Monday, May 23, 2011

House Hearing & Major Debate Over U.S.-Canada Keystone XL Pipeline

May 23: The House Energy and Commerce Subcommittee on Energy and Power, Chaired by Representative Ed Whitfield (R-KY), is holding the eighth day of its hearings on the "American Energy Initiative" today. The hearing began at 3:00 PM and will focus on the discussion draft of legislation -- the "North American-Made Energy Security Act". The draft legislation aims to bring more North American oil supplies online by expediting the consideration of the Presidential Permit for the Keystone XL pipeline expansion [See WIMS 4/26/11]. The draft legislation requires the President to issue a Presidential Permit decision no later than November 1, 2011. According to a Republican release the completion of the Keystone pipeline extension would more than double the current system's capacity, bringing 1.29 million barrels per day to into U.S. markets. 
    Witnesses scheduled to testify at the hearing include representatives from: Alberta Energy Resources Conservation Board; Murray Smith & Associates; TransCanada; United Association of Plumbers and Pipefitters; IHS Cambridge Energy Research Associates; and National Wildlife Federation. 
    On May 20, in anticipation of a hearing today on the draft legislation to expedite federal approval of the pipeline project, Representatives Henry Waxman (D-CA), Ranking Member of the Energy and Commerce Committee, and Bobby Rush (D-IL), Ranking Member of the Subcommittee on Energy and Power, sent a letter urging the Committee to request documents from Koch Industries relating to the company's interest in Canadian tar sands and the extent to which it will benefit if the Keystone XL pipeline is constructed.
    The letter to full Committee Chairman Fred Upton (R-MI) and Subcommittee Chairman Whitfield, which references several related documents, indicates that, "According to Reuters, Charles and David Koch, the owners of Koch Industries, are 'positioned to be big winners if Keystone XL pipeline is approved' and would receive 'great financial opportunity.' Publicly available information indicates that the company is involved in several aspects of Canadian tar sands development. Koch's Pine Bend Refinery in Minnesota currently processes roughly 25% of the tar sands fuel imports to the United States. Koch owns Flint Hills Resources, LLP, in Calgary, Canada, which is 'among Canada's largest crude oil purchasers, shippers and exporters.' Flint Hills Resources also operates a crude oil terminal in Hardisty, Alberta, where the Keystone XL pipeline will begin. According to the Government of Alberta, Koch Industries has both proposed and producing tar sands projects in the province. The Oil Sands Developers Group also indicates that Koch is a tar sands project developer. Koch's Corpus Christi refinery is positioned near the end of the proposed Keystone XL pipeline and would be a potential buyer for the tar sands crude shipped through the pipeline."
    Waxman and Rush said, "In light of these reports, we asked our staff to contact Koch Industries to learn more about the company's role in the Keystone XL pipeline and Canadian tar sands.  Yesterday, our staff spoke with representatives of the company.  In that conversation, the Koch representatives would not answer questions about Koch's investments in Canadian tar sands. The Koch representatives said that the Keystone XL pipeline has 'nothing to do with any of our businesses' and that Koch had 'no financial interest' in the pipeline. They also stated that the company neither supports nor opposes the legislation we will be considering. . . 
    "However, Koch's representatives refused to answer questions about Koch's activities or interests in the Canadian tar sands.  They refused to confirm or deny reports that the company is developing tar sand projects. They also refused to say whether Koch Industries owns -- through a wholly owned subsidiary -- a terminal involved in the tar sands business." They said, "There appears to be a significant discrepancy between the published reports that Koch Industries would be 'big winners' if the pipeline is approved and the statement of the Koch representatives that the pipeline has 'nothing to do' with Koch's businesses. We do not presume that Koch's representations are inaccurate. But we were dismayed by the company's lack of candor in responding to staff's questions and believe additional inquiry is warranted." The Democratic Representatives requested that the Committee request a number of listed documents regarding the Koch brother involvement or interests in the Keystone XL pipeline project.
    The American Petroleum Institute (API) issued a statement in advance of the hearing saying the "bipartisan" legislation that would approve the Keystone XL Pipeline by November 1, is "an important driver of U.S. economic growth and job creation." API Executive Vice President Marty Durbin said, "U.S. jobs supported by Canadian oil sands development could grow from 21,000 jobs today to 465,000 jobs by 2035. The Keystone XL pipeline has undergone extensive analysis and review over the last two years and it is time to focus efforts on creating jobs and strengthening our relationship with America's number one source of imported oil: Canada. Nearly 1000 U.S. businesses in 47 states already provide services, materials or equipment to Canada in support of oil sands development," said Durbin. "A recent survey of Americans showed that 85 percent believe that U.S. government policies should support the use of oil from Canada's oil sands. Other countries are looking out for their energy futures. The U.S. needs to as well." API also thanked U.S. Reps. Lee Terry (R-NE) and Mike Ross (D-AR) for their bipartisan support.
    Charles Drevna, President, National Petrochemical & Refiners Association (NPRA) also wrote and op-ed indicating in part, ". . .our good neighbor to the north is offering to sell us more oil taken from oil sands in Western Canada that would benefit the American people by strengthening our economic and national security and by creating desperately needed jobs for American workers. According to a study by the Canadian Energy Research Institute, more than 342,000 new U.S. jobs are likely to be created directly and indirectly between 2011 and 2015 because of Canadian oil sands development. In part this is because much of the money Americans send to Canada to buy oil is spent by Canadians on U.S. goods and services. All that's needed is U.S. State Department approval for the construction of the Keystone XL pipeline, which would act as a superhighway to bring oil from Alberta to our country . ."
    Peter Lehner, Executive Director, Natural Resources Defense Council issued a statement saying, "Tar sands oil is dirty and destructive, and the proposed Keystone XL tar sands oil pipeline won't reduce gas prices. Instead, this pipeline will perpetuate our dependence on oil, with all its attending problems of climate change and high energy costs. Given the major consequences involved in locking ourselves into tar sands oil, this pipeline should not be rushed -- not through an expedited State Department process or through legislation. And yet recently the State Department issued a supplemental environmental review after the EPA deemed its first round inadequate. Unfortunately, the department failed once again to do its homework and only gave superficial treatment to serious questions of need, greenhouse gas emissions, pipeline safety, environmental justice around refineries, and alternative routes to the current proposal to cross the Ogallala Aquifer -- the source of freshwater for eight states. The department only gave 45 days for public comment and has completely disregarded the many requests from farmers and landowners for hearings . ."
    Access the hearing website for links to the draft legislation, a background memo, and witness testimony following the hearing (click here). Access the letter from Reps. Waxman and Rush (click here). Access the statement from API (click here). Access a number of statements for and against the XL project, including those from the NRDC and NPRA, posted on the National Journal Energy & Environment Experts blog (click here). Access the 4/22/11 FR announcement on the Supplemental Draft Environmental Impact Statement  (click here). Access the State Department Keystone Project website for complete information (click here). [*Energy/TarSands]