H. Rept. 112-140 - 112th Congress (2011-2012)
July 08, 2011, As Reported by the Energy and Commerce Committee

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House Report 112-140 - NORTH AMERICAN-MADE ENERGY SECURITY ACT




[House Report 112-140]
[From the U.S. Government Printing Office]


112th Congress                                            Rept. 112-140
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================
 
                NORTH AMERICAN-MADE ENERGY SECURITY ACT

                                _______
                                

                  July 8, 2011.--Ordered to be printed

                                _______
                                

         Mr. Upton, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1938]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1938) to direct the President to expedite the 
consideration and approval of the construction and operation of 
the Keystone XL oil pipeline, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Hearings.........................................................     8
Committee Consideration..........................................     8
Committee Votes..................................................     9
Committee Oversight Findings.....................................    13
Statement of General Performance, Goals and Objectives...........    13
New Budget Authority, Entitlement Authority, and Tax Expenditures    13
Earmark..........................................................    13
Committee Cost Estimate..........................................    13
Congressional Budget Office Estimate.............................    13
Federal Mandates Statement.......................................    14
Advisory Committee Statement.....................................    14
Applicability to Legislative Branch..............................    14
Section-by-Section Analysis of Legislation.......................    14
Changes in Existing Law Made by the Bill, as Reported............    15
Dissenting Views.................................................    16

                               AMENDMENT

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``North American-Made Energy Security 
Act''.

SEC. 2. FINDINGS.

  Congress finds and declares the following:
          (1) The United States currently imports more than half of the 
        oil it consumes, often from countries hostile to United States 
        interests or with political and economic instability that 
        compromises supply security.
          (2) While a significant portion of imports are derived from 
        allies such as Canada and Mexico, the United States remains 
        vulnerable to substantial supply disruptions created by 
        geopolitical tumult in major producing nations.
          (3) Strong increases in oil consumption in the developing 
        world outpace growth in conventional oil supplies, bringing 
        tight market conditions and higher oil prices in periods of 
        global economic expansion or when supplies are threatened.
          (4) The development and delivery of oil and gas from Canada 
        to the United States is in the national interest of the United 
        States in order to secure oil supplies to fill needs that are 
        projected to otherwise be filled by increases in other foreign 
        supplies, notably from the Middle East.
          (5) Continued development of North American energy resources, 
        including Canadian oil, increases domestic refiners' access to 
        stable and reliable sources of crude and improves certainty of 
        fuel supply for the Department of Defense, the largest consumer 
        of petroleum in the United States.
          (6) Canada and the United States have the world's largest 
        two-way trading relationship. Therefore, for every United 
        States dollar spent on products from Canada, including oil, 90 
        cents is returned to the United States economy. When the same 
        metrics are applied to trading relationships with some other 
        major sources of United States crude oil imports, returns are 
        much lower.
          (7) The principal choice for Canadian oil exporters is 
        between moving increasing crude oil volumes to the United 
        States or Asia, led by China. Increased Canadian oil exports to 
        China will result in increased United States crude oil imports 
        from other foreign sources, especially the Middle East.
          (8) Increased Canadian crude oil imports into the United 
        States correspondingly reduce the scale of ``wealth transfers'' 
        to other more distant foreign sources resulting from the 
        greater cost of importing crude oil from those sources.
          (9) Not only are United States companies major investors in 
        Canadian oil sands, but many United States businesses 
        throughout the country benefit from supplying goods and 
        services required for ongoing Canadian oil sands operations and 
        expansion.
          (10) There has been more than 2 years of consideration and a 
        coordinated review by more than a dozen Federal agencies of the 
        technical aspects and of the environmental, social, and 
        economic impacts of the proposed pipeline project known as the 
        Keystone XL from Hardisty, Alberta, to Steele City, Nebraska, 
        and then on to the United States Gulf Coast through Cushing, 
        Oklahoma.
          (11) Keystone XL represents a high capacity pipeline supply 
        option that could meet early as well as long-term market demand 
        for crude oil to United States refineries, and could also 
        potentially bring over 100,000 barrels per day of United States 
        Bakken crudes to market.
          (12) Completion of the Keystone XL pipeline would increase 
        total Keystone pipeline capacity by 700,000 barrels per day to 
        1,290,000 barrels per day.
          (13) The Keystone XL pipeline would provide short-term and 
        long-term employment opportunities and related labor income 
        benefits, as well as government revenues associated with sales 
        and payroll taxes.
          (14) The earliest possible construction of the Keystone XL 
        pipeline will make the extensive proven and potential reserves 
        of Canadian oil available for United States use and increase 
        United States jobs and will therefore serve the national 
        interest.
          (15) Analysis using the Environmental Protection Agency 
        models shows that the Keystone XL pipeline will result in no 
        significant change in total United States or global greenhouse 
        gas emissions.
          (16) The Keystone XL pipeline would be state-of-the-art and 
        have a degree of safety higher than any other typically 
        constructed domestic oil pipeline system.
          (17) Because of the extensive governmental studies already 
        made with respect to the Keystone XL project and the national 
        interest in early delivery of Canadian oil to United States 
        markets, a decision with respect to a Presidential Permit for 
        the Keystone XL pipeline should be promptly issued without 
        further administrative delay or impediment.

SEC. 3. EXPEDITED APPROVAL PROCESS.

  (a) In General.--The President, acting through the Secretary of 
Energy, shall coordinate with each Federal agency responsible for 
coordinating or considering an aspect of the President's National 
Interest Determination and Presidential Permit decision regarding 
construction and operation of the Keystone XL pipeline, to ensure that 
all necessary actions with respect to such decision are taken on an 
expedited schedule.
  (b) Agency Cooperation With Secretary of Energy.--Each Federal agency 
described in subsection (a) shall comply with any deadline established 
by the Secretary of Energy pursuant to subsection (a).
  (c) Final Order.--Not later than 30 days after the issuance of the 
final environmental impact statement, the President shall issue a final 
order granting or denying the Presidential Permit for the Keystone XL 
pipeline, but in no event shall such decision be made later than 
November 1, 2011.
  (d) Environmental Review.--No action by the Secretary of Energy 
pursuant to this section shall affect any duty or responsibility to 
comply with any requirement to conduct environmental review.

                          PURPOSE AND SUMMARY

    H.R. 1938, the ``North American-Made Energy Security Act of 
2011'', was introduced by Rep. Lee Terry (together with Reps. 
Gardner, Green, McKinley, McMorris Rodgers, Murphy, Myrick, 
Pitts, Ross, Scalise, Sullivan, Upton, Walden, and Whitfield) 
on May 23, 2011. The legislation requires the President to 
coordinate with the relevant federal agencies and reach a final 
decision granting or denying the Presidential Permit for the 
proposed Keystone XL pipeline project by no later than November 
1, 2011.

                  BACKGROUND AND NEED FOR LEGISLATION

    A Canadian pipeline company, TransCanada, has long sought 
to increase the capacity of its Keystone pipeline system in 
order to bring more Canadian crude oil to American refineries. 
A permit application for its proposed expansion project, 
Keystone XL, was submitted to the State Department in September 
of 2008.
    In the 33 months since--an unusually long period for such 
permits--the nation has faced high gasoline prices as well as 
soaring unemployment rates. Approval of Keystone XL would help 
address both of these concerns, but the Obama administration 
has yet to make a final decision about whether to allow the 
project to move ahead. Most recently, the Environmental 
Protection Agency raised several objections that may further 
delay a final decision.
    Despite the economic downturn, the nation's demand for 
petroleum and motor fuels remains strong and is projected by 
the Energy Information Administration to grow in the years 
ahead. However, domestic oil production is limited by the 
federal government. Many promising domestic onshore and 
offshore areas are explicitly off-limits to energy leasing, and 
even those that are not may be subject to permitting delays or 
regulatory constraints that effectively make them so. Oil 
imports are needed to fill the gap between consumption and 
domestic production.
    Unfortunately, many nations that serve as a source of these 
imports continue to display substantial instability as well as 
anti-American hostility. This raises serious concerns about the 
risks--both economic and otherwise--of continued reliance upon 
such nations.
    The role of Canadian oil is critical to America's energy 
future. In addition to being a very stable country, as well as 
a strong ally and our largest trading partner, Canada is 
America's single largest source of oil imports. Further, 
Canadian oil production is on the rise, especially oil sands 
production from the province of Alberta. The untapped potential 
is vast--an estimated 175 billions barrels of recoverable oil 
places Alberta second only to Saudi Arabia in proven reserves. 
Canada currently produces more than enough oil for its own 
needs and sends most of the rest South, via pipelines, to 
American refineries.
    Thus, Alberta oil sands production represents a nearly-
ideal source of supply for the American market that will likely 
increase in the years ahead. However, the existing pipeline 
system between the two nations is unable to keep up with the 
growing volumes, necessitating the need for a major expansion 
project such as Keystone XL.
    Once completed, the Keystone XL project would add another 
700,000 barrels per day to the capacity of 591,000 barrels per 
day in the existing pipeline, more than enough to make a 
difference in the price at the pump. It can do so for the long 
term, as output from Alberta is expected to provide this 
additional oil for decades to come. In addition to the energy 
benefits, the construction of Keystone XL will create tens of 
thousands of American jobs.
    H.R. 1938, the North American-Made Energy Security Act of 
2011, does not change the extensive environmental reviews and 
other requirements necessary for Keystone XL to obtain its 
federal permit. The bill is simply an acknowledgement that this 
project has already been thoroughly studied and that all 
legitimate concerns have been raised and addressed, and sets a 
date certain--November 1, 2011--by which the Obama 
administration must reach a final decision.

Keystone XL permitting timeline

    Ordinarily, the U.S. government does not have permit 
authority for oil pipelines, even interstate pipelines. 
Generally, the primary siting authority for oil pipelines would 
be established under applicable state law. However, the 
construction, connection, operation and maintenance of a 
pipeline that connects the United States with a foreign country 
has historically required executive permission conveyed through 
a Presidential Permit. Executive Order 13337 delegates to the 
Secretary of State the President's authority to receive 
applications for Presidential Permits.
    TransCanada submitted an application for a Presidential 
Permit with the U.S. Department of State (DOS) in September 
2008. In November of 2008, TransCanada submitted a 
comprehensive environmental report to DOS, thereby initiating 
the National Environmental Policy Act review process.
    On January 28, 2009, DOS issued its Notice of Intent to 
Prepare an Environmental Impact Statement, which commenced a 
public scoping period to identify significant environmental 
issues. Among other things, this included public meetings held 
in more than twenty impacted communities. On April 16th, DOS 
issued a Draft Environmental Impact Statement (DEIS) and 
extended the public comment period to 77 days.
    On July 2, 2010, DOS closed the comment period on the DEIS. 
The Environmental Protection Agency (EPA) determined that the 
DEIS was inadequate, requiring DOS to perform additional review 
in a Supplemental Draft Environmental Impact Statement (SDEIS). 
The SDEIS was issued on April 29, 2011 and initiated an 
additional 45-day comment period. DOS ultimately concluded that 
``the information in this SDEIS does not alter the conclusions 
reached in the [DEIS] regarding the need for and the potential 
impacts of the proposed Project.''
    On June 6, 2011, EPA again informed DOS that the SDEIS 
contains insufficient information and requested additional 
analysis be performed for the Final Environmental Impact 
Statement (FEIS).
    Assuming no further delays--an optimistic assumption--DOS 
should release its FEIS in August, likely initiating an 
additional 30-day public comment period. In addition, the 
comment period will begin on the National Interest 
Determination to solicit views from the Secretaries of Defense, 
Commerce, Transportation, Energy, and Homeland Security, as 
well as the Attorney General, Administrator of the EPA, and 
others that the Secretary of State deems appropriate.
    The ongoing permitting process for Keystone XL has thus far 
taken 33 months, and has included multiple opportunities for 
public input. By comparison, the original Keystone pipeline 
project was permitted in less than 24 months. H.R. 1938 would 
set November 1, 2011 as the date by which the administration 
must act, more than three years after the application was 
originally submitted.
    Throughout the approval process, any and all environmental 
and safety concerns have been addressed. The SDEIS concluded 
that: ``[a]s a result of incorporation of the current PHMSA 
regulations, current industry standards, and the set of 57 
Project-specific Special Conditions developed by PHMSA and 
agreed to by Keystone, the proposed Project would have a degree 
of safety over any other typically constructed domestic oil 
pipeline system under current code and a degree of safety along 
the entire length of the pipeline system similar to that which 
is required in [High Consequence Areas] as defined under [PHMSA 
regulations].''
    Moreover, claims of environmental damage attributable to 
production of the oil sands in Alberta--including assertions of 
substantially higher greenhouse gas emissions relative to 
conventional oil--are particularly misplaced in the context of 
the U.S. approval process for Keystone XL. For example, the on-
site impacts and emissions are the responsibility of the 
Alberta government, and there is no need for a redundant 
consideration of these matters. At a May 23, 2011 hearing 
before the Subcommittee on Energy and Power, Dan McFayden, 
Chairman of the Energy Resources Conservation Board of Alberta, 
testified as to the rigor and thoroughness of its approval 
process and the many safeguards that have been put in place. 
``Every oil sands project is subjected to regulatory scrutiny 
throughout its life cycle, from authorization and operational 
compliance to end-of-life closure,'' he said.
    More importantly, the Canadian and Alberta provincial 
governments have made clear that they will allow oil sands 
production to increase regardless of Keystone XL's fate. If the 
President fails to approve Keystone XL, the same amount of 
Canadian oil will very likely be produced and transported west 
via pipelines to Pacific ports for export to China and other 
Asian nations. Thus, approval or disapproval of the project 
ultimately makes no difference regarding the environmental 
impacts and emissions associated with the production of 
Albertan oil sands.
    These conclusions are further supported by Keystone XL 
Assessment issued by the U.S. Department of Energy (DOE) Office 
of Policy and International Affairs (the ``DOE KXL Report''). 
In June 2010, Ensys Energy was contracted by DOE to conduct an 
evaluation of the impacts on United States and global refining, 
trade and oil markets of Keystone XL project to bring 
additional Canadian crudes into the United States. The DOE KXL 
Report is included as part of the SDEIS. The study includes an 
assessment of global life-cycle GHG impacts of scenarios 
evaluated in this study. That study concluded ``no significant 
change . . . in global refinery CO
2
 and total life-
cycle GHG emissions whether KXL is built or not.'' Changes in 
lifecycle emissions were calculated with models and methodology 
used in deriving indirect impacts of petroleum consumption for 
the EPA's renewable fuels standard program.

The energy benefits of Keystone XL

    Once completed, the Keystone XL project would add another 
700,000 barrels per day of pipeline capacity to the system's 
existing 591,000 barrels per day, bringing this oil to 
refineries in the Midwest and Gulf Coast. Subsequent upgrades 
could boost additional throughput to over 800,000 barrels per 
day. According to the DOE KXL Report, Keystone XL holds ``the 
potential to very substantially reduce U.S. dependency on non-
Canadian foreign oil, including from the Middle East.''
    Rapidly-growing production from Alberta's oil sands is the 
reason the pipeline expansion is needed. America currently 
imports approximately 2 million barrels per day (mbd) from 
Canada, of which 1.1 mbd is from oil sands. However, oil sands 
production is relatively new and its potential has only begun 
to be realized. According to testimony at the May 23 hearing 
from James Burkhard, Managing Director of IHS CERA, ``the oil 
sands make Canada one of the very few countries in the world 
that could substantially increase oil production for the next 
several decades.'' He added that ``over the past decade 
production growth picked up rapidly and supply more than 
doubled to about 1.5 mbd in 2010. This is greater than the 1.2 
mbd that Libya exported to the global market in 2010, before 
the civil war.''
    Oil sands production is expected to continue its rapid 
growth. Murray Smith, former member of the Legislative Assembly 
of Alberta and Minister of Energy, testified that ``Alberta's 
production is expected to increase to over 3 million barrels a 
day by the end of the decade.'' In other words, Canada has more 
than enough oil to dramatically increase exports to the United 
States and maintain them for the foreseeable future. The only 
limiting factor is pipeline capacity.
    By way of comparison, President Obama recently authorized 
the release of 30 million barrels of oil from the Strategic 
Petroleum Reserve (SPR) for a period of 30 days--an additional 
million barrels per day. Keystone XL has the potential to add 
70 percent as much oil per day as this recent SPR release, but 
with two critical differences. First, the SPR is not a source 
of newly-produced oil but rather a stockpile previously set 
aside for emergency use, while the oil coming from Canada via 
Keystone XL would represent a genuine addition to the nation's 
supply. More importantly, while the SPR stockpile is available 
for a short time span and then would need to be replenished, 
Keystone XL could be supplying oil every day for several 
decades--truly part of the long-term solution to the nation's 
demand for all of its petroleum needs.

The economic benefits of Keystone XL

    In addition to the benefits of a secure supply of 
additional oil from a strong ally, approval of Keystone XL is 
also projected to create a substantial number of jobs. Stephen 
Kelly, Assistant General President of the United Association of 
Plumbers and Pipe Fitters, testified in favor of H.R. 1938 at 
the May 23rd hearing. According to estimates cited by Kelly, 
the project is ``expected to create approximately 13,000 high-
quality, good-paying construction jobs.'' Kelly testified that 
the wages and benefits for these jobs would be approximately 
$50 per hour.
    The benefits will go well beyond the direct jobs building 
the pipeline. For example, most of the construction equipment, 
pipe, and other supplies used to build Keystone XL would be 
U.S.-sourced, as well as much of the technical expertise 
associated with the project. Kelly testified that the indirect 
jobs ``include 7,000 manufacturing jobs associated with the 
production of materials and components for the pipeline, and 
over 118,000 spin-off jobs in various sectors related to the 
design, construction and operation of the pipeline.''
    Even after the construction phase is complete, Keystone XL 
would provide employment associated with its operation. Along 
with Canadian oil, the pipeline would also alleviate potential 
oil bottlenecks that might otherwise limit growing oil 
production in North Dakota and Montana, ensuring continued job 
growth there. In addition, Canadian oil can take the place of 
declining Mexican and Venezuelan supplies reaching Gulf Coast 
refineries, helping to maintain or expand jobs at those 
facilities. Further, given the well-established inverse 
relationship between energy costs and employment, the reduction 
in oil and gasoline prices as a consequence of Keystone XL 
would yield additional jobs throughout the economy.
    Ironically, during the span in which the Keystone XL permit 
has languished at DOS, the Obama administration and Congress 
embarked on a $787 billion dollar stimulus package in an 
attempt to reduce unemployment and jump-start the economy. 
Keystone XL would have been a prime example of the ``shovel-
ready'' projects that proponents of the stimulus package had 
hoped to initiate--one that creates a large number of well-
paying jobs and boosts economic activity. Furthermore, while 
the stimulus package cost taxpayers a great deal of money (and 
whether it actually created an appreciable number of jobs is a 
matter of considerable debate), the $7 billion dollar Keystone 
XL project would be financed privately. In fact, rather than 
require tax dollars Keystone XL would generate substantial tax 
revenues for state and local communities along its route as 
well as the federal government.

The Trans-Alaska Pipeline precedent

    There are many historical parallels between Keystone XL and 
the debate over the Trans-Alaska Pipeline in the early 1970s. 
Back then, a major discovery of oil on the North Slope of 
Alaska in Prudhoe Bay--the largest on the continent prior to 
development of the Alberta oil sands--necessitated a pipeline 
to transport this oil to American refineries, hence the 
proposed 700-mile Trans-Alaska Pipeline. The project was 
thoroughly studied for several years during which all 
legitimate environmental and safety concerns were addressed. 
Nonetheless, federal approval became bogged down by NEPA-
related delays similar to those currently impeding Keystone XL.
    However, Middle East turmoil and rising oil prices finally 
sparked Congressional action. In 1973, Congress passed and 
President Nixon signed the Trans-Alaska Pipeline Authorization 
Act, which removed all federal roadblocks to the project. 
Construction on the pipeline began in 1974 and was completed in 
1977. It has been in operation ever since.
    Since that time, the pipeline has delivered 16 billion 
barrels of oil to the American market, and has contributed 
substantially to the health of Alaska's economy while creating 
jobs throughout the nation. And, notwithstanding the many dire 
predictions at the time from anti-pipeline activist groups 
(several of whom now oppose Keystone XL), the pipeline has 
amassed an excellent environmental and safety record and did so 
using technology far less sophisticated than what would be 
required for Keystone XL.
    The main difference between the Trans-Alaska Authorization 
Act and the North American-Made Energy Security Act is that the 
latter does not automatically approve the project, but merely 
requires the President to make a decision on Keystone XL by a 
date certain.

                                HEARINGS

    The Subcommittee on Energy and Power on May 23, 2011 held a 
legislative hearing on a discussion draft of the ``North 
American-Made Energy Security Act of 2011'' and received 
testimony from:
          The Honorable Dan McFayden, Chairman, Alberta Energy 
        Resources Conservation Board;
          Mr. Alex Pourbaix, President, Energy and Oil 
        Pipelines, TransCanada;
          Mr. Stephen Kelly, Assistant General President, 
        United Association of Plumbers and Pipe Fitters;
          Mr. James Burkhard, Managing Director, Global Oil, 
        IHS Cambridge Energy Research Associates;
          Mr. Jeremy Symons, Sr. Vice President, Conservation & 
        Education, National Wildlife Federation; and,
          Mr. Murray Smith, President, Murray Smith & 
        Associates.

                        COMMITTEE CONSIDERATION

    On May 16, 2011, a discussion draft of H.R. ___, the North 
American-Made Energy Security Act, was released.
    On May 23, 2011, the Subcommittee on Energy and Power held 
a legislative hearing on the discussion draft and 
Representative Terry, together with Representatives Ross, 
Upton, Whitfield, Sullivan, Green, McMorris Rodgers, Walden, 
McKinley, Gardner, Scalise, Myrick, Pitts and Murphy introduced 
the discussion draft as H.R. 1938, the North American-Made 
Energy Security Act (the ``NAMES Act'').
    On June 15, 2011, the Subcommittee on Energy and Power 
favorably reported the NAMES Act to the full Committee by a 
voice vote. During the markup, three amendments were offered 
and defeated by voice vote.
    On June 23, 2011, the full Committee on Energy and Commerce 
met in open markup session. During the markup, six amendments 
were offered, of which one was adopted, and the Committee 
ordered H.R. 1938 favorably reported to the House.

                            COMMITTEE VOTES

    Clause 3(b) of rule XII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Upton to order H.R. 1938, reported to the House, 
as amended, was agreed to by a record vote of 33 yeas and 13 
nays. The following reflects the recorded votes taken during 
the Committee consideration, including the names of those 
Members voting for and against.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

         STATEMENT OF GENERAL PERFORMANCE, GOALS AND OBJECTIVES

    H.R. 1938 directs the President to expedite consideration 
and approval of the construction and operation of the Keystone 
XL pipeline project.

    NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the committee finds that H.R. 
1938, the North American-Made Energy Security Act, would result 
in no new or increased budget authority, entitlement authority, 
or tax expenditures or revenues.

                                EARMARK

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, 
the committee finds that H.R. 1938, the North American-Made 
Energy Security Act, contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                      July 8, 2011.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1938, the North 
American-Made Energy Security Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1938--North American-Made Energy Security Act

    In September 2008, a Canadian firm applied for a permit to 
construct the proposed Keystone XL pipeline, which would carry 
crude oil from Alberta, Canada, to destinations on the U.S. 
Gulf Coast. Because the proposed pipeline would cross 
international borders, it requires a Presidential Permit issued 
by the Department of State. H.R. 1938 would direct the 
President, acting through the Secretary of Energy, to 
coordinate with federal agencies to complete all necessary 
actions required to enable the Secretary. of State to issue a 
final order to either grant or deny that Presidential Permit no 
later than November 1, 2011.
    CBO estimates that enacting H.R. 1938 would have no 
significant impact on the federal budget. According to the 
Department of State and the Department of Energy, the 
regulatory activities related to the proposed Keystone XL 
pipeline are already underway, and CBO expects that, under 
current law, a final decision will be made during fiscal year 
2012. Based on information from those agencies, CBO estimates 
that any change in federal costs to comply with the accelerated 
timeframe specified by H.R. 1938 would be insignificant.
    Enacting H.R. 1938 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. 
H.R. 1938 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

               SECTION-BY-SECTION ANALYSIS OF LEGISLATION

Section 1: Short title

    Section 1 provides the short title for the legislation, the 
``North American-Made Energy Security Act.''

Section 2: Findings

    Section 2 offers numerous Congressional findings regarding 
domestic and global oil markets, the national security and 
economic benefits of Canadian oil imports, the parameters of 
the Keystone XL's capacity and environmental impact, and the 
process of permit approval thus far.

Section 3: Expedited approval process

    Section 3 directs the President, acting through the 
Secretary of Energy, to coordinate with all Federal agencies 
responsible for an aspect of the President's National Interest 
Determination and Presidential Permit decision regarding 
construction and operation of Keystone XL, to ensure that all 
necessary actions are taken on an expedited schedule. The 
President must issue a final order granting or denying the 
Presidential Permit for Keystone XL 30 days after the issuance 
of the final environmental impact statement, but in no event 
later than November 1, 2011. Section 3 makes also makes clear 
that no action made by the Secretary of Energy pursuant to this 
section shall affect any duty or responsibility to comply with 
any requirement to conduct environmental review.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                     DISSENTING VIEWS ON H.R. 1938

    The State Department is currently considering a permit 
application for the Keystone XL pipeline, pursuant to the 
Department's delegated authority to permit a transboundary 
pipeline project if the Department finds that such a project is 
in the national interest. Keystone XL is a highly controversial 
$7 billion pipeline that would transport up to 830,000 barrels 
per day (bpd) of tar sands crude oil almost 2,000 miles from 
Alberta to refineries in the Gulf Coast.\1\ H.R. 1938, the 
``North American-Made Energy Security Act of 2011,'' would 
override the State Department's ongoing process. The bill would 
set a November 1, 2011, deadline for the State Department to 
act on the permit, direct the Department of Energy to establish 
a schedule for other responsible agencies to participate in the 
process, and make a series of findings that essentially 
predetermine the outcome of the State Department's evaluation 
of the pipeline.
---------------------------------------------------------------------------
    \1\TransCanada Keystone Pipeline, L.P., Application of TransCanada 
Keystone Pipeline, L.P. for a Presidential Permit Authorizing the 
Construction, Operation, and Maintenance of Pipeline Facilities for the 
Importation of Crude Oil to be Located at the United States-Canada 
Border, 7-9 (Sept. 19, 2008); U.S. Department of State, Supplemental 
Draft Environmental Impact Statement, Keystone XL Project, Applicant 
for Presidential Permit: TransCanada Keystone Pipeline, LP, 1-5 (Apr. 
22, 2011).
---------------------------------------------------------------------------
    Transboundary pipeline projects require Presidential 
approval to proceed. The President has delegated the authority 
to permit transboundary pipeline projects to the State 
Department under Executive Orders 11423 and 13337, which 
require a finding that a project is in the national 
interest.\2\ Pursuant to the National Environmental Policy Act, 
in considering a project, the State Department must prepare an 
environmental impact statement (EIS) assessing the project's 
impacts on the environment and evaluating alternatives that 
would avoid or minimize adverse environmental effects.\3\ E.O. 
13337 recognizes that these complex decisions involve matters 
within the expertise of multiple federal agencies, and it 
provides specified federal agencies 90 days to comment on the 
application.\4\
---------------------------------------------------------------------------
    \2\Exec. Order No. 11423, 33 Fed. Reg. 11741 (Aug. 16, 1968); Exec. 
Order No. 13337, 69 Fed. Reg. 25299 (Apr. 30, 2004).
    \3\National Environmental Policy Act of 1969, Pub. L. No. 94-83.
    \4\Exec. Order No. 13337, Sec. 1(c), 69 Fed. Reg. 25299 (Apr. 30, 
2004).
---------------------------------------------------------------------------
    The Department of State published a draft EIS on April 16, 
2010, for public comment. In response to extensive criticism of 
the draft, the State Department published a supplemental draft 
EIS (SDEIS) on April 22, 2011, providing additional information 
and analysis on various aspects of the project.\5\ The public 
comment period on the SDEIS closed on June 6, 2011. The State 
Department is currently evaluating comments on the SDEIS from 
the public and other federal agencies and is preparing the 
final EIS, which is expected to take several months.
---------------------------------------------------------------------------
    \5\U.S. Department of State, Notice of Availability of the Draft 
Environmental Impact Statement for the Proposed TransCanada Keystone XL 
Pipeline Project, 75 Fed. Reg. 20653 (Apr. 16, 2010); U.S. Department 
of State, Notice of Availability of the Supplemental Draft 
Environmental Impact Statement for the Proposed TransCanada Keystone XL 
Pipeline Project, 76 Fed. Reg. 22744 (Apr. 22, 2011).
---------------------------------------------------------------------------
    After completing the analysis of the project's 
environmental impacts, the State Department will proceed to 
determine whether the project is in the national interest, 
which requires consideration of other factors beyond the 
environmental impacts. Pursuant to E.O. 13337, other federal 
agencies including the Departments of Defense, Justice, 
Interior, Commerce, Transportation, Energy and Homeland 
Security, and EPA have 90 days to provide their views regarding 
whether the proposed project is in the national interest. Also, 
the State Department has pledged that it will provide 30 days 
for the public to weigh in on the national interest 
determination, concurrent with the other agencies' review 
period. The State Department has stated that it intends to act 
on the permit by the end of the year.
    H.R. 1938 would short-circuit this process. It requires the 
State Department to issue the permit decision within 30 days of 
the issuance of the final EIS and no later than November 1, 
2011. This would cut the time available for federal agencies to 
consult on the State Department's national interest decision by 
two-thirds and either substantially reduce or wholly eliminate 
the public comment period. The bill also would make findings 
related to the permit decision on matters currently being 
evaluated by the State Department and other federal agencies.

                        I. PURPOSE OF H.R. 1938

    Supporters of H.R. 1938 assert that the bill is necessary 
to get the Keystone XL pipeline built, claiming that the Obama 
administration has stonewalled on the project approval and 
created unnecessary delays in the permitting process.\6\ 
TransCanada's president for energy and oil pipelines, Alex 
Pourbaix, stated that TransCanada has waited 33 months for the 
State Department's permit decision on Keystone XL, while prior 
pipeline permit applications have taken 20 months.\7\
---------------------------------------------------------------------------
    \6\House Subcommittee on Energy and Power, Statement of 
Subcommittee Chairman Ed Whitfield, Markup on H.R. 1938, 112th Cong. 
(June 15, 2011) (available at http://republicans. 
energycommerce.house.gov/Media/file/Markups/Energy/061511/
Whitfield.pdf).
    \7\House Subcommittee on Energy and Power, Testimony of TransCanada 
president for energy and oil pipelines Alex Pourbaix, Hearing on the 
American Energy Initiative, 112th Cong. (2011) (preliminary transcript 
available at http://democrats.energycommerce.house.gov/sites/default/
files/image_uploads/Transcript_Hearing_EP_05.23.11.pdf).
---------------------------------------------------------------------------
    However, there is reason to believe that the review process 
has been appropriate given the scope and implications of the 
project. When asked whether the length of the Keystone XL 
review justified special legislation to truncate the review 
process, TransCanada's Pourbaix declined to endorse H.R. 1938, 
testifying that the company had ``no involvement in this 
proposed legislation.'' Mr. Pourbaix stated that the review 
process for Keystone XL was ``entirely appropriate, given the 
magnitude of the project and ensuring that people and 
stakeholders are heard in this process.''\8\
---------------------------------------------------------------------------
    \8\Id.
---------------------------------------------------------------------------
    The review process has taken longer than other recent 
pipelines, in part because Keystone XL is a larger and more 
controversial project and because the initial environmental 
review from the State Department was widely viewed as 
inadequate.\9\ The comment period on the DEIS closed on May 31, 
2010. Pursuant to NEPA, EPA, DOE, the Interior Department and 
other federal agencies commented on the draft EIS, and there 
were over 40,000 public comments as well.\10\ As required by 
statute, EPA reviewed the adequacy of the draft EIS and rated 
the draft as ``Category 3--Inadequate Information,'' which is 
the lowest rating possible.\11\ In particular, EPA suggested 
that the State Department provide additional analysis on 
greenhouse gas emissions, air pollution from refineries, 
pipeline safety, and potential environmental justice 
concerns.\12\
---------------------------------------------------------------------------
    \9\See, e.g., Letter from Rep. Inslee et al. to Hillary Clinton, 
Secretary of State (June 23, 2010) (conveying concerns of 50 members of 
the House of Representatives); Letter from Henry A. Waxman, Chairman, 
Energy and Commerce Committee, to Hillary Rodham Clinton, Secretary of 
State (July 2, 2010) (online at: http://
democrats.energycommerce.house.gov/documents/20100706/
State.070210.Clinton.Keystone.XL.pdf); Letter from Henry A. Waxman, 
Chairman, Energy and Commerce Committee, to Elizabeth Orlando, Keystone 
XL Project Manager, Department of State (July 2, 2010) (online at: 
http://democrats.energycommerce.house.gov/documents/20100706/
State.070210.Orlando.Keystone.XL.pdf).
    \10\Department of State Keystone XL Pipeline Project, How to Get 
Involved (available at http://www.keystonepipeline-xl.state.gov/
clientsite/keystonexl.nsf?Open) (accessed June 30, 2011).
    \11\Letter from Cynthia Giles, Assistant Administrator for 
Enforcement and Compliance Assurance, U.S. EPA, to Jose Fernandez and 
Kern-Ann Jones, U.S. Department of State (Jul. 16, 2010).
    \12\Id.
---------------------------------------------------------------------------
    One witness before the Committee raised concerns that the 
Keystone XL pipeline would raise gas prices by facilitating oil 
company market manipulation, hurt energy security by allowing 
tar sands product to be exported from the Gulf Coast, and 
jeopardize clean water supplies, among other concerns.\13\ 
Another invited witness submitted written testimony expressing 
concerns of farmers and ranchers near the pipeline route whose 
livelihood would be threatened by a spill.\14\
---------------------------------------------------------------------------
    \13\House Subcommittee on Energy and Power, testimony of Jeremy 
Symons, Hearing on the American Energy Initiative, 112th Cong. (2011) 
(online at: http://democrats.energy commerce.house.gov/
index.php?q=hearing/hearing-on-theamerican-energy-initiative-day-8).
    \14\House Subcommittee on Energy and Power, testimony of Randy 
Thompson, Hearing on the American Energy Initiative, 112th Cong. (2011) 
(online at: http://democrats.energy commerce.house.gov/
index.php?q=hearing/hearing-on-theamerican-energy-initiative-day-8).
---------------------------------------------------------------------------
    Also, no evidence has been presented to the Committee 
suggesting that the State Department will fail to carry out its 
stated plans to act on the permit application by the end of the 
year, or that the project would be endangered by waiting until 
then.\15\ While EPA filed additional comments on the SDEIS, EPA 
noted that the State Department had agreed to address many of 
the issues raised in the final EIS, and EPA's comments do not 
threaten or delay the State Department's ability to move 
forward with a final decision. With the close of the public 
comment period on the SDEIS in early June, the State Department 
has several months to complete the final EIS by September, 
while still providing 90 days for agency consultations on the 
national interest determination and a concurrent 30 days for 
public comment on the determination prior to the end of the 
year.
---------------------------------------------------------------------------
    \15\U.S. Department of State, State Department Announces Next Steps 
in Keystone XL Pipeline Permit Process (Mar. 15, 2011).
---------------------------------------------------------------------------
    This bill would require the State Department to make a 
decision within 30 days of the final EIS, or by November 1, 
2011, at the latest. This cuts the period for interagency 
consultation on the national interest determination by two-
thirds and drastically shortens or eliminates any opportunity 
for public comment on the national interest determination.
    Proponents of this bill also argue that the Keystone XL 
pipeline will lower gas prices, enhance energy security, and 
create jobs, and therefore the permit should be approved.
    Although the majority views claim that the Keystone XL 
pipeline will reduce gas prices, they provide no support for 
that assertion. In fact, some analyses indicate that the 
pipeline would actually raise gasoline prices in the United 
States, particularly in the Midwest, which would see supplies 
drop as oil is diverted to refineries on the Gulf Coast. In its 
application for the Keystone XL pipeline, TransCanada told the 
Canadian government that the Midwest market is 
``oversupplied,'' resulting in ``price discounting'' for 
Canadian heavy crude oil.\16\ TransCanada concluded that a 
pipeline to the Gulf Coast will benefit all heavy crude 
producers in Western Canada ``by increasing the price they 
receive for their crude.''\17\ TransCanada also provided an 
independent analysis predicting that the Keystone XL pipeline 
would increase prices by $6.55 per barrel of crude oil in the 
Midwest and $3 per barrel everywhere else.\18\ By 2013, this 
will generate between $2 billion and $3.9 billion in additional 
revenue for Canadian oil companies.\19\ Dr. Philip Verlerger, a 
prominent oil market analyst, concluded after analyzing 
Keystone XL that ``millions of Americans will spend 10 to 20 
cents more per gallon for gasoline and diesel fuel'' if the 
pipeline is built.\20\
---------------------------------------------------------------------------
    \16\TransCanada Keystone Pipeline Group Ltd., Keystone XL Pipeline 
Section 52 Application, Section 3: Supply and Markets at 7.
    \17\Id.
    \18\Purvin & Gertz, Inc., Western Canadian Crude Supply and 
Markets, Prepared for TransCanada Keystone Pipeline Group Ltd. (Feb. 
12, 2009) at 27-28.
    \19\Id. at 29. See also, Philip Verleger, If gas prices go up 
further, blame Canada, Minnesota Star-Tribune (Mar. 13, 2011).
    \20\Philip Verleger, If gas prices go up further, blame Canada, 
Minnesota Star-Tribune (Mar. 13, 2011).
---------------------------------------------------------------------------
    Supporters of the Keystone XL pipeline also argue that it 
will enhance energy security by reducing reliance on oil 
imports from the Middle East and Venezuela. A report by EnSys, 
which was contracted by DOE, finds that U.S. imports of 
Venezuelan crudes are projected to drop in all scenarios and 
are only minimally affected by building or not building 
Keystone XL.\21\
---------------------------------------------------------------------------
    \21\EnSys, Keystone XL Assessment--Final Report, 99 (Dec. 23, 
2010).
---------------------------------------------------------------------------
    The majority views also are misleading in providing a 
partial quote from the EnSys report to claim that the report 
found that ``Keystone XL holds `the potential to very 
substantially reduce U.S. dependency on non-Canadian foreign 
oil, including from the Middle East.'' The full quote from the 
report is: ``Together, growing Canadian oil sands imports and 
U.S. demand reduction have the potential to very substantially 
reduce U.S. dependency on non-Canadian foreign oil, including 
from the Middle East.''\22\ In fact, EnSys found that policies 
to lower oil demand have a substantially larger impact on U.S. 
imports of Middle Eastern crude than would increasing the 
amount of Canadian oil sands imports.\23\ The majority's quote 
also eliminates the distinction that EnSys makes between the 
effects on Middle Eastern oil imports of increasing oil sands 
imports (which has an effect) and building the Keystone XL 
pipeline (which does not). After a news report containing a 
similar mischaracterization of the EnSys results, EnSys 
released a statement clarifying its findings:

    \22\Id. at 6.
    \23\EnSys, Keystone XL Assessment--Final Report, 103 (Dec. 23, 
2010).

          The EnSys report makes clear that it is the low 
        demand scenario, (which assumes strong policy actions 
        to reduce U.S. oil use), supported by potentially 
        increasing US imports of Canadian crudes, that ``could 
        essentially eliminate Middle East crude imports longer 
        term'', not the Keystone XL pipeline. As the EnSys 
        report clearly states in its executive summary, the 
        Keystone XL pipeline would not of itself have any 
        significant impact on U.S. oil imports.\24\
---------------------------------------------------------------------------
    \24\EnSys, Response to the Reuters News item published February 1, 
2011 10:10pm EST, by Timothy Gardner and Edited by Devid Gregorio 
(undated) (online at: http://www.ensysenergy.com/files/
ResponsetoReutersonKeystoneXLassessmentreport.pdf).
---------------------------------------------------------------------------
    Another analysis finds that the Keystone XL pipeline would 
facilitate the export of Canadian crude to China rather than 
the United States.\25\
---------------------------------------------------------------------------
    \25\Philip K. Verleger, The Tar Sands Road to China (May 2011).
---------------------------------------------------------------------------

                    II. SECTION-BY-SECTION ANALYSIS

A. Section 2: Findings

    Section 2 makes congressional findings on matters relevant 
to the State Department's permit decision. Several findings 
supplant the State Department's review process, directly 
stating that Keystone XL is in the national interest. The 
findings are broadly unbalanced, presenting only statements 
that support approval of the Keystone XL project. Some findings 
are even inaccurate and misleading. The cumulative effect of 
the findings is to conclude that construction of the Keystone 
XL project is in the national interest, and making it difficult 
for the State Department to reach any other conclusion.
    Several of the findings resolve key issues that the State 
Department is currently considering in the permit decision. 
Section 2(4) states that ``(t)he development and delivery of 
oil and gas from Canada to the United States is in the national 
interest of the United States in order to secure oil supplies 
to fill needs that are projected to otherwise be filled by 
increases in other foreign supplies, notably from the Middle 
East.'' Another finding states that the earliest possible 
construction of Keystone XL will make Canadian oil reserves 
available for U.S. use and increase jobs and ``will therefore 
serve the national interest.''\26\ These findings infringe on 
the President's authority to decide whether the pipeline is in 
the national interest of the United States.
---------------------------------------------------------------------------
    \26\H.R. Sec. 1938 2(14).
---------------------------------------------------------------------------
    The findings are also unbalanced. The bill presents reasons 
to approve the Keystone XL pipeline while ignoring or denying 
the many concerns about the project.
    One of the central objections to the Keystone XL pipeline 
is the effect on climate change. It is widely recognized that 
tar sands crudes have higher life-cycle greenhouse gas 
emissions than conventional crudes, and the SDEIS found that 
the project could increase U.S. life-cycle greenhouse gas 
emissions by up to an additional 23 million metric tons of 
CO
2
-equivalent annually, although EPA commented that 
this was an underestimate of the high-end amount.\27\ EnSys 
project that, if other pipeline projects are not approved, 
construction of Keystone XL would increase tar sands production 
by 800,000 barrels per day and increase global CO
2
-
equivalent emission by 20 million metric tons per year by 
2030.\28\ However, the findings fail to acknowledge any of 
these projections. In fact, the only mention of global warming 
is an inaccurate claim regarding the lack of impact on 
greenhouse gas emissions, which is discussed further below.
---------------------------------------------------------------------------
    \27\See, e.g., State Department, SDEIS at 3-199 (April 22, 2011).
    \28\EnSys, Keystone XL Assessment--Final Report at 117 (Dec. 23, 
2010); EnSys, Keystone XL Assessment--Final Report, Appendix, 40 (Dec. 
23, 2010).
---------------------------------------------------------------------------
    The findings also make no mention of the other 
environmental impacts of increased tar sands production, 
including the destruction of Canada's boreal forests and 
wetlands, and the degradation of water and air quality.\29\ EPA 
has raised concerns about the health impacts on communities 
that live near refineries from increased emissions from 
refineries.\30\
---------------------------------------------------------------------------
    \29\See Woynillowicz et al., Oil Sands Fever, Pembina Institute, 
36-52 (Nov. 2005).
    \30\Letter from Cynthia Giles, U.S. EPA to Jose W. Fernandez, 
Assistant Secretary, Economic, Energy and Business Affairs, U.S. Dept. 
of State and Dr. Kern-Ann Jones, Assistant Secretary, Oceans and 
International Environmental and Scientific Affairs, U.S. Dept. of State 
(June 6, 2011).
---------------------------------------------------------------------------
    The majority views dismiss the environmental concerns by 
asserting that oil sands production will increase with or 
without construction of Keystone XL. However, the International 
Energy Agency disagrees, finding that as much as 1 million 
barrels per day of production could fail to materialize if new 
pipelines are delayed.\31\ Similarly, sources in the oil 
industry and Albertan government indicate that access to 
pipelines is key to industry's plans to more than double tar 
sands production by 2020.\32\
---------------------------------------------------------------------------
    \31\Pipelines key to growth in North American crude output, IEA 
says, Globe and Mail (June 17, 2011).
    \32\Untimely pipeline spills: TransCanada, Enbridge buffected by 
accidents; Alberta frets over landlocked bitumen, Petroleum News (June 
19, 2011).
---------------------------------------------------------------------------
    The bill findings also downplay serious concerns about the 
safety of diluted bitumen pipelines. Critics argue that tar 
sands bitumen is more corrosive than conventional oil and may 
exacerbate pipeline deterioration.\33\ These concerns are 
heightened by the series of accidents along TransCanada's first 
Keystone pipeline in the first year of operation. The 
Administrator of the Pipeline and Hazardous Materials Safety 
Administration testified in the Energy and Power Subcommittee 
that PHMSA has not evaluated the risks associated with 
transporting diluted bitumen.\34\ A breach of the Keystone XL 
pipeline that contaminates the Ogallala Aquifer would be 
calamitous. The findings also fail to address the concerns of 
landowners who will see the pipeline cross their land.\35\
---------------------------------------------------------------------------
    \33\Anthony Swift et al., Tar Sands Pipelines Safety Risks, a Joint 
Report by the Natural Resources Defense Council, National Wildlife 
Federation, Pipeline Safety Trust, and Sierra Club, 6 (Feb. 2011) 
(online at www.nrdc.org/energy/files/tarsandssafetyrisks.pdf).
    \34\House Subcommittee on Energy and Power, Testimony of Pipeline 
and Hazardous Materials Safety Administration Administrator Cynthia L. 
Quarterman Hearing on ``Pipeline Safety,'' 112th Cong. (Jun. 16, 2011).
    \35\House Subcommittee on Energy and Power, Testimony of Randy 
Thompson, Hearing on the American Energy Initiative, 112th Cong. (May 
23, 2011) (online at http://democrats. energycommerce.house.gov/sites/
default/files/image_uploads/Testimony_EP_05.23.11_Thompson.pdf).
---------------------------------------------------------------------------
    Several of the findings are inaccurate or misleading. 
Contrary to Section 2(15), there has not been analysis using 
EPA models showing that construction of the Keystone XL 
pipeline will result in no significant change in United States 
or global greenhouse gas emissions. EPA confirmed the 
inaccuracy of this finding in a letter to Ranking Member 
Rush.\36\ Section 2(7) suggests that Canadian oil would ship to 
China if Keystone XL were not built. There is no existing 
outlet for any meaningful quantity of tar sands oil to be sent 
to China and there are significant barriers to constructing the 
necessary pipeline(s).\37\ Once completed, however, Keystone XL 
may provide a ready export corridor for the oil to Southeast 
Asia.\38\ Section 2(14) implies that faster construction of 
Keystone XL would speed the flow of Canadian oil to the U.S., 
but industry analyses show that spare pipeline capacity would 
persist until 2024 even without the construction of Keystone 
XL.\39\
---------------------------------------------------------------------------
    \36\Letter from Gina McCarthy, Assistant Administrator, U.S. EPA, 
to Rep. Bobby L. Rush (Jun. 22, 2011).
    \37\Green Party of Canada, Greens Defend BC North Coast Oil Tanker 
Ban (Feb. 25, 2011) (online at http://greenparty.ca/media-release/2011-
02-25/greens-defends-bc-north-coast-oil-tanker-ban). See also The Tar 
Sands Road to China.
    \38\See The Tar Sands Road to China.
    \39\Keystone XL Assessment--Final Report at 30-31.
---------------------------------------------------------------------------

B: Section 3: Expedited approval process

    Section 3 shortens the review process for the Keystone XL 
permit application by requiring that the President issue a 
final order granting or denying the Presidential Permit within 
30 days of the issuance of the final environmental impact 
statement, and no later than November 1, 2011. The expedited 
approval process requires the Secretary of Energy to coordinate 
the federal agencies involved in the national interest 
determination to ensure that the agencies act on an expedited 
schedule. The federal agencies must meet any deadline 
established by the Secretary of Energy.
    This language would substantially cut the time available 
for federal agencies and the public to provide their views on 
the national interest determination. Currently, after the State 
Department issues a final EIS, there will be a 90-day period 
for the Department to consult with other federal agencies to 
determine if issuing a permit for the project is in the 
national interest.\40\ The public would also be able to submit 
comments on the national interest determination during the 
first 30 days of this period. This bill eliminates two-thirds 
of the time currently provided for federal agencies to consult 
on the national interest determination. It also would require 
reduction or elimination of the 30-day public comment period on 
the national interest determination that the State Department 
has committed to provide.
---------------------------------------------------------------------------
    \40\U.S. Department of State, Supplemental Draft Environmental 
Impact Statement, Keystone XL Project, Applicant for Presidential 
Permit: TransCanada Keystone Pipeline, LP at ES-4 (Apr. 22, 2011) 
(hereinafter ``SDEIS'').
---------------------------------------------------------------------------
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.

                                   Henry A. Waxman.
                                   Bobby L. Rush.
                                   Jay Inslee.
                                   Lois Capps.
                                   G.K. Butterfield.
                                   Edward J. Markey.
                                   Jan Schakowsky.
                                   Donna M. Christensen.
                                   Doris O. Matsui.
                                   Anna G. Eshoo.
                                   Diana DeGette.
                                   Kathy Castor.
                                   Edolphus Towns.