[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
KEYSTONE XL PIPELINE:
EXAMINING SCIENTIFIC AND
ENVIRONMENTAL ISSUES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT
JOINT WITH THE
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
TUESDAY, MAY 7, 2013
__________
Serial No. 113-26
__________
Printed for the use of the Committee on Science, Space, and Technology
Available via the World Wide Web: http://science.house.gov
U.S. GOVERNMENT PRINTING OFFICE
81-190 WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, [email protected].
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR., DANIEL LIPINSKI, Illinois
Wisconsin DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
PAUL C. BROUN, Georgia DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi ALAN GRAYSON, Florida
MO BROOKS, Alabama JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois SCOTT PETERS, California
LARRY BUCSHON, Indiana DEREK KILMER, Washington
STEVE STOCKMAN, Texas AMI BERA, California
BILL POSEY, Florida ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky MARK TAKANO, California
KEVIN CRAMER, North Dakota ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
------
Subcommittee on Environment
HON. CHRIS STEWART, Utah, Chair
F. JAMES SENSENBRENNER, JR., SUZANNE BONAMICI, Oregon
Wisconsin JULIA BROWNLEY, California
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas MARC VEASEY, Texas
PAUL C. BROUN, Georgia MARK TAKANO, California
RANDY WEBER, Texas ALAN GRAYSON, Florida
EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas
------
Subcommittee on Energy
HON. CYNTHIA LUMMIS, Wyoming, Chair
RALPH M. HALL, Texas ERIC SWALWELL, California
FRANK D. LUCAS, Oklahoma ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas JOE KENNEDY III, Massachusetts
MICHAEL MCCAUL, Texas MARC VEASEY, Texas
RANDY HULTGREN, Illinois MARK TAKANO, California
THOMAS MASSIE, Kentucky ZOE LOFGREN, California
KEVIN CRAMER, North Dakota DAN LIPINSKI, Illinois
RANDY WEBER,Texas EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas
C O N T E N T S
Tuesday, May 7, 2013
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Chris Stewart, Chairman, Subcommittee
on Environment, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 9
Written Statement............................................ 10
Statement by Representative Suzanne Bonamici, Ranking Minority
Member, Subcommittee on Environment, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 11
Written Statement............................................ 12
Statement by Representative Lamar S. Smith, Chairman, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 13
Written Statement............................................ 14
Statement by Representative Eric Swalwell, Ranking Minority
Member, Subcommittee on Energy, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 14
Written Statement............................................ 15
Statement by Representative Cynthia Lummis, Chairwoman,
Subcommittee on Energy, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 70
Written Statement............................................ 71
Witnesses:
Mr. Lynn Helms, Director, Department of Mineral Resources, North
Dakota Industrial Commission
Oral Statement............................................... 16
Written Statement............................................ 18
Mr. Brigham A. McCown, Principal and Managing Director, United
Transportation Advisors, LLC
Oral Statement............................................... 23
Written Statement............................................ 25
Mr. Anthony Swift, Attorney, International Program, Natural
Resources Defense Council
Oral Statement............................................... 42
Written Statement............................................ 44
Mr. Paul Knappenberger, Assistant Director, Center for the Study
of Science, Cato Institute
Oral Statement............................................... 59
Written Statement............................................ 61
Discussion....................................................... 70
Appendix I: Answers to Post-Hearing Questions
Mr. Lynn Helms, Director, Department of Mineral Resources, North
Dakota Industrial Commission................................... 91
Mr. Brigham A. McCown, Principal and Managing Director, United
Transportation Advisors, LLC................................... 96
Mr. Paul Knappenberger, Assistant Director, Center for the Study
of Science, Cato Institute..................................... 102
KEYSTONE XL PIPELINE:
EXAMINING SCIENTIFIC AND
ENVIRONMENTAL ISSUES
----------
TUESDAY, MAY 7, 2013
House of Representatives,
Joint Hearing with the Subcommittee on
Environment and the Subcommittee on Environment
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittees met, pursuant to call, at 10:03 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Chris
Stewart [Chairman of the Subcommittee on Environment]
presiding.
[GRAPHIC] [TIFF OMITTED] T1190.001
[GRAPHIC] [TIFF OMITTED] T1190.002
[GRAPHIC] [TIFF OMITTED] T1190.003
[GRAPHIC] [TIFF OMITTED] T1190.004
[GRAPHIC] [TIFF OMITTED] T1190.005
[GRAPHIC] [TIFF OMITTED] T1190.006
[GRAPHIC] [TIFF OMITTED] T1190.007
Chairman Stewart. Good morning. The joint hearing on the
Subcommittee on Environment and the Subcommittee on Energy will
come to order. Welcome to today's joint hearing entitled
``Keystone XL Pipeline: Examination of Scientific and
Environmental Issues.'' In front of each Member are packets
containing the written testimony, biographies, and truth-in-
testimony disclosures for today's witnesses.
Before we get started, and since this is a joint hearing
involving two Subcommittees, I wanted to explain how we will
operate procedurally, so all Members will understand how the
question-and-answer period will be handled. As always, we will
alternate between the majority and minority Members. After
first recognizing the Chair and Ranking Members of the
Environment and Energy Subcommittees, we will then recognize
those Members present at the gavel in order of seniority on the
Full Committee, and those coming in after the gavel will be
recognized in order of arrival.
And I now recognize myself for five minutes for my opening
statement.
I would like to thank the witnesses for being with us
today. We appreciate your service and the sacrifice you made,
and we look forward to hearing for you--from you.
The subject of today's hearing, construction of the XL
pipeline, is of profound economic and national security
interest. The proposed pipeline has been under continuous
review for more than four years. Now, let's think about that
for a moment. More than four years, that is about the length of
time it took the United States to fight and win World War II.
You can complete a university degree in four years. A large
portion of the transcontinental railroad was built in four
years. You can do a lot of things in four years. The only thing
we can't do is get this Administration to make a decision about
building a much-needed pipeline.
During the past four years, as this project has been
studied, we have learned that the pipeline is safe and
environmentally sound. We also know it will create jobs and it
promotes energy security. In fact, in 2010, then-Secretary of
State Clinton signaled as much when she said that the State
Department was likely to approve the project. That, of course,
sparked an outcry from the Administration's environmental
allies, resulting in politically driven delay and additional
review, all of which came at considerable expense and further
loss of economic opportunity.
The comment period on the State Department's most recent
Draft Supplemental Environmental Impact Statement, or SEIS,
closed just months--for last month. In that report, the State
Department found that the proposed project is safe. It uses
state-of-the-art materials, coating, construction practices,
and monitoring systems. The State Department SEIS goes on to
say that the pipeline would be one of the safest pipelines ever
built or operated.
In regard to its effects on the environment, the Department
found ``that there would be no significant impacts.'' And
because the project will have little or no impact on oil sands
production--the Canadian oil will be brought to market whether
or not the Keystone pipeline is built--effects on carbon
emissions would be negligible.
And while the EPA claims that over a 50-year period the
additional emissions would create as much as 935 million metric
tons of greenhouse gases, this is far less than one percent of
global emissions. As Paul Knappenberger of the Cato Institute
will tell us today, even using EPA's worst-case scenario
assumptions, the effect of the pipeline would only increase the
rate of warming by an imperceptible 1/100,000 of a degree per
year.
In regard to jobs, the State Department estimates that the
pipeline would have significant positive socioeconomic impacts
in the form of local employment, increased tax revenue,
ancillary business development, and increased spending by
workers on goods and services. As the Department states in the
SEIS, ``the proposed project would potentially support
approximately 42,100 average annual jobs across the United
States. This employment would potentially translate to
approximately $2.05 billion in earnings.''
And there is also this important point: the President
frequently urges us to reduce our reliance on foreign oil from
unstable, undemocratic regimes that are unfriendly to the U.S.
interests. As a former Air Force pilot, I have personal
knowledge of how important it is to reduce our reliance on
sources of energy that emanate from instable and unpredictable
areas of the world. If you want to enhance our national
security while decreasing the need to put our sons and
daughters in harm's way in far-off regions of the world, then
build the Keystone pipeline.
Finally, building the pipeline will allow us to increase
our trading relationships with Canada, a stable and friendly
democracy with whom we share a long and peaceful border.
In short, the pipeline is in the national interest. There
is no logical reason not to allow it to move forward.
I now recognize the gentlelady from Oregon, the Ranking
Member, Ms. Bonamici, for her opening statement.
[The prepared statement of Mr. Stewart follows:]
Prepared Statement of Environment Subcommittee Chairman Chris Stewart
The subject of today's hearing, construction of the XL pipeline, is
of profound economic and national security interest.
The proposed pipeline has been under continuous review for more
than four years. Let's think about that for a moment. More than four
years. That's about the length of time it took for the United States to
fight and win WW II. You can complete a university degree in four
years. A large portion of the transcontinental railroad was built in
four years. We can do a lot of things in four years. The only thing we
can't do is to get this Administration to make a decision about
building a much-needed pipeline.
During the past four years, as the project has been studied, we
have learned that the pipeline is safe and environmentally sound. We
also know it will create jobs and that it promotes energy security. In
fact, in 2010, then-Secretary of State Clinton signaled as much when
she said that the State Department was likely to approve the project.
That, of course, sparked an outcry from the Administration's
environmental allies, resulting in politically driven delay, and
additional review--all of which came at considerable expense and
further loss of economic opportunity.
The comment period on the State Department's most recent Draft
Supplemental Environmental Impact Statement, or SEIS, closed just last
month. In that report, the State Department found that:
The proposed project is safe. It uses state-of-the-art
materials, coating, construction practices, and monitoring systems. The
State Department SEIS goes on to say that the pipeline would be one of
the safest pipelines ever built or operated.
In regard to its effects on the environment, the
Department found ``that there would be no significant impacts.'' And
because the project will have little or no impact on oil sands
production--the Canadian oil will be brought to market whether or not
the Keystone pipeline is built--effects on carbon emissions would be
negligible.
And while the Environmental Protection Agency claims that over a
50-year period, the additional emissions ``could be as much as 935
million metric tons'' of greenhouse gases, this is far less than one
percent of global emissions. As Paul Knappenberger of the Cato
Institute will tell us today, even using EPA's worst-case scenario
assumptions, the effect of the pipeline would only increase the rate of
warming by an imperceptible one one-hundred-thousandth of a degree per
year.
In regard to jobs, the State Department estimates that the pipeline
would have significant positive socioeconomic impacts in the form of
local employment, increased tax revenues, ancillary business
development, and increased spending by workers on goods and services.
As the Department states in the SEIS, ``the proposed Project would
potentially support approximately 42,100 average annual jobs across the
United States . . . This employment would potentially translate to
approximately $2.05 billion in earnings.''
And there is also this important point: the President frequently
urges us to reduce our reliance on foreign oil from unstable,
undemocratic regimes that are unfriendly to U.S. interests. As a former
Air Force pilot, I have personal knowledge of how important it is to
reduce our reliance on sources of energy that emanate from unstable and
unpredictable areas of the world. If you want to enhance our national
security, while decreasing the need to put our sons and daughters in
harm's way in far-off regions of the world, then build the Keystone
pipeline.
Finally, building the pipeline will allow us to increase our
trading relationship with Canada, a stable and friendly democracy with
whom we share a long and peaceful border.
In short, the pipeline is in the national interest. There is no
logical reason not to allow it to move forward.
I now recognize the gentlelady from Oregon, Ranking Member
Bonamici, for her opening statement.
Ms. Bonamici. Thank you very much, Chairman Stewart. I
don't see Chairwoman Lummis.
I want to welcome our witnesses and thank you all for
participating in today's hearing about the Keystone XL
pipeline. The discussion we are having here today is important
because the Keystone pipeline project heightens and highlights
an issue that this Committee has been debating for a long time:
climate change caused by human activity. There has been
disagreement with colleagues across the aisle regarding the
human role in the changing climate. For that reason, I was
pleased a few weeks ago when the Subcommittee on the
Environment held a climate change hearing in which all of the
witnesses agreed in their testimony that global warming is
happening, humans are contributing to it, and the country must
take action to address it.
This is relevant to today's hearing because the Keystone XL
pipeline showcases our continued dependence on fossil fuels,
the use of which contributes greatly to anthropogenic climate
change. I am pleased that this hearing will also address
potential negative impacts of the pipeline on those living and
working along the proposed pipeline route, including those
engaged in agricultural activities.
I am glad that the witnesses will also be discussing the
pipeline's impact on land use and that they will discuss
potential threats that large-scale pipeline projects can pose
to fragile water resources.
Also significant are local concerns about the cleanup of
potential spills from the pipeline. I joined many of my
colleagues who know that we must be thoughtful and informed
before we give the go-ahead to traverse the thousands of miles
of the American countryside with new infrastructure for an old
energy source. According to the State Department's Draft
Environmental Impact Statement, the Keystone XL pipeline will
bring thousands of temporary construction jobs and positively
impact local economies at a time when our country is navigating
through a slow economic recovery. These short-term benefits to
our economy should not be overlooked, but they should be
considered alongside with the substantial environmental and
safety challenges presented by the pipeline, including the
potentially disastrous impact on the local economy if they
still were to occur.
That happened not too long ago in Michigan. A pipeline
transporting oil from Canada to the United States' destinations
ruptured and spilled about 800,000 gallons of crude oil into
the Kalamazoo River. Now, three years later, cleanup is yet to
be completed because of the difficult task of getting the heavy
oil sands out from the river floor where much of it remains
submerged. The EPA recently recommended that the State
Department take a closer look at how spills of oil sands may
require different response actions or equipment from response
actions for conventional oil spills. That is why Congress
requested that the National Academy of Sciences study this type
of oil, and it is my hope that we will soon know more about
what differences exist between oil sands and conventional
crudes.
In closing, although I would never claim to speak for all
the Democrats about the Keystone project specifically, we do
all agree that our country must set ambitious goals to combat
anthropogenic climate change. Fossil fuels will continue to
play a role in powering our economy for the foreseeable future,
but we must also invest more in renewable energy as a 21st
century solution to combat climate change, boost our job
markets, and reduce our dependence on fossil fuels over the
long term. I look forward to hearing the witnesses'
perspectives on the environmental and safety issues associated
with that project.
And with that, Mr. Chairman, I yield back.
[The prepared statement of Ms. Bonamici follows:]
Prepared Statement of Environment Subcommittee Ranking Member Suzanne
Bonamici
Than you, Chairman Stewart and Chairwoman Lummis. I want to welcome
our witnesses and thank you all for participating in today's hearing
about the Keystone XL Pipeline. The discussion we are having today is
important because the Keystone pipeline project highlights an issue
that this Committee has been debating for a long time: climate change
caused by human activity. There has been disagreement with colleagues
across the aisle regarding the human role in the changing climate. For
that reason, I was pleased two weeks ago when the Subcommittee on the
Environment held a climate change hearing in which all the witnesses
agreed in their testimony that global warming is happening, humans are
contributing to it, and the country must take action to address it.
This is relevant to today's hearing because the Keystone XL
Pipeline showcases our continued dependence on fossil fuels, the use of
which contributes greatly to anthropogenic climate change. I am pleased
that this hearing will also address potential negative impacts of the
pipeline on those living and working along the proposed pipeline route,
including those engaged in agricultural activities. I'm glad that the
witnesses will also be discussing the pipeline's impact on land use and
that they will discuss potential threats that large-scale pipeline
projects can pose to fragile water resources. Also significant are
local concerns about the clean-up of potential spills from the
pipeline. I join many of my colleagues who know that we must be
thoughtful and informed before we give the go-ahead to traverse
thousands of miles of the American countryside with new infrastructure
for an old energy source.
According to the State Department's Draft Environmental Impact
Statement, the Keystone XL Pipeline will bring thousands of temporary
construction jobs and positively impact local economies at a time when
our country is navigating through a slow economic recovery. These
short-term benefits to our economy should not be overlooked, but they
should be considered alongside the substantial environmental and safety
challenges presented by the pipeline, including the potentially
disastrous impact on the local economy if a spill were to occur.
That happened not too long ago in Michigan. A pipeline transporting
oil from Canada to U.S. destinations ruptured and spilled 800,000
gallons of crude oil into the Kalamazoo River. Now, three years later,
cleanup has yet to be completed because of the difficult task of
getting the heavy oil sands out from the river floor where much of it
remains submerged. The EPA recently recommended that the State
Department take a closer look at how spills of oil sands may require
different response actions or equipment from response actions for
conventional oil spills. That's why Congress requested that the
National Academy of Sciences study this type of oil, and it is my hope
that we will soon know more about what differences exist between oil
sands and conventional crudes.
In closing, although I would never claim to speak for all Democrats
on the Keystone projct specifically, we do all agree that our country
must set ambitious goals to combat anthropogenic climate change. Fossil
fuels will continue to play a role in powering our econmoy for the
foreseeable future, but we must also invest more in renewable energy as
the 21st century solution to combat climate change, boost our job
markets, and reduce our dependence on fossil fuels over the long term.
I look forward to hearing the witnesses' perspectives on the
environmental and safety issues associated with this project. And with
that, Mr. Chairman, I yield back.
Chairman Stewart. I thank you, Ms. Bonamici.
Noting that the Chair of the Subcommittee on Energy, Mrs.
Lummis, is on her way but not here yet, we will now turn to the
Full Committee Chair, Mr. Smith.
Chairman Smith. Thank you, Mr. Chairman.
In December 2008, then-President-elect Obama announced a
massive new economic stimulus proposal, which he said would
focus on ``shovel-ready'' construction projects. Less than
three months earlier, TransCanada submitted to the Federal
Government what might be considered the epitome of all shovel-
ready projects: the request to build a 1,700 mile Keystone
pipeline from Alberta to the Texas Gulf. Four-and-a-half years
have passed since the President made ``shovel-ready'' part of
the political discussion.
Today, TransCanada still waits for the Federal Government
to decide whether allowing the company to create more than
40,000 jobs building a pipeline to deliver oil from an ally is
in our national interest. Many Americans would consider such a
decision to be simple, but the Federal Government has required
millions of dollars, years of study, and thousands of pages of
reports. Fortunately, the end is in sight. In the coming
months, the Obama Administration will decide the future of the
pipeline.
Today, we will discuss the scientific and environmental
factors at the center of the debate that surrounds this
decision. Ultimately, there are two major concerns in this
debate: (1) whether we have the ability to construct and
operate the pipeline safety, and (2) whether the pipeline's
construction will contribute significantly to climate change.
On both of these questions, extensive analysis undertaken by
the State Department has affirmed the safety and environmental
soundness of the project. For example, with respect to
greenhouse gas emissions, the worst-case scenario projected
that approval of the pipeline could result in a U.S. annual
carbon dioxide emissions increase of only 12/1000 of one
percent.
The Keystone pipeline creates jobs and enhances our energy
independence with minimal impact on the environment. This
project, which is been thoroughly evaluated, should be approved
immediately. I hope today's discussion will provide Members a
useful scientific and environmental background for decision
making as we move to consider legislation regarding Keystone on
the House floor later this month.
Thank you, Mr. Chairman, and I will yield back.
[The prepared statement of Mr. Smith follows:]
Prepared Statement of Full Committee Chairman Lamar S. Smith
In December 2008, then-President-elect Obama announced a massive
new economic stimulus proposal, which he said would focus on ``shovel-
ready''construction projects. Less than three months earlier,
TransCanada submitted to the Federal Government what might be
considered the epitome of all shovel-ready projects: a request to build
the 1,700-mile Keystone Pipeline from Alberta to the Texas Gulf.
Four and a half years have passed since the President made ``shovel
ready'' part of the political discussion. Today, TransCanada still
waits for the Federal Government to decide whether allowing a company
to create more than 40,000 jobs building a pipeline to deliver oil from
an ally is in our national interest. Many Americans would consider such
a decision to be simple. But the Federal Government has required
millions of dollars, years of study, and thousands of pages of reports.
Fortunately, the end is in sight. In the coming months, the Obama
Administration will decide the future of the pipeline. Today, we will
discuss the scientific and environmental factors at the center of the
debate that surrounds this decision.
Ultimately, there are two major concerns in this debate: (1)
whether we have the ability to construct and operate the pipeline
safely, and (2) whether the pipeline's construction will contribute
significantly to climate change.
On both of these questions, extensive analysis undertaken by the
State Department has affirmed the safety and environmental soundness of
the project. For example, with respect to greenhouse gas emissions, the
worst-case scenario projected that approval of the pipeline could
result in a U.S. annual carbon dioxide emissions increase of only 12
one-thousandths of one percent.
The Keystone Pipeline creates jobs and enhances our energy
independence with minimal impact to the environment. This project,
which has been thoroughly evaluated, should be approved immediately. I
hope today's discussion will provide Members a useful scientific and
environmental background for decision making, as we move to consider
legislation regarding Keystone on the House floor later this month.
Thank you, and I yield back.
Chairman Stewart. Thank you, Mr. Smith.
The Chair now recognizes the Ranking Member of the
Subcommittee on Energy, Mr. Swalwell.
Mr. Swalwell. Thank you, Chairman Stewart and Chairwoman
Lummis, for holding this hearing today. I also want to thank
our witnesses for being here, and I do appreciate the
opportunity to examine the costs and benefits of this project
in greater detail.
And Chairman Stewart, you did point out the length of time
it has taken, which I do appreciate. We want to move projects
along as quickly as possible. But I do think when you are
dealing with so many miles, almost 1,000 miles with this
particular project, it is in our interest to make sure that we
get it right because, although it has taken four years to look
at this project, it could take only a matter of seconds to
cause devastating consequences to our environment, our Earth,
and people around the pipeline. And I think it is worth making
sure that we get it right.
And I will take the opportunity to point out that it has
been over two months now that we have been waiting for a
Secretary of Energy to be approved by the Senate, and that
confirmation of Ernest Moniz has been held up in the Senate and
has been blocked by one individual. So I am also frustrated
about how long it takes for things to happen. I think it is an
antiquated, bizarre system where one individual can block a
Secretary from being approved, and that individual, the
Secretary of Energy, would play a prominent and important role
in this project and other renewable projects. So I hope that
the Senate starts to move along this nominee so that we can get
to work and see what this project's impact will continue to be,
and I am in favor of moving things along as well.
I also think it has been pretty clear and I have made it
known from this position that I believe in a balanced, all-of-
the-above approach when it comes to our energy production, but
when it comes to determining whether we should approve a
project as large and long-lasting as a pipeline that would
transport 830,000 barrels of tar sands oil from Canada to the
Gulf Coast every day, I want to make sure that we have a full
and clear understanding of the total number of U.S. jobs we can
expect the Keystone XL pipeline to create, the impacts on
climate change, and the chances and consequences of a major
spill.
I always have said that if we can make it safe, we should
make it happen. If we find we can't make it safe, we should
find ways to make it happen. And ultimately, if there is no way
to make it environmentally safe, then I don't think we should
make it happen. I also think that if we are looking forward and
we are looking at that pie chart of where our energy supply is
coming from, it is in our best interest to continue to expand
the part of the chart that comes from renewables, which, right
now, I believe is too small and there is a lot greater
potential for us to expand that part of the chart, which I also
believe and history has shown can create made-in-America jobs,
just as many jobs as the Keystone pipeline would create.
So I look forward to discussing these important issues with
you today. And with that, I yield back the balance of my time.
[The prepared statement of Mr. Swalwell follows:]
Prepared Statement of Ranking Member of the Committee on Energy Eric
Swalwell
Thank you, Chairman Stewart and Chairwoman Lummis, for holding this
hearing today, and I also want to thank the witnesses for being here. I
appreciate the opportunity to examine the costs and benefits of this
controversial project in greater detail.
I agree with those who say we need an``all-of-the-above'' approach
to energy production. But when it comes to determining whether we
should approve a project as large and long-lasting as a pipeline that
would transport 830,000 barrels of tar sands oil from Canada to the
Gulf Coast every day. I want to make sure that we all have a clear
understanding of the total number of U.S. jobs we'd expect the Keystone
XL Pipeline to create, the impacts on climate change, and the chances
and consequences of a major spill.
I look forward to discussing these important issues with each of
you today. With that, I yield back the balance of my time.
Chairman Stewart. Thank you. Thank you, Mr. Swalwell.
We will--it is now time to introduce the members of our
panel today and once again with our gratitude for you being
here. It takes me a little bit to introduce them because they
are very distinguished with long resumes.
Our first witness is Mr. Lynn Helms, the Director of the
Department of Mineral Resources, the North Dakota Industrial
Commission. Previously, he has worked as a Production Engineer,
a Reservoir Engineer, and an Asset Team Leader on projects in
Abu Dhabi, Alaska, North Dakota, Texas, and Wyoming.
Our second witness is Mr. Brigham A. McCown, the Principal
and Managing Director of United Transportation Advisors. Mr.
McCown has over 25 years of executive, legal, and operations
management experience in areas pertaining to energy,
transportation, and the environment. He most recently served as
the first acting Administrator of the Pipeline and Hazardous
Materials Safety Administration at the U.S. Department of
Transportation.
Our third witness is Mr. Anthony Swift, an attorney for the
International Program at the Natural Resources Defense Council.
Prior to working at the NRDC, Anthony worked as a Policy
Analyst for the Department of Transportation where he worked on
alternative fuels, efficiency standards, and a National
Environmental Policy Act review process.
And our final witness today is Mr. Paul ``Chip''
Knappenberger, the Assistant Director at the Center for the
Study of Science at the Cato Institute. Mr. Knappenberger has
over 25 years of experience in climate research and public
outreach, including 13 years with the Virginia State
Climatology Office and 17 years as a Research Coordinator for
the New Hope Environmental Services, Incorporated.
As our witnesses should know, spoken testimony is limited
to five minutes each, after which Members of the Committee have
five minutes each to ask questions. Your written testimony will
be included in the record of the hearing.
And I now recognize our first witness, Mr. Helms, for five
minutes.
STATEMENT OF MR. LYNN HELMS, DIRECTOR,
DEPARTMENT OF MINERAL RESOURCES,
NORTH DAKOTA INDUSTRIAL COMMISSION
Mr. Helms. Good morning, Mr. Chairman and Members of the
Committee. Thank you for the invitation to speak to the
Committee on Science, Space, and Technology. I love that title.
We try to do our things in North Dakota on a science basis. We
try--this one obviously the science is in, and now we are into
the political phase of the Keystone XL pipeline.
Why does North Dakota have a stake in this? North Dakota is
the home of the Bakken, as you well know, the largest
unconventional resource discovered in the United States of
America. We are currently producing 780,000 barrels of oil per
day. We have a commitment to place 60,000 barrels of oil per
day on Keystone XL the day that it opens, and that can be
expanded to 100,000 barrels a day. That was a tough negotiation
with TransCanada to get that on ramp in our neighbor in Baker,
Montana.
The shortfall in pipeline capacity out of the State of
North Dakota has resulted in a very disrupted transportation
system, and you see that on page two of my testimony. Seventy-
one percent of our oil now moves out of the State by rail. And
I personally authored a paper in 2006 that said I couldn't
believe that would ever happen. It was uneconomic, it was too
expensive, it didn't make sense, it was impractical, but 71
percent of our crude oil now moves by rail out of the State of
North Dakota.
In addition to that, 10,000 barrels a day gets trucked into
Canada to find a pipeline and another 35,000 barrels travels by
semi back into North Dakota to reach those rail facilities to
move out of the State, so it's a very disrupted system that we
have in North Dakota.
What does Keystone mean to western North Dakota? It would
mean 300 to 500 less long-haul truck trips per day from oil and
gas wells to rail stations in western North Dakota. Now, our
figures show that those trucks emit 2.9 times the greenhouse
gases, they commit three to four times the number of spills
that a pipeline does. They produce dust; they produce
accidents. So Keystone XL, for every year that it is in
service, it is going to reduce North Dakota's greenhouse gas
emissions by almost one million kilograms per day. It is going
to reduce oil spills by 60 to 80 per year. It is going to
reduce traffic fatalities by three to six and injury accidents
by 85 to 100.
So let's turn that around. For every year the Keystone is
delayed, we emit one million kilograms per day of greenhouse
gases that could not be emitted. We suffer 60 to 80 oil spills
per year that don't have to happen, three to six people die on
North Dakota highways unnecessarily, and 85 to 150 people
suffer serious traffic injuries, and that doesn't need to
happen.
I took a look at the SEIS. The spill frequency and impact
analysis are consistent with our experience in North Dakota
with pipeline construction and what we have seen. The
greenhouse gas evaluation is consistent with North Dakota's
experience. As I stated, I co-authored a paper in 2006 that was
pretty dismissive of rail transportation for Bakken crude oil,
and yet, changes in the market, changes in rail efficiency, and
people being innovative in the way they move crude oil now puts
71 percent of our oil on the rails.
One last thing: my experience with Keystone XL goes a
little bit beyond the borders of North Dakota. My family lives
in Harding County, South Dakota. They built a brand-new school
based on the property taxes the Keystone XL is expected to pay.
My sister-in-law is a teacher in that school. My son-in-law is
a farmer in York County, Nebraska. Keystone XL will go right
across 1/4 of his land. We have had lots of discussions about
it. He has no qualms about it. He irrigates out of the Ogallala
aquifer, and he is completely prepared for the pipeline to
transverse his farmland.
So we believe in the State of North Dakota that it is time
to build Keystone XL. I yield the remainder of my time for
questions. Thank you, Mr. Chairman.
[The prepared statement of Mr. Helms follows:]
[GRAPHIC] [TIFF OMITTED] T1190.008
[GRAPHIC] [TIFF OMITTED] T1190.009
[GRAPHIC] [TIFF OMITTED] T1190.010
[GRAPHIC] [TIFF OMITTED] T1190.011
[GRAPHIC] [TIFF OMITTED] T1190.012
Chairman Stewart. Thank you, Mr. Helms.
Mr. McCown.
STATEMENT OF MR. BRIGHAM A. MCCOWN,
PRINCIPAL AND MANAGING DIRECTOR,
UNITED TRANSPORTATION ADVISORS, LLC
Mr. McCown. Chairman Stewart, Ranking Member Bonamici,
Chairman Lummis, and Ranking Member Swalwell, thank you--and
distinguished Members, thank you for the invitation to be here
today to testify at this joint hearing on Keystone XL.
You know, this process is important and, I think, even
crucial to better understanding the role that pipelines play in
our everyday lives. The Pipeline and Hazardous Materials Safety
Administration, an agency within the USDOT, is responsible for
overseeing the safe and secure movement of over one million
hazardous material shipments each and every day by air, by
land, by sea, by rail, and yes, by pipeline. You know, and at
no point in our Nation's history has the role and future of our
national pipeline infrastructure been subject to more careful
review and scrutiny.
We have 2.6 million miles of pipeline in this country and
that is enough to circle the Earth 100 times. And we have, for
close to half a century, transported the lion's share of our
Nation's energy supplies via pipeline. And for most of that
time, our underground energy highways, if you will, have
remained out of sight and out of mind. That, of course, is no
longer the case, given the heated debate surrounding the
approval of the remaining portion of the Keystone pipeline
system. Last year, pipelines transported 11.3 billion barrels
of crude--that is B as in billion--barrels of crude and refined
products. Of that amount, pipeline operators safely transported
these supplies 99.999952 percent of the time. Yes, pipeline
releases can and do occur, but we also have to understand that
the goal of our robust and mature pipeline safety regulations
is zero accidents, zero releases. And when a pipeline upset
does occur, comprehensive federal regulations exist to minimize
the consequences of any such releases.
That record is strong and even getting better. In fact,
thanks to strong government oversight by PHMSA, new
technologies, and a shared approach to risk management by all
stakeholders, pipeline accidents continue to decline. Over the
last decade, pipeline spills have decreased--the number--by 59
percent and total volume of releases has decreased by 43
percent even as the overall production has increased, both the
mileage of active pipelines and the freight tons shipped by
them. I think this is an extraordinary figure when you consider
that pipelines transport almost 2/3 of all the energy supplies
consumed in our country each year.
Although the Draft EIS dedicates 200 pages to the rail
alternative, Federal Government statistics on accident data
reveal that pipelines are approximately 4-1/2 times safer than
rail and 64 times safer than commercial motor vehicle if you
look at freight tons shipped. To take it a step further, on a
per-ton-mile basis, those figures translate that pipelines are
over five times safer than rail and almost 500 times safer than
commercial motor vehicles or trucks.
Pipelines are also unique in that they are the only
transportation system we have that does not require a round-
trip to load and deliver supplies. Rail and truck have their
place as an integral component of a tightly interwoven supply-
chain system. That said, pipelines represent the best when it
comes to hauling large volumes of energy products over great
distances.
Critics of Keystone are quick to highlight the claim that
oil sands resources like those transported by Keystone are more
corrosive than traditional crude oil, thus, more likely to
spill. This is simply not true. The Federal Government has not
documented a single instance where the release of oil sands
crude was caused by internal corrosion of the pipeline. The
characteristics of diluted oil sands crude are similar to
conventional crude and, in fact, Canadian diluted bitumen,
sometimes called dilbit, is actually less corrosive than oil
from Mexico, Colombia, and even California.
While opponents claim the opposite, no studies have
validated such an assumption. While it may be tempting and
politically expedient to point to corrosiveness as something to
be feared, the fact that it makes for a good talking point
doesn't make it true. Scrutiny is, of course, welcome and a
warranted thing, but in the face of this analysis, it is of
utmost importance that we as a Nation recognize the
indispensable role that pipelines play. Let there be no
mistake, energy plays a crucial role in our Nation's economy,
and energy security depends on important infrastructure
projects like Keystone.
Thank you, Mr. Chairman.
[The prepared statement of Mr. McCown follows:]
[GRAPHIC] [TIFF OMITTED] T1190.013
[GRAPHIC] [TIFF OMITTED] T1190.014
[GRAPHIC] [TIFF OMITTED] T1190.015
[GRAPHIC] [TIFF OMITTED] T1190.016
[GRAPHIC] [TIFF OMITTED] T1190.017
[GRAPHIC] [TIFF OMITTED] T1190.018
[GRAPHIC] [TIFF OMITTED] T1190.019
[GRAPHIC] [TIFF OMITTED] T1190.020
[GRAPHIC] [TIFF OMITTED] T1190.021
[GRAPHIC] [TIFF OMITTED] T1190.022
[GRAPHIC] [TIFF OMITTED] T1190.023
[GRAPHIC] [TIFF OMITTED] T1190.024
[GRAPHIC] [TIFF OMITTED] T1190.025
[GRAPHIC] [TIFF OMITTED] T1190.026
[GRAPHIC] [TIFF OMITTED] T1190.027
[GRAPHIC] [TIFF OMITTED] T1190.028
Chairman Stewart. Thank you, Mr. McCown.
Mr. Smith? I am sorry, Mr. Swift.
STATEMENT OF MR. ANTHONY SWIFT,
ATTORNEY, INTERNATIONAL PROGRAM,
NATURAL RESOURCES DEFENSE COUNCIL
Mr. Swift. Thank you. Thank you for today's opportunity to
testify on the environmental issues associated with the
Keystone XL tar sands pipeline. My name is Anthony Swift. I am
an Energy Policy Analyst with the Natural Resources Defense
Council. NRDC is a national, nonprofit organization dedicated
to protecting public health and the environment.
Keystone XL would transport tar sands crude, primarily in
the form of deluded bitumen through the United States to the
Gulf Coast where the State Department forecasts most of it will
be refined and exported internationally. Diluted bitumen is a
mixture of bitumen tar sands, which is heavier than water and
too thick to move by pipeline and light volatile natural gas
liquids. Tar sands of diluted bitumen differ substantially from
the lighter conventional crude historically moved on the U.S.
pipeline system. Pipelines moving thick, diluted bitumen
operate at higher temperatures than pipelines moving less
viscous, lighter crudes.
In the United States, the only area with history moving
heavy crudes with similarities to tar sands is a small network
of pipelines in California. Studies of California's pipeline
system show that the higher a pipeline's operating temperature,
the higher its spill risk. Pipelines operating at temperatures
above 100 degrees Fahrenheit spilled up to 23 times more often
due to external corrosion than conventional pipelines. The
State Department's Draft Environmental Review estimated that
Keystone XL would operate at between 130 and 150 degrees
Fahrenheit.
The U.S. pipeline system may already be showing the strain
of moving tar sands. The first imports of diluted bitumen came
from pipelines in northern Midwest in the late 1990s and have
increased exponentially since then. Accident reports show that
the northern Midwestern States moving the largest volumes of
diluted bitumen for the longest period of time spilled 3.6
times more crude per mile than the national average over the
last three years. The Enbridge mainline, the first pipeline to
move significant volumes of diluted bitumen into the United
States, spilled nearly a million gallons into the Kalamazoo
River in 2010 after a rupture caused by external corrosion and
stress corrosion cracking. In March, the Pegasus pipeline
spilled over 200,000 gallons of tar sands crude into the
suburban Arkansas community of Mayflower. This week, another
spill on the same pipeline was discovered in Missouri.
We have seen with recent pipelines that special conditions
do not translate--necessarily translate to safer pipelines.
TransCanada's Keystone I and Bison pipelines are examples.
Though both carry special conditions, the first leaked 14 times
in its first year and the second exploded.
In addition to the risk of ruptures, investigators have
shown major gaps in leak-detection technology and regulations.
These gaps are most apparent with high-capacity pipelines like
Keystone XL. According to State, Keystone XL's real timely
detection system cannot detect leaks smaller than half-a-
million gallons a day. Once spilled, tar sands diluted bitumen
has proven significantly more damaging and difficult to clean
than conventional crude, particularly in water bodies. After
nearly three years and $1 billion have been spent cleaning the
Kalamazoo tar sands spill, over 38 miles of that river are
still contaminated with tar sands. Spill responders have found
that conventional methods prove ineffective for containing and
cleaning tar sands spills.
In addition to the risk of spills, Keystone XL is a
lynchpin for tar sands expansion and the climate emissions
associated with it. Without Keystone XL, tar sands production
growth will take a substantially reduced trajectory. North
Dakota producers have found rail to be feasible and, in many
cases, preferable as a transportation option. Late last year, a
200,000-barrel-a-day pipeline proposal was canceled due to lack
of interest by North Dakota producers using rail. There is a
litany of reasons why rail isn't feasible to supply tar sands
production growth.
The lack of alternatives for Keystone XL has been observed
by tar sands producers themselves, the financial industry, and
Canada's own Natural Resources Minister. The impact of--tar
sands would have on U.S. climate emissions is substantial. The
Keystone XL tar sands pipeline would, if approved, be
responsible for at least 181 million metric tons of carbon
dioxide each year, comparable to the tailpipe emissions for
more than 37 million cars or 51 coal-fired power plants.
The significance of these emissions to global climate
change can be summed up in this way: if you find your house is
on fire, the question of how much gasoline you would have to
pour on the fire to really make a difference given its size is
a wrong one to ask, at least if your goal is to put the fire
out. Tar sands are significantly more carbon-intensive than
conventional crude, and the choice to replace our conventional
fuel stock with tar sands is the wrong one if we are serious
about addressing climate change. Simply stated, the Keystone XL
pipeline is not in the Nation's interest.
NRDC thanks you for the opportunity to present its views,
and I would be pleased to answer any questions you may have.
[The prepared statement of Mr. Swift follows:]
[GRAPHIC] [TIFF OMITTED] T1190.029
[GRAPHIC] [TIFF OMITTED] T1190.030
[GRAPHIC] [TIFF OMITTED] T1190.031
[GRAPHIC] [TIFF OMITTED] T1190.032
[GRAPHIC] [TIFF OMITTED] T1190.033
[GRAPHIC] [TIFF OMITTED] T1190.034
[GRAPHIC] [TIFF OMITTED] T1190.035
[GRAPHIC] [TIFF OMITTED] T1190.036
[GRAPHIC] [TIFF OMITTED] T1190.037
[GRAPHIC] [TIFF OMITTED] T1190.038
[GRAPHIC] [TIFF OMITTED] T1190.039
[GRAPHIC] [TIFF OMITTED] T1190.040
[GRAPHIC] [TIFF OMITTED] T1190.041
[GRAPHIC] [TIFF OMITTED] T1190.042
Chairman Stewart. Thank you, Mr. Swift.
And now, our final witness, Mr. Knappenberger.
STATEMENT OF MR. PAUL KNAPPENBERGER,
ASSISTANT DIRECTOR, CENTER FOR THE
STUDY OF SCIENCE, CATO INSTITUTE
Mr. Knappenberger. Good morning. Chairman Stewart,
Chairwoman Lummis, and other distinguished Members of the
Subcommittee, I thank you for the opportunity to offer
testimony this morning. I am Paul Knappenberger, Assistant
Director of the Center for the Study of Science at the Cato
Institute, a nonprofit, nonpartisan public policy research
Institute located here in Washington, D.C.
Before I begin my testimony, I would like to make clear
that my comments are solely my own and do not represent any
official position of the Cato Institute.
Climate change results from a variety of factors, both
human and natural. The primary concern raised over the pipeline
involves the carbon dioxide emissions that will result from the
production and use of the oil that the pipeline will carry. In
its Supplemental Environmental Draft--Environmental Impact
Statement, the State Department finds--and I think that there
is broad agreement on this point--that a barrel of oil produced
from the Canadian tar sands carries about a 17 percent carbon
dioxide emissions premium compared to the average barrel of oil
finding its way into the U.S. market.
Now, the disagreement between the State Department, the
Environmental Protection Agency, and several environmental
groups involves how many new carbon dioxide emissions this 17
percent premium results in when it is applied to the 830,000
barrels of oil that the pipeline will carry each day. The State
Department concludes that the economy of the tar sands is such
that it will come to market one way or another whether or not
the Keystone XL pipeline is ever built. It thus finds virtually
no additional carbon dioxide emissions resulting from the
project.
The EPA contends that the State Department is too quick to
reach such a conclusion. The EPA argues that without the
pipeline, much of the oil will remain in the ground, and thus,
while the existence of the pipeline won't result in more oil
being used in the United States, it will result in a 17 percent
emissions premium on the pipeline's portion of that oil. The
EPA gives this extra amount as 18.7 million metric tons of
carbon dioxide per year.
And several environmental organizations take the viewpoint
that while the pipeline may not increase the amount of oil used
in the United States, the oil that it displaces from the U.S.
market will be consumed by other countries as the global demand
for oil continues to grow. They calculate that the pipeline
will result in about 181 million metric tons of additional
carbon dioxide each year.
So in these terms, the differences among the groups appear
large and contentious, and much of the protestation involving
the Keystone XL pipeline focuses on these emissions numbers.
But these protests are largely misplaced. It is imperative to
keep in mind that the endgame is climate change, and carbon
dioxide emissions are not climate change. They influence
climate change but they are not a measure of it. Therefore,
before any type of assessment as to the potential climate
impact of the pipeline can be made, it is essential to
translate carbon dioxide emissions into some sort of climate
unit, like the global average temperature change. In other
words, how much global warming will the pipeline produce? Isn't
that what everyone wants to know?
Now, why is it then that such numbers are absent in the
discussions of the impacts of the pipeline? It is not as if
there is no good way of calculating them. This is precisely
what climate models are designed to do. Climate models emulate
the Earth's climate system and allow researchers to change
various influences upon it, such as adding additional carbon
dioxide emissions, and then seeing what happens in the computer
simulations.
So why haven't they been applied to predict the climate
impact of the pipeline? Because if they were, the answer would
be exceedingly tiny. For example, using a climate model
emulator that was developed under support of the EPA, I find
that in the case of the State Department's analysis, as there
are very few additional carbon dioxide emissions resulting from
the pipeline, there are essentially--there is essentially no
associated climate change. Under the EPA's assumptions, the
average temperature rise works out to less than 0.00001 degree
C per year. That is 1/100,000 of a degree.
And even under the assumption that all the Keystone XL oil
was additional oil in the global supply, the extra warming is
still less than 1/10,000 of a degree per year. In other words,
if the pipeline were to operate at full capacity for the next
1,000 years, it would raise the global average temperature by
less than 1/10 of a degree.
It is this kind of information, not information on carbon
dioxide emissions, that is required to properly assess the
climate change aspect of this or any other proposed project or
regulation. In these terms, the difference between the State
Department's Environmental Impact Statement and those of its
critics all but vanished. No matter whose carbon dioxide
emissions estimate is used, the climate impact of the oil
transported by the pipeline is too small to measure or carry
any physical significance. In deciding the fate of the Keystone
XL pipeline, it is important not to let symbolism cloud these
facts.
Thank you very much.
[The prepared statement of Mr. Knappenberger follows:]
[GRAPHIC] [TIFF OMITTED] T1190.043
[GRAPHIC] [TIFF OMITTED] T1190.044
[GRAPHIC] [TIFF OMITTED] T1190.045
[GRAPHIC] [TIFF OMITTED] T1190.046
[GRAPHIC] [TIFF OMITTED] T1190.047
[GRAPHIC] [TIFF OMITTED] T1190.048
[GRAPHIC] [TIFF OMITTED] T1190.049
[GRAPHIC] [TIFF OMITTED] T1190.050
Chairman Stewart. Thank you, Mr. Knappenberger.
To all the witnesses, thank you again for your testimony,
for your expertise.
I would remind the Members that when we do ask our
questions, Committee rules limit the questioning to five
minutes. And we look forward to asking and prodding you a
little bit on that, but before we do, we are going to back up
just a little bit and with agreement with the Ranking Minority
Member, we are going to go to the Chairwoman of the
Subcommittee on Energy, Mrs. Lummis, and allow her to provide
her opening statement.
Mrs. Lummis. Well, thank you, Chairman Stewart. And I
apologize for my conflicting meetings this morning. And thank
you for allowing me to join you late. I was over at the Natural
Resources Committee.
This is such an important subject for our country, and so I
really want to thank you for scheduling this hearing on the
science and technical issues related to the Keystone XL
pipeline, which falls squarely within the jurisdiction of this
Committee. And I want to thank the witnesses for being here
today as well.
As we all know, the energy landscape is changing
dramatically. We have gone in the United States from being a
net importer to a net exporter of petroleum products. At the
same time, we have gone from being a net exporter of food to a
net importer, so lots of things changing in our country. We
have now become a global leader in natural gas production and
are expected to lead in oil production by the end of the
decade. Instead of building import terminals for LNG, we are
modifying these facilities to export our abundant natural gas.
And we have countries all over the world that would be so happy
to receive our abundant natural gas resources.
And despite these changes, the Keystone XL pipeline
languishes. Now, this project would allow us to decrease our
reliance on unfriendly sources of oil and increase our trade
relationship with Canada. Approval of the pipeline would also
carry Bakken crude being produced in North Dakota. I deeply
appreciate the comments of our witness, Mr. Helms, on that
subject earlier.
The pipeline offers a safe and permanent solution to
alleviate the bottleneck of U.S. crude oil in the midcontinent.
In fact, it is the safest solution that exists. And I can say
that as a person who grew up and still ranch next to an oil
refinery. And we have lots of problems with the oil refinery,
and I am grateful for RCRA and other environmental laws and for
environmental regulators that help us regulate our neighborly
relationship with a refinery. The pipelines have never been the
problem. The pipelines have been the safest part of that
operation.
The State Department, in fact, has concluded that the
Keystone XL pipeline, with its 57 extra safety features, would
have a degree of safety over any other domestic pipeline. Yet
this Administration persists in stopping the project, saying in
2012 that a deadline requiring the President to approve or deny
the pipeline ``prevented a full assessment of the pipeline's
impact.'' Now, this was after thousands of pages of analysis
and tens of thousands of public comments over a four-year
period.
Now, we have had another year and another report, still no
response from the Administration other than to stall the
project to death. Now, that is not too surprising to some of
us, because we are finally of the realization that all-of-the-
above to this President must mean something other than
hydrocarbons. But I don't understand how the President can
claim to be committed to job creation and economic growth and
still obstruct this project because it would support both.
According to the State Department, the project would support
over 42,000 jobs and result in $2 billion in the pockets of
hard-working Americans. That would be such a shot in the arm to
our economic recovery.
And that is just beginning. Direct expenditures on
construction and materials could amount to $3.3 billion, and
sales and use tax could generate another $65 million in revenue
for States, not to mention the positive impact that trade with
Canada has on our U.S. economy. According to the U.S. Census
Bureau, for every dollar the United States spends on Canadian
goods and services, Canada spends approximately 89 cents on
U.S. goods and services.
So this testimony today is deeply appreciated. It is very
helpful. It is going to be very interesting for us to have the
opportunity to quiz you about the very disparate conclusions
that you have drawn and expressed in your opening statements,
but I do want to thank you, Mr. Chairman, for allowing me to
present opening remarks.
And I yield back.
[The prepared statement of Mrs. Lummis follows:]
Prepared Statement of Chairwoman of the Energy Subcommittee Cynthia
Lummis
Good morning and welcome to today's hearing, ``Keystone XL
Pipeline: Examination of Scientific and Technical Issues.'' I want to
thank Chairman Stewart for holding this hearing with me on such an
important and pressing issue. I also want to thank the witnesses for
being here today, and I look forward to their testimony.
In the last few years, the U.S. energy landscape has changed
dramatically. We have gone from a net importer to a net exporter of
petroleum products; we have become the global leader in natural gas
production and are expected to lead in oil production by the end of the
decade. Instead of building import terminals for LNG, we are modifying
these facilities to export our abundant nautral gas resources.
Despite these changes, one issue has remained stagnant over the
last four years, and that is the approval of the Keystone XL Pipeline.
This project would allow us to decrease our reliance on unstable or
unfriendly sources of oil and increase our trading relationship with
Canada, a friendly, democratic, and stable ally. Approval of the
pipeline would also facilitate our own oil development, as the pipeline
would also carry Bakken crude being produced in North Dakota.
In addition to increasing our energy security, the pipeline offers
a safe and permanent solution to alleviate the bottleneck of U.S. crude
oil in the midcontinent. In fact, it's the safest solution that exists.
The State Department concluded Keystone XL, with its 57 extra safety
features, would have a degree of safety over any other domestic
pipeline. Yet President Obama has slow-walked the project, saying in
2012 that a deadline requiring him to approve or deny the pipeline
``prevented a full assessment of the pipeline's impact.'' This was
after thousands of pages of analysis and tens of thousands of public
comments over a four-year period.
Another year and another report later, the Administration has yet
to approve the project. That the Administration would slow-walk a
project that supports fossil fuels is perhaps no surprise to some of
us. However, what I cannot understand is how the President can
rhetorically claim to be committed to job creation and economic growth,
and in practice obstruct a project that would support both. According
to the State Department, the project would support over 42,000 jobs and
result in two billion dollars in the pockets of hardworking Americans.
This would represent a significant contribution to our slow economic
recovery.
And that is just the beginning. Direct expenditures on construction
and materials could amount to $3.3 billion dollars, and sales and use
taxes could generate another $65 billion dollars in revenue for the
affected States. Yet another often-overlooked economic benefit is the
positive impact that trade with Canada has on the U.S. economy--trade
with Canada benefits the U.S. economy more than trade with any other
nation in the world. According to the U.S. Census Bureau, for every
dollar the U.S. spends on Canadian goods and services, Canada spends
approximately 89 cents on U.S. goods and services. I hope this
Administration realizes that actions speak louder than words. To voice
support for job creation and economic growth is one thing; to actually
do something about it is another. I hope the President will prioritize
action over empty rhetoric and approve the project as soon as possible.
We have waited long enough.
Thank you, Mr. Chairman. I yield back.
Chairman Stewart. Thank you, Ms. Chairwoman.
If there are other Members who wish to submit additional
opening statements, your statements will be added to the record
at this point.
And now, we come to the questioning of the panel, and as
all of us look forward to this, I recognize myself for five
minutes for my questions.
You know, I have to say, just as an aside, this problem
puzzles me. It seems to me that this is something that there
should be broad and bipartisan support for. That the objections
to the pipeline are a great example of straining at a gnat and
swallowing a camel, I just think you have to work--you have got
to work hard to find real objections to this project.
And I understand the keys are, you know, can we operate it
safely and is it going to increase CO2 emissions in
a meaningful way? And I think that you have done a great job of
answering those questions. And when you weigh that against
the--you know, the cost-benefit analysis of the economic
impacts and the national security interests, again, it is
difficult for me to understand why this is not an easy decision
and, frankly, a decision that should have been made, well,
sometime ago, certainly within the last four years.
The environmental groups rest their opposition on the
proposed project on the assumption that it will contribute to
climate change, and I think there are two false assumptions
here. One of them is very meaningful to me as a former business
owner, the presumption that in the absence of the pipeline,
this natural resource will remain in the ground, and I just
can't imagine an economic analysis or an economic model that
would prove that. I mean it would work against everyone's self-
interest that are involved in this project to say that, well,
they can't pipe it; therefore, they are going to leave it.
And the second one would be that the emissions from the
sands production would have a significant impact on climate
change, which is what many of you have addressed here today. I
guess I would ask maybe Mr. Helms or maybe, you know, other
members of the panel if you want, Mr. McCown or Mr.
Knappenberger, if you want to jump in on this. And you have
answered it on some level already but I would like to go into
just a little more detail, first, your opinion on the first
presumption that is this oil would remain in the ground if we
are not able to pipe it. Mr. Helms, you look anxious to answer
this.
Mr. Helms. Thank you, Chairman Stewart. I am anxious to
answer it because people believe that the Bakken crude oil
would remain in the ground in the absence of pipeline
transportation, but the fact is that innovations in
transportation systems and innovations in markets seeking the
ideal market for the crude oil that was tailored to the crude
oil led to an abundance of rail transportation out of North
Dakota. So, as I stated, 71 percent of our crude oil now moves
by rail in the absence of pipelines. I think it is a faulty
presumption that the oil will stay in the ground in the absence
of Keystone XL pipeline. I think innovations will be put in
place by industry to move that oil some other way----
Chairman Stewart. And in this case----
Mr. Helms [continuing]. And those ways will be less safe
and more environmentally risky.
Chairman Stewart. And that is what I was going to re-
emphasize. In this case, the options are much, much worse than
having a pipeline.
Mr. Helms. That is right.
Chairman Stewart. Yes. Any other comments then?
Mr. McCown. Now, Mr. Chairman, I was just going to echo
those comments that, you know, this oil will find its way to
the market, and it is already flowing through other pipelines.
It is traveling by barge down the Mississippi River. Those
efforts will continue, so it is in our interest to make sure it
is transported as safely as possible, and that is with a brand-
new, state-of-the-art pipeline.
Chairman Stewart. To the--to other world markets, and the
Pacific Rim, for example, isn't it safe to say that our
standards on air quality and other environmental thresholds are
more stringent than if this oil were refined in India or China?
Mr. McCown. Absolutely. And, you know, the EPA is not in
China yet to my knowledge.
Chairman Stewart. Yes. So if you are interested in global
climate change and recognize that this is a global market and a
global problem, wouldn't you be advocating for this product to
be refining here in the United States where we have very strict
refining standards?
Mr. McCown. Absolutely. And that is my argument as well,
that, you know, this displaces oil from less stable nations, it
displaces oil that is being brought in from overseas, and I
think you have made a critical point on not only the emissions
but also on the energy security component as well.
Chairman Stewart. Okay. All right. Thank you. Thank you for
your responses.
And I now recognize Ms. Bonamici for her five minutes.
Ms. Bonamici. Thank you very much, Mr. Chairman.
Just in response to your comments, Mr. Chairman, I do want
to point out that the president of Canadian Natural Resources
Limited recently said long term we do need Keystone to be able
to grow the volumes in Canada. So I just wanted to point that
out, that there will be growth because of the Keystone pipeline
and we would need to keep that in mind.
Mr. Swift, in your testimony you talked about the number of
permanent jobs that are anticipated from the Keystone XL
pipeline, and there is no question that there will be several
thousand temporary construction jobs, no doubt about that, but
in terms of permanent jobs, you mentioned----
Mr. Swift. The State Department estimated that there would
be 35 permanent jobs.
Ms. Bonamici. Thirty-five jobs. And just to put that in
perspective, the Congressional Budget Office estimated that
there will be 750,000 jobs lost because of sequestration, so I
just want to put that in perspective. We are talking about 35
permanent jobs.
In your testimony, Mr. Swift, as well as in the EPA's April
22, 2013, letter to the State Department commenting on the
Draft Environmental Impact Statement, there is a brief but, I
think, a significant discussion regarding the Enbridge spill at
the Kalamazoo River in Michigan and what has been learned so
far about spills of oil sands or diluted bitumen into water
bodies. And the EPA expressed its concern about the Keystone
project by suggesting on page three of the letter, ``spills of
diluted bitumen, dilbit, may require different response actions
or equipment from response actions for conventional oil
spills.''
They go on to suggest that the State Department address
this in greater detail and they state on page four of the
letter that dredging of the bottom sediments was determined to
be the best way to clean up the Kalamazoo River, which three
years later they are still working on. But if you read the
EPA's response in its entirety--and I certainly don't want to
speak for them because they are not here--the letter seems to
suggest a concern that we may not know enough about how to
clean up this material. So are you aware of any other best
practices for cleanup of diluted bitumen besides dredging the
river, or are you aware of whether the State Department
discussed any alternatives in the Draft Environmental Impact
Statement for best practices of cleanup of diluted bitumen?
Mr. Swift. The State Department recognized that the
Kalamazoo spill poses unique risks that conventional practices
had been inadequate to contain and remediate the spill, but
they made the point that they were looking toward future
innovations to be able to deal with tar sands spill. And
unfortunately, those innovations haven't happened. We are no
further now than we were in 2010 when it comes to dealing with
diluted bitumen tar sands. And the problem there is that, you
know, once you have a release in a water body, the bitumen is
heavier than water. It sinks into the water column. And most
conventional practices rely on the idea that oil will float on
the water's surface.
Ms. Bonamici. All right. Thank you. And also, Mr. Swift, as
I mentioned in the opening statement, we had a hearing a couple
weeks ago in the Environment Subcommittee on relevant issues
related to climate change. We had Dr. Bill Chameides here, a
well-respected atmospheric scientist who studies global warming
and climate change, and he is suggesting an iterative risk-
management approach, meaning that we must constantly reevaluate
whether we are making the right decisions to address climate
change as we learn more as technologies change.
And we have heard today from some of the witnesses who now
say that Keystone XL will not matter much to the amount of
global greenhouse gas emissions. However, each new project,
without strong controls, will add more greenhouse gases into
our atmosphere. So will you provide your views on how the
Keystone XL project would affect global greenhouse gas
emissions given that we estimate that the substance transported
by Keystone is 17 percent more greenhouse gas-intensive than
conventional crudes?
Mr. Swift. Well, so EPA estimates that it would add, you
know, a billion metric--a million metric tons of carbon in the
atmosphere over its lifetime just simply by replacing tar
sands--or conventional crude with tar sands at the Gulf Coast.
One of the important things to recognize is here we have a
project in which you can map--and, you know, my--Chip would
agree that you can actually determine an impact on global
temperatures from building this pipeline. And in the scheme of
climate change where one degree Celsius is the difference
between significant environmental changes that have significant
impacts on how we are able to live our lives in the future, a
little bit over the top makes a big difference when it comes to
whether we reach our climate goals or not.
Ms. Bonamici. Thank you. And just in my remaining few
seconds, I would like to hear from each witness quickly,
please. I have heard that building the Keystone XL might
actually increase gas prices in the Midwest. Is that correct?
Mr. Swift. I will say that TransCanada noted that building
Keystone XL would increase oil prices in the Midwest. And one
of the tar sands producers, the President of Cenovus, noted
that the lack of pipelines from Alberta was constituting a
subsidy to U.S. energy consumers of over $30 billion a year.
Ms. Bonamici. I am sorry. My time is expired. I yelled
back. Thank you, Mr. Chairman.
Chairman Stewart. Did any of the others want to address
that last question? She left it open for any of you.
Mr. McCown. I will just mention that because of the
constraints, there is a discount on crude but the refining
margin is greater, but that doesn't necessarily translate into
cheaper retail prices. So the refining margins may decrease
once Keystone, but I don't see a direct impact to added retail
price at the pump.
Chairman Stewart. Okay. All right. Thank you. I would just
note quickly if you are unemployed right now and hoping for a
job, having a job to only last two or three years is not a bad
deal when you are looking at that or nothing.
Mrs. Lummis, the Chairwoman of the Subcommittee on Energy.
Mrs. Lummis. Thank you, Mr. Chairman.
Mr. McCown, some of the opponents of the project have
argued against a piece of infrastructure, pipeline, that is
widely used in the United States. I would like to know if you
agree that oil sands pose greater risks for pipeline integrity.
Mr. McCown. I do not believe that they do. Canada has been
transporting this type of crude since 1968. The United States
has about ten years of experience transporting this crude. The
Integrity Management Program for pipeline safety has come a
long way--a long way in the last decade to now where corrosion
is no longer the leading cause of pipeline accidents. Serious
pipeline accidents are caused by third-party damage. That being
said, there are multiple studies out on dilbit corrosivity. I
have several of them here. Each one of them says, you know,
pipeline steel wet by oil does not corrode. The pH values of
the dilbit do not contribute to stress corrosion cracking,
which is what Mr. Swift was talking about, so long as a
different epoxies are used, different type of bonding
materials, which we are going to see in this pipeline.
So, you know, this oil has been transported safely for a
very long time, and, you know, have there been spills that have
been referenced? Yes, but it is a little bit of a leap to then
say then they must because to because of this type of oil. In
fact, like I said, we know that most pipeline accidents are not
caused by the pipelines themselves.
Mrs. Lummis. Follow-up question: the State Department's
assessment was that the possibility for spills is rare and
relatively small. Do you agree with the State Department's
assessment, and do you know what they base their conclusions
on?
Mr. McCown. I do agree. I mean, they based their
conclusions on the review of the pipeline process and the
pipeline design specs, which it is my understanding the State
Department was aided significantly by the USDOT, who are the
pipeline experts and--in assessing this pipeline. You know, the
57 special conditions frankly, you know, go well above and
beyond what federal law currently requires in many areas with
respect to the design and the operation of the pipeline. That
doesn't mean we shouldn't be vigilant. It doesn't mean that we
shouldn't hold the accountable responsible for how they operate
the pipeline, but, you know, I have looked at this pipeline. I
have looked at the specifications. I have talked to them, and I
feel confident that this will, in fact, be the safest pipeline
ever constructed, and that enhances security. And, as we know,
pipelines are the safest mode of transportation. To me, this is
a no-brainer.
Mrs. Lummis. One more question, this one for Mr.
Knappenberger. Regarding the EPA's comments on the State
Department report, the EPA questions the finding that Keystone
XL would not substantially affect greenhouse gas emissions or
contribute to climate change. Could you comment further on why
you believe the State Department is correct rather than the
EPA?
Mr. Knappenberger. Well, I don't take a strong opinion on
which is correct when it comes to the carbon dioxide emissions
from the pipeline. When you translate carbon dioxide emissions,
though, into some sort of climate unit, which is what everyone
is interested in, the climate impacts of the pipeline, you find
that the differences between next-to-no emissions and EPA's
analysis, which turned out to be 18.7 million metric tons of
extra emissions, it sounds like a lot, but when you translate
those extra emissions into carbon units or into climate change
units, they turn out to be hardly any difference between them
at all. We are talking about hundreds of thousandths of degrees
here.
Mrs. Lummis. Is it true that we now meet Kyoto Protocol
numbers?
Mr. Knappenberger. I don't believe that is the case, no.
Mrs. Lummis. Okay. Is it true that the Clean Air Act has
produced cleaner air every year since it has been in effect?
Mr. Knappenberger. Well, the Clean Air Act, until recently,
wasn't designed to regulate carbon dioxide emissions, so I
think the Clean Air Act probably successfully cleaned up what I
consider traditional pollutants in the air. I don't think that
carbon dioxide is--sort of meets the definition of a
traditional pollutant.
Mrs. Lummis. Is it a pollutant? Is carbon dioxide a
pollutant?
Mr. Knappenberger. Not in my opinion.
Mrs. Lummis. Okay. Mr. Chairman, I yield the balance of my
time.
Chairman Stewart. Thank you, Mrs. Lummis.
We now recognize Mr. Swalwell.
Mr. Swalwell. Thank you, Mr. Chair.
And my concern is primarily environmental safety and
economic growth and how we balance the two of those. And I
understand and appreciate the need for jobs. And our brothers
and sisters in the building trades will tell you that right now
in these tough economic times that any job is a good job, even
a temporary job, because we know, in the construction trades,
they move from temporary project to temporary project. And I
certainly appreciate that.And what I want to talk about is just
kind of weighing the environmental impacts against economic
growth and whether the long-term impacts outweigh the short-
term gains in economic growth.
Also, my friends from the other side have expressed
concerns about the Administration and frustration with the
Administration going forward, but I think what we have seen
here is two conflicting reports, one from the State Department
and one from the EPA. And I would suggest and put forward that
if there was a conspiracy by the Administration against this
project, they are not doing it in a very good way because they
certainly would not have two conflicting reports.
And so I ask you, Mr. Swift, does it seem like there is a
conspiracy against this project from the Administration, or is
it more complicated than that because of such a large-scale
project?
Mr. Swift. Certainly no conspiracy. And I would also
mention that this phase of the Keystone XL pipeline has really
only been in review for about 12 months after it was rejected.
This is a new presidential permit application. It restarts the
process.
Mr. Swalwell. Great. Mr. Swift, in your testimony you
describe some significant environmental concerns associated
with this project, including increased greenhouse gas emissions
and potential risks to pipeline safety. Is there any way we can
address or mitigate these impacts while still allowing Keystone
XL to move forward?
Mr. Swift. Well, certainly, one of the key issues is a
higher carbon content of tar sands. And, to some extent, we
have seen very little progress in Canada at reducing the carbon
content of tar sands production paths. Canada agreed with us to
reduce our--their emissions by 17 percent of 2005 levels by
2020, and they are on track of--to increasing theirs by five
percent while we are on track to meeting ours. So, to some
extent, one of the issues is the nature of tar sands
production.
Mr. Swalwell. Also, an argument I have heard in favor of
this project is that from a national security standpoint it is
better that we are receiving extracted oil from allies like
Canada rather than volatile areas like the Middle East. But
given that the price of crude oil is set globally and world oil
production was about 89 million barrels per year last year
according to the Energy Information Administration, how would
Keystone impact gas prices in the United States and, let's say,
if we had a major supply disruption somewhere else in the
world?
Mr. Swift. Keystone would not buffer us from supply
disruptions, because when you have a supply disruption, there
is a global market. Canadian oil prices go up despite the fact
they have no other market to sell it to than the United States.
I should mention that over the last five or six years, the one
thing that has begun to protect the U.S. energy market is our
reduced consumption of fossil fuels. We have reduced our use by
over two million barrels a day, which is quite a bit more than
Keystone would carry.
Mr. Swalwell. Is there any guarantee in any of the
contracts you have seen or specs you have seen that would
promise that U.S. consumers would have access and rights to the
oil first?
Mr. Swift. There is no guarantee whatsoever, and in fact,
TransCanada has been asked to make such a guarantee and they
have refused to do so. One of the areas of State's analysis
indicates that over half of the crude oil in Keystone XL will
be refined and exported internationally.
Mr. Swalwell. And so when it comes to the impacts of oil
supply disruptions and price volatility on our national
security, do you think it is fair to say that the big issue is
not so much America's dependence on foreign oil but rather it
is our dependence on oil, period?
Mr. Swift. That is exactly how I see it.
Mr. Swalwell. Great. Thank you. And I will yield back the
balance of my time.
Chairman Stewart. Thank you. The Chair now recognizes Mr.
Rohrabacher.
Mr. Rohrabacher. Thank you very much, Mr. Chairman. And
thank you for holding this hearing.
Let me just note, I was a young reporter before I got
involved in working with President Reagan and coming here, and
my memory has it that almost every single oil and gas project
that has been proposed in my adult lifetime has been opposed
by--and strenuously opposed by a certain group of people within
our society. And I will have to say that most of the opposition
to oil and natural gas, which, of course, provides us as
Americans with--well, with the energy we need for--to have an
agricultural system that provides us food and the fuel that we
need for commerce and we have national defense and national
security and industry. All of these things depend on oil and
natural gas now. Yet, during my lifetime, there has been a
group of people opposing every single new project. There is
always some reason.
And I noted when I was younger--I covered a story when they
were talking about oil spills, and there was an oil spill off
of my coast, and I was concerned about it. And the oil
companies did a study to see what the problems were, and when
they had a hearing on it, they had a hearing--I happened to be
a young reporter at the time and, Mr. Chairman, I will never
forget this hearing. The oil companies were really boring and
didn't give us much copy, but there was a young girl outside
the hearing who was holding up a rubber duck covered with oil
screaming ``murderer'' at the guys who were going in to
testify. And you can imagine who got the press coverage.
This is really a significant--this is really significant to
whether or not we are going to have prosperity in our country,
because at that time the American people took for granted that
we were going to be prosperous, and we were going to be secure,
and there would be these fundamental building parts of our
economy that would develop as they always had been. That is not
the case anymore. The American people understand how fragile we
are economically and understand how, even with supposedly a 7.5
unemployment rate--anybody who believes that probably also
believes in global warming--we have to take this seriously. And
let's just note of all these objections what they have
accomplished, Mr. Chairman, is that we have hired a lot more
lawyers, and the lawyers have made a lot of money over the
years on this, which is then added to the bill that costs for
energy, of course.
The one other thing that I remember is also that the
horrendous predictions of what would happen if we built the
Alaskan pipeline. It just happened to be at that time. Now, I
want everybody to think what our economy would have done in the
last 20 years had we not built the Alaskan pipeline. But we
heard the same thing and we heard the caribous were going to
disappear because the pipeline was going right through their
breeding area. And now, what have we found out after the
pipeline? They love the pipeline, and in fact, there are more
caribous than ever because they sort of snuggle up to it when
it gets cold.
We have got to start using our heads on this when we are
making decisions, because it is going to impact on more than
just the caribous. It is going to impact on whether or not the
United States is a prosperous and secure country. And I find
the arguments that we faced about pipeline--about this
particular project, it has nothing to do with safety; it has
everything to do with the global warming theory that human
beings are causing the planet to change and get warmer and
warmer, I might add. The predictions that we have had is by now
it would be five degrees warmer than it is, and actually, it is
getting cooler.
So with those--that type of--I think I will--I have got
exactly 25 more seconds, and instead of leaving it up to the
panel, I will just--with one last little shot here, and that is
I believe that global--the global warming theory based that
mankind is impacting on our climate has been so exaggerated
just beyond--obviously, mankind has some impact because we all
exhale carbon dioxide. And--but it has been so exaggerated that
it will bring down the standard of living of the American
people, this fraudulent idea that we are the primary factor in
climate change and then the predictions of climate change just
never happened. I mean it is--we are going in the opposite
direction.
Thank you very much, Mr. Chairman.
Chairman Stewart. I thank you, Mr. Rohrabacher.
And we now turn to your companion from California, Mr.
Takano.
Mr. Takano. Thank you, Mr. Chairman. And I share the
gentleman's concern and love of caribou.
Mr. Rohrabacher. I eat the caribou.
Mr. Takano. I will leave it at that. I live somewhat inland
from the gentleman in California. I live in a region of
California that is in a basin surrounded by mountains, and so I
am very grateful for strong EPA standards that have helped
clean up the air. I remember as a little boy that we would have
days where we couldn't go to physical education because the air
quality was so bad. The air has gotten better through the
standards, and the air may not be cleaner air from year to
year, but certainly standards have helped us clean up the air
in our region.
Now, my question to Mr. Swift: Is it the case that this
bitumen--and I have learned a lot more about bitumen here--will
this oil be refined within the United States, or do we expect
the bitumen to be exported abroad on ships to be refined in
other countries?
Mr. Swift. Well, in the short term, we are expecting it to
be refined in the Gulf Coast of the United States. There is
nothing--there are prohibitions to exporting crude produced in
the United States. Canadian producers could export the bitumen
for refinery--for refinement elsewhere, but the general
expectation is it will move to the Gulf Coast, be refined
there, and then many of the products from that would be
exported internationally.
Mr. Takano. When you say the Canadians could export crude
bitumen without being refined in the United States, what do you
mean by that? You mean that even though it is transported
through this pipeline, it could be exported even from the
endpoint in the United States directly in its crude form?
Mr. Swift. There is no legal basis for preventing them from
doing that once they get it to the--to Houston.
Mr. Takano. Okay. Well, Mr. McCown, you are shaking your
head. Do you disagree with that answer?
Mr. McCown. I do--yes, sir, I do disagree with that answer.
You have to have an oil export license if you want to export
raw crude. So I think it is--if the oil does not come here, and
Canada built a different pipeline system or a rail system to
somewhere else, sure, it can be exported. But if it comes to
the United States, it has to be at least refined here.
Mr. Swift. The export license requirement is for crude
produced in the domestic 48 States of the United States. It
doesn't apply for crude produced in Alberta.
Mr. Takano. Okay. Mr. Chairman, you raised the point about
the--you know, the preference--the desirability of having crude
refined in our country rather than other countries, which may
have less stringent standards. I am just wondering if there is
consensus that perhaps--or this point to me brings up, you
know, the possibility that maybe we should look at tightening
up that provision, that all oil that leaves our shores should
be refined here and meet the more stringent standards set by
our EPA.
Mr. Swift. Well, one point I would make--was that a
question for me?
Mr. Takano. Yes, yes, go ahead.
Mr. Swift. Well, one point I would make is that Canada has
proven--there has been significant opposition to pipelines that
would move tar sands across Canada's west coast to the point
that even industry observers are saying that those pipelines
are unlikely to move forward. And the other point to keep in
mind is that China doesn't have the capacity to process heavy
crude. So based on the refinery market that we see in the world
today, the real question is does it get refined in the United
States or does production expansion slow down? The question
isn't whether, you know, we see zero tar sands production in
2030; the question is does production go from two million to
three million barrels a day or two million to six million
barrels a day? And when it comes to the environmental impacts,
that makes a big difference, which is an area you land on.
Mr. Takano. So it is the increased capacity that this
pipeline would facilitate. It would stimulate far more rapid,
intensive development of this source of bitumen?
Mr. Swift. That is exactly right.
Mr. Takano. How much experience do we have with bitumen
flowing across oceans?
Mr. Swift. When it comes to Canadian tar sands bitumen, I
don't think we have much experience.
Mr. Takano. Are there comparable source of bitumen that are
transported in large container ships?
Mr. Swift. There are some heavy sources of crude from
Venezuela that have some similar properties that move into Gulf
Coast refineries.
Mr. Takano. Okay. Have there been any spills of this sort
of bitumen of any note?
Mr. Swift. Not to my knowledge.
Chairman Stewart. And, Mr. Takano, if I could, you may have
noticed that your--we didn't start the clock----
Mr. Takano. Oh, I am sorry.
Chairman Stewart. We didn't start on time. I think you are
about out of time, but if you want to finish this question----
Mr. Takano. Okay. So, you know, my concerns are mainly
about the Chairman's concern about China and India having
lesser standards in terms of refining. Is that a significant
reason why the environmental community is concerned about--is
this what adds to the global climate change?
Mr. Swift. Well, certainly one of the key issues is, again,
China and India don't have the capacity to process this crude,
and Canada currently doesn't have the ability to send it to
those markets. So, to some extent, the real issue is whether--
the only way that tar sands crude or its refined products get
to the international market right now is via Keystone XL.
Mr. Takano. Okay. Thank you. Mr. Chairman, thank you.
Chairman Stewart. Okay, thank you. Yes. It would surprise
me if they--China and India don't develop that capability very
quickly if the opportunity arose for them.
Mr. Weber.
Mr. Weber. Thank you, Mr. Chairman.
For the panel, any of you all think that pipeline DB that
wealth flowing through a pipeline produces as much CO2
as 300 to 500 diesel 18-wheeler truckloads a day? Mr. Helms,
somebody, yes or no?
Mr. Helms. Well, Congressman Weber, I don't believe that it
does and----
Mr. Weber. Thanks. Mr. McCown.
Mr. McCown. It is not.
Mr. Weber. Mr. Swift.
Mr. Swift. I----
Mr. Weber. Your mike is not on.
Mr. Swift. Truck transport is more energy intensive than
pipeline.
Mr. Weber. So you would agree that it does produce more
CO2? Mr. Knappenberger.
Mr. Knappenberger. Yes, I agree.
Mr. Weber. You agree, thank you.
Next question for the panel, an industry safety rating of
99.999525 percent safe, Mr. Helms, are you aware of any other
industry that has that kind of safety record?
Mr. Helms. Congressman, I am not aware of any----
Mr. Weber. Thanks. Mr. McCown.
Mr. McCown. I am not. And I think that will even go higher.
Mr. Weber. Mr. Swift.
Mr. Swift. Industry is hoping to improve that record. When
you think about the amount of oil----
Mr. Weber. I will take that as a no. Mr. Knappenberger.
Mr. Knappenberger. I don't know of any, no.
Mr. Weber. I don't either. Next question. Mr. Swift, you
said that the likelihood--it seemed like you raised a lot of
discussion about the likelihood of the bitumen oil leaking, and
so that seems to be a great degree of your argument against the
pipeline is based on the leakage. So you are not as concerned
about the climate issues as you are the leakage. Is that fair
to say?
Mr. Swift. No, we are also very concerned about the
climate.
Mr. Weber. More so than the leakage?
Mr. Swift. I would say one of the primary environmental
impacts is the climate issue.
Mr. Weber. Well, that is one of your primary environmental
impacts. So if they--we can make the pipeline safer and if we
can make climate emissions lesser, then you would be good?
Mr. Swift. Yeah, if we can do--if we can--yeah, if we lower
the climate emissions and make the pipeline safer.
Mr. Weber. Great. Are you familiar with the--and acronym
BACT?
Mr. Swift. You may have to refresh my memory.
Mr. Weber. Mr. Helms, do you know what BACT stands for?
Mr. Helms. Yes, Mr. Congressman. It is best available
control technology.
Mr. Weber. Okay. And so is it safe to say that while we are
developing--using this bitumen that we can improve our BACT,
our best available control technology, so that we can reduce
those emissions? In fact, I am somewhat amused by your
discussion with my colleague from California talking about
bitumen and how there wasn't much experience in moving it and
all that those implications, because if we refrained from new
innovations, indeed we would not--you all would not be so
intent on green technology, would you not? Solyndra wouldn't
have got half a billion dollars because they didn't have a
track record, no experience.
So the truth of the matter is, in my opinion, that this
very pipeline that comes into my district by the way--and it is
not Houston; it is Port Arthur; Nederland, Texas, down on the
Gulf Coast where XL pipeline terminates, just FYI. Under that
assumption, the fact that we don't know how to handle bitumen,
we would have never, ever embarked upon trying to improve on
batteries, on wind power, on solar power because we don't have
that experience. I am amused, Mr. Swift, that you said after
the Kalamazoo spill in 2010 there have not been any
innovations. I am thinking, my gosh, only somewhat three years
later there are no innovations, and yet, in your very
discussion points, you say that you are concerned about the
pipeline going out 50 years and how long out do we worry about
global warming?
Mr. Swift. Quite some time.
Mr. Weber. Quite some time, yet you are lamenting the fact
that there is no new innovations in handling that you have seen
over the scant two or three years. That seems antithetical to
me.
How many of you all saw--did any of you all see the article
in the Wall Street Journal yesterday about California and Texas
producing oil? No? Okay. Well, let me make this point. My time
is running short here. California--Texas produces more oil than
the next four oil-producing States combined. California has
been oil-averse, as my colleague over here said, people that
were against everything about fossil fuel basically in his
tenure. Texas' unemployment rate is 6.4 percent while
California's is 9.4 percent. Texas has been the recipient of
taxes of $20 billion from the oil industry and has no income
tax, while California has an unbelievable--has an income tax
rate and a capital gains tax rate of 13.3 percent. So the
economic impact for our working Americans is huge.
I am out of time. We need this pipeline. Mr. Chairman, I
yield back eight seconds.
Chairman Stewart. Eight seconds. Thank you, Mr. Weber.
We now turn to Ms. Brownley from California.
Ms. Brownley. Thank you, Mr. Chair.
I wanted to follow up on the line of questioning that
Congresswoman Bonamici started at the beginning of the hearing
and just talk a little bit more about job creation. And I am
directing my question to you, Mr. Swift. You had mentioned that
35 jobs would be created from the Keystone pipeline. I wanted
to really just explore a little bit about looking at job
creation at Keystone compared to the job creation potential, I
think, for sustainable alternative energy projects. And by the
way, the comparison of Texas and California--I am from
California--and we have been very focused on sustainable
alternative energies and it is job creation as well. So if you
could comment on that, I would appreciate it.
Mr. Swift. Certainly. In 2011 a Brookings study showed that
clean energy jobs are one of the fastest-growing sectors in the
United States growing twice as fast as the economy. There are
over 2.7 million clean energy jobs today and a consortium of
about 800 clean energy entrepreneurs recently reported that in
2012 their companies hired over 100,000 personnel. And these
jobs tend to be--I mean, in clean energy, you tend to see a
higher manufacturing base element to them. And in another
recent study, they evaluated the job creation impact by dollar
invested. It found that clean energy, for every dollar
invested, you got more than three times as many jobs produced
than the fossil fuel industry.
Ms. Brownley. Thank you for that. Also, on the
environmental side of this particular project, in your
testimony I think you wrote and spoke to that the high-
temperature tar sands pipelines are at a greater risk of leaks,
and I think you cited a study in Kern County, California. And
so the question is is it fair to say that railroad trains
carrying tar sands are also at greater risk of leaks?
Mr. Swift. Well, one of the key things to keep in mind when
it comes to railroads moving tar sands, while many railroads
are moving Bakken crude, there has been very little tar sands
by rail. A Reuters story just a few weeks ago showed that, you
know, around 20,000 barrels a day was being moved to the Gulf
Coast by rail or barge, and one of the--I mean the northern
Albertan tar sands producers have been under many of the exact
same market incentives to move their product by rail. The
difficulty is they don't have the profit margins to afford the
higher costs. They are more than 900 miles farther away from
refinery markets. And, in fact, the mere process of moving tar
sands by rail is more expensive. It requires specialized
infrastructure, and you can actually fit less tar sands crude
in each rail car relative to light crude. And we are not seeing
the infrastructure being built out yet.
Ms. Brownley. Thank you. And my last question is--I think
Mr. Helms testified that his son-in-law is a farmer, I believe,
and said he had no objection to the Keystone pipeline. And so I
just, you know, wanted to hear your comments vis-a-vis rural
areas, and will operators in rural areas be able to respond
quickly in the event that there was some kind of accident or
spill?
Mr. Swift. You know, I have talked to folks in Nebraska and
South Dakota. The--one of the farmers who discovered the 20,000
gallon spill on the Keystone I pipeline was a first responder.
He had no idea what to do in the event of a tar sands spill.
And first responders are often the ones that detect leaks, that
have to deal with it initially, and they don't have the
training to deal with it.
And as far as farming goes, farmers in Nebraska are very
opposed to the project, and they are concerned about its impact
to their water and also looking at the climate impacts of, you
know, warmer temperatures, disrupted weather on farming. Last
year, we had the hottest year on temperature. Half of our corn
crop was destroyed in a drought. So farmers are on both ends,
concerned about their water quality and also feeling the brunt
of climate change.
Ms. Brownley. And do we have evidence of what your
statement that you just made about ranchers', farmers' concerns
and----
Mr. Swift. Certainly. Certainly. And statements and I can
provide additional evidence of that.
Ms. Brownley. Thank you. And I will yield the balance of my
time.
Chairman Stewart. Thank you, Ms. Brownley.
Mr. Cramer from North Dakota, who has some interest in
this, I suppose.
Mr. Cramer. Yes, thank you, Mr. Chairman, and Ranking
Member as well. Thank you to all of the witnesses. Special
thank you to my friend, Lynn Helms, whose intellect is matched
only by his integrity as a regulator.
And I might add that while North Dakota enjoys the fastest-
growing personal per capita income and the lowest unemployment
rate and a huge budget surplus in the State's coffers and more
jobs available then people to fill them, we also were recently
ranked by the American Lung Association with an A rating for
clean air. We meet all ambient air quality standards as
prescribed by the EPA. We have the cleanest water, cleanest
land, most productive topsoil in the country. We feed a hungry
world, and we do it all pretty well, and most of the time we
would like to tell the Federal Government we will call if we
need your help, but they seem to want to impose themselves
quite regularly.
I think. as an opening statement beyond that, I want to
remind the Committee or those of you that maybe don't know, for
nearly 10 years I was on the North Dakota Public Service
Commission, carried the pipeline portfolio, have sited billions
of dollars and thousands of miles worth of pipelines. Perhaps
the biggest challenge in that tenure was siting the original
Keystone pipeline. We talk about this like this is the first
time it has been invented, as though no one ever thought about
moving oil sands to market before.
The first 260 miles in the United States of the original
Keystone pipeline are through North Dakota. If you hired
Sacajawea to find a worse route, she couldn't have. They chose
a lousy greenfield route in eastern North Dakota through some
of the richest farmland in the country, two scenic rivers,
eight counties, 600 landowners, none of whom benefited a bit
from oil other than using it in their combines and their
tractors and heating their homes and all the things that we all
use oil products for.
The great part of that experience for me was that, while
there were 600 landowners involved in the original TransCanada
Keystone pipeline, all 600 willingly signed a contract. We did
not have to go to condemnation for one inch of that pipeline.
That is not because we are great regulators or great
politicians; it is because we have citizens who understand the
value of this important product and understand it is the safest
way to move it.
Now, it is interesting, perhaps, for somebody from
TransCanada to hear me expose the virtues of that process,
because at the time they thought I was the biggest pain in the
backside that they had ever come across because we did require
them to do a lot of things that they weren't necessarily
inclined to do, including pulling under rivers as opposed to
cutting through them.
But I also think it is important to note that we did have a
spill at one of the pumping station, but the good news was that
after the spill everything worked. The SCADA system worked. The
balance shut down. Eyewitnesses saw the oil. The berms kept it
in. The little bit that got out was cleaned up at TransCanada's
expense to the point where PHMSA was satisfied and the health
department was satisfied in the Public service commission was
satisfied with the repairs to the point that they were up and
running within days. I think to talk about it as though there
would never be a spill would be inaccurate, but I think it is
also to talk about as though a spill is somehow going to ruin
the world is also inaccurate. We always want to do better and
always can.
I could talk about a lot of things, including siting the
Bridger pipeline, which is the onramp to the Keystone XL. And
wouldn't we love to have Bakken crude get to that market where
they pay a premium as opposed to a discount, which is what we
get in many of the markets?
That said, I want--I do have a technical question and
probably start with you, Mr. Helms, anybody else that could
help with this. We talked about this dilbit or bitumen as
though it is some sort of a foreign substance, but there has
been some disagreement both here and in the Natural Resources
Committee, and I think the E&C Committee as well. Could you
tell us the difference and is it that dramatically different?
Because I really do not know. Mr. Helms, if you could, you
understand this production as well as anybody.
Mr. Helms. Mr. Chairman, Congressman Cramer, I have been to
the oil sands in Fort McMurray and looked at the dilbit. It is
not all that different than the crude oil that I produced when
I worked for Texaco in central Montana and northwestern
Montana. Those were heavy crude oils that were produced out of
the Sawtooth sands, and we transported them by truck to Great
Falls, Montana, and had them refined there. It is not some
foreign alien substance. It is a mixture of light hydrocarbon
and heavy hydrocarbon, and you can move it in pipelines or tank
trucks or railcars.
Mr. Cramer. Mr. McCown, do you have anything to add?
Mr. McCown. I completely agree with everything Mr. Helms
just said.
Mr. Cramer. Well, then, let me just in my remaining seconds
cite a couple of other things. I think in situ process is
interesting. It has become better and better and it always will
be. China builds coal-fired power plants like we build stick
houses. They are not going to not build refineries for this
stuff. And I have been to enough funerals of North Dakota
soldiers fighting in the Middle East to remind everybody that
this is a matter of national security, not just economic
security. And I yield back.
Chairman Stewart. Thank you, Mr. Cramer.
Then it looks like our last questioning from Mr. Veasey.
Mr. Veasey. Thank you, Mr. Chairman.
I wanted to ask Mr. McCown a question about best practices
and what his opinion was on best industry practices being used
to build this pipeline. And more specifically, I want to know
would somebody be able to come back, you know, after the
pipeline is built a year later, two years later and say, well,
actually, this could have been done to make the pipeline safer
and even industry agreeing to that to a certain extent.
I know that with some of the environmental issues that we
have had in the North Texas area, not just with oil and gas but
others--take, for instance, flaring. Someone will say, well, it
is too expensive to pipeline the gas out and so we will just
flare it. We know environmentally that flaring is not the best
thing to do, but sometimes, it is just done for efficiency and
for maximizing profits. So are the very best practices being
used as it relates to the environment and the safety of this
pipeline?
Mr. McCown. That is a very good question. And yes, they
are. And I share your concern. I have been a planning and
zoning commissioner in North Texas where I have voted against
pipelines that didn't seem to make sense in places. But yes,
the--yeah, the 57 special conditions that TransCanada has come
up with, they did that before the passage of the last pipeline
safety improvement bill. And a lot of the things that are in
here are now lost. So they were cutting edge ahead of the law.
I think the key component is to make sure that the
regulator not only holds them to the highest standard but
requires continual refinement of that process. As technology
includes--if you look at cars 20, 30 years ago, we didn't have
airbags, we didn't have different things. As technology
increases, then we hold the entire infrastructure system
accountable as well. But the question isn't, you know, should
we rebuild the pipeline? The question is this will be the
state-of-the-art as we have today far exceeding anything else
that is out there. And that makes it safer.
Mr. Veasey. Mr. Swift, what is your opinion on the best
practices and this being the safest possible pipeline to move
crude?
Mr. Swift. Well, we heard this same language used with
regard to Keystone I and TransCanada's natural gas Bison
pipeline, both constructed in 2010, both with special
conditions. Both said they were state-of-the-art and would
unlikely to spill in the first 30 or 40 years. And with
Keystone I, we saw 14 spills in the first year; and with the
Bison pipeline, a 60-foot section of it exploded. Now,
TransCanada was recently put under a sweeping review by
Canadian regulators for what one whistleblower, who was a--
quality control personnel, claims to be systematic violation of
minimum safety standards in the building of pipelines.
So, on one hand, we have questions of whether they use the
best methods available and this--or will they--will the specs
be the best available? And the second is will they build to
spec? And both of these issues seem to be a problem with regard
to TransCanada.
And as a final note on these 57 conditions, as Brigham
mentioned--as Mr. McCown mentioned, you know, many of the
special conditions are now minimum safety standards set by the
2012 pipeline safety law. Many of these special conditions are
conditions that TransCanada was already required to abide by
because of the--its Canadian sections. So while there are a
large number of conditions, if you really look at which ones
add any, you know, bar above what the current bar is, it is a
much smaller list.
Mr. Veasey. And I would like for Mr. McCown to respond
specifically to what Mr. Swift said about the specs.
Mr. McCown. Sure. Well, there is a lot of spin going on
there, but the fact that the Canadian portion is built to
whatever spec, it doesn't require the U.S. portion to be built
to that same spec. Two, the--PHMSA oversees the construction
and the placement and service through its own inspections and
through third-party validators both that the company uses and
PHMSA uses so it is built to spec.
Secondly, you know, when I was at PHMSA, we moved the
``spill criteria'' down to basically, I think, anything more
than five gallons. So when people say it was a spill, there is
a big difference between a little spill and a big spill, and
these numbers get thrown around like they are candy and it is a
little misleading, frankly.
Mr. Veasey. Mr. Chairman, thank you.
Chairman Stewart. Thank you. All right, thank you. It
appears that that is the end of our questioning then. I would
like to thank the witnesses one more time for your valuable
testimony and for your time, your expertise. We appreciate it.
To the Members of the Committee, there may be those who
have additional questions for you, and if that is the case, we
will ask you to respond to those in writing. The record will
remain open for two weeks for additional comments and written
questions from the Members.
The witnesses are excused and this hearing is now
adjourned.
[Whereupon, at 11:37 a.m., the Subcommittees were
adjourned.]
Appendix I
----------
Answers to Post-Hearing Questions
[GRAPHIC] [TIFF OMITTED] T1190.051
[GRAPHIC] [TIFF OMITTED] T1190.051
[GRAPHIC] [TIFF OMITTED] T1190.052
[GRAPHIC] [TIFF OMITTED] T1190.053
[GRAPHIC] [TIFF OMITTED] T1190.054
[GRAPHIC] [TIFF OMITTED] T1190.055
[GRAPHIC] [TIFF OMITTED] T1190.056
[GRAPHIC] [TIFF OMITTED] T1190.057
[GRAPHIC] [TIFF OMITTED] T1190.058
[GRAPHIC] [TIFF OMITTED] T1190.059
[GRAPHIC] [TIFF OMITTED] T1190.060
[GRAPHIC] [TIFF OMITTED] T1190.061
[GRAPHIC] [TIFF OMITTED] T1190.062
[GRAPHIC] [TIFF OMITTED] T1190.063