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Keystone XL Pipeline Debate Intensifies

President Obama’s decision to deny the Keystone XL Pipeline Presidential Permit application prompted debate among Congressional Officials and Department of State (“State Department”) Officials. (See January 23, 2012 edition of the WER).  On January 25, 2012, the House of Representatives Energy and Commerce Committee Subcommittee on Energy and Power held a hearing to discuss the “North American Energy Access Act,” or House Resolution 3548 (“HR 3548”).   HR 3548 sparked controversy by proposing to transfer permitting authority over the Keystone XL Pipeline to the Federal Energy Regulatory Commission (“FERC” or the “Commission”).

The State Department is currently authorized to receive applications for Presidential Permits for all oil infrastructure projects that cross a U.S. Border pursuant to Executive Order 11423.  Executive Order 11423 also indicates that the Secretary of State shall consult with other individuals, including Secretary of the Treasury, the Secretary of Defense, the Attorney General, the Secretary of the Interior, the Secretary of Commerce, the Secretary of Transportation, the Interstate Commerce Commission, and the Director of the Office of Emergency Planning.  Ultimately, however, the Secretary of State will issue or deny the Presidential Permit unless an official required to be consulted with requests the Secretary of State refer the application to the President for consideration and final decision.  President Obama became involved in the Keystone XL Permit decision when Congress enacted the “Temporary Payroll Tax Cut Continuation Act” and required a decision on the Permit within 60 days.

On December 2, 2011, Representative Lee Terry (R-NE) introduced HR 3548, which is now garnering greater attention after the denial of the Presidential Permit for Keystone XL Pipeline.  HR 3548 would require FERC to issue a permit for the “construction, operation and maintenance” of the Keystone XL Pipeline within 30 days of receiving the permit.  If FERC declines to act within 30 days, the permit will be deemed to have been issued.   In addition to issuing a permit, HR 3548 requires FERC to enter into a memorandum of understanding with Nebraska for review of a modification to the pipeline route in Nebraska.

At the hearing before the Subcommittee on Energy and Power on January 25, 2012, Dr. Kerri-Ann Jones, Assistant Secretary of State, Bureau of Oceans and International Environmental and Scientific Affairs from the State Department testified that HR 3548 would not resolve any concerns that the State Department had with the Keystone XL Pipeline prior to recommending denial of the Presidential Permit.  Dr. Jones indicated that the proposed legislation would impose “narrow time constraints and create[s] automatic mandates that prevent an informed decision.”   In addition to Dr. Jones, Jeff C. Wright, Director of the Office of Energy Projects at FERC, testified that while the Commission has no position on HR 3548, it should provide “clear and effective procedures” for conducting a review of the Keystone XL Pipeline project application.  Wright also testified that HR 3548 poses some concerns for the Commission’s ability to exercise reasoned decision making.  He also testified that HR 3548 could “be construed as providing that federal jurisdiction which supplants local authority” as individual states currently have some authority to site oil pipelines within their jurisdiction.

A copy of HR 3548 is available here.