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112th Congress                                            Rept. 112-703
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
                    NORTH AMERICAN ENERGY ACCESS ACT

                                _______
                                

 December 17, 2012.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3548]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3548) to facilitate United States access to 
North American oil resources, 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
Amendment........................................................     2
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Hearings.........................................................    11
Committee Consideration..........................................    12
Committee Votes..................................................    12
Committee Oversight Findings.....................................    18
Statement of General Performance Goals and Objectives............    18
New Budget Authority, Entitlement Authority, and Tax Expenditures    18
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    18
Committee Cost Estimate..........................................    18
Congressional Budget Office Estimate.............................    18
Federal Mandates Statement.......................................    19
Advisory Committee Statement.....................................    19
Applicability to Legislative Branch..............................    19
Section-by-Section Analysis of the Legislation...................    19
Changes in Existing Law Made by the Bill, as Reported............    20
Dissenting Views.................................................    21

                               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 Energy Access Act''.

SEC. 2. RESTRICTION.

  (a) In General.--No person may construct, operate, or maintain the 
oil pipeline and related facilities described in subsection (b) except 
in accordance with a permit issued under this Act.
  (b) Pipeline.--The pipeline and related facilities referred to in 
subsection (a) are those described in the Final Environmental Impact 
Statement for the Keystone XL Pipeline Project issued by the Department 
of State on August 26, 2011, including any modified version of that 
pipeline and related facilities.

SEC. 3. PERMIT.

  (a) Issuance.--
          (1) By ferc.--The Federal Energy Regulatory Commission shall, 
        not later than 30 days after receipt of an application 
        therefor, issue a permit without additional conditions for the 
        construction, operation, and maintenance of the oil pipeline 
        and related facilities described in section 2(b), to be 
        implemented in accordance with the terms of the Final 
        Environmental Impact Statement described in section 2(b). The 
        Commission shall not be required to prepare a Record of 
        Decision under section 1505.2 of title 40 of the Code of 
        Federal Regulations with respect to issuance of the permit 
        provided for in this section.
          (2) Issuance in absence of ferc action.--If the Federal 
        Energy Regulatory Commission has not acted on an application 
        for a permit described in paragraph (1) within 30 days after 
        receiving such application, the permit shall be deemed to have 
        been issued under this Act upon the expiration of such 30-day 
        period.
  (b) Modification.--
          (1) In general.--The applicant for or holder of a permit 
        described in subsection (a) may make a substantial modification 
        to the pipeline route or any other term of the Final 
        Environmental Impact Statement described in section 2(b) only 
        with the approval of the Federal Energy Regulatory Commission. 
        The Commission shall expedite consideration of any such 
        modification proposal.
          (2) Nebraska modification.--Within 30 days after the date of 
        enactment of this Act, the Federal Energy Regulatory Commission 
        shall enter into a memorandum of understanding with the State 
        of Nebraska for an effective and timely review under the 
        National Environmental Policy Act of 1969 of any modification 
        to the proposed pipeline route in Nebraska as proposed by the 
        applicant for the permit described in subsection (a). Not later 
        than 30 days after receiving approval of such proposed 
        modification from the Governor of Nebraska, the Commission 
        shall complete consideration of and approve such modification.
          (3) Issuance in absence of ferc action.--If the Federal 
        Energy Regulatory Commission has not acted on an application 
        for approval of a modification described in paragraph (2) 
        within 30 days after receiving such application, such 
        modification shall be deemed to have been issued under this Act 
        upon expiration of the 30-day period.
          (4) Construction during consideration of nebraska 
        modification.--While any modification of the proposed pipeline 
        route in Nebraska is under consideration pursuant to paragraph 
        (2), the holder of the permit issued under subsection (a) may 
        commence or continue with construction of any portion of the 
        pipeline and related facilities described in section 2(b) that 
        is not within the State of Nebraska.

SEC. 4. RELATION TO OTHER LAW.

  (a) General Rule.--Notwithstanding Executive Order 13337 (3 U.S.C. 
301 note), Executive Order 11423 (3 U.S.C. 301 note), section 301 of 
title 3, United States Code, and any other Executive Order or provision 
of law, no presidential permits shall be required for the construction, 
operation, and maintenance of the pipeline and related facilities 
described in section 2(b) of this Act.
  (b) Applicability.--Nothing in this Act shall affect the application 
to the pipeline and related facilities described in section 2(b) of--
          (1) chapter 601 of title 49, United States Code; or
          (2) the authority of the Federal Energy Regulatory Commission 
        to regulate oil pipeline rates and services.

                          PURPOSE AND SUMMARY

    H.R. 3548, the ``North American Energy Access Act,'' was 
introduced by Rep. Lee Terry (together with several other 
representatives) on December 2, 2011. The legislation requires 
the U.S. Federal Energy Regulatory Commission to issue, within 
30 days, a permit for the Keystone XL pipeline project in 
accordance with the terms of the August 26, 2011 Final 
Environmental Impact Statement from the Department of State.

                  BACKGROUND AND NEED FOR LEGISLATION

    Energy is often found far from where it is needed, and 
North American crude oil is no exception. A Canadian pipeline 
company, TransCanada, has long sought to increase the capacity 
of its Keystone pipeline system in order to bring more oil from 
Alberta to American refineries in the Midwest and Gulf Coast. A 
permit application for its proposed 1,700 mile expansion 
project, Keystone XL, was submitted to the U.S. Department of 
State (DOS) in September 2008.
    In the more than four years since--an unusually long period 
for such permits--the Nation has faced consistently high 
gasoline prices, stubbornly-high unemployment rates, and 
continued risks of relying on oil from the Middle East. 
Approval of Keystone XL would help address all of these 
concerns, but the Obama Administration denied approval for the 
pipeline in January 2012. The Administration's latest 
announcement delaying a decision on a resubmitted application 
for Keystone XL until 2013 raises serious questions about its 
commitment to the project. In addition, a point may be reached 
soon where continued inaction will force the Canadian 
government to pursue other markets for its oil, at which time 
the benefits to the American people of Keystone XL would be 
lost.
    Additional Canadian oil would benefit America in many ways. 
Meeting the Nation's demand for petroleum and motor fuels 
remains a challenge. However, domestic oil production growth 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 concerns about the risks--
both economic and otherwise--of continued reliance upon such 
nations. Further, declining production from Venezuela and 
Mexico, both important sources of supply for the large 
concentration of refineries located along the Gulf Coast, are 
leading to shortfalls that will need to be made up through oil 
supplies from elsewhere.
    For these reasons, Canadian oil is critical to America's 
energy future. In addition to being a very stable country, a 
strong ally, and our largest trading partner, Canada is 
America's single largest source of oil imports. Canadian output 
is on the rise, especially oil sands production from the 
province of Alberta. The untapped potential is vast--Alberta is 
second only to Saudi Arabia in proven reserves with an 
estimated 175 billion barrels of recoverable oil. 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 
increase in the years ahead. And pipelines are the safest means 
of transporting that oil. However, the existing pipeline system 
between the two nations is unable to keep up with the growing 
volumes (and especially the capacity from Canada to the Gulf 
Coast), necessitating the need for a major expansion project 
such as Keystone XL.
    Once completed, the Keystone XL project would add at least 
700,000 barrels per day to the 591,000 barrels per day capacity 
of the existing pipeline, more than enough to substantially 
reduce imports from the Middle East, as well as make a 
difference in the price at the pump. And it can do so for the 
long term, as the output from Alberta is expected to provide 
this additional oil for decades to come. The pipeline also 
would furnish a safe and efficient means of transporting the 
growing domestic supplies of oil from the Bakken formation in 
North Dakota and Montana to refineries in the Midwest and Gulf 
Coast.
    In addition to the energy benefits, the construction phase 
of Keystone XL would create thousands of American jobs. The 
completed pipeline will sustain many permanent jobs, including 
those associated with refining the oil into gasoline and other 
products. Alleviating potential bottlenecks in the Bakken 
formation also will facilitate continued oil-industry job 
growth there.
    The substantial benefits of Keystone XL would come at no 
cost to the American taxpayer; TransCanada will pay the 
project's estimated $7 billion. In fact, over the lifetime of 
the project, billions in revenue will be created in local, 
State and Federal taxes.

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 
historically has required executive permission conveyed through 
a Presidential Permit. Executive Order 13337 delegates the 
President's authority to receive applications for Presidential 
Permits to the Secretary of State.
    TransCanada submitted an application for a Presidential 
Permit with DOS in September 2008. In November 2008, 
TransCanada submitted a comprehensive environmental report to 
DOS, thereby initiating the National Environmental Policy Act 
(NEPA) review process.
    On January 28, 2009, DOS issued its Notice of Intent to 
Prepare an Environmental Impact Statement (EIS), 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 16, 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).
    The FEIS was issued by DOS on August 26, 2011. It compiles 
three years of work by fourteen Federal and State bureaus and 
agencies. Its issuance commenced a 30-day public comment period 
and a 90-day multi-agency comment period on the National 
Interest Determination.
    Since the President denied approval for the first Keystone 
XL application on January 18, 2012, the process has essentially 
begun anew. On May 4, 2012, TransCanada resubmitted an 
application for a Presidential Permit for a revised Keystone XL 
pipeline route with the Department of State. On June 15, 2012, 
the Department of State filed a notice of intent in the Federal 
Register to prepare a Supplemental Environmental Impact 
Statement (SEIS) to the August 2011 EIS on Keystone XL. The 
work on the SEIS continues to be ongoing.
    The ongoing permitting process for Keystone XL has taken 
over 50 months thus far, and has included multiple 
opportunities for input from every affected level of government 
as well as the public. By comparison, the original Keystone 
pipeline project was permitted in less than 24 months.

Keystone XL Legislative Timeline

    In order to address the Administration's delays in 
approving this project, Rep. Lee Terry (R-NE) introduced H.R. 
1938, the ``North American-Made Energy Security Act of 2011,'' 
on May 23, 2011. This bill would have required the President to 
make a final decision on Keystone XL by November 1, 2011.
    On May 23, 2011, the Subcommittee on Energy and Power held 
a hearing on H.R. 1938. On June 15, 2011, the Subcommittee 
favorably reported the bill to the full Committee on Energy and 
Commerce. On June 23, 2011, the full Committee on Energy and 
Commerce favorably reported H.R. 1938 to the House. On July 27, 
2011, it passed the House by a vote of 279-147.
    However, on July 25, 2011, the President issued a Statement 
of Administration Policy in opposition to the bill. The 
Administration did not reject Keystone XL explicitly, but 
asserted that imposing a statutory deadline of November 1, 2011 
``is unnecessary because the Department of State has been 
working diligently to complete the permit decision process for 
the Keystone XL pipeline and has publicly committed to reaching 
a decision before December 31, 2011.''
    On November 10, 2011, the White House reversed position and 
announced that DOS will need additional time beyond 2011 to 
make a decision on Keystone XL, suggesting a target date of 
2013 at the earliest. The ostensible reason for the delay was a 
dispute in Nebraska over a portion of the pipeline's route 
through that State. That dispute is currently being resolved by 
the State government of Nebraska.
    The Nebraska State legislature and Governor have made clear 
that it was never their intention for a relatively minor route 
change to become a rationale for lengthy Federal delays or to 
jeopardize the entire 1,700 mile project. On November 15, 2011, 
Governor Dave Heineman stated that ``Nebraskans have been clear 
about our position on the pipeline--we support it.''
    On December 23, 2011, Congress passed and the President 
signed H.R. 3765, the ``Temporary Payroll Tax Cut Continuation 
Act.'' It included provisions requiring the President to 
approve Keystone XL within 60 days unless he determines that 
doing so is not in the national interest. On January 18, 2012, 
well before the 60-day period had run, the President rejected 
the pipeline, claiming that more time is needed for DOS to 
review it. Though this rejection was purportedly for Nebraska's 
benefit, Governor Heineman responded that ``I am very 
disappointed with the actions of President Obama and his 
decision to deny a jobs-creating pipeline,'' and the Governor 
asserted that the President ``should be focused on putting 
Americans back to work, and could have done so by issuing 
conditional approval of the pipeline.''
    It should be noted that the intra-state concerns in 
Nebraska are completely unrelated to the reason for Federal 
involvement in Keystone XL--the fact that the pipeline would 
cross the border from Canada into the U.S.
    Notwithstanding H.R. 3765, Mr. Terry introduced H.R. 3548, 
the ``North American Energy Access Act,'' on December 2, 2011. 
This bill would require FERC to issue a permit for the Keystone 
XL project in accordance with the terms of the FEIS. If FERC 
does not do so within 30 days, the project is deemed to be 
approved. The bill also requires that FERC incorporate, in a 
timely fashion, any proposed route modifications or other 
changes approved by the Governor of Nebraska.
    H.R. 3548 does not alter or short circuit the environmental 
reviews and other requirements necessary for Keystone XL to 
obtain its Federal permit. Indeed, the project has been studied 
extensively and all legitimate concerns have been raised and 
addressed in the FEIS. H.R. 3548 simply requires the FERC to 
approve the project based on the FEIS.

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. In addition to the Canadian oil, the pipeline also could 
carry up to 100,000 barrels per day of American oil from the 
Bakken formation.
    According to an assessment of Keystone XL conducted for the 
Department of Energy and included in the SDEIS (DOE KXL 
Report), the project 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, 2011 
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, in June 2011, President Obama 
responded to the Libya-induced price spike by authorizing 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 
80 percent as much oil per day as this SPR release, but with 
two critical differences. First, the SPR is not a source of 
newly-produced oil, but a stockpile previously set aside for 
emergency use. 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 supply oil every day for several decades--truly part of 
the long-term solution to the Nation's demand for all of its 
petroleum needs.
    These benefits would largely be lost if Keystone XL is not 
built. Although some of Canada's growing oil production could 
reach the U.S. through other pipelines, as well as alternatives 
like rail transport, most of it would bypass the country 
without Keystone XL. The Canadian government has stated that 
continued delays would leave them little choice but to increase 
pipeline capacity west to Pacific ports for transport by tanker 
to China and other Asian markets. Indeed, Canadian Prime 
Minister Steven Harper expressed ``profound disappointment'' 
with the President's January 18, 2012 decision not to approve 
Keystone XL, and said that Canada ``will continue to work to 
diversify its energy exports.'' Subsequently, the Prime 
Minister has visited China, and among the agenda items was a 
Canadian proposal to build an oil pipeline from Alberta to the 
Pacific Coast.
    The loss of Canadian oil to Asia would damage the Nation's 
energy security. The KXL DOE Report finds that the choice for 
Canadian exporters ``is between moving increasing crude oil 
volumes to the USA or to Asia,'' and that if these ``crudes 
move to Asia instead of the U.S., the `gap' would be filled by 
offsetting increases in crude oil imports from other foreign 
sources, especially the Middle East (as the primary balancing 
supplier).'' Similarly, the FEIS concludes that if the pipeline 
is not built, Gulf Coast refineries ``would be forced to rely 
on oil shipped by barge or tanker from areas outside of North 
America from regions which are experiencing declining 
production or are not secure and reliable sources of crude 
oil.''
    Unlike Canadian oil flowing through a pipeline to the 
Pacific Coast and on to tankers headed for Asia, virtually all 
of the oil flowing through Keystone XL would go to American 
refineries. DOE Deputy Assistant Secretary for Policy Analysis 
Carmine Defiglio concluded in a June 22, 2011 Memorandum to DOS 
that the export of Keystone XL oil from American ports would be 
``unlikely.'' Further, while most of the products refined from 
Canadian oil sent to Asia would stay in Asia, most of the 
gasoline and other fuels made from Keystone XL oil would serve 
the American market.

The Economic Benefits of Keystone XL

    In addition to the benefits of a secure supply of oil from 
a strong ally, approval of Keystone XL also is 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 23, 
2011 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.''
    The strong labor union support for Keystone XL was 
reaffirmed at the December 2, 2011, hearing on H.R. 3548 before 
the Subcommittee on Energy and Power. Representatives of the 
Laborers' International Union of North America, the 
International Union of Operating Engineers, the United 
Association of Plumbers and Pipe Fitters, and the International 
Brotherhood of Electrical Workers all testified in support of 
H.R. 3548. For example, Brent Booker, Director of the 
Construction Department at the Laborers' International Union of 
North America, stated that ``Keystone XL will create good-
paying jobs here in the United States and Canada and will 
increase the nation's energy security by providing a reliable 
source of crude oil from a friendly and stable trading partner. 
And it will provide state and local governments with new 
revenue that can help them provide the needed services to the 
public.'' These four union witnesses estimated that Keystone XL 
would create, respectively, 3 million, 3 million, 2.5 to 3 
million, and 64,000 worker-hours for their members--and they 
are not the only unions that would be involved in the project.
    Even after the construction phase is complete, Keystone XL 
would provide employment associated with its operation. Along 
with Canadian oil, the pipeline also would 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 
enacted and implemented a $787 billion 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 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--an estimated $138.4 million in 
annual property tax revenues alone.
    It is worth noting the stark contrast between Keystone XL 
and the growing number of Federally-funded failures like solar-
panel maker Solyndra, the first recipient of stimulus money to 
go bankrupt. The former has the potential to create thousands 
of jobs while adding to the Nation's energy supply and 
generating government revenues, while the latter is currently 
providing no jobs and no energy, but is costing taxpayers more 
than half a billion dollars.

The Environmental Benefits of Keystone XL

    The FEIS makes a strong environmental case for building 
Keystone XL. Indeed, it finds that every alternative to this 
project carries relatively higher environmental risks.
    Throughout the lengthy permitting process, any and all 
environmental and safety concerns have been addressed. The FEIS 
noted that DOS worked with the Pipeline and Hazardous Materials 
Safety Administration (PHMSA) to require 57 project-specific 
special conditions. As a result, ``DOS determined that 
incorporation of the Special Conditions would result in a 
Project that would have a degree of safety greater than any 
typically constructed domestic oil pipeline system under 
current regulations and a degree of safety along the entire 
length of the pipeline system that would be similar to that 
required in high consequence areas as defined in the 
regulations.'' In effect, the FEIS is requiring Keystone XL to 
be the safest oil pipeline in existence. At the December 2, 
2011 hearing, David Barnett, Special Representative of the 
United Association of Plumbers and Pipe Fitters, criticized the 
irrational preoccupation with the risks from Keystone XL. He 
stated that ``there are thousands of miles of 50 and 100-year 
old oil and gas pipelines that are well beyond their useful 
life,'' but that ``in focusing attention on Keystone XL, we 
have zeroed in on the model pipeline rather than the problem 
pipelines.''
    Nonetheless, the FEIS concedes that Keystone XL carries 
some risks, but concludes that it is ``preferred alternative'' 
to any other option. In fact, it states that ``DOS does not 
regard the No Action Alternative [not building the pipeline] to 
be preferable to the proposed Project.''
    The Keystone XL pipeline represents the shortest path 
between North America's largest source of new oil supplies 
(Alberta) and North America's largest demand center for that 
oil (the refineries of the Gulf Coast). Further, pipelines are 
the safest mode of oil transport, as compared to tanker, barge, 
train, or truck. Without the Keystone XL pipeline linking 
Canadian production with American refining, Alberta's growing 
oil supplies will travel longer distances over less safe means 
to reach Asia, while Middle Eastern and other oil supplies will 
do the same to reach the Gulf Coast. As discussed previously, 
this would be counterproductive from an energy security 
standpoint, but it would also be counterproductive from an 
environmental standpoint. Beyond the risk of spills, the FEIS 
notes that ``transport of crude oil by tanker rather than by 
pipeline would likely result in greater transportation-related 
GHG emissions.''
    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 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. 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 the DOE KXL 
Report, which includes an assessment of global life-cycle GHG 
impacts of scenarios evaluated in this study. That study 
concluded ``no significant change . . . in global refinery CO2 
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 Trans-Alaska Pipeline Precedent

    There are many parallels between Keystone XL and the debate 
over the Trans-Alaska Pipeline in the early 1970s. Back then, a 
major discovery of oil in the North Slope of Alaska at Prudhoe 
Bay--the largest on the continent prior to development of the 
Alberta oil sands--necessitated a pipeline to bring this oil to 
southern Alaska for transport to West Coast refineries. A 
consortium of energy companies proposed to build the 800-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 and 
deemed it approved. The statute's purpose was ``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 oil 
pipeline be constructed promptly without further administrative 
or judicial delay or impediment.''
    Construction on the Trans-Alaska Pipeline began in 1974. 
Despite numerous engineering challenges associated with 
Alaska's extreme temperatures and rugged terrain, the pipeline 
was completed on time in 1977. It has been in operation ever 
since.
    To date, the pipeline has delivered over 16 billion barrels 
of oil to the American market, considerably more than a number 
of the project's critics had predicted. It has contributed 
substantially to the health of Alaska's economy while creating 
jobs across the country and strengthening national security. 
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 it did so using technology 
far less sophisticated than what is required in the FEIS for 
Keystone XL. Most consider the pipeline to be a great success--
indeed, many see it as a source of national pride as well as 
oil.
    The Trans-Alaska Pipeline Authorization Act was an 
acknowledgement by Congress that the environmental review 
process it created had gotten out of hand, and that a project 
clearly in the national interest was being jeopardized. With 
that bill, Congress took back control of the process and put an 
end to the unnecessary delays. As a result, an important 
pipeline project at risk of being stopped by red tape was 
allowed to proceed. The North American Energy Access Act seeks 
to accomplish much the same thing.

                                HEARINGS

    On December 2, 2011, the Subcommittee on Energy and Power 
held a legislative hearing on the ``North American Energy 
Access Act,'' and received testimony from:

            Mr. Brent Booker, Director, Construction 
        Department, Laborers' International Union of North 
        America;
            Mr. Jeffrey Soth, Assistant Director, 
        Department of Legislative and Political Affairs, 
        International Union of Operating Engineers;
            Mr. David Barnett, Special Representative, 
        Pipe Line Division, United Association of Journeymen 
        and Apprentices of the Plumbing and Pipe Fitting 
        Industry of the United States and Canada;
            Mr. Bruce Burton, International 
        Representative, International Brotherhood of Electrical 
        Workers;
            Mr. Jerome Ringo, Chief Business Officer, 
        BARD Holdings Inc.; and,
            Ms. Jane Kleeb, Executive Director, Bold 
        Nebraska.

    A second legislative hearing was held on January 25, 2012, 
and testimony was received from:

            The Honorable Kerri-Ann Jones, Assistant 
        Secretary of State, Bureau of Oceans and International 
        Environmental and Scientific Affairs; and
            Mr. Jeffrey C. Wright, Director, Office of 
        Energy Projects, Federal Energy Regulatory Commission.

    A third legislative hearing was held on February 3, 2012, 
and testimony was received from:

            Ms. Margaret Gaffney-Smith, Chief--
        Regulatory Programs, U.S. Army Corps of Engineers;
            Mr. Mike Pool, Deputy Director, Bureau of 
        Land Management;
            Mr. Steven M. Anderson, Brigadier General 
        (Retired), U.S. Army; and,
            Mr. Randall F. Thompson, Nebraska rancher.

                        COMMITTEE CONSIDERATION

    On December 2, 2011, H.R. 3548, the ``North American Energy 
Access Act,'' was introduced.
    On December 2, 2011, January 25, 2012, and February 3, 
2012, the Subcommittee on Energy and Power held legislative 
hearings on H.R. 3548.
    On February 6 and 7, 2012, the full Committee on Energy and 
Commerce met in open markup session. During the markup, 6 
amendments were offered, of which 1 was adopted, and the 
Committee ordered H.R. 3548 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. 3548, reported to the House, 
as amended, was agreed to by a record vote of 33 yeas and 20 
nays. The following reflects the recorded votes taken during 
the Committee consideration, including the names of those 
Members voting for and against.


                      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. 3548 facilitates United States access to North 
American oil resources.

   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. 
3548, the ``North American Energy Access Act,'' would result in 
no new or increased budget authority, entitlement authority, or 
tax expenditures or revenues.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, 
the Committee finds that H.R. 3548, the North American-Made 
Energy Security Act, contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

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

H.R. 3548--North American Energy Access Act

    H.R. 3548 would establish procedures and requirements 
related to issuing federal permits for the proposed Keystone XL 
pipeline, which would be constructed by a private company to 
carry crude oil from Alberta, Canada, to destinations on the 
U.S. Gulf Coast. Under current law, the proposed pipeline 
requires a Presidential permit because it would cross 
international borders. The Department of State is responsible 
for issuing such permits.
    H.R. 3548 would modify current law to exempt the sponsors 
of the Keystone XL pipeline from the requirement to obtain a 
Presidential permit for that project and would specify 
procedures for the Federal Energy Regulatory Commission (FERC) 
to issue necessary permits. Under the bill, FERC would have 30 
days to review an application for a permit to construct, 
operate, and maintain the proposed pipeline; if FERC did not 
act on the application within that time, the permit would be 
deemed to have been issued. In addition, the bill would specify 
procedures related to federal reviews of any future 
applications to modify the route of the proposed pipeline and 
accompanying environmental reviews required under the National 
Environmental Policy Act.
    CBO estimates that enacting H.R. 3548 would have no 
significant impact on the federal budget. Based on information 
from affected agencies, CBO estimates that the bill would not 
significantly affect spending for regulatory activities related 
to the proposed Keystone XL pipeline, which would be subject to 
appropriation. Further, because FERC recovers 100 percent of 
its costs through user fees, any change in its administrative 
costs would be offset by an equal change in fees that the 
commission charges. Enacting H.R. 3548 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.R. 3548 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: This section provides the short title for the 
legislation, the ``North American Energy Access Act.''
    Section 2: This section provides that no person may 
construct, operate, or maintain the oil pipeline described in 
the Final Environmental Impact Statement (FEIS) issued by the 
State Department on August 26, 2011, except with a permit 
issued under the Act.
    Section 3--Issuance of Permit: Subsection 3(a) provides 
that Federal Energy Regulatory Commission (FERC) is required to 
issue a permit for the construction of the pipeline if the 
application is for the pipeline described in the FEIS. FERC is 
required to issue a permit for the pipeline within 30 days of 
receiving an application. If FERC fails to act on the 
application within 30 days of receipt, the permit shall be 
deemed issued upon expiration of the 30 days.
    Modifications Generally: Subsection 3(b) provides that the 
applicant may make a substantial modification to the pipeline 
only with the approval of FERC.
    Nebraska Modification: Subsection 3(c) provides that FERC 
must enter into a memorandum of understanding with the State of 
Nebraska to complete a review, pursuant to the National 
Environmental Policy Act of 1969, of any modification to the 
proposed pipeline route in Nebraska. FERC is required to 
approve the modification within 30 days after receiving 
approval of the proposed modification from the Governor of 
Nebraska. The modification shall be deemed approved if FERC 
fails to act within 30 days of receiving the application for 
modification.
    Section 4: This section provides that a no presidential 
permit shall be required to construct pipeline, and that the 
pipeline remains subject to pipeline safety standards and FERC 
rate regulation, as applicable.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

                               BACKGROUND

    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, Canada to 
refineries in the Gulf Coast.\1\ Under existing law, 
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\
---------------------------------------------------------------------------
    \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).
    \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. Pursuant to NEPA, EPA, DOE, and other 
federal agencies commented on the draft EIS, and there were 
also extensive public comments. EPA reviewed the adequacy of 
the draft EIS and rated the draft as ``Category 3--Inadequate 
Information,'' which is the lowest rating possible.\5\ In 
response, the State Department published a supplemental draft 
EIS (SDEIS) on April 22, 2011, providing additional information 
and analysis on various aspects of the project.\6\ The comment 
period ended on June 6, 2011.
---------------------------------------------------------------------------
    \5\Letter from Cynthia Giles, Assistant Administrator for 
Enforcement and Compliance Assurance, U.S. Environmental Protection 
Agency, to Jose W. Fernandez, Assistant Secretary, Economic, Energy and 
Business Affairs, U.S. Department of State and Dr. Kerri-Ann Jones, 
Assistant Secretary, Oceans and International Environmental and 
Scientific Affairs, U.S. Department of State (Jul. 16, 2010).
    \6\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).
---------------------------------------------------------------------------
    Subsequently, on August 26, 2011, the State Department 
issued a final EIS.\7\ At that time, the State Department 
planned on a 90-day review period in which it would consult 
with other federal agencies to determine if issuing a permit 
for the project is in the national interest.\8\ The public was 
also invited to submit comments on the national interest 
determination during the first 30 days of that period.\9\
---------------------------------------------------------------------------
    \7\U.S. Department of State, Final Environmental Impact Statement 
Fact Sheet (Aug. 26, 2011); U.S. Department of State, Final 
Environmental Impact Statement for the Proposed Keystone XL Project; 
Public Meetings, 76 Fed. Reg. 53525 (Aug. 26, 2011); U.S. Department of 
State, Notice of Availability of the Final Environmental Impact 
Statement for the Proposed Keystone XL Project, 76 Fed. Reg. 55155 
(Sept. 6, 2011).
    \8\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'').
    \9\U.S. Department of State, State Department Announces Next Steps 
in Keystone XL Pipeline Permit Process (Mar. 15, 2011).
---------------------------------------------------------------------------
    However, there were widespread public concerns about the 
pipeline and the adequacy of the review process. In particular, 
the State Department received numerous comments on the final 
EIS regarding the unique and sensitive nature of the Sand 
Hills, including its wetlands, ecosystem, and shallow 
groundwater, and the Nebraska legislature had convened a 
special session to consider these issues.\10\ Given the 
increased concern regarding the proposed route's potential 
environmental impacts on the Sand Hills, the State Department 
determined that additional information was needed to make a 
National Interest Determination for the Presidential 
Permit.\11\
---------------------------------------------------------------------------
    \10\Id.
    \11\Id.
---------------------------------------------------------------------------
    Thus, the State Department announced on November 10, 2011, 
that it would seek additional information and study alternative 
routes in Nebraska, given the extensive concerns regarding the 
proposed route through the Sand Hills area.\12\ The Department 
estimated that the process, including issuance of a supplement 
to the final EIS and the subsequent public comment period, 
could be completed by early 2013.\13\
---------------------------------------------------------------------------
    \12\U.S. Department of State, Keystone XL Pipeline Project Review 
Process: Decision to Seek Additional Information (Nov. 10, 2011).
    \13\Id.
---------------------------------------------------------------------------
    Following the State Department's announcement, President 
Obama stated his support for the Department's decision. The 
President noted the potential effects of the pipeline on 
health, safety, and the environment, as well as the extensive 
concerns raised through the public review and comment process. 
He concluded that ``we should take the time to ensure that all 
questions are properly addressed and all the potential impacts 
are properly understood.''\14\ Further, the President stated 
that the final decision regarding the Keystone XL permit 
``should be guided by an open, transparent process that is 
informed by the best available science and the voices of the 
American people.''\15\
---------------------------------------------------------------------------
    \14\The White House, Statement by the President on the State 
Department's Keystone XL Pipeline Announcement (Nov. 10, 2011).
    \15\Id.
---------------------------------------------------------------------------
    On December 23, 2011, Congress passed the Temporary Payroll 
Tax Cut Continuation Act of 2011, H.R. 3765, which included a 
provision requiring the President to determine within 60 days 
whether the Keystone XL pipeline is in the national interest. 
On January 18, 2012, the State Department recommended to 
President Obama that the permit for the proposed pipeline be 
denied because the Department did not have sufficient time to 
obtain the information necessary to assess whether the project 
is in the national interest.\16\ There was no identified 
alternative route through Nebraska that avoided the 
ecologically-sensitive Sand Hills area, so the ultimate route 
of the proposed pipeline was unknown.
---------------------------------------------------------------------------
    \16\U.S. Department of State, Report to Congress Under the 
Temporary Payroll Tax Cut Continuation Act of 2011, Section 501(b)(2), 
Concerning the Presidential Permit Application of the Proposed Keystone 
XL Pipeline (Jan. 2012).
---------------------------------------------------------------------------
    Based on the State Department's recommendation, President 
Obama denied the pending application for the construction of 
the Keystone XL pipeline on January 18, 2012. The President 
stated that ``the rushed and arbitrary deadline insisted on by 
Congressional Republicans prevented a full assessment of the 
pipeline's impact, especially the health and safety of the 
American people, as well as our environment.''\17\ TransCanada 
Corporation, the company that seeks to build the Keystone XL 
pipeline, can reapply for a permit at its discretion. According 
to the State Department, the ``denial of the permit application 
does not preclude any subsequent permit application or 
applications for similar projects.''\18\
---------------------------------------------------------------------------
    \17\The White House, Statement by President Barack Obama on the 
Keystone XL Pipeline (Jan. 18, 2012).
    \18\U.S. Department of State, Media Note: Denial of the Keystone XL 
Pipeline Application (Jan. 18, 2012).
---------------------------------------------------------------------------
    In February 2012, TransCanada announced that it would move 
forward with construction of the southern leg of the Keystone 
XL pipeline, which would extend from Cushing, Oklahoma to the 
Gulf of Mexico. If pursued as a discrete project, the southern 
leg of the pipeline does not require a presidential permit, as 
it does not cross an international border. President Obama 
announced his support for the southern portion of the pipeline 
on March 22, 2012, all necessary federal permits were final as 
of July 2012, and construction of the southern portion began in 
August, although public protests and opposition have 
continued.\19\
---------------------------------------------------------------------------
    \19\See, e.g., Keystone XL pipeline construction begins amid 
protests, Los Angeles Times (Aug. 16, 2012); Keystone XL pipeline 
opponents turn to civil disobedience, Washington Post (Oct. 15, 2012).
---------------------------------------------------------------------------
    H.R. 3548 would eliminate the need for a presidential 
permit for the Keystone XL pipeline, and it would give 
permitting authority to the Federal Energy Regulatory 
Commission solely for the Keystone XL pipeline. It would also 
eliminate all authority for FERC to exercise discretion 
regarding the permitting process, requiring FERC to issue a 
permit for the construction of the Keystone XL pipeline within 
30 days of receipt of an application. If FERC does not act on 
the permit application within 30 days, the permit would be 
deemed to have been issued. In addition, the bill would 
prohibit FERC from imposing any conditions on the permit, 
without exception. The bill also provides that the applicant 
may make a substantial modification to the pipeline route or 
final EIS with FERC approval, upon expedited consideration.
    With regard to the proposed pipeline route in Nebraska, 
H.R. 3548 requires FERC to enter into a memorandum of 
understanding with the State of Nebraska within 30 days of 
enactment to complete an environmental review of any 
modification to the proposed route through the State. FERC 
would be required to approve such a modification within 30 days 
of approval by the Governor of Nebraska. If FERC does not act 
on an application for approval of the modified route within 30 
days, the modification would be deemed to have been issued. The 
bill would also allow construction of the pipeline to begin 
while the proposed Nebraska route modification is under 
consideration.

                                ANALYSIS

    H.R. 3548 eliminates the President's authority to permit 
the Keystone XL pipeline, mandates approval of the pipeline, 
and overrides and short-circuits an appropriate review process 
for a highly controversial project with significant long-term 
effects. Even for many who want to see the Keystone XL pipeline 
built, H.R. 3548 is not an acceptable or appropriate way to 
move this project forward. The Administration needs sufficient 
time to get the necessary factual information to address the 
numerous and complex issues that have been raised regarding 
this project.
    Supporters of H.R. 3548 assert that transferring the 
permitting authority for Keystone XL to FERC will simply move 
it to an agency with appropriate expertise. Congressman Terry 
stated that the bill takes a ``rational approach'' of giving 
the authority to ``the federal agency that actually has 
experience in pipelines.''\20\ In actuality, this transfer of 
authority for a single pipeline project clearly is not intended 
to utilize FERC's technical expertise, as it gives FERC no 
discretion in the matter, requiring FERC to issue the permit 
within 30 days of receipt of the application and preventing 
FERC from establishing any conditions on the permit.
---------------------------------------------------------------------------
    \20\Statement of Representative Terry, Committee on Energy and 
Commerce, Subcommittee on Energy and Power, American Jobs Now: A 
Legislative Hearing on H.R. 3548, the North American Energy Access Act, 
112th Cong. (Feb. 3, 2012).
---------------------------------------------------------------------------
    Supporters of H.R. 3548 also claim that this bill is 
necessary to avoid unnecessary delay in getting the Keystone XL 
pipeline built. Congressman Sullivan criticized the State 
Department's three-year review of the permit application as a 
``travesty'' and asserted that it ``is in our national interest 
to move forward with this pipeline.''\21\ However, there is 
reason to believe that the review process for Keystone XL has 
been entirely appropriate given the immense scope and 
considerable implications of the project. Likewise, the 
President's decision to deny the permit was necessary under the 
circumstances, as additional information was needed to properly 
evaluate the application, including the lack of a final route 
through Nebraska for the State Department to evaluate, and 
Congress had set an arbitrarily short deadline for an up-or-
down decision under the Temporary Payroll Tax Cut Continuation 
Act of 2011.
---------------------------------------------------------------------------
    \21\Statement of Representative Sullivan, Committee on Energy and 
Commerce, Subcommittee on Energy and Power, American Jobs Now: A 
Legislative Hearing on H.R. 3548, the North American Energy Access Act, 
112th Cong. (Feb. 3, 2012).
---------------------------------------------------------------------------
    Rather than allowing the existing review process to produce 
a decision based on relevant information, H.R. 3548 would 
create an unprecedented legislative earmark that would grant 
special treatment to one company for a single project, 
requiring FERC to rubberstamp the permit application for the 
Keystone XL pipeline. As one Nebraska ranch owner concerned 
about the pipeline testified before the Subcommittee on Energy 
and Power, ``If the Keystone XL truly has merit, then it should 
be able to withstand a rigorous and comprehensive review that 
it deserves and has not gotten.''\22\
---------------------------------------------------------------------------
    \22\Testimony of Randall F. Thompson, Committee on Energy and 
Commerce, Subcommittee on Energy and Power, American Jobs Now: A 
Legislative Hearing on H.R. 3548, the North American Energy Access Act, 
112th Cong. (Feb. 3, 2012).
---------------------------------------------------------------------------
    Key issues that have been raised about the pipeline include 
whether it will enhance energy security, the extent to which it 
would create jobs and use materials manufactured in North 
America, concerns regarding pipeline safety, and accusations of 
aggressive negotiating tactics by TransCanada Corporation, 
including using threats of eminent domain to take private 
property rights for the pipeline. There are also strong 
concerns related to climate change because the pipeline will 
import large quantities of tar sands crude, which has 
substantially higher lifecycle carbon emissions compared to 
conventional crude oil.
    Supporters of the Keystone XL pipeline argue that it will 
enhance energy security by reducing reliance on oil imports 
from the Middle East and Venezuela. Other energy experts assert 
that the Keystone XL pipeline will not have any noticeable 
impact on America's energy security or will actually harm our 
security. Retired U.S. Army Brigadier General Steven Anderson 
testified before the Subcommittee: ``I strongly oppose the 
Keystone XL pipeline because it will degrade our national 
security. The critical element is simply this: the pipeline 
keeps our great nation addicted to oil, a dependence that makes 
us both strategically and operationally vulnerable.''\23\ A 
report by EnSys for the Department of Energy found that 
construction of the pipeline would not substantively change the 
quantity of Canadian fuel imported to the United States 
because, if this pipeline were not built, market demand would 
drive broadly similar capacity.\24\ In addition, a prominent 
oil market analyst asserted that the pipeline will facilitate 
the export of Canadian crude to countries other than the United 
States.\25\ Most recently, the newest EIA projections find that 
dramatic improvements in fuel efficiency in vehicles, together 
with growing domestic oil production, will slash our reliance 
on imported oil by 25% between 2010 and 2020.\26\
---------------------------------------------------------------------------
    \23\Testimony of Mr. Steven M. Anderson, Brigadier General 
(Retired), U.S. Army, Committee on Energy and Commerce, Subcommittee on 
Energy and Power, American Jobs Now: A Legislative Hearing on H.R. 
3548, the North American Energy Access Act, 112th Cong. (Feb. 3, 2012).
    \24\EnSys, Keystone XL Assessment--Final Report, 116 (Dec. 23, 
2010).
    \25\Philip K. Verleger, The Tar Sands Road to China (May 2011).
    \26\U.S. Energy Information Administration, Annual Energy Outlook 
Early Release 2013, Total Energy Supply, Disposition, and Price 
Summary, Reference case (table) (online at www.eia.gov/oiaf/aeo/
tablebrowser/#release=AEO2013ER&subject;=9-AEO2013ER&table;=1-
AEO2013ER&region;=0-0&cases;=early2013-d102312a).
---------------------------------------------------------------------------
    Supporters of H.R. 3548 also assert that if the Keystone XL 
pipeline is not built, Canada's tar sands crude will be sent to 
Asia instead. In fact, this is by no means certain.\27\ 
Expansions of existing pipelines to British Columbia could 
provide a limited amount of additional capacity. The new 
pipelines and expanded tanker operations that would be needed 
to supply capacity comparable to the Keystone XL pipeline face 
strong opposition in British Columbia and by a unified group of 
First Nations' peoples.\28\
---------------------------------------------------------------------------
    \27\See U.S. Department of State, Final Environmental Impact 
Statement for the Proposed Keystone XL Project, 3.14-62 (acknowledging 
that although various pipeline projects have been proposed to transport 
crude oil to the Canadian west coast ``they face significant opposition 
in the regulatory process'') (Aug. 26, 2011).
    \28\See, e.g., Gateway pipeline risks exceed rewards, B.C. Premier 
says, Toronto Globe (Jul. 22, 2012); First nations claim alliance is 
barrier that pipelines won't break, Vancouver Sun (Dec. 1, 2011).
---------------------------------------------------------------------------
    The potential for job creation from the Keystone XL 
pipeline is another disputed issue. In the final EIS, the State 
Department estimated that approximately 5,000 to 6,000 
temporary workers would be employed during the construction 
phase.\29\ In data it submitted to the State Department, 
TransCanada, the company seeking to build the Keystone XL 
pipeline, predicted ``a peak workforce of approximately 3,500 
to 4,200 construction personnel.''\30\ Subsequently, however, 
the industry began citing much higher numbers. For example, 
TransCanada and the American Petroleum Institute have claimed 
that the project would generate 20,000 construction and 
manufacturing jobs in the short term.\31\ This figure, which is 
three to four times higher than the State Department estimate 
and nearly five to six times higher than TransCanada's own 
original estimate, has been criticized as inflated.\32\ In 
addition, a Perryman Group study commissioned by TransCanada 
predicts the project would result in more than 118,000 person-
years of employment, including indirect and induced jobs, over 
the assumed 100-year lifetime of the project.\33\ However, this 
figure also has been called into question as flawed and poorly 
documented by independent third-parties such as the Cornell 
University Global Labor Institute (GLI).\34\ GLI's report 
concluded that the Keystone XL pipeline ``will not be a major 
source of U.S. jobs, nor will it play any substantial role at 
all in putting Americans back to work.''\35\ The Washington 
Post Fact Checker also cast doubt on exaggerated claims that 
Keystone XL would create ``tens of thousands'' of jobs.\36\
---------------------------------------------------------------------------
    \29\U.S. Department of State, Final Environmental Impact Statement 
for the Proposed Keystone XL Project, Executive Summary, ES-22 (Aug. 
26, 2011).
    \30\TransCanada Keystone Pipeline, LP, Keystone XL Project 
Environmental Report, 2-42 (Nov. 2008).
    \31\TransCanada, (online at www.transcanada.com/
economic_benefits.html) (accessed on Nov. 30, 2011); American Petroleum 
Institute, Keystone XL? The benefits are stacking up. (2011) (online at 
www.api.org/aboutapi/ads/upload/Stacks_Up_KeystoneXL_COS.pdf) (accessed 
on Jan. 24, 2012).
    \32\See, e.g., Keystone Pipeline debate heats up, Washington Post, 
(Nov. 5, 2011).
    \33\The Perryman Group, The Impact of Developing the Keystone XL 
Pipeline Project on Business Activity in the US (June 2010).
    \34\Cornell University Global Labor Institute, Pipe Dreams? Jobs 
Gained, Jobs Lost by the Construction of Keystone XL, 17-21 (Sep. 
2011).
    \35\Id. at 2.
    \36\Keystone pipeline jobs claims: a bipartisan fumble, Washington 
Post (Dec. 14, 2011).
---------------------------------------------------------------------------
    It is also unclear to what extent steel and other materials 
and goods used in the Keystone XL pipeline will be sourced from 
the United States, despite claims that the project will 
significantly benefit our manufacturing industries. TransCanada 
has made repeated representations to congressional offices 
regarding the domestic manufacturing opportunities presented by 
the Keystone XL pipeline project. For instance, on December 2, 
2011, Alex Pourbaix, TransCanada's president for energy and oil 
pipelines, testified before the Energy and Commerce Committee 
that ``we are using the latest technologies and the strongest 
steel pipe from American mills to build the pipeline.''\37\ On 
February 2, 2012, TransCanada informed Committee staff that 
``[a]pproximately 74% of the pipe required for the Project in 
the United States was sourced from North American based mills--
Evraz Regina Canada and Welspun Little Rock, U.S.''\38\ 
TransCanada also stated that ``[w]e have not sourced any steel 
from India.''\39\
---------------------------------------------------------------------------
    \37\Testimony of Alex Pourbaix, President, Energy and Oil 
Pipelines, TransCanada Corporation, Committee on Energy and Commerce, 
Subcommittee on Energy and Power, Hearing on The American Energy 
Initiative: Expediting the Keystone XL Pipeline: Energy Security and 
Jobs, 112th Cong. (Dec. 2, 2011).
    \38\Email from Government Relations Staff, TransCanada Corporation, 
to Staff, Energy and Commerce Committee (2:35pm, Feb. 2, 2012).
    \39\Email from Government Relations Staff, TransCanada Corporation, 
to Staff, Energy and Commerce Committee (12:17pm, Feb. 2, 2012).
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    Information obtained by Congressman Doyle indicates that 
these statements may not be accurate. On February 6, 2012, 
Welspun Tubular, LLC in Little Rock informed Congressman Doyle 
that the steel to be used in the construction of the Keystone 
XL pipeline was produced in India. The GLI also concluded that 
a significant portion of the pipes and components, and the 
steel used to manufacture them, are likely to be imported, 
significantly reducing any potential job impacts for U.S. 
manufacturing.\40\ However, the majority reported H.R. 3548 
without attempting to resolve these inconsistencies regarding 
materials sourcing and manufacturing, and thus without solid 
information regarding the degree to which the project would 
actually benefit American industry.
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    \40\Cornell University Global Labor Institute, Pipe Dreams? Jobs 
Gained, Jobs Lost by the Construction of Keystone XL, 11-13 (Sep. 
2011).
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    Pipeline safety and the risk of oil spills is another area 
of concern. Critics argue that bitumen is more corrosive than 
conventional oil and may exacerbate pipeline deterioration.\41\ 
A series of recent ruptures and other pipeline failures in the 
United States and Canada, resulting in cumulative leaks of 
almost 2.5 million gallons of oil, have heightened these 
concerns.\42\ In addition, reports of substandard foreign steel 
used by TransCanada in the leak-prone Keystone I pipeline and 
supplied by Welspun, the same company with which TransCanada 
has contracts for Keystone XL, have further contributed to 
safety concerns.\43\ A whistleblower who worked as a safety 
inspector on TransCanada's first Keystone pipeline has raised 
numerous safety concerns about Keystone XL based on his 
experience, including that it will be ``built with foreign 
materials which are not up to standards necessary for proper 
construction'' to handle the high-pressure pumping of tar sands 
oil, which ``has the consistency of peanut butter'' and the 
abrasiveness of ``heavy grit sandpaper.''\44\
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    \41\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).
    \42\Regulators Warned Company on Pipeline Corrosion, New York Times 
(Jul. 29, 2010); Nearby Oil Spill Highlights Hazards in Area's 
Pipelines, The New York Times (Sept. 16, 2010); Oil Spill Largest in 36 
Years, Calgary Herald (May 5, 2011); Keystone Pipeline Spill Raises 
Concerns About TransCanada 's Super-Sizing, Forbes (May 11, 2011).
    \43\Cornell University Global Labor Institute, Pipe Dreams? Jobs 
Gained, Jobs Lost by the Construction of Keystone XL, 13-14, 28-29 
(Sep. 2011).
    \44\Letter from Michael R. Klink to Representative Henry A. Waxman 
(Feb. 1, 2012).
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    The potential for oil spills with Keystone XL has been of 
particular concern because the proposed route in Nebraska 
crossed the sensitive Sand Hills area. It is likely that an 
alternative route would still go through the Ogallala Aquifer, 
which is part of a system that supplies drinking water for 2 
million people and provides about 30% of the groundwater used 
for irrigation in the U.S.\45\ Randy Thompson, a Nebraska ranch 
owner whose property lies along the proposed path of the 
pipeline, testified before the Subcommittee on Energy and Power 
about the devastating effects that an oil spill would have on 
his livelihood, stating that his livestock watering wells and 
irrigation wells would ``become virtually useless'' if 
contaminated.\46\
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    \45\U.S. Geological Survey, High Plains Regional Ground-Water Study 
(online at http://co.water.usgs.gov/nawqa/hpgw/factsheets/
DENNEHYFS1.html) (accessed on Feb. 10, 2012).
    \46\Testimony of Randall F. Thompson, Committee on Energy and 
Commerce, Subcommittee on Energy and Power, American Jobs Now: A 
Legislative Hearing on H.R. 3548, the North American Energy Access Act, 
112th Cong. (Feb. 3, 2012).
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    Pursuant to a new bipartisan pipeline safety law, a study 
is underway by the Pipeline Hazardous Materials Safety 
Administration (PHMSA) to determine whether its existing 
regulations are sufficient to ensure the safety of pipelines 
used to transport diluted bitumen.\47\ Cynthia Quarterman, the 
Administrator of PHMSA, testified before the Subcommittee on 
Energy and Power that the agency has not previously done a 
study to analyze the risks associated with transporting diluted 
bitumen.\48\ Yet H.R. 3548 would force the approval of the 
Keystone XL pipeline project before a conclusion has been 
reached regarding the adequacy of existing pipeline safety 
standards.
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    \47\Pipeline Safety, Regulatory Certainty, and Job Creation Act of 
2011, Pub. L. No. 112-90.
    \48\Testimony of the Honorable Cynthia L. Quarterman, 
Administrator, Pipeline and Hazardous Materials Safety Administration, 
U.S. Department of Transportation, Committee on Energy and Commerce, 
Subcommittee on Energy and Power, Hearing on the American Energy 
Initiative: Pipeline Safety, 112th Cong. (June 16, 2011).
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    H.R. 3548 also would hamstring FERC in any attempts to 
ensure the safety of the pipeline. The bill requires FERC to 
issue a permit for the Keystone XL pipeline within 30 days of 
receipt of the application. Such an expedited process does not 
allow for adequate regulatory review. FERC official Jeffrey 
Wright testified before the Subcommittee on Energy and Power 
that it was impossible to build a record that would yield a 
defensible decision in 30 days.\49\ Furthermore, the bill 
prohibits FERC from imposing any conditions on the permit. 
Thus, even if FERC identified any safety concerns during the 
short period of time it will have for review, the agency would 
be prevented from addressing them, such as by establishing 
conditions that must be met in order to mitigate a safety 
problem.
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    \49\Testimony of Jeffrey C. Wright, Director, Office of Energy 
Projects, Federal Energy Regulatory Commission, Committee on Energy and 
Commerce, Subcommittee on Energy and Power, American Jobs Now: A 
Legislative Hearing on H.R. 3548, the North American Energy Access Act, 
112th Cong. (Jan. 25, 2012).
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    Concerns have also been raised over reports of aggressive 
negotiating tactics by TransCanada Corporation to take the 
rights to private property along the proposed path of the 
pipeline. Even before a permit has been issued, TransCanada has 
been issuing offers to private property owners for the use of 
their land for the pipeline, and then threatening those private 
land owners with condemnation proceedings to take their land 
through eminent domain if they do not accept the offer within a 
short timeframe.\50\ A letter from TransCanada to Randy 
Thompson states, ``While we hope to acquire this property 
through negotiation, if we are unable to do so, we will be 
forced to invoke the power of eminent domain and will initiate 
condemnation proceedings against this property promptly after 
the expiration of this one month period.''\51\ As Mr. Thompson 
testified before the Subcommittee on Energy and Power, he and 
other citizens of Nebraska ``view TransCanada as an overly-
aggressive company'' that has tried to ``intimidate and bully 
their way across our State.''\52\ Mr. Thompson further stated 
that he and other Nebraska land owners ``feel that approval of 
this project would strip us of our individual property rights. 
We do not feel that a foreign corporation has any right to take 
our land for their private use and gain, especially when there 
has been no determination that this project is in the national 
interest.''\53\ H.R. 3548 would reward a foreign corporation 
with a legislative earmark for the Keystone XL pipeline, 
empowering TransCanada to continue in its efforts to take 
rights to private property along the proposed path of the 
pipeline.
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    \50\Eminent Domain Fight Has a Canadian Twist, The New York Times 
(Oct. 17, 2011).
    \51\Letter from Tim Irons, Senior Land Coordinator, TransCanada 
Keystone Pipeline LP, to Randy Thompson, Nebraska ranch owner (July 21, 
2010).
    \52\Testimony of Randall F. Thompson, Committee on Energy and 
Commerce, Subcommittee on Energy and Power, American Jobs Now: A 
Legislative Hearing on H.R. 3548, the North American Energy Access Act, 
112th Cong. (Feb. 3, 2012).
    \53\Id.
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    Some of the strongest opposition to the Keystone XL 
pipeline stems from its effect on climate change. It is widely 
recognized that tar sands crudes have higher life-cycle 
greenhouse gas emissions than conventional crudes, and the 
final EIS found that the project could increase U.S. life-cycle 
greenhouse gas emissions by up to an additional 21 million 
metric tons of CO2-equivalent annually.\54\ EnSys 
projected 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 CO2-
equivalent emission by 20 million metric tons per year by 
2030.\55\
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    \54\U.S. Department of State, Final Environmental Impact Statement 
for the Proposed Keystone XL Project, 3.14-55 (Aug. 26, 2011).
    \55\EnSys, Keystone XL Assessment--Final Report at 117 (Dec. 23, 
2010); EnSys, Keystone XL Assessment--Final Report, Appendix, 40 (Dec. 
23, 2010).
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    Other environmental impacts of increased tar sands 
production include the destruction of Canada's boreal forests 
and wetlands, loss of habitat for wildlife and migratory birds, 
and the degradation of water and air quality.\56\ EPA has also 
raised concerns about the health impacts on communities that 
live near refineries from increased emissions from refineries 
processing tar sands crude.\57\
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    \56\See Woynillowicz et al., Oil Sands Fever, Pembina Institute, 
36-52 (Nov. 2005).
    \57\Letter from Cynthia Giles, Assistant Administrator for 
Enforcement and Compliance Assurance, U.S. Environmental Protection 
Agency, to Jose W. Fernandez, Assistant Secretary, Economic, Energy and 
Business Affairs, U.S. Department of State and Dr. Kerri-Ann Jones, 
Assistant Secretary, Oceans and International Environmental and 
Scientific Affairs, U.S. Department of State (June 6, 2011).
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    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.\58\ 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.\59\
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    \58\Pipelines key to growth in North American crude output, IEA 
says, Globe and Mail (June 17, 2011).
    \59\Untimely pipeline spills: TransCanada, Enbridge buffeted by 
accidents; Alberta frets over landlocked bitumen, Petroleum News (June 
19, 2011).
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    For the reasons stated above, we dissent from the views 
contained in the Committee's report.
                                   Henry A. Waxman.
                                   Bobby L. Rush.