January 01, 2012

The Keystone XL Pipeline Debate: Local Concerns Or Global Cause?

Joseph M. Dawley

The Keystone XL pipeline, a proposed crude oil pipeline project that would extend from the tar sands oil fields of Alberta, Canada, to the Texas Gulf Coast, has recently become ground zero in environmental and climate change policy. While the attention that the Keystone XL has garnered is clear, the debate over the pipeline is multifaceted and shows how local issues can be used to challenge a global issue. Specifically, the State of Nebraska and state and federal environmental organizations have raised concerns about the pipeline’s potential environmental impacts on Nebraska’s Sand Hills region, which contains numerous wetlands of special concern, a sensitive ecosystem, and significant areas of shallow groundwater. At a broader level, national and international environmental organizations are strongly critical of the environmental impact of the tar sands oil extraction process, which requires large quantities of water and results in carbon dioxide emissions. Also on the national level are pipeline supporters who believe the project will enhance U.S. energy security and provide much needed jobs. As with many issues, the truth lies somewhere in the middle. While many of the local issues can be resolved through the permitting process, the larger debate over tar sands oil development must be addressed at an energy and environmental policy level by the executive and legislative branches of our government.

To construct the pipeline, TransCanada Keystone Pipeline, L.P., must obtain a Presidential Permit, which is required for cross-border liquid pipelines and would be issued by the U.S. Department of State pursuant to Executive Order 13,337 (Apr. 30, 2004). Although the Executive Order suggested that it was intended to accelerate the permitting process, in fact this premise is contradicted by the Keystone application. This process began over three years ago when TransCanada filed an application for a Presidential Permit in September 2008. The Presidential Permit review process requires the State Department to prepare an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act (NEPA). Upon issuance of the Final EIS, the State Department must determine whether the proposed project is in the national interest by expanding its evaluation beyond environmental concerns and considering economic, energy security, foreign policy, and other issues that it considers relevant. As part of the national interest evaluation, the State Department is required to consult with the U.S. Environmental Protection Agency, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), the U.S. Attorney General, and the U.S. Departments of Energy, Interior, Commerce, and Homeland Security.

On August 26, 2011, the State Department published the Final EIS (FEIS) in which it concluded that the proposed project would result in no significant impacts along the project corridor as long as TransCananda: complies with all applicable laws and regulations; incorporates fifty-seven project specific conditions developed by PHMSA into the pipeline’s operations and maintenance manual; incorporates avoidance, mitigation, and reclamation measures; and constructs and operates the pipeline in the manner described in the FEIS. See 76 Fed. Reg. 55,155 (Sept. 6, 2011). With regard to the alternatives considered in the NEPA review process, the State Department concluded that its preferred alternative is the proposed route with the variations and minor route realignments described in the FEIS. Id. The variations and minor route alignments described in the FEIS did not include re-routing the pipeline to avoid the Sand Hills region of Nebraska.

The issuance of the FEIS was met with furor. The State of Nebraska and Nebraska residents and non-governmental organizations raised concerns about the risks of a pipeline crossing the Sand Hills. Ultimately, the State Department announced that it would delay a decision until 2013 so it could conduct a Supplemental EIS to consider route alternatives to avoid or mitigate impact on the Sand Hills. Almost immediately after this announcement, however, TransCanada announced agreement with the State of Nebraska on a new route alternative along with a plan to expedite the environmental review process. The State Department, however, has not yet moved off of its current first quarter of 2013 projected timeline.

While time heals all wounds, it is unclear whether two more years will resolve the tar sands oil debate. TransCanada is clearly working hard to address the environmental concerns raised by Nebraskans. Even if these concerns are addressed, given the political pressure exerted against the project so far, issuance of the Presidential Permit does not appear to be guaranteed. The permitting process requires the consideration of both environmental (NEPA) impact and national interests. Once the deck is cleared of the environmental impact issue, the hard policy work begins for the State Department. But without a clear national energy policy, the decision will be the subject of the political winds of 2013.

Joseph M. Dawley

Joseph M. Dawley is an in-house environmental attorney at EQT Corporation.