The State Department found that there 

would be 3,900 construction jobs. On the national level, one of the 

ways to think about this is it is the chance of getting a Keystone 

XL construction job is similar to the chance of being struck by 

lightning when considering the labor force. 

Mr. TONKO. Well, I understand any of those jobs to be important 

but I sense that it is not the best path to follow if we rely on Keystone XL as the job creator. Let me put it into this context, CBO 

estimates that the sequester will cost 750,000 jobs this year alone. 

If this were really about jobs, we would not have gone forward with 

sequester. We could have passed our President’s jobs bill in the last 

Congress. I believe we would be taking the advice of many economists and making infrastructure investments and energy investments that we need to support a modern economy as the best way 

to create jobs and advance a safe climate. 

This project is not about jobs; it is about committing us to an oilbased economy for another 50 years or more. It is about committing 

us to serious disruption of our climate system, our agriculture, our 

fisheries, our coastlines, our water supplies. I believe that we don’t 

have to choose. We can have it both ways. We can have safe climate and good jobs. 

And I believe I am almost up but I would ask, Dr. Jaccard, with 

the right policies can we shift to low carbon energy and grow jobs 

at the same time? 

Mr. JACCARD. Absolutely. When you look at independent analysis 

at MIT, University of Maryland, Stanford University, these are 

independent studies. We involve oil fossil fuel companies in the 

projects and in the work. We continuously show if you start now, 

a transition over many decades—doesn’t mean shutting down production or coal mines or oil sands today—it means not expanding 

and transitioning towards cleaner energy, that that is a jobs future 

and it is a climate future as well. 

Mr. TONKO. Thank you very much. Thank you Mr. Chairman. 

Mr. WHITFIELD. The gentleman’s time has expired. Well, that 

concludes today’s hearing. Mr. Rush? 

94 

Mr. RUSH. Mr. Chairman, if I might with your indulgence. Mr. 

Chairman, I want to just kind of clarify a comment that you made 

earlier in the hearing where you referenced an article in the Economist and the reason that we don’t need to worry about climate 

change. 

Mr. WHITFIELD. I didn’t say we didn’t need to worry about climate change. I did reference the article in the Economist. 

Mr. RUSH. I would like to clarify the article just a little bit more, 

Mr. Chairman. I think you are referencing a March 30 article 

which describes the correlation between mean global temperatures 

and greenhouse gas emissions. Mr. Chairman, I think you should 

read the entire article which explains that we are currently heading towards a temperature increase that would ‘‘be extremely damaging’’ with more areas affected by drought with up to 30 percent 

of species at greater risk of extinction, which will likely increase of 

intense hurricanes like super storm Sandy and with much higher 

sea levels. 

You might also want to read the editorial in the Economist from 

the same date which advocates for our government policies to cut 

carbon pollution. 

Finally, Mr. Chairman, if you want to look at an article in a scientific journal, nature climate change that came out just this week, 

the article explains this scientific issue and is about anything but 

comforting. 

And I think, Mr. Chairman, this highlights the need to have a 

series of hearings, not just one hearing 2 years ago, but a series 

of hearings on climate change science so that this committee can 

better understand all the issues and better understand what is at 

stake. Thank you, Mr. Chairman, for your indulgence. 

Mr. WHITFIELD. Well, you know I am delighted that you raised 

that issue and I really appreciate your referring everybody to this 

article. I think everyone should read this article. And all of us 

could pick out specific parts of this article to buttress the argument 

that we want to make, and there is no question about that. And 

that is why I think—for example, let me just read this: this is from 

the article. ‘‘Lastly, there is evidence that the natural non-manmade variability of temperatures may be somewhat greater than 

the international Panel on Climate Change has thought. A recent 

paper by a group of Chinese in the proceedings of the National 

Academy of Sciences links temperature changes from 1750 to natural changes such as sea temperatures in the Atlantic Ocean and 

suggests that the anthropogenic global warming trends might have 

been overestimated by a factor of two.’’ 

Now, we here today can’t answer this question. And so I know 

that you all have asked—I mean we have had a lot of hearings on 

climate change, and it may make you feel good to know that this 

morning I talked to our staff and said, maybe we should have another hearing about it because the temperatures have been flat for 

10 years according this article. And maybe we need to address the 

issue. And so I, for one, am perfectly happy to bring in scientists 

because this is an ongoing issue. Things are changing every day, 

every year, and I don’t think any of us have all the answers. So 

I appreciate your raising the issue. And you have any other comments? 

95 

Mr. RUSH. No, Mr. Chairman, I would just like to know when 

will the hearing be scheduled? And I look forward to the hearing 

that would bring some scientists in so that we would stop getting 

opinions from industry officials and those who have a self-interest 

in it. Let us bring some scientists who can offer independent conclusions about climate change. 

Mr. GRIFFITH. Mr. Chairman? 

Mr. WHITFIELD. Yes. 

Mr. GRIFFITH. Mr. Chairman, I just want to point out that while 

he may not call himself a scientist per se, Dr. Jaccard actually was 

a part of that team that received the Nobel Prize working on climate change—— 

Mr. WHITFIELD. Right. 

Mr. GRIFFITH [continuing]. So he is no stranger to the issue. 

Mr. WHITFIELD. Right. 

Mr. GRIFFITH. So I do feel it is a mischaracterization to say that 

we only have industry folks coming in when we have a couple of 

scientists here today who take counter view—— 

Mr. WHITFIELD. Right. 

Mr. GRIFFITH [continuing]. But also one who shared in a Nobel 

Prize. 

Mr. WHITFIELD. And we have had a multitude of hearings on climate change over the last 5 years. 

Mr. RUSH. Mr. Chairman, I really respect Dr. Jaccard and I respect his accomplishments but that doesn’t nullify our request that 

we have a hearing specifically with scientists to discuss climate 

change, not Keystone but climate change itself and—— 

Mr. WHITFIELD. Well, they don’t have to be mutually—— 

Mr. RUSH. If you want to invite Dr. Jaccard to come in to be a 

part of that panel, I have no objections to that. But the focus of 

it would be climate change and not Keystone. 

Mr. WHITFIELD. Well, we are all—— 

Mr. RUSH [continuing]. Of which we are really deliberating not 

Keystone itself but whether or not this Congress is going to or 

wanting to jeopardize the international relationships between Canada and the U.S., whether or not we want to just hijack the process. And this committee will begin to just write international policy 

without the input of the Administration or the Secretary of State. 

That is what this hearing is about. 

Mr. WHITFIELD. Well, we asked for agencies to send representatives to this hearing and they refused. 

Mr. RUSH. But, Mr. Chairman, the nature and the subject of this 

hearing I want to be real clear is not climate change; it is Keystone. 

Mr. WHITFIELD. Well, Keystone is very important. Isn’t that 

right, Mr. Mallino? 

Mr. MALLINO. Yes, sir. 

Mr. RUSH. I am not in opposition that Keystone is very important. All right. But I don’t want to see the process short-circuited 

by the actions of this committee in favor of this bill that is before 

us. 

Mr. WHITFIELD. Well, I really appreciate you raising the issue, 

Mr. Rush. 

Mr. RUSH. Well—— 

96 

Mr. WHITFIELD. And you know we are very sensitive to your concerns. And I know that you and Mr. Waxman have written a number of letters, and we have a lot of issues to visit together, so thank 

you. 

And once again I want to thank the members of the panel for 

being with us today. We appreciate all of your testimony and you 

responding to our questions. And we will keep the record open for 

10 days in the event that some additional material that someone 

may want to offer. 

And with that, we will conclude today’s hearing and thank you 

once again. Today’s hearing is concluded. 

[Whereupon, at 12:43 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

97 


82179.043

frout;c u.s. Oil and Gas, 

West TeHas Permian Basin '. 

oCISig Sk,""",o"u,, CORP I. jl TSXV:BSP 

'------------------ -- ~:: 

Take Our 2013 Audience Survey 

PetroChlna, Canada Ink Deal1 

Tuesday SeptenU>f1,2009. 7:33am PDT 

By Kishori Krishnan exclusive To Crydf! Investing NaWS2 

PelroChlna Com;>aIJll"S $1.7 bilUon 011 sands 

deal in Canada win sharpen its edge as a 

producer of heavy oil, and again underscores 

how access to credit is enabling Chinese 

co~nies to acquire overseas reserves, 

PetroChina was chosen by closely held 

A!habasca OJ! Sands Corp5 as its JOint 

venture partner after the Canadian fm'll 

rea.zed it would be difficult to finance its 

MacKay River" and Dover oil sands 1 projects 

In Alberta province via equity marl<ets. 

It also impressed AOSC witn its e)Cp9rtise in 

producing heavy oil - generally defined as 

having an American Petroleum Institute gravity of less than 22 degrees - in northeastern China. 

Prices of fight, sweet crude on the New York Mercantile Exchange are currently trading at ha~ their 

peak hit In July last year. This haS led some producers, Including Rovel Dutch Shell PLCa, to 

poslpone oil sands projects as lhey are capitaHntensive and need crude futures above a cartain 

threshold to be viable. US oil demand is also in the doldrums due to the global eeonorric downturn, 

malting il harder for producers to justify investments in new crude oil production, 

While some suggest PetroChlna's investment In Canadian 011 sands is opportunistic, analysts say It 

offers China's largest-listed oil ~ny several advantages 

PetroChlna and parent ehjna National Petroleum Corn "are building a position overseas In heavy oil 

outpUt. CNPC is active in 1A;mezue\a's Qrinoco heaVY oil belt 10and Is rruUlng bids with France's 

~ "for two more oil blocks there, people farrifiar with the situation said in July. 

On Monday, AOSC said a regulatory application for the forst phase of the MacKay River projeCt, 

representing an output of 35,000 barrels per day, is planned at the end of 2009. 'We believe 

PetroChina's domestic heavy oil extraction experience In (the) Uaohe flBld could help in monetizing 

these trapped resources in these Alberta sands.' said Gordon Kwan, head of energy research at 

Mirae Asset Securities, 

Heavy oil IS attractive to Chinese co~nles because It has lower corrrnercial value than fighter 

grades. This means it can be purchased and run through refineries more cheaply When oil prices are 

hi9h, 

PetroChina may be betting on two IOng-Oormant pipeline projects between }llberta and the Pacific 

Coast moving ahead so that equity oil can be shipped to its Chinese refineries. 

Enbridge Inc'2's Northern Gateway Pipelines proposes to fink oil sands to a deepwater port in 

Kitimat, BriliSh ColuniJia. Kinder Morgan Canada, a UOIt of Kinder Morgan Energy Partners tP, has 

a simlar proposal, and says it can alSo expand its exisUOg pipeline running west from Alberta. 

My of these projects could increase the share of 011 sands production destined for Asia to about 15 

per cent by the mddle 01 the next decade. compared with 1 per cent today. 

Crude news 

US crude oil futures straddled narrowly near even early on Monday as traders weighed forecasts for 

a drawdown in crude stocks and a raft of econorric data that could guide market sentiment for the 

day. 

Early support for crude came from China, Where the official PUrchasing managers index for August 
98 


82179.044

reached a 1S-month high,according to surveys released on Tuesday. Crude futures dropped sharply 

on Monday as a dive in Chinese equities spurred worries over oil derrandand economic growth. 

"Despite the sell-off, WTl's trading range remains intact, and downside support wid not be taken out 

untll we break below the $68.25 mark basis October and $66 basis October Brent,· said Ed Melr, 

analyst at MF GlObal in New Yori<o "Slrrilany, products have some ways to go before they too lake 

oUI their short·term uPChennels," Me;r added. 

On Tuesday, crude oii traded little changed near $70 a barrel on concem a slowdown in lending 

growth may derail a recovery in China. the world's second-largest energy user. 

Oil fell 3.8 per cent on Monday, the biggest decline in two weeks, as Chinese aquities led a global 

51""" following a report that the nation's banks cut \ending. China accounts for about a 10tn of 

global crude oil use, according to BP Pic data. 

'Worries about China translated into weakness in conmodity prices, including the oil price,· said 

DaVid Moore 13, a cofflltOdity strategist at Conm:>nweafth Bank of ,btmtralia Ltd in Sydney. 

Crude oil for October delivery was at $70.08 a barrel, up 12 cents. in after·hOurs eleCtronic trading 

on the New Yorl< Mercantile E~cnange. Yesterday, Ina cohbact deClined $2.78 to $69.96, the 

biggest drop since August 14 .. Plicas have increased 57 per cent tnis year. 

Crude supply 

"Markel supply is quite adequate to meet demand at the moment and that is one of the reasons why 

on a three-!o-six month view we'll see the oil price retrace somewhat," Moore said. "By the end of 

the year we night be looking at an oil price in the low $60s: 

N> energy department report on Septent>er 2 will probably shOw thet US cructe-oil ~ 

~"Jast week. " Btoont>erg News survey s!towed. Supplies likely dropped 500,000 barrels 

from 343.8 rrllRan the prtorweek, according to the media" of eight analyst responses in the survey. 

GasoUna stocl<ptles probably fe.1.OS million barre'" Supplies of distillate fuellncluding heating ofl 

and diesel, probably increased 675,000 barrels, according to the survey. Inventories are near their 

highest since 1983. 

Brent crude oil for October set!1ement was at $69.82 a barrel, up 17 cents, on the London-based 

ICE Futures Europe exchange. The contract declined $3.14, or 4.3 per cent, 

AI! of what we are seeing today can be biamed on the Chinese stocK-rrarkel .~Ioff,· said lllrn 

~'5, a senior energy analyst at BN!' Paribas Commodity Futures Inc in New York. "The Chinese 

mari<ets have helped support cofflltOdities. Price rises have been based on expectations of 

increased econorrie growth and demand in China.' 

Corporate affalts 

QAQ Rosneft '"said second-quarter profit fellS3 per cant after cnude prices turrb1ed and RussIa's 

biggest oil produoerhad a foreign currency Ios$, 

Net income dropped to $1.61 billion from $4.31 biHion in the year-earlier period, the Moscow-b.ased 

COflllany said. Profit declined after Urals export prices in northwestem Europe fell 1;1 per cent to 

average $56.12 a barrel, according to slate-run Rosneft, ~heired by Deputy Prime Minister Jgru: 

~n 

A foreign exchange toss of $391 I111lion as the ruble weakened against tha doUar also depressed 

eatnlngs. 

"The only rraterial difference from our expectations Was a foreign exchange loss: Irina Elinevskeya 

an oil analyst at Renaissance Capital, sald. 'It's .• one-off expense and we don't believe it had any 

influence on the underlying fundamentals of the cOlT'jlany." 

MegaWest Energy'S, the Canadian corflll'ny that begen producing oil in western Missouri last year 

is planning to restart its Missourt oil wells. Faffing oil prtces furced the COrflll'"y to suspend 

production jst a few monthS after It started, and lhe wells have been idie throughOut 2009. TOday, 

however, ,!looks like MIssouri's oil bett w[tl be back in business. 

MegeWest got a $2 2 milia" IQvesjmen! '''from two institutional investors in exchange for a 10 per 

cent stake in the Missouri wells. nssys lhe money will enabie It to restart operations, 

Higher oil prices help. too - crude has Nsen to $70 a barrel from about $40 when the wells were 

shut down, The wildcatter's shares are risiog on the news, but they're stiR down 72 per cent from a 

year ago. 

4/8/20138:57 ) 
99 


82179.045

............ 

Canada approves PetroChina oil-sand investment Dlu:.mber 30, :2009 ! Chl"l$ Ofiv$r 

_0 Share E""" Print 

HONG KONG (MarKetWatchr The Canadian sovemment approYed Tuesday ?etroChina Co 's 

(US:ptr)(HK:SS7) 1 9 bilbon Canadian dollar {$1.B billion) bid to buy a maj:»ity stake in two Alberta 

oil ... sands projects... canada's Industry Minister Tony Clea'ent said in a .statement he was sans-fred the 

inv6$Unent is "likely to be of nat benefit to Canada" The deal mcutes commitments by PetroCl'una 

on SpendIng and investment. as we:U as pb creation. The deal win give PetroChina maprity control of 

the MacKay RIver aod Dover oU-sands pro)9CtS held by Aihabascs 011 Sands Corp 

foday's Top Stoek Pick ~ C~y S1iIt to Capitalize QI'l $&0 SillOfl iI1dtJs.tfy-Leam More! W>Wi.OT'CSlockP1ck.com 

$10 011 Change Coupon find a Gootly&ri Tire & Service loca!ion Near You & $aWt Up To $1 O! WWW.900dyaar.com/serv~ 

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Partner Center. 

From The Archives 

PelroChma to buy 60% in two Canadian 011 

sands project$ 

SepIentlerl.2009 

PetroChina hIgher after Canadian project 

buyout 

Janua-y 4, 2012 

Athabasca Oil Sands Corp. !PO tips scales at $1.4 billion 

Aprll7.zmo 

Related Keywords 

Investment 

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Petrochina 

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4/812013 8;$5 AM 
100 


82179.046

PetroChina buys entire Alberta oilsands 

project 

The Canadian Press 

Posted: Jan 3, 2012 9:08 AM ET 

Last Updated: Jan 3, 20126:52 PM ET 571 

Athahasca Oil Sands Corp. has exercised its option to sell its remaming 40 pef' cent interest in the 

MacKay River oilsands project to a unit of Chinese oil giant PerroChina for about $680 million. 

The deal, announced Tuesday, gives PetroChina full ownership of MacKay River project, one of the 

newest of northern Alberta's oilsands developments. 

It continues a trend that has seen Chinese companies acquire miners, energy producers and other 

resources companies in Canada and around the world to secure future supplies of mineral~, steel, oil and 

gas and other raw materials for its rapidly growing economy. 

Athabasca had sold PetroChina a 60 per cent stake in the project last year. 

Regulatory approval 

Two weeks ago, the Alberta Energy Resources Conservation Board and Alberta Environment and Water 

approved the project. 

Athabasca said it decided to sell its remaining stake in MacKay River "because it believes the long-term 

prospects of the company are enhanced by deploying its capital and resources into its other development 

projects." 

The Calgary company .aid it will save about $190 million in capital spending this year from the 

divestiture. 

Sveinung Svarte, president and CEO, said that since the company sold control of the MacKay River 

project last year, it has grown and diversified and has other oil and gas prospects to develop. 

"We added approxinlately three billion barrels of contingent resource (best estimate) through successful 

drilling and acquisitions, reaching approximately 10 billion barrels of contingent resources," he said. 

PTA· Petrochlna Company LImited· Dally Line ~~~~------~~--------,l~>ro 

145.00 

140.00 

135.00 

•• Ii--::,3:----::Fe::+:-b---......,Mar::i--------A~P.....J 121l>ro r nee-month stock chart for PetroChina. (CBC) 

lof2 4/812013 9:45 AM 
101 


82179.047

"We grew the resource base of the Hangingstone asset area, which the company estimates now has the 

potential to produce more than 80,000 barrels of bitumen per day. As a result, we accelerated the timing 

of development for this project and fIrst production is expected in 2014. 

Svarte said the company has also acquired more than 1.7 million acres of promising light oil and 

liquids-rich natural gas properties and is targeting targeting a production rate of 8,000 - 10,000 barrels of 

oil equivalent output a day by the end of tlris year. 

Bill Gallacher. chainnan of the Athabasca board, said the company plans to diversify its operations with 

more non-oilsands developments. 

"Our strategy is to ultimately aclrieve approximately 50 per cent of our production from the company's 

oilsands division and the balance from the light oil division," he said. "We will use the proceeds from the 

option exercise to implement this strategy." 

The $1. 9-billion Athabasca-PetroClrina dealla.~t year also included the Dover project, wlrich is expected 

to obtain regulatory approval about a year from now. Once it does, there will be an identical divestiture 

option. 

TIle fIrst phase of the MacKay River project is expected to produce 35,000 barrels per day, eventually 

expanding to 150,000 barrels. Construction of the project will begin next month with startup targeted for 

2014. 

It will use steam-assisted gravity drainage, or SAGD, technology to extract bitumen. Under SAGD, 

oilsands companies pipe steam underground to melt thick tar-like oiJsands deposits. The oil is then 

collected through a second pipeline and pumped to the surface. 

© The Canadian Press, 2012 

THE CANADIAN PRESS ,., 

200 4/8/20139:45 AM 
102 


82179.048

113TH CONGRESS 

1s'l' SESSIO~ H.R.3 

To approye the construction, operation, and maintenance of the Keystone 

XL pipeline, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

ThLlliCH 15, 2013 

:\'lr. TERRY (for himself, .xII'. lVLATHESO",", Mr. UPTON, Mr. BARROW of Georgia, lVlr. WHITFIELD, Mr. BACHCS, Mr. BARTO"'", lVIr. BILIRAKIS, }Ir. 

BISHOP of l~tah, Mrs. BLACKI3l'R",", Mr. BO","","ER, Mr. BOlTSTA.,\'Y, Mr. 

BRIDEKSTI","E, Mr. BROUN of Georgia, l\1r. BUCSHON, 1\11'. BROOKS of 

Alabama, Mr. BURGESS, lV1rs. CAPITO, :\11'. CARTER, lV1r. CASSIDY, l\1r. 

CHABOT, MI'. COBLE, lVlr. COK.\WAY, }1r. CRAMER, }Ir. CRAW-PORD, }lr. 

CT:LBERSO",", Mr. DAIKES, }Ir. RODNEY DAYIS of Illinois, Mr. DllKCA.' 

of South Carolina, Mrs. ELL:VIEI{S, 1\11'. FIC'!CHER, 1\11'. FLORES, lVlr. 

FRAKKS of Arizona, Mr. GOHl\IERT, lVlr. GARDKER, lVlr. GI","GREY of 

Georgia, lVls. GfuL",'GER, MI'. GRAYES of Missouri, }lr. GmF'PI"," of Arkansas, lVlr. GlUFFITH of Virginia, lVIr. GrTHRIE, Mr. R~RPER, Mr. HARms, 

Mr. HFELSKA.\iP, }Ir. HnZEKGA of lVIichigan, :\11'. HUNTER, lV1r. JOIIKSO"," of Ohio, lVlr. KIC'!ZI:-\GER of Illinois, :\11'. LL'\CE, MI'. LATTA, .I'llI'. 

LOl'w, 1\11'. LrETKE)IEYER, Mrs. LFilnIIS, Mr. :\LlliCILL"JT, Mr. lVIcCAllL, 

Mr. l\ICHE:-\RY, l\Ir. lVlcKI:-''LEY, 1\11'. :\IEEILL'l, MI'. l\fFRPHY of Pennsylvania, :\11'. }IULLIN, MI'. MnXA:-\EY, Mrs. XOEM, Mr. XUKES, l\Ir. 

OLSO",", l\Ir. PEARCE, :\fr. PITTS, Mr. POE of Texas, Mr. RIBBLE, Mrs. 

lVIcl\10RRIS RODGERS, lVIr. ROGERS of .Michigan, Mr. SCALISE, Mr. SHIl\IhTS, Mr. SHt'STEH, Mr. STIYERS, :\11'. THO)IPSOK of Pennsylyania, :\lr. 

WALDEK, Mrs. ,VALORSKI, Mr. WEBER of Texas, 1IIr. WEST:llORELA.'D, 

lVIr. W01l1ACK, Mr. Yor:-w of Florida, :\Ir. COFFl\L~'l, Mr. BEKTfI'OLIO, 

and Ms. l<'oxx) intt'oduced the following bill; which was referred to the 

Committee on Transportation and Infrastructure, and in addition to the 

Committees on Energy and Commercc and Xatural Resources, for a period to be subsequentl:v' determined by the Speaker, in eaell case for consideration of such prmisions as fall "ithin the .iurisdietion of the committee concerned 
103 


82179.049

2 

A BILL 

To approve the construction, operation, and maintenance of 

the Keystone XL pipeline, and for other purposes. 

1 Be it enacted by tlw Senate and House of Representa2 lives of t/w United States of A me rica in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 'l'his Act may be cited as the "Northern Route Ap5 proval Act". 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) To maintain our Nation's competitive edge 

9 and ensure an economy built to last, the United 

10 States must have fast, reliable, resilient, and envi11 ronmentally sound means of moving energy. In a 

12 global economy, we 'will compete for the world's in13 vestments based in significant part on the quality of 

14 our infrastructure. Investing in the Nation's infra15 structure provides immediate and long-term eco16 nomic benefits for local communities and the Nation 

17 as a whole. 

18 (2) The delivery of oil from Canada, a dose ally 

19 not only in proximity but in shared values and 

20 ideals, to domestic markets is in the national inter21 est because of the need to lessen dependence upon 

22 insecure foreign sources . 

• IIRa m 
104 


82179.050

3 

1 (3) The Keystone XL pipeline would provide 

2 both short-term and long-term employment opportu3 nities and related labor income benefits, such as gov4 ernment revenues associated ",'ith taxes. 

5 (4) The State of Nebraska has thoroughly re6 ,'iewed and approved the proposed Keystone XL 

7 pipeline reroute, concluding that the concerns of Ne8 braskans have had a major influence on the pipeline 

9 reroute and that the reroute ,,'ill have minimal envi10 ronmental impacts. 

11 (5) The Department of State and other Federal 

12 agencies have over a long period of time conducted 

13 extensive studies and analysis of the technical as14 pects and of the environmental, social, and economic 

15 impacts of the proposed Keystone XL pipeline. 

16 (6) The transportation of oil via pipeline is the 

17 safest and most economically and environmentally 

18 effective means of doing so. 

19 (7) The Keystone XL is in much the same posi20 tion today as the Alaska Pipeline in 1973 prior to 

21 congressional action. Once again, the Federal regu22 latory process remains an insurmountable obstacle 

23 to a project that is likely to reduce oil imports from 

24 insecure foreign sources . 

• HR 3 IH 
105 


82179.051

4 

1 SEC. 3. KEYSTONE XL PERMIT APPROVAL. 

2 Notwithstanding Executive Order No. 13337 (3 

3 U.S.C. 301 note), Executive Order No. 11423 (3 U.S.C. 

4 301 note), section 301 of title 3, United States Code, and 

5 any other Executive order or provision of law, no Presi6 dential permit shall be required for the pipeline described 

7 in the application filed on May 4, 2012, by TrallsCanada 

8 Keystone Pipeline, L.P. to the Department of State for 

9 the Keystone XL pipeline, as supplemented to include the 

ION ebraska reroute evaluated in the Final Evaluation Re11 port issued by the Nebraska Department of Environ12 mental Quality in <Tanuary 2013 and approved by the Ne13 braska governor. The final environmental impact state14 ment issued by the Secretary of State on August 26, 2011, 

15 coupled 'with the Final Evaluation Report described in the 

16 previous sentence, shall be considered to satisfY all re17 quirements of the National Environmental Policy Act of 

18 1969 (42 U.S.C. 4321 et seq.) and of the National His19 tOTIC Preservation Act (16 U.S.C. 470 et seq.). 

20 SEC. 4. JUDICIAL REVIEW. 

21 (a) EXCIXSIVE JURISDICTION.-Except for review by 

22 the Supreme Court on \\Tit of certiorari, the United States 

23 Court of Appeals for the District of Columbia Circuit shall 

24 have original and exclusive jurisdiction to determine25 (1) the validity of any final order or action (in26 cluding a failure to act) of any Federal agency or of-

.HR 3 IH 
106 


82179.052

5 

ficer with respect to issuance of a permit relating to 

2 the construction or maintenance of the Keystone A"L 

3 pipeline, including any final order or action deemed 

4 to be taken, made, granted, or issued; 

5 (2) the constitutionality of any provision of this 

6 Act, or any decision or action taken, made, granted, 

7 or issued, or deemed to be taken, made, granted, or 

8 issued under this Act; or 

9 (3) the adequacy of any environmental impact 

10 statement prepared under the National Environ11 mental Policy Act of 1969 (42 U.S.C. 4321 et seq.), 

12 or of any analysis under any other Act, with respect 

13 to any action taken, made, granted, or issued, or 

14 deemed to be taken, made, granted, or issued under 

15 this Act. 

16 (b) DEADLINE FOR FILING CLAH1.-A claim arising 

17 under this Act may be brought not later than 60 days 

18 after the date of the decision or action giving rise to the 

19 claim. 

20 (c) E:lI.t>EDITlm COKSIDER~TIO~.-The United 

21 States Court of Appeals for the District of Colmnbia Cir22 cuit shall set any action brought under subsection (a) for 

23 expedited consideration, taking into account the national 

24 interest of enhancing national energy security by providing 

.HR 3 IH 
107 


82179.053

6 

1 access to the significant oil reserves in Canada that are 

2 needed to meet the demand for oil. 

3 SEC. 5. AMERICAN BURYING BEETLE. 

4 (a) }1'IXDL,\GS.-The Congress finds that5 (1) environmental reviews performed for the 

6 Keystone XL pipeline project satisfy the require7 ments of section 7 of the Endangered Species Act of 

8 1973 (16 U.S.C. 1536(a)(2») in its entirety; and 

9 (2) for purposes of that Act, the Keystone XL 

10 pipeline prQjcct will not jeopardize the continued ex11 istence of the American burying beetle or destroy or 

12 adyersely modify American burying beetle critical 

13 habitat. 

14 (b) BIOLOGICAL OPI:-.JIOl\.-The Secretary of the In15 terior is deemed to have issued a \\Titten statement setting 

16 forth the Secretary's opinion containing such findings 

l7 under section 7(b)(I)(A) of the Endangered Species Act 

18 of 197(3 (16 U.S.C. 1536(b)(I)(A)) and any taking of the 

19 American burying beetle that is incidental to the COllstruC20 tion or operation and maintenance of the Keystone XL 

21 pipeline as it ma~r be ultimately defined in its entirety, 

22 shall not be considered a prohibited taking of such species 

23 under such Act . 

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1 SEC. 6. RIGHT-OF-WAY AND TEMPORARY USE PERMIT. 

2 The Secretary of the Interior is deemed to have 

3 granted or issued a grant of right-of-way and temporary 

4 use permit under section 28 of the Mineral Leasing Act 

5 (30 U.S.C. 185) and the Federal Land Policy and lVlan6 agement Act of 1976 (43 U.S.C. 1701 et seq.), as set forth 

7 in the application tendered to the Bureau of Land Man8 agement for the Keystone XL pipeline. 

9 SEC. 7. PERMITS FOR ACTIVITIES IN NAVIGABLE WATERS. 

10 (a) ISSUA~'\CE OF PEmlITs.-The Secretary of the 

11 Army, not. later than 90 days after receipt of an applica12 tion therefor, shall issue all permits under section 404 of 

13 the Federal Water Poliution Control Act (33 U.S.C. 1344) 

14 and section 10 of the Act of March 3, 1899 (33 U.S.C. 

15 403; commonly knuwn as the Rivers and Harbors Appro16 priations Act of 1899), necessary for the construction, op17 eration, and maintenance of the pipeline described in the 

18 May 4, 2012, application referred to in section 3, as sup19 plemented by the Nebraska reroute. The application shall 

20 be based on the administrative record for the pipeline as 

21 of the date of enactment of this Act, 'which shall be consid22 ered complete. 

23 (b) WAIVER OF PROCEDURAL REQl:IREl\IE~TS.-The 

24 Secretary may waive any procedural requirement of law 

25 or regulation that the Secretary considers desirable to 

26 waive in order to accomplish the purposes of this section . 

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8 

(c) ISSlTA;,CE I~ ABSEXCE OF ACTIOK BY THE SEC2 RETARY.-If the Secretary has not issued a permit de3 scribed in subsection (a) on or before the last day of the 

4 90-day period referred to in subsection (a), the permit 

5 shall be deemed issued under section 404 of the Federal 

6 Water Pollution Control Act (33 U.S.C. 1344) or section 

7 10 of the Act of March 3, 1899 (33 U.S.C. 403), as appro8 priate, on the day follmving such last day. 

9 (d) I.lIl\UTATIOKo-The Administrator of the Environ10 mental Protection Agency may not prohibit or restrict an 

11 activity or use of an area that is authorized under this 

12 section. 

13 SEC. 8. MIGRATORY BIRD TREATY ACT PERMIT. 

14 The Secretary of the Interior is deemed to have 

15 issued a special purpose permit under the :Migratory Bird 

16 Treaty Act (16 U.S.C. 703 et seq.), as described in the 

17 application filed with the United States Fish and Wildlife 

18 Service for the Keystone XL pipeline on January 11, 

19 2013. 

o 

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