Keystone battle inspires effort to tame process

WASHINGTON — Inspired by the five-year fight over Keystone XL, U.S. Rep. Gene Green is pushing legislation that would smooth the approval process for pipelines and power lines that cross U.S. borders.

But the success of that bill depends on divorcing it from the high-profile Keystone XL pipeline fight.

“We have to get past Keystone,” said Green, D-Houston. “This does nothing to Keystone XL. This is for the future.”

The bill introduced by Green and Rep. Fred Upton, R-Mich., aims to write new rules for the federal government’s review of border-crossing energy infrastructure projects that have yet to be proposed, effectively replacing an ad hoc presidential permit process created by a smattering of executive orders.

For instance, the State Department is tasked with vetting proposed oil pipelines, like TransCanada’s Keystone XL project, under an executive order issued by former President George W. Bush in 2004.

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But when it comes to natural gas pipelines that would cross U.S. borders, a 60-year-old presidential directive gives the Federal Energy Regulatory Commission the responsibility for issuing or denying presidential permits.

And for electric transmission infrastructure, the presidential permit decision rests with the Energy Department, under executive orders signed in 1954 and 1978.

Martin Edwards, vice president of legislative affairs for the Interstate Natural Gas Association of America, called the current approach a “not-very-coherent process that has grown up over the last 50 or 60 years without a lot of thought to it.”

Some energy analysts and industry representatives warn that presidential permit reviews could bog down even more, as companies look to build new pipelines and power lines moving North American electricity, oil and gas across Mexico, Canada and the United States.

“We’re trying to bring some certainty to the process,” Green said, noting that Keystone XL showed that “the process for cross-border pipelines is pretty confusing.”

He predicts more pipelines and power lines in the future.

“We are going to see these cross-border pipelines and electricity grow,” he said. “If we really are going to have a North American energy market, we need to be able to easily move that product back and forth.”

The demand for infrastructure to move more oil, gas and power could be fed by greater production across North America, as energy companies use hydraulic fracturing and horizontal drilling to extract newly accessible fossil fuels from dense rock formations. Energy reforms in Mexico also could spur more activity.

Bill co-sponsor Upton says the continent’s expanding energy potential requires a new “architecture of abundance.”

“As energy production grows across the United States, building the infrastructure to move these supplies to consumers is emerging as the real challenge of the 21st century,” he said.

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Upton, head of the House Energy and Commerce Committee, scheduled a subcommittee hearing on the legislation last week, kicking off a process that could put it before the full House later this year. That hearing was canceled because of the government shutdown but is expected to be rescheduled.

Bill supporters hope to capitalize on concerns raised by TransCanada Corp.’s five-year quest to build the Keystone XL pipeline between Alberta and the Gulf Coast — without tethering the legislation to the politically charged project. Their mantra: “This is a forward-looking bill.”

“Keystone XL is always going to be around, but we don’t want it to be the calling card of this bill,” said a congressional aide supportive of the legislation. “When the focus becomes that, you lose sight of the fact that there are a lot of other projects that may not have been filed, that people are holding back on (because of uncertainties with the current process).”

The State Department is now reviewing comments on a draft environmental assessment of Keystone XL as part of its determination of whether the project is in the “national interest.” If any one of eight separate federal agencies disagrees with the State Department’s decision, that would launch a process that ultimately would put the final verdict in President Barack Obama’s hands.

Although some Keystone XL critics are wary of the bill — and want to explicitly make sure the legislation wouldn’t provide new openings for the TransCanada project — the measure is drawing support from some lawmakers in the Northeast, where most of the United States’ 40 border-crossing power lines are located, straddling the border with Canada.

Bill backers also plan to appeal to lawmakers’ typical preference for Congress set rules for interstate commerce instead of leaving decisions up to executive orders that can be changed at any time.

A draft of the Upton-Green bill would put border-crossing oil pipeline reviews in the hands of the Commerce Department, natural gas pipeline requests before the Federal Energy Regulatory Commission and electric transmission projects in front of the Energy Department.

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The measure would affect only the presidential permit stage of review and would not touch other local and federal regulatory hurdles, including scrutiny from pipeline regulators and environmental assessments.

It also would not apply retroactively to Keystone XL or roughly a dozen other border-crossing projects already waiting for presidential permits, including some that have already been built. They include:

  • Enbridge Energy’s request for changes in the presidential permit governing its Alberta Clipper (or Line 167) pipeline that crosses the U.S.-Canada border, so the company can boost its capacity to 880,000 barrels per day.
  • Kinder Morgan’s proposal to boost the capacity of a natural gas pipeline at the U.S.-Mexico border.
  • Plains All American Pipeline’s request to formalize a change in ownership and get permits to operate pipelines it recently purchased, including six at the U.S.-Canada border and another crossing the Detroit River. At least one of the pipelines already was the subject of a State Department application pending since 2007 because of a previous ownership change.

While Keystone XL gets all the attention, other border-crossing energy projects have had long waits, including a planned wind farm set to be built a half-mile south of the U.S.-Mexico border.

In 2007, Sempra asked the Energy Department for a presidential permit allowing it to build and operate a power line that would link the planned Energia Sierra Juarez wind farm in Mexico with U.S. power facilities owned by San Diego Gas & Electric.

The federal government issued a presidential permit five years later.

Border crossings

Electricity: The U.S. has 40 electric transmission lines carrying power across its borders with Canada and Mexico. Five applications for presidential permits for electric transmission infrastructure are pending before the Energy Department.

Natural gas: Fifty natural gas pipelines cross U.S. borders with Canada and Mexico, with applications for presidential permits for two more in Arizona and Texas pending.

Oil: Nineteen oil pipelines cross U.S. borders, with 17 straddling the U.S.-Canada line and two others running into Mexico. Seven existing or planned cross-border oil pipelines are pending presidential permits from the State Department.

Source: Congressional Research Service

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