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Republicans Blocked on Keystone Focus on Permit Approval Process

Photographer: Daniel Acker/Bloomberg

Workers prepare pipes during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, on March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. Close

Workers prepare pipes during construction of the Gulf Coast Project pipeline in Prague,... Read More

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Photographer: Daniel Acker/Bloomberg

Workers prepare pipes during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, on March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas.

U.S. House Republicans, unsuccessful in trying to force approval of the Keystone XL pipeline, are trying a new tack by pushing changes to speed reviews of other cross-border energy projects.

The proposed measure wouldn’t affect Keystone, the $5.3 billion plan to link Alberta’s oil sands to U.S. refineries that has sparked a debate over oil pipelines and the environment, because it applies only to future projects.

Democrats led by Representative Henry Waxman objected at a House Energy and Commerce Committee’s Energy and Power Subcommittee hearing on the legislation today. Waxman, a California Democrat, said it would “rubber stamp” applications, including those, like Keystone, that would carry heavy crude from Alberta to the U.S. Republicans said the bill would bring clarity to a process that can drag on for years.

“Keystone is not, is not, the issue today,” said Representative Fred Upton, a Michigan Republican and chairman of the House Energy and Commerce Committee. “There are many other upcoming cross border projects, large and small, that may be subject to similar delays.”

Oil and gas pipelines and electric transmission lines now must get a presidential permit when they cross either the northern or southern borders of the U.S.

Bill Details

Under the bill, the Commerce Department would be required to approve an oil pipeline application within 120 days unless the commerce secretary found the project would not be in the U.S. national security interest.

The Federal Energy Regulatory Commission would retain responsibility for natural gas lines, and the Energy Department would continue to review electric transmission projects. The bill would set the same 120-day deadline for approval.

Republicans said environmental reviews mandated by other federal and state laws would be sufficient to weigh the risks of pipeline and electric power line construction.

The State Department now oversees the environmental analysis for liquid pipelines like Keystone. It then weighs other factors including a project’s effect on the economy, foreign relations, and national security to determine whether it’s in the national interest.

TransCanada Corp. (TRP) first applied to build Keystone XL more than five years ago.Obama rejected the first route, citing objections from Nebraska state officials over its environmental risks. TransCanada, based in Calgary, submitted a new application in May 2012 for a northern leg that pushes further east in Nebraska.

TransCanada says it expects the administration to decide on the project during the first three months of 2014.

Seven Applications

There are seven applications for cross-border oil pipelines under review at the State Department, including Keystone.

Enbridge Inc. (ENB) has applied to double the capacity of its Alberta Clipper line Alberta to Wisconsin. The change would mean that 880,000 barrels of heavy crude could be transported on the link, more than the 830,000 that Keystone XL could carry.

The State Department is considering the scope of its environmental review for the clipper expansion.

The department has approved two cross-border pipelines to carry liquid ethane from the U.S. to Canada in the past four months.

Vantage Pipeline US LP got the go-ahead in June to build a pipeline from Tioga, North Dakota, to Alberta that could eventually carry 60,000 barrels a day of ethane. The U.S. portion would traverse 80 miles. Vantage applied for a permit in January 2011.

In August, the department issued a presidential permit to NOVA Chemicals Corp. to transport ethane produced from the Marcellus Shale to a petrochemical facility Corunna, Ontario. The line was constructed in 1986 to transport natural gas. Nova applied for the permit in August 2012.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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