Energy Policy, Legislative Updates, Oil, U.S. Senate

Senate Committee Passes Legislation Approving Keystone XL Pipeline and Pushes Full Senate Vote

oilOn June 18, 2014, the Senate Committee on Energy & Natural Resources (“Committee”) passed in a 12-10 bi-partisan vote a bill that would approve TransCanada’s application to build Keystone XL pipeline, which has been pending government approval for years.  A recent cause for further delay in the approval process sprang from the February 2014 Nebraska court’s ruling that overturned as unconstitutional the state law and Governor’s decision under which the pipeline had been approved to pass through the state. In early April, several democratic senators urged President Obama in a letter to set an explicit timeline for completion of the review of the pipeline application by May 31, 2014. Shortly thereafter, the State Department announced that it would extend the period for government agencies to submit their views on the project, given “the uncertainty created by the on-going litigation in the Nebraska Supreme Court which could ultimately affect the pipeline route in that state.” This further delay by the Administration came as no surprise. You can read our previous posts on the Keystone pipeline here and here, as well as articles in which I discussed the likely impact of the Nebraska ruling: Law360 article, Washington Times article. The Committee’s approval of the bill is the latest “skirmish” in what the Committee’s Chair, Senator Mary Landrieu, described as an ongoing “battle to build the Keystone Pipeline.”

Although the House had passed H.R. 3, the Northern Route Approval Act in May 2013 approving the pipeline, “it has been ignored in the Senate,” Ranking Member Senator Lisa Murkowski noted. On May 1, 2014, Senator John Hoeven, (R-ND) introduced S. 2280, A bill to approve the Keystone XL Pipeline. A Committee news release explained that, with respect to the bill it passed on June 18, “the text of the bill from Sens. John Hoeven, R-N.D., Mary Landrieu, D-La., and Murkowski is virtually identical to S. 2280, which was introduced by Hoeven in May, is cosponsored by 55 additional members of the Senate, and is already pending on the Senate calendar.”

Senators Landrieu and Murkowski discussed significant global developments that highlight the importance of expediting approval of Keystone. Senator Landrieu commented:

Two events in the last 24 hours underscore clearly why today’s vote to approve the Keystone Pipeline was important. The Canadian government has conditionally approved the 730-mile Enbridge’s Northern Gateway Pipeline to send oil sands to the West Coast of Canada instead of the Gulf Coast. And, yesterday, al-Qaeda affiliated militants attacked the largest oil refinery in Iraq that refines 350,000 barrels of oil per day—nearly the same amount the United States imports from Iraq. The Keystone Pipeline would transport nearly two and a half times that amount to American refineries.

And Senator Murkowski remarked regarding Canada’s approval of the Northern Gateway Pipeline:

This is a reflection of the fact that has been demonstrated really time and time again here – efforts to block production fail at blocking production…but what they do do is they succeed in diverting and delaying much needed energy… and depriving the people in this country of those jobs and that opportunity….It deprives our economy of the prosperity that I believe we will see result from approval of this infrastructure.

Both Senators urge the full Senate to take up the bill for consideration and final vote.

The Department of State issued an Errata Sheet on June 6, 2014 for the Keystone XL Final Supplemental Environmental Impact Statement, which corrected information regarding rail incidents analysis, among other items. The Department continues to analyze the 2.5 million comments it received during the comment period, which can be found at: www.regulations.gov, Docket ID: DOS-2014-0003. We will keep you posted on Keystone developments.

Brian Heslin

About Brian Heslin

Brian Heslin represents energy companies in regulatory proceedings at the state and federal level. In addition, he provides advice on busines and strategic planning, upstream natural gas supply and capacity negotiation, compliance and other related services.

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The landscape of the energy industry is rapidly changing, with a focus on the development of clean, domestic energy sources and a secure, reliable energy infrastructure driving significant changes in the interdependency of energy industry segments and an increase in government regulation. Continued growth in the domestic production of oil and natural gas has positioned the U.S. to be an energy exporter in the global market and will have a marked impact on the course of the industry’s development.

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