[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
H.R. 3, THE NORTHERN ROUTE APPROVAL ACT
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HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND POWER
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
APRIL 10, 2013
__________
Serial No. 113-26
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Energy and Power
ED WHITFIELD, Kentucky
Chairman
STEVE SCALISE, Louisiana BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
RALPH M. HALL, Texas JERRY McNERNEY, California
JOHN SHIMKUS, Illinois PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania EDWARD J. MARKEY, Massachusetts
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas GENE GREEN, Texas
ROBERT E. LATTA, Ohio LOIS CAPPS, California
BILL CASSIDY, Louisiana MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia DORIS O. MATSUI, California
CORY GARDNER, Colorado DONNA M. CHRISTENSEN, Virgin
MIKE POMPEO, Kansas Islands
ADAM KINZINGER, Illinois KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California (ex
FRED UPTON, Michigan (ex officio) officio)
C O N T E N T S
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Page
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 2
Prepared statement........................................... 2
Hon. Lee Terry, a Representative in Congress from the State of
Nebraska, opening statement.................................... 3
Prepared statement........................................... 4
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 5
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 6
Prepared statement........................................... 7
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 8
Witnesses
Alexander Pourbaix, President, Energy and Oil Pipelines,
Transcanada.................................................... 10
Prepared statement........................................... 14
Anthony Swift, Attorney, Natural Resources Defense Council....... 29
Prepared statement........................................... 31
Keith Stelter, President, Delta Industrial Valves, Inc........... 37
Prepared statement........................................... 39
David Mallino, Jr., Legislative Director, Laborers International
Union of North America......................................... 46
Prepared statement........................................... 48
Mark Jaccard, Professor and Research Director, Simon Fraser
University..................................................... 54
Prepared statement........................................... 56
Submitted Material
Articles submitted by Mr. Stelter................................ 97
H.R. 3........................................................... 102
H.R. 3, THE NORTHERN ROUTE APPROVAL ACT
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WEDNESDAY, APRIL 10, 2013
House of Representatives,
Subcommittee on Energy and Power,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Ed
Whitfield (chairman of the subcommittee) presiding.
Members present: Representatives Whitfield, Scalise, Hall,
Shimkus, Pitts, Terry, Burgess, Latta, Cassidy, Olson,
McKinley, Gardner, Griffith, Barton, Upton (ex officio), Rush,
McNerney, Tonko, Engel, Green, Capps, Barrow, Matsui,
Christensen, Dingell, Waxman (ex officio), and Jackson Lee.
Staff present: Nick Abraham, Legislative Clerk; Gary
Andres, Staff Director; Charlotte Baker, Press Secretary; Mike
Bloomquist, General Counsel; Sean Bonyun, Communications
Director; Allison Busbee, Policy Coordinator, Energy & Power;
Patrick Currier, Counsel, Energy & Power; Tom Hassenboehler,
Chief Counsel, Energy & Power; Jason Knox, Counsel, Energy &
Power; Nick Magallanes, Policy Coordinator, CMT; Brandon
Mooney, Professional Staff Member; Mary Neumayr, Senior Energy
Counsel; Andrew Powaleny, Deputy Press Secretary; Chris Sarley,
Policy Coordinator, Environment & Economy; Phil Barnett,
Democratic Staff Director; Greg Dotson, Democratic Staff
Director, Energy and Environment; Caitlin Haberman, Democratic
Policy Analyst; and Alexandra Teitz, Democratic Senior Counsel,
Environment and Energy.
Mr. Whitfield. I would like to call this hearing to order
this morning, and I will be introducing our witnesses after the
opening statements. Before we actually start the hearing
formally, I wanted to make a little presentation as just a note
of my sympathy to the Chairman of the full committee, Mr.
Upton. I don't know if some of you may remember that Louisville
beat Michigan in the NCAA championship game. And so I just hope
that this would make him feel a bit better, this----
Mr. Upton. You know, this is a true story. A couple people
asked about where you were yesterday because you missed an
important meeting on the chair, vice chair meeting. You missed
the first of three votes on the House Floor. And I said have
you talked to Whitfield? And he said I did. I gave him some
food little bit earlier this afternoon but I haven't given him
the antidote yet. But now I know what the antidote is, Maker's
Mark.
Mr. Whitfield. Yes, well, that particular product is made
in my district----
Mr. Upton. Yes.
Mr. Whitfield. So we just wanted to help make you feel
better.
Mr. Upton. I think that that may have.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. But I want to thank all of you for being
here today on this very important hearing. We are going to be
discussing H.R. 3, the Northern Route Approval Act, which would
remove the federal delays that continue to block the Keystone
XL pipeline expansion project.
Keystone pipeline has become a household name across the
country. Unfortunately, this is far from the first hearing on
the topic and far from the first bill designed to grant
Keystone its long overdue federal approval. But this project is
too important to give up on, and we again offer legislation to
green-light it.
Remember, TransCanada first made an application on this
project in September 2008, almost 5, 6 years ago. Our first
legislative attempt to approve Keystone was criticized by some
as unnecessary on the grounds that the Obama Administration was
already committed to make a final decision by the end of the
year, and by that year, I mean 2011. Well, the bottom line is
we still do not have a final decision.
Next, we were told that a dispute over a portion of the
route through Nebraska needed to be addressed. Early this year,
the governor of Nebraska notified the President that the
intrastate issues have been resolved. And the Secretary of
State's office, through their Supplemental Environmental Impact
Statement, have noted that this project would not have negative
environmental impacts.
So to be truthful, at this point we believe that the
Administration has continued to delay this because we invited
to testify today someone from the U.S. Department of State, the
Bureau of Land Management, the U.S. Fish and Wildlife Service,
the U.S. Army Corps of Engineers, and U.S. EPA, and no one
would agree to come.
But throughout all of the delays, two things have not
changed. The Nation still faces unacceptable levels of
unemployment. This project would provide employment. And we
know, going into the summer, we are going to have higher
gasoline prices. This would provide additional oil for our
consumers.
So to put it in a nutshell, any energy project today
basically turns out to be a fight between environmentalists and
people who want to expand and make available energy
independence in America. We have a unique opportunity to be
energy independent in America. And there are more safeguards
put on this pipeline than any that has been proposed to be
built ever.
[The prepared statement of Mr. Whitfield follows:]
Prepared statement of Hon. Ed Whitfield
Today, we will be discussing H.R. 3, the ``Northern Route
Approval Act,'' which would remove the federal delays that
continue to block the Keystone XL pipeline expansion project.
The Keystone XL pipeline has become a household name across the
country. Unfortunately, this is far from the first hearing on
the topic and far from the first bill designed to grant
Keystone XL its long-overdue federal approval. But this
projectis too important to give up on, and we again offer
legislation designed to green-light it.
The timeline of this project is a bit ironic. Our first
legislative attempt to approve Keystone XL was criticized by
some as unnecessary on the grounds that the Obama
administration was already committed to making a final decision
by the end of the year--and by year I mean 2011. As we all
know, that did not happen.
Next, we were told that a dispute over a portion of the
route through Nebraska needed to be addressed prior to any
presidential decision. But early this year, the Governor of
Nebraska notified the president that the intra-state issues
have been resolved. And following the first Environmental
Impact Statement released in August 2011, the latest
Supplemental Environmental Impact Statement from the State
Department that incorporates the Nebraska re-route, concludes
that the project would have limited adverse environmental
impacts.
At this point, we are led to believe that the
administration has come up with a new excuse for further
delays. But unfortunately we are unlikely to learn about it
today since none of the federal agencies we asked to testify
accepted our invitation. For the record, we asked the following
agencies to attend: The U.S. Department of State, the Bureau of
Land Management, the U.S. Fish and Wildlife Service, the U.S.
Army Corps of Engineers, and the U.S. Environmental Protection
Agency. However, we are pleased that an excellent group of non-
governmental experts are with us today, and we look forward to
hearing theirperspectives.
Throughout all of the delays two things have not changed--
the nation still faces unacceptable levels of unemployment as
well as high gasoline prices. Keystone XL would help address
both. Whether you are an unemployed welder or a low-income mom
struggling to afford each fill-up at the pump, the delays are
particularly unfair to the least fortunate among us. Little
wonder the American people overwhelmingly favor this project-
Democrats, Republicans, and Independents. America is a nation
of builders, and the American people want to see Keystone XL
built.
Yet, the approval process has dragged on for over four
years and there is still no clear end in sight. And even if the
president does eventually approve the pipeline, there is a real
risk of litigation from environmental groups creating
additional years of delays. The Northern Route Approval Act
addresses all of these potential impediments and expeditiously
approves the project.
I might add that this year marks the 40th anniversary of
the Trans-Alaska Pipeline Authorization Act of 1973. Much like
Keystone XL, the Alaska pipeline was held up for several years
by federal red tape. It took an act of Congress to remove the
roadblocks and finally approve the project. 40 years later, we
now know that the Alaska pipeline has been a tremendous
success, delivering over 16 billion barrels of oil to the
American market while creating jobs and amassing an excellent
environmental and safety record.
In retrospect, it seems ridiculous that the Alaska pipeline
was nearly prevented from being built. And it is just as
ridiculous that Keystone XL is taking this long. Once again, it
is time for Congress to act.
By passing H.R. 3, we will soon see the 20,000 direct jobs
and 100,000 indirect jobs, and then the million barrels per day
of much-needed oil flowing from Canada to refineries in the
Midwest and Gulf Coast.
I'd like to thank my friend Lee Terry of Nebraska for his
leadership on this issue and for his sponsorship of H.R. 3. I
hope that this bipartisan Keystone bill is the last one that
will be necessary to start the project and that the next thing
we hear about regarding the Keystone XL pipeline is the sound
of thousands of workers building it.
# # #
Mr. Whitfield. So with that, at this moment, I would like
to yield such time as he may consume, the gentleman from
Nebraska who introduced H.R. 3, Lee Terry.
OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEBRASKA
Mr. Terry. Well, thank you, Mr. Chairman, for holding this
hearing.
We have been involved with this issue for now over 2 years
in this committee. What is interesting is that not until
Congress got involved did the Administration even begin to move
the process at the State Department. And of course, with one of
the bills that actually passed and was signed into law, we know
that they stalled the process when the State Department
recommended denial and the President in fact denied the permit
in January of 2012.
So here we are, April 2013, still mired in the process. My
bill H.R. 3 puts an end to that. The bill declares that no
presidential permit shall be required for the project and deems
the final Environmental Impact Statement of August 26, 2011,
along with the additional work of the Nebraska DEQ of January
2013, as sufficient.
The additional provisions of the bill will ensure the
pipeline is built. History is a great educator. In 1973,
Congress passed, and President Nixon signed into law, the
transatlantic Alaska pipeline. Authorized to ensure that
because of the ``extensive governmental studies already made of
this project and the national interest in early delivery of
North Slope oil to domestic markets, the trans-Alaska pipeline
be constructed promptly without further administrative or
judicial delay or impediment.'' Sound familiar? That is what we
are saying now.
In effect, Congress ended the paralysis by analysis and
green-lighted the project. Keystone XL is the trans-Alaska
pipeline of our day. We need to cement our relationship with
our best trading partner and friend in Canada, and secure our
national security interests and energy security interests by
approving this pipeline. And I yield back.
[The prepared statement of Mr. Terry follows:]
Prepared statement of Hon. Lee Terry
Mr. Chairman -
Thank you for holding this hearing today. As you know, I
have been involved in this issue for close to two years. What
is interesting is that not until Congress got involved did the
Administration even begin to move the process at the State
Department. Of course, we all know that they also stalled the
process when they recommended to the President that he deny the
pipeline application in January 2012. So hear we are--April
2013, still mired in process.
My bill, HR 3, puts an end to that.
The bill declares that no presidential permit shall be
required for the project and deems the Final EIS of August 26,
2011 along with the additional work of the Nebraska DEQ of
January 2013 sufficient. The additional provisions of the bill
will ensure the pipeline gets built.
History is a great educator. In 1973, Congress passed and
President Nixon signed the Trans-Alaska Pipeline Authorization
Act to ``to insure that because of the extensive governmental
studies already made of this project and the national interest
in early delivery of North Slope Oil to domestic markets, the
trans-Alaska pipeline be constructed promptly without further
administrative or judicial delay or impediment. In affect,
Congress ended paralysis-by-analysis and green-lighted the
project.
Keystone XL is the Trans-Alaska pipeline of our day. We
need to cement our relationship with our best trading partner.
Mr. Whitfield. At this time I would like to recognize the
gentleman from Illinois, Mr. Rush, for a 5-minute opening
statement.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. Thank you, Mr. Chairman. And Mr. Chairman, I
watched the game on Monday night and anecdotally, I thought of
this hearing and I thought of my colleagues on the other side
and I think that the one thing that Mr. Pitino showed that he
could adjust his game according to the dictates of the game,
and I see my Republican friends cannot adjust their game to the
dictates of what is happening to the American people. And so
where Mr. Pitino is going to the Hall of Fame, my Republicans
on the other side there will be inducted into the hall of shame
for their refusal to have hearings with scientists on climate
change.
Mr. Chairman, we can appreciate, I am sure those on the
other side can appreciate the irony that we are here today for
the umpteenth time debating a bill that will circumvent the
ongoing State Department review process mandating any approval
of the Keystone pipeline, and limit citizens' abilities to file
lawsuits against the project. Shame. And while at the same
time, Exxon and Mobil are still scrambling to clean up the
Pegasus oil spill in Mayflower, Arkansas, which ruptured on
March 29 while carrying crude oil from my home State of
Illinois to the Gulf Coast intention. Shame.
Currently, it is still unclear exactly why the Pegasus leak
occurred. But yet my Republican colleagues are here trying to
force through another major pipeline project before the
American people even have the answers for what caused the most
current oil spill. Shame.
Mr. Chairman, let me state the obvious, that the timing of
this hearing does very little to bolster the majority side's
arguments for circumventing the review process and forcing
through another major pipeline project. Shame. I must admit
that this subcommittee would be much better served by holding
hearings on issues that affect American families and consumers.
From farmers on the plains and the Midwest States of America
who have seen record drought and crop loss, to the business
owners and homeowners on the Gulf and mid-Atlantic Coast who
have seen their homes and their livelihoods engulfed in regular
floods, to the firefighters who have been fighting severe
wildfires in Colorado, Arizona, and California over this past
year.
Mr. Chairman, as you know, Ranking Member Waxman and I have
sent to you two dozen letters to you and Chairman Upton, since
May 2011 requesting that this subcommittee hold hearings into
the science of climate change and the likely impacts of raising
temperatures so that members of this body can better understand
the nature of the threat that faces this Nation.
In your March 14 response, you and Chairman Upton state
that ``in the 112th Congress, the Committee frequently
addressed climate change issues and that the Committee heard
from more than 30 witnesses, including climate scientists, who
testified concerning climate change-related matters.'' Mr.
Chairman, however, your letter to me and Mr. Waxman failed to
acknowledge that out of the dozens of hearings and 30-plus
panelists that have testify before this subcommittee, the vast
majority of those invited represented electric utilities, coal
companies, oil refineries, and chemical manufacturers. Mr.
Chairman, not one unbiased, unaffected scientist was ever
invited to testify to any hearings.
Today, we have scheduled only one hearing dedicated to
learning about the actual science of climate change and that
was held way back in 2011 and only after so many Democrats
decided to exercise our right and demand a minority hearing
under House Rule 11. Mr. Chairman, everybody in this room
understands that the bill before us will never, ever see the
light of day. So why are we here?
With that, I yield back the balance of my time.
Mr. Whitfield. Thank you, Mr. Rush.
At this time I recognize the Chairman of the full
committee, Mr. Upton, for a 5-minute opening statement.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, Mr. Chairman. When my friend
Mr. Rush started talking about change, I thought maybe it was
the change that we went from 56 votes in the Senate to now 62
votes in support of the Keystone bill as was illustrated with
the vote on the budget as one of the amendments last month.
Today, we take an important step in support of the Keystone
XL pipeline. It is called jobs and affordable energy. And I
want to remind folks that one of our goals is to develop a
North American Energy Independent Plan so that we are not at
the mercy of the Middle East or countries like Venezuela. In
much of this country, gas prices have more than doubled since
January '08, and this Administration has predicted that the
average gas prices are going to be over $4.15 very soon. Our
most vulnerable cannot afford these prices on top of an already
weak economy that only created 98,000 jobs last month.
The President said last year that he would do whatever it
takes to create U.S. jobs. Well, here is a $7 billion
construction project with more than 20,000 direct jobs and
100,000 indirect jobs, and after more 4 years, what are we
waiting for? As policymakers, our job is to ensure that America
can take full advantage of our Nation's valuable resources by
unlocking the power of our innovators and entrepreneurs.
This committee has embarked on a path to explore this new
era of North American energy abundance and rapid technological
innovation. And the ability to successfully unlock these
resources will lead to increased American prosperity and less
energy imports from geopolitically unstable regions of the
world.
We should be measuring our energy policy proposals by
whether they help contribute to increasing American energy
self-sufficiency. Do they help to reduce volatility from
foreign sources, keep costs low for consumers, help maintain or
contribute to a diverse energy supply portfolio, and are
protective of the environment? By those standards, I am happy
to say that this bill, H.R. 3, passes the test.
We have all heard the unemployment numbers associated with
this project and the tens of thousands of direct and indirect
jobs that will be created, but today, I am pleased to welcome
somebody who will help put a face to those numbers, Keith
Stelter of Delta Industrial Valves in Niles, Michigan. Delta's
made-in-America valves and jobs that go with them, which I have
witnessed, are an important part of Keystone XL energy. But
these jobs don't happen unless the pipeline gets built.
This pipeline will also include a number of state-of-the-
art features that will make it the safest oil pipeline in
existence. The pipeline would incorporate some 57 additional
safety standards proposed by the Pipeline and Hazardous
Materials Safety Administration and adhere to the strongest new
pipeline safety standards that were signed into law by
President Obama last year, the product of legislation that I
helped developed along with my colleague John Dingell and
supported by every member of this committee. Even the Obama
Administration's State Department concluded in its EIS that the
project poses minimal environmental risk. Not building Keystone
elevates risk as tankers and trains have significantly higher
spill rates than pipelines.
The project has broad bipartisan support in the House and
the Senate with nearly 100 cosponsors and enjoys broad public
support as well among Republicans and Democrats. It is time for
Congress to come together and help make this legislation a
reality. This important bill takes the lessons that we learned
from the trans-Alaskan pipeline when it was met with
unnecessary roadblocks. Just as the TAP pipeline was a game
changer in the '70s, the Keystone project will be a game
changer in our pursuit of North American energy independence.
I want to particularly thank Chairman Whitfield for his
tireless efforts, Lee Terry and the other cosponsors on both
sides of the aisle. And I would yield my balance of my time
to--who was seeking time--Joe Barton.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Today, we take an important step in support of the Keystone
XL pipeline, its jobs and affordable energy. I want to remind
folks that one of our goals is to develop a North American
energy independence plan to ensure we are not at the mercy of
the Middle East or countries like Venezuela.
Gas prices have more than doubled in many parts of the
country since January 2009, with numerous communities enduring
$4 a gallon today and prices are expected to only go up this
summer. Our most vulnerable cannot afford these prices on top
of an already weak economy that only created 88,000 jobs last
month. The president last year declared that he'd do ``whatever
it takes'' to create U.S. jobs. Well, here's a $7 billion
construction project that will put thousands of Americans back
to work. After more than four years--what are we waiting for?
As policymakers, our job is to ensure America can take full
advantage of our nation's valuable resources by unlocking the
power of our innovators and entrepreneurs. The committee has
embarked on a path to explore this new era of North American
energy abundance and rapid technological innovation. The
ability to successfully unlock these resources will lead to
increased American prosperity and less energy imports from
geopolitically unstable regions of the world.
We should be measuring our energy policy proposals by
whether they help contribute to increasing American energy
self-sufficiency. Do they help to reduce volatility from
foreign sources, keep costs low for consumers, help maintain or
contribute to a diverse energy supply portfolio, and are
protective of the environment? By those standards, I am happy
to say H.R. 3 passes the test overwhelmingly.
We have all heard the employment numbers associated with
this project, the tens of thousands of direct and indirect jobs
that will be created, but today I am pleased to welcome
somebody who will help put a face to those numbers, Keith
Stelter of Delta Industrial Valves in Niles, Michigan. Delta's
made-in- America valves and the jobs that go with them are an
important part of the Keystone XL story. But these jobs can't
happen unless Keystone XL gets built.
Keystone XL will also include a number of state-of-art
features that will make it the safest oil pipeline in
existence. The pipeline would incorporate 57 additional safety
standards proposed by the Pipeline and Hazardous Materials
Safety Administration and adhere to stronger new pipeline
safety standards that were signed into law, the product of
legislation I helped develop along with my colleague Rep. John
Dingell. Even the Obama administration's State Department
concluded in its Environmental Impact Statement (EIS) that the
project poses minimal environmental risks. Not building
Keystone elevates risks as tankers and trains have
significantly higher spill rates than pipelines.
The project has broad bipartisan support in the House and
Senate and enjoys broad public support as well. It is time for
Congress to come together and help make Keystone a reality by
approving the Northern Route Approval Act. This important bill
takes the lessons we learned when the Trans-Alaskan Pipeline
was met with unnecessary roadblocks. Just as the Trans-Alaskan
Pipeline was a game changer in the 1970s, the Keystone XL
project will be a game changer in our pursuit of North American
energy independence.
I would like to thank my friend Ed Whitfield and his
subcommittee's tireless efforts to break the administration's
four-year long impasse and approve Keystone XL. I also would
like to thank my friend Lee Terry for his sponsorship of this
bipartisan and commonsense bill.
# # #
Mr. Barton. Which I support what the chairman just said and
I want to yield to Mr. Barrow of Georgia.
Mr. Barrow. Well, I thank you, Mr. Barton. I thank the
Chairman for convening this hearing. I am proud to be an
original cosponsor of this legislation. Every day we don't act
on this project the United States becomes more dependent on
countries that don't like us for the transportation energy that
we absolutely need. And we are missing out on the opportunity
to put thousands of people to work here in America.
Critics believe that this project will only make us more
dependent upon oil as our primary source of transportation
energy in this country, but you can't be more dependent on
something than we already are dependent upon oil. The only
issue here is whether or not we are going to become dependent
on countries that are friendly to us, to allies and commercial
partners, or become more dependent on folks who are rivals of
ours who do not like us.
In that light I am proud to support this legislation. It is
good for this country, it is great for the economy, and I look
forward to moving this legislation forward. Thank you, sir. And
I yield back the balance of my time.
Mr. Whitfield. The gentleman's time has expired. At this
time I recognize the gentleman from California, Mr. Waxman, for
5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman. Today, this
subcommittee is holding a hearing on legislation to make
climate change worse by giving preferential treatment to
TransCanada's Keystone XL tar sands pipeline. I believe this
would be a terrible mistake.
Step outside today. The temperature is going to be around
90. The normal high temperature for April 10th in the District
of Columbia is 65, according to the National Oceanic and
Atmospheric Administration. This isn't an isolated incident.
Last year alone, the United States broke or tied 34,000 high
temperature records.
We know climate change is happening now, and the costs are
beginning to mount. The Government Accountability Office added
climate change to its high risk list, due to the huge financial
exposure it poses for the United States. In 2011 and 2012, our
country experienced weather and climate disasters from
Hurricane Sandy, to droughts, to floods, to all sorts of
problems that affected not only our farmers but the coastal
areas all over this country. And if you add up the costs of
these disasters, it came to around $188 billion. These
disasters aren't over. We are going to expect far more
disasters in the future.
So faced with a climate change issue, this committee, you
would expect, would be holding hearings and trying to work
together on legislation. But that is not what we are doing. We
won't even hold a hearing on the science of this issue. Look at
the record of this committee. In the last Congress, the House
Republicans voted to say that climate change was a hoax. They
voted 53 times to block any action on climate change. They
voted to defund research. They voted to block action by the EPA
to control pollution, to prevent energy efficiency measures
from going into effect, and to stop the Administration from
encouraging developing countries to do their part to address
this serious international global issue.
Well, this is a problem. And we asked the Republicans to
hold a hearing with the experts, because they have said over
and over again the science is not clear. But they won't bring
in the scientific experts to talk about the matter.
They say we need a North American energy independence.
Well, part of our energy independence is to be independent of
using oil. And we could fuel our motor vehicles by electricity
and hybrids and other sources, natural gas. Instead, we want to
develop more oil.
Well, we are going to need oil for the foreseeable future
and I wish we didn't need as much of it, but why do we need the
source of oil to be from the dirty tar sands of Canada? Just to
get the tar sands out of the ground and ready to go through a
pipeline, it goes through an enormous process that takes a lot
of energy to make the oil available to go through the pipeline.
And if we do not agree to import this tar sands oil, Canada is
going to find a difficulty in what to do with it because they
can't get it to the coast of Canada to take it to China. They
want to take it through the United States in a pipeline, with
all sorts of problems that pipelines offer, and then bring it
to the Gulf of Mexico where it likely will be, taken on
freighters to China to help them with their demand for oil.
They say we are going to need more oil--that is right. But
market economics actually tell us that the most competitive oil
will be produced. Tar sands oil is expensive to extract, land-
locked, and highly polluting. Producers are already facing
lower prices for their product because of transportation
constraints. Absent the Keystone XL pipeline, getting tar sands
to market will cost more, and tar sands will be less
competitive with the alternatives. Thos alternatives now
include a lot more U.S. shale oil from the Bakken and other
areas.
So I think it would be a mistake to agree to the tar sands
pipeline. But this decision is under consideration right now by
the State Department under the Obama Administration. Rather
than let them make a deliberate decision--and I hope they don't
make a decision that I would disagree with--this committee
would like to legislate a special earmark to help this
particular project. No other project is going to get this
special treatment. In this committee, the oil people get
special treatment. Those who are worried about climate change
don't even get a chance to be heard from.
Our job is to do something about problems that are going to
affect the future of our country, our children, and
grandchildren. This committee is absent without leave on the
issue of climate change.
Mr. Whitfield. The gentleman's time has expired.
At this time I would like to introduce the witnesses that
we have with us today. First of all, I want to thank all of you
for joining us on this important hearing as we explore ways for
America to be more energy independent. First of all, we have
with us today Mr. Alexander Pourbaix, who is the president of
the Energy and Oil Pipeline at TransCanada. We have Mr. Keith
Stelter, who is the president of Delta Industrial Valves. And I
passed over Mr. Swift, but Mr. Swift is with us, Anthony Swift,
who is the attorney for Natural Resources Defense Council. And
then we have Mr. David Mallino, who is the legislative director
for the Laborers International Union of North America. And then
we have Dr. Mark Jaccard, who is professor and research
director at Simon Fraser University.
So thank all of you for being with us this morning, and I
am going to recognize each one of you for a period of 5 minutes
for your opening statement. And there is a little box on the
table that will turn red when your time has expired so you can
be aware of that, not that we won't let you finish, but Mr.
Pourbaix, we will recognize you first for 5 minutes for your
opening statement.
STATEMENTS OF ALEXANDER POURBAIX, PRESIDENT, ENERGY AND OIL
PIPELINES, TRANSCANADA; ANTHONY SWIFT, ATTORNEY, NATURAL
RESOURCES DEFENSE COUNCIL; KEITH STELTER, PRESIDENT, DELTA
INDUSTRIAL VALVES, INC.; DAVID MALLINO, JR., LEGISLATIVE
DIRECTOR, LABORERS INTERNATIONAL UNION OF NORTH AMERICA; AND
MARK JACCARD, PROFESSOR AND RESEARCH DIRECTOR, SIMON FRASER
UNIVERSITY
STATEMENT OF ALEXANDER POURBAIX
Mr. Pourbaix. Thank you, Mr. Chairman.
I would like to thank this subcommittee for the opportunity
to testify once again today on behalf of TransCanada, the
developer of the Keystone XL pipeline project, and the operator
of the Keystone pipeline system.
We are very excited to be developing the $14 billion
Keystone pipeline system, which will link securing growing
supplies of U.S. and Canadian crude oil with the largest
refining markets in the United States, thereby significantly
improving North American energy security.
The first two phases of the Keystone pipeline system
already are in service with the capacity to deliver almost
600,000 barrels a day of crude oil to U.S. refineries every
day. To date, the existing Keystone system has safely delivered
over 400 million barrels of oil, meeting a vital market need.
In 2008, TransCanada filed its presidential permit
application with the State Department for the proposed 830,000
barrel-a-day Keystone XL pipeline. The State Department
conducted a comprehensive environmental review over the next 3
plus years, concluding with a final EIS in August 2011. The
final EIS concluded that, first, the project would have no
significant impacts to most resources along the proposed
project corridor; second, the project would be safer than any
other typically constructed domestic oil pipeline system; and
third, construction and operation of the pipeline would not
constitute a substantive contribution to U.S. or global carbon
emissions.
Before completing its national interest review however, the
Administration announced last January that it was denying
TransCanada's application because it could not complete its
review by the deadline imposed in the 2011 payroll tax
legislation. Last May, TransCanada re-filed its presidential
permit application to allow construction of the northern leg of
the XL pipeline from the U.S.-Canada border to Steele City,
Nebraska. The application maintained the previously studied and
approved project route through Montana and South Dakota.
In Nebraska, we committed to reroute the pipeline to move
it out of the Sandhills region. Following completion of the
public review process established by the Nebraska Legislature
in January of this year, Governor Heineman approved the new
route, which is incorporated in our pending State Department
application. In June, the State Department announced its intent
to prepare a Supplemental Environmental Impact Statement for
KXL. The State Department is now conducting a public comment
period on the March 1, 2013, draft SEIS which continues through
the 22nd of this month.
As we understand the State Department review process, a
number of further procedural steps are expected to follow upon
completion of the current public comment period. It appears now
that a decision on the pending presidential permit application
could be many more months down the road. I would like to
express TransCanada's appreciation for the sentiments behind
the recently proposed Northern Route Approval Act.
This morning, I would just like to very briefly highlight
the need for, and the benefits of, the Keystone XL pipeline.
The project is fundamentally about meeting the needs of U.S.
crude oil refiners, enhance U.S. consumers for a reliable and
sustainable source of crude oil to supplement or replace
declining foreign supplies without turning to greater reliance
on Middle East sources. The primary purpose of the Keystone XL
project is to transport heavy crude oil from Western Canada for
delivery to Cushing, Oklahoma, and Gulf Coast refineries.
In addition, the proposed KXL project would provide needed
transportation capacity for Bakken and midcontinent crude oils.
There can be little dispute that these purposes enhance U.S.
energy security at a critical juncture. The need for the
project is clearly demonstrated by the existing firm long-term
contracts for more than 500,000 barrels a day of western
Canadian crude oil to be transported through the Keystone XL
pipeline in the Gulf Coast project to Texas refineries.
Keystone has also made available up to 100,000 barrels a
day of capacity on the proposed project for domestic U.S. crude
oil produced in the Bakken area of Montana and North Dakota,
and has signed long-term contracts to transport 65,000 barrels
per day of Bakken production.
I should also point out that by transporting crude oil from
growing, secure North American basins in Canada, Montana, North
Dakota, Oklahoma, and West Texas to the U.S. refining market,
Keystone could serve as part of the solution to higher U.S.
consumer energy prices by increasing crude oil supply to the
United States and improving the perception of future U.S.
supply availability.
Construction and operation of the Keystone XL project would
provide significant economic benefits with no government
subsidy or expenditures. The project is privately funded and
financed and is shovel-ready, waiting only for the pending
presidential permit decision.
The March 2013 draft SEIS recognizes a wide range of
socioeconomic benefits that would be derived for construction
and operation of the project, including the following:
construction of the project would contribute approximately 3.4
billion to U.S. GDP. Construction contracts, materials, and
support purchased in the U.S. would total approximately 3.1
billion. Approximately 10,000 construction workers engaged for
4- to 8-month seasonal construction periods would be required
to complete the proposed project. A total of 42,100 jobs
throughout the United States would be supported by construction
of the proposed projects. And total earnings of workers
supported by the proposed project would be approximately 2.05
billion.
The Keystone pipeline system is subject to comprehensive
pipeline safety regulation under the jurisdiction of the U.S.
Department of Transportation Pipeline and Hazardous Materials
Safety Administration. To protect the public and environmental
resources, Keystone is required to construct, operate,
maintain, inspect, and monitor the pipeline in compliance with
the PHMSA regulations, as well as relevant codes and standards.
Above and beyond the PHMSA regulations, Keystone has agreed
to comply with 57 additional special conditions developed by
PHMSA for the XL project. Taking these 57 special conditions
into account, the draft SEIS specifically recognizes that these
measures provide for an additional safety factor on the
proposed project that exceeds those typically applied for in
domestic oil pipeline projects.
Finally, I wanted to reiterate that the XL project has
undergone a thorough and comprehensive environmental review
over the last 4 plus years. After all of this review, the March
2013 draft Supplemental EIS yet again concluded that ``the
analyses of potential impacts associated with construction and
normal operation of the proposed project suggest that there
would be no significant impacts to most resources along the
proposed project route.''
With respect to carbon emissions, a draft SEIS found that
it is unlikely the proposed project would have a substantial
impact on the rate of western Canadian oil sand development and
that if the project were approved, there be no substantial
change in global GHG emissions. Thanks for the time.
[The prepared statement of Mr. Pourbaix follows:]
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Mr. Whitfield. Yes. Thank you, Mr. Pourbaix. And the lights
evidently are not working so I let him go over quite a bit, so
you all take your time.
Mr. Swift, you are recognized for 5 minutes.
STATEMENT OF ANTHONY SWIFT
Mr. Swift. Thank you. Chairman Whitfield, Ranking Member
Rush, and members of the committee, thank you for today's
opportunity to testify on Congressman Terry's proposal.
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.
The Keystone XL tar sands pipeline is a lynchpin for the
expansion of tar sands production in Canada. On this point,
market analysts, the tar sands industry, and the environmental
community agree. Industries plan to triple tar sands production
by 2030, and the significant environmental impacts of that plan
simply cannot take place without the approval of Keystone XL.
Alternative proposals will not allow the same level of tar
sands expansion, and the associated climate emissions is a
Keystone XL pipeline.
Pipelines to the West and East Coast are stalled by
entrenched public and First Nations opposition. Several
proposals would require the use of aging pipelines to move tar
sands to communities in sensitive watersheds. After the rupture
of the Pegasus pipeline in the Arkansas community of Mayflower,
the risks of these projects is becoming more apparent to the
public.
In its draft environmental review of Keystone XL, while the
State Department acknowledged that tar sands is significantly
more carbon-intensive over its lifecycle than conventional
crude, the agency mistakenly suggested that rail could provide
an economic alternative to Keystone XL. We should remember the
State Department made a similar prediction in 2011. We now know
the agency's conclusions and underlying assumptions were wrong.
Two years later, they continue to be wrong. A cornerstone of
State's conclusion that rail is a feasible alternative to
Keystone XL is the example of rail use by oil producers in
North Dakota. From 2009 to 2013, North Dakota producers
increased their use of rail to move light crude from a few
thousand barrels a day to over half-a-million barrels per day.
Now, over \2/3\ of North Dakota's total production moves by
rail.
As they turn to rail, North Dakota's domestic light oil
producers have even rejected major pipeline proposals. The
dramatic increase of crude by rail in the United States and
southern Canada is almost entirely light crude moving from the
Bakken oil fields. It is not northern Alberta's tar sands. Data
from the U.S. Energy Information Administration shows that no
more than 21,000 barrels per day, less than 1 percent of
Canadian tar sands and conventional heavy crude, moved by rail
to U.S. refineries and markets in the Gulf Coast in December of
2012.
There are two major reasons why tar sands producers haven't
turned to rail to move their product to market. First, it is
significantly more expensive for them to do so; and second,
they have significantly tighter profit margins than Bakken
light crude producers. Tar sands diluted bitumen is
significantly more expensive to move by rail than Bakken light
crude. After all, northern Alberta is about 1,000 miles farther
from refineries than North Dakota.
Moreover, moving heavy tar sands by rail has additional
complications. Producers can't fit as much heavy crude on a
rail car. Specialized real cars are required. Specialized on-
loading and offloading facilities are required. And by and
large, they are not being built to handle tar sands. All of
these factors increase the cost of moving a barrel of tar sands
to the Gulf Coast refineries by rail. That is why the rate
producers are actually paying to move tar sands to the Gulf by
rail is twice that of what State estimated. New tar sands
projects have very tight margins. Some have breakeven costs
above $100 a barrel. Many of these projects won't move forward
with substantially higher transportation costs.
In addition to its impacts on climate, Keystone XL would
endanger critical jobs on ranches and farms in the Plains
States in order to transport tar sands to the Gulf Coast where
can be refined and then exported internationally. I want to
make the point that the State Department has indicated Keystone
XL would have no impact on gasoline prices, and in fact, it
will increase oil prices in the Midwest by significant margins.
In exchange for 35 permanent jobs, Keystone XL would pose a
permanent risk to American communities, sensitive water
resources, and the agricultural industry. We need to protect
those jobs, not put them at risk for the type of tar sands
blowout that has poisoned nearly 40 miles of the Kalamazoo
River in Michigan or the recent spill in Arkansas which sent up
to 420,000 gallons of tar sands oil flowing through the
community of Mayflower.
The substantial risks of the Keystone XL tar sands pipeline
outweigh its marginal benefits. Keystone XL is a lynchpin for
tar sands expansion and the substantial climate pollution
associated with it. The pipeline would threaten American
communities, lands, and water resources in order to transport
tar sands to the Gulf where it can be refined and exported
internationally.
Simply stated, Keystone XL is not in the Nation's interest
and should be rejected on that basis. NRDC thanks you for the
opportunity to present its views and I would be pleased to
answer any and all of your questions.
[The prepared statement of Mr. Swift follows:]
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Mr. Whitfield. Thank you, Mr. Swift.
Mr. Stelter, your recognized for 5 minutes.
STATEMENT OF KEITH STELTER
Mr. Stelter. Thank you. I have never done anything like
this before. I am not an expert at anything, just ask my wife.
I think Mr. Upton probably invited me here because, as we
have gotten to know each other, I am in a kind of unique
position. We are a manufacturer of American-made valves that
are used in oil production. I also am a person who holds
patents on valve design so I know the technology. I also
probably spent more time in Alberta, Canada, at the oil sands
than possibly everybody else in this room combined, other than
my associate from that region.
I guess I would just say that, first and foremost, the
Canadians are completely perplexed and stymied why--I am just
talking about the general public and the executives of the
companies and such, why America is just thumbing their nose at
this ability to have this crude. One of the guys said it would
be like if you owned a catering company and your best friend
was throwing a wedding and he chose an enemy of both of you to
do the catering for your daughter's wedding instead of your
friend.
The need for crude oil is not going to go away anytime
soon. I do agree that it is in everybody's best interest to get
away from it for many reasons, but that is technology that
needs to be developed and brought forward.
I can tell you as a member of the private sector, when
things are in demand and when the technology is there, we will
grab a hold of it and run with it. If other sources of power
were available and were practical and consumers wanted them, we
would be all over it.
My company has benefited as a manufacturer. We started out
back in the oil sands back in the early '90s when it was really
just a handful of crazy guys that had gone up there and had
this idea of getting the oil out of this frozen tundra. Now
they have developed it. If you have looked at my testimony,
they are the world-low producer cost-per-barrel if not one of
the. I am not exactly sure on a month-by-month basis.
If the XL pipeline doesn't go through, the oil sands
production companies are not going to close up and go away.
China wants that oil. Like I say, I am up there constantly.
PetroChina is making investments, they are up there lobbying,
they are buying out entire oil production facilities, and they
are also buying portions of others. They will get pipelines put
in to the West Coast; there is no doubt about that. I mean it
is a done deal if we don't do the XL pipeline.
Knowing manufacturing, I can tell you that companies like
mine, with the help of Mr. Upton and other people in the
government, are taking steps to make our plants more efficient,
whether it is the lighting we use. We have gone away from toxic
chemicals with our cooling for our machining. I can tell you
that our counterparts in Asia and China in particular are not
doing those things.
So I guess to call a lesser of two evils, if somebody is
going to get their hands on that crude oil and use it, which
they are, I think it is in our best interest that companies in
America who are trying to do the right thing, are trying to be
more efficient, are able to get a hold of that.
I will comment also that in the time I spent up there and
in just the last few years, a majority of the products that we
sell up in the oil sands region are going into the
environmental portion as opposed to the direct production of
oil sands oil crude. Their recent thing is tailings
reclamation. Back in the '70s, '80s, and such up until the
early 2000s, basically the oil sands companies, tar sands
companies were just pumping their tailings out in these big
ponds and kind of just leaving them. They would put some air
cannons out there to keep birds from landing on them or animals
going through them.
But the Canadian Government has gotten very strict and now
they are the fast track thing called the tailings reclamation.
And because of that, they are reclaiming these large oil
tailings reclamation ponds and they have gotten to the point
where they have to--before they go and extract from an area,
they take pictures of it and they literally--I have seen this--
they have to go and replant, replace dead trees in that area,
and when you go by there now, you would never know that
anything ever took place there as far as oil production.
The technology is sound for the pipeline. As I mentioned, I
hold some patents in valve design, own a company that
manufactures them. Like anything else, the problem is in the
maintenance. If you buy a tire, if the technology of that tire
is sound, if you put it on your car and run it for 100,000
miles and don't rotate it or anything, it is going to blow out.
And the same is true of a pipeline. You know, it is the problem
with every--I can't say every, but every one I have ever seen--
pipeline problem has been a maintenance issue where they
weren't maintained properly or something has caused the earth
to shift and cracked the pipeline. But the technology is sound.
[The prepared statement of Mr. Stelter follows:]
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Mr. Whitfield. Well, thank you very much, Mr. Stelter.
And Mr. Mallino, you are recognized for 5 minutes.
STATEMENT OF DAVID MALLINO, JR.
Mr. Mallino. Thank you, Mr. Chairman.
On behalf of the 500,000 members of the Laborers
International Union of North America, I would like to thank
you, Ranking Member Rush, and all the members of the
subcommittee for allowing me to testify today on the union's
behalf.
My union strongly supports the construction of the Keystone
XL pipeline. The benefits of this privately funded
infrastructure project are too great to allow it to be derailed
by environmental extremism. The Keystone XL will create
millions of hours of work with good wages and benefits for the
union construction workers who build this pipeline.
For many members of LIUNA, this project is not just a
pipeline; it is in fact a lifeline. The construction sector was
hit particularly hard by the recession with unemployment in the
industry reaching over 27 percent in 2010. Joblessness in
construction remains far higher than any industry or other
sector of the economy. It is nearly double the national
unemployment rate with over 1 million construction workers
currently sidelined. Too many Americans are out of work and the
Keystone XL pipeline will change that dire situation for
thousands of them.
TransCanada has executed a project labor agreement with
LIUNA and four other construction unions, guaranteeing that
this pipeline will be built with the best-trained, highest-
skilled construction workers in the world. Regardless of the
characterizations by the project's opponents, it is
indisputable that jobs will be created and supported by the
building of this pipeline. These jobs will have a ripple effect
of consumer spending that will have a positive impact on the
States and communities where the pipeline is going to be
located.
Unfortunately, some of the pipeline's opponents have
resorted to attacking the nature of the work that our members
have chosen as careers. They have imposed a value judgment that
holds these construction jobs to be of a lesser value because
by its very nature a construction project has a completion
date, and therefore, that individual job will come to an end at
some point. They call these jobs temporary in order to diminish
their importance and they recruit others to join in a chorus of
negativity in the mistaken belief that these jobs have no real
value to society. To attack the project, they have called these
jobs dirty and dangerous.
The fact of the matter is construction is in fact a
dangerous occupation, and when not perform by trained workers,
it can lead to unacceptable levels of environmental harm.
However, when construction is performed by well-trained union
workers, it is less dangerous and can be conducted in a more
environmentally sensitive manner.
Construction of this pipeline will also produce needed
government revenue at the federal, state, and local levels.
These new resources can help our state and local governments
protect their communities from harmful budget cuts that have
led to layoffs and elimination of much-needed services.
The Keystone XL pipeline will be the safest pipeline in the
world, as you have heard. The 57 special conditions that have
been mentioned before have a degree of safety higher than any
typically constructed domestic oil pipeline under the current
regulations.
Additionally, in order to address environmental concerns
about the Nebraska Sandhills and the Ogallala Aquifer,
TransCanada rerouted 195 miles of the pipeline. The Nebraska
governor, Dave Heineman, once an opponent of the pipeline
because of environmental concerns, recently sent a letter to
the President approving TransCanada's new 195-mile reroute.
If the Keystone XL pipeline is not built, Canadian
producers will seek alternatives to the American markets. This
oil will not remain in the ground. Producers will find ways to
move it to market. Denial of a presidential permit of the
Keystone XL increases the likelihood that American markets will
miss the opportunity to secure long-term commitments for this
North American resource.
The Laborers support H.R. 3, the North American Route
Approval Act, a bipartisan bill which will clear away the
remaining roadblocks preventing construction of the pipeline.
As mentioned, similar legislation was necessary to allow
construction of the trans-Alaska pipeline which has been a
great boon for our members in particular, as well as other
unions that worked on the project.
If opponents of American jobs succeed in preventing the
Keystone XL pipeline from being built, the socioeconomic
benefits of this project will not be realized. No local, state,
or federal revenues will be generated by the construction and
operation of the pipeline, and there will be no additional
income to property owners and businesses along the pipeline
route. And critically important to LIUNA and our members, the
jobs that will be created by this massive private investment
will be lost.
I appreciate the opportunity to testify and I will be happy
to try to answer any questions you may have.
[The prepared statement of Mr. Mallino follows:]
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Mr. Whitfield. Thank you, Mr. Mallino.
Dr. Jaccard, you are recognized for 5 minutes.
STATEMENT OF MARK JACCARD
Mr. Jaccard. Thank you, Mr. Chairman.
The State Department assumes that denying Keystone XL will
not slow development of the Alberta oil sands, yet a great deal
of evidence contradicts this assumption. And ironically, much
of the evidence comes not from environmentalists but from
industry analysts, Canadian politicians, and even the oil sands
producers themselves. Quite simply, plans to triple oil sands
production over the next two decades cannot be realized without
increased pipeline capacity. In addition to Keystone XL, two
key proposals to ship Alberta bitumen across the province of
British Columbia are the northern gateway of Enbridge and the
Trans Mountain expansion of Kinder Morgan.
I happen to live in Vancouver, British Columbia, where I am
a professor of energy economics, former chair of the Utilities
Commission, and a frequent advisor on energy and climate
policy. Industry analysts now rate the probability of these two
projects at below 50 percent and with good reason. Aboriginal
bands along the overland routes and on the coast where oil
tanker traffic would increase dramatically are strongly
opposed. And because these native bands have never signed
treaties to extinguish their land title, they have a powerful
legal position in the Canadian courts.
Just as important, there is strong public opposition in
B.C. to both projects. The city of Vancouver opposes the use of
its port to export oil. And the provincial opposition party
vows to stop northern gateway if it forms the next government.
It has a 20-point lead in the opinion polls and the election is
next month.
So if we ask if denial of Keystone XL will slow oil sands
development and the carbon pollution it causes, the answer is a
resounding yes. Without these three projects, oil sands
expansion will be slowed as producers scramble to develop less
effective, more costly alternatives.
But this is not the most important question to ask when
considering a project like Keystone XL. We must have the
honesty and political courage to ask a more important question.
We must ask what we must be doing today to slow the global rise
of carbon pollution and ask what role the decision about
Keystone XL can play in this difficult but hugely important
challenge. It is not an easy question. Oil industry executives
don't want to talk about it. They prefer to discuss jobs and
wealth from extracting more fossil fuels from the Earth's
crust. But rising carbon pollution in our atmosphere is a
classic tragedy of the commons. Since each source of carbon
pollution is only some percentage of the whole, each polluter
argues that it may as well continue, even expand.
China says it should burn coal as long as North America
still burns fossil fuels. Canada says it should develop oil
sands as long as China still burns coal. Next, with this logic,
Venezuela will argue it should develop all of its enormous
deposits of heavy oil. Given the incredible amount of fossil
fuels in the Earth's crust, scientists have been quite clear
that this game's end state is a dramatically hotter, more
unstable planet than the one we have based our economies on. A
planet we are hurtling toward with great momentum.
And if we are honest about this tragedy of the commons
conundrum, U.S. political leaders know that domestic efforts to
reduce carbon pollution are meaningless if they are not taken
in concert with serious efforts by others. Yet Canada and the
province of Alberta in particular are not doing their share.
And this is very unpopular in a large percentage of the
Canadian population.
In 2009, President Obama stressed the urgency of U.S.
action as part of a global effort, and on that basis, set a
target for the U.S. to reduce its emissions by 2020 to 17
percent below their 2005 level. Independent sources now confirm
the U.S. is on track to achieve this target. In solidarity, the
Canadian Government promised to achieve the same target for
2020. But last year, the Canadian auditor general reported that
emissions in 2020 are likely to be 7 percent higher rather than
17 percent lower. And the main reason, not surprisingly, is the
projected oil sands growth.
The Keystone XL decision provides the ideal opportunity for
the U.S. Government to signal to its allies, trading partners,
and the rest the world that the climate tragedy of the commons
cannot be addressed if we are not pulling together. It cannot
be addressed if we accelerate the extraction of fossil fuels
from the Earth's crust. It cannot be addressed if countries
like Canada are free-riding on the efforts of countries like
the U.S.
In denying Keystone XL, the U.S. Government would simply
explained to Canada that it is extremely concerned with rising
carbon pollution and with the fact that it is incurring costs
to keep its pollution reduction promises and expects other
countries to meet their promises, too. It would also explain
that it will next be talking to other countries like China
about free-riding on U.S. efforts.
In solving this extremely difficult global climate tragedy
of the commons, we should expect nothing less from the world's
most powerful Nation.
Thank you. I will be pleased to answer questions.
[The prepared statement of Mr. Jaccard follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you, Dr. Jaccard. And thank all of you
for your testimony.
At this time, the members of the panel will be asking
questions, and I will recognize myself for 5 minutes.
I think Dr. Jaccard did make a good point and that is, as
we know in America, for example, our CO2 emissions
are the lowest they have been in 20 years, and yet we know
China and some other countries' CO2 emissions
continue to increase dramatically. And it is difficult to talk
about any energy project today anywhere without a discussion
about the impact on climate change.
And many of you may have read the five-page article in the
most recent issue of the Economist in which it talks about
climate change scientists are puzzled that the temperature rise
has been flat for the last 10 years even though carbon dioxide
emissions are going up significantly in most other countries
around the world except in the U.S. and maybe some in Europe.
So there are some interesting developments coming right now
on this issue, and one of the problems we have in the U.S., we
feel like that we don't have to take a backseat to anyone on
the good job that we have done with the environment. But the
question is China talks a good game but they are burning more
fossil fuels now than ever, and here in the U.S., we are the
only country in the world that technically you cannot even
build a new coal-fired plant in this country if the greenhouse
gas regulations are finalized, which they will be soon, and so
we are sort of shooting ourselves in the foot.
But this is about Keystone pipeline and our ability to be
energy independent. So Dr. Pourbaix, one question I would like
to ask you--we had a hearing on this a year or so ago and one
of the members raised an interesting point and was talking
about that they estimated 800,000 tons of steel would be used
in this project. And this member had indicated that he was
upset because he understood that TransCanada was not going to
be buying U.S. steel, not buying steel produced in the U.S. He
specifically pointed out that they would be coming from an
Indian multinational company called Welspun Corporation, and
also a Russian company. And this member said that he would feel
a little bit better if just one small amount of the steel for
this project would be coming from America. Would you address
that issue? Would there be steel coming from America if this
project is approved?
Mr. Pourbaix. Sure, I would be happy to, Chairman.
In order to be in a position to build this pipeline, we had
to start the procurement of pipe for the pipeline years ago,
and we have procured approximately 75 percent of the pipe for
this project from North American suppliers mixed between a
Canadian supplier in Saskatchewan and a supplier in Arkansas.
And we would have procured more, but at the time, those were
the two companies that had the ability to produce steel with
the very sophisticated specifications we require. Since that
time, we have announced a number of expansions to the Keystone
XL project and 100 percent of the pipe for those projects,
40,000 tons, has been sourced directly from American suppliers.
Mr. Whitfield. And you all have already purchased the
steel?
Mr. Pourbaix. Yes.
Mr. Whitfield. And could you share with us the amount of
money that that cost roughly?
Mr. Pourbaix. It would be in the ballpark of somewhere
between probably 1 \1/2\ and $2 billion.
Mr. Whitfield. Two billion?
Mr. Pourbaix. Yes.
Mr. Whitfield. And one thing about Keystone, there is not
any government money involved in the Keystone project, is
there?
Mr. Pourbaix. No, not at all.
Mr. Whitfield. It is all private dollars?
Mr. Pourbaix. Yes.
Mr. Whitfield. OK. Now Mr. Mallino, you had mentioned in
your testimony that the labor unions had signed a project labor
agreement with TransCanada. That is the case, right?
Mr. Mallino. It is. And also, can we get a couple more heat
lamps on me? If my mom is watching and if I am not truly
crimson she will be disappointed if I can't even out the red in
my face.
TransCanada has been a great partner in this and the
project labor agreement was executed probably close to 2 years
ago and it will guarantee that the construction on the U.S.
portion of this pipeline will be built 100 percent union. And
there are five unions totally involved.
Mr. Whitfield. How many jobs would you anticipate that
would bring?
Mr. Mallino. Well, this has been an issue and I don't take
up too much of the time. In the construction sector, we talk
about hours because depending upon how many people you have on
a job, you can get it done much more quickly.
Mr. Whitfield. Right.
Mr. Mallino. It will be millions of hours for the laborers.
Mr. Whitfield. OK.
Mr. Mallino. Right now, we have done about a half-a-million
on the Southern Gateway project just in the last 6 months of
last year. There is probably an equal number down there on that
project.
Mr. Whitfield. OK.
Mr. Mallino. Keystone XL is a multiple of that.
Mr. Whitfield. OK, thanks. Mr. Rush, you are recognized for
5 minutes.
Mr. Rush. Thank you, Mr. Chairman.
Dr. Jaccard, I am in kind of a difficult position. Maybe
you can help me out. It seems as though the environmental
community of which I have had a lot of respect for and a lot of
collaboration with over the years, it seems to me that they are
really downplaying the impact in importance of jobs as it
relates to this particular issue. And I represent a district
that is struggling economically, multigenerational
unemployment, and it seems as though there is no concern or any
contemplation of the problems that my constituency and other
constituencies across the country have in terms of economic
plight. Where do the environmentalists place as a priority on
this particular project the creation of jobs?
Mr. Jaccard. Thank you. I don't represent environmental
community, but I am an economist who studies how economies
respond to different kinds of policies. Ten years ago, I wrote
a book called ``Sustainable Fossil Fuels.'' I wrote that book
because I have nothing against any fossil fuel. I actually
believe that fossil fuels are a very valuable resource for
humanity. I just refuse to close my eyes to the impacts of
carbon pollution if we burn those fossil fuels and don't
capture the carbon.
Mr. Rush. Thank you. Thank you.
Mr. Jaccard. And so therefore----
Mr. Rush. Thank you. I----
Mr. Jaccard. I looked at the jobs. There are a lot of jobs
created in capturing carbon, burying it, in making alternatives
to fossil fuels.
Mr. Rush. Thank you. Mr. Swift, will you answer that, my
question?
Mr. Swift. Yes. Well, in the United States, the
environmental jobs, green jobs, have been one of the fastest-
growing sectors in the U.S. economy. It was one of the only
sectors that grew during the recession. If you look at the
dollar investment in clean energy generates about three to four
times as many jobs as a dollar invested in the fossil fuel
industry. And these are the sort of jobs that tend to be jobs
that stay with us, that are manufacturing jobs, jobs that allow
us to export the solutions to the energy dependence or oil
dependence issue that United States----
Mr. Rush. Thank you, very much. Thank you.
Mr. Mallino, how many of the jobs that is now in the
southern sector of this project that is currently operating,
what is the percentage of minority participation in terms of
contracts and also jobs?
Mr. Mallino. You know, we have answered this question for
you in the past, Congressman. We responded for the record last
time we don't track those numbers, but our union reflects the
communities where we are located. So in areas where there is
high diversity, our union is very diverse. In areas of low
diversity, we are not as diverse. We reflect the communities
where our locals are located, but we don't track that number.
Mr. Rush. All right. Mr. Pourbaix, do you track those
numbers?
Mr. Pourbaix. We do try to track those numbers, and my
experience is that on the southern leg of the Gulf Coast it
does depend by community, but I had asked for this information
a day or so ago and I saw ranges. Depending on what community,
it was anywhere between 12 percent minority participation in
the workforce and 55 percent minority participation in the
workforce. So we do have significant minority participation in
the southern leg.
Mr. Rush. All right. Mr. Chairman, I yield back.
Mr. Whitfield. Thank you, Mr. Rush. At this time I
recognize the gentleman from Texas, Mr. Barton, for 5 minutes.
Mr. Barton. Thank you. Thank you, Mr. Chairman.
I don't think it is a secret that I am a proponent and
supporter of the Keystone pipeline, so it is somewhat redundant
for me to ask too many questions. So I would point out, though,
that people like me that support hydrocarbon development don't
deny that the climate is changing. I think you can have an
honest difference of opinion on what is causing that change
without automatically being either all in that it is all
because of mankind or it is all just natural. I think there is
a divergence of evidence.
I would point out that if you are a believer in the Bible,
one would have to say the great flood is an example of climate
change. And that certainly wasn't because mankind had
overdeveloped hydrocarbon energy.
So in any event, I would ask the gentleman from the
Canadian Government if you agree with the professor at the
other end of the table that if we don't do Keystone that these
projects won't be developed that get the oil to the west coast
of Canada and onto Japan and China. Do you agree that it is
Keystone or nothing, or do you think that the energy will be
developed and sent somewhere?
Mr. Pourbaix. I think I would disagree with that that
characterization and the similar characterization made by Mr.
Swift. In fact, I mean, I think what we are seeing, the reason
that there has been so much more rail transport out of the
Bakken is that there were very few existing pipelines and so
rail was the only option. Until very recently in Alberta, the
existing pipelines had the capacity to take away that oil.
As those pipelines are reaching capacity--and I am speaking
with the senior people in these oil companies on an almost
daily basis and all of them are executing on strategies to
build more rail terminals and to move more oil by rail. The
typical number that we see quoted is $15 a barrel to get that
oil from the oil sands to the U.S. Gulf Coast. I would also add
that comes with a three times higher emission of greenhouse gas
to move a barrel of oil by rail than by pipeline and a much
significantly higher risk of a spill by doing it that way.
So in fact if the oil is going to be produced and is going
to be moved by rail, which I think the evidence is clearly in
favor of that, by denying the Keystone XL permit, you are
almost certainly going to increase global GHG as these rail
sources proliferate. And that is exactly what we are seeing
right now. And if you talk to the major Canadian rail
companies, they see it as their largest area of growth is
moving oil out of the oil sands to U.S. markets.
Mr. Barton. Of what we call the Keystone pipeline, which is
not a legal term, it is just a general term, how much of that
is either in existence or already permitted and in the process
of being built?
Mr. Pourbaix. So we have already--we call it base-Keystone
that has been service since 2010. That was a project that was
in the range--it is about a $7 billion project that is moving
600,000 barrels of oil a day to Cushing and refining markets in
the Midwest. We are presently building the southern leg of what
was originally Keystone XL from Cushing to the Gulf Coast, and
all of that is soon to be in service. The only thing we are
here----
Mr. Barton. How many miles is that?
Mr. Pourbaix. Oh, gee. I would probably get it wrong, but
it would be of the----
Mr. Barton. This is the government. It doesn't have to be
exact. I mean----
Mr. Pourbaix. I mean probably if you add it all up, it is
probably somewhere in the range of over 2,000 miles of pipe.
Mr. Barton. You got about 2,000 either built or being
built. How much is in question in this permit that we are----
Mr. Pourbaix. Just that portion from the Alberta border to
Nebraska, and so probably about 800 miles.
Mr. Barton. So about \2/3\ of it is built----
Mr. Pourbaix. Yes.
Mr. Barton [continuing]. Or ready to be built and about 1/3
is under debate.
Mr. Pourbaix. Exactly.
Mr. Barton. OK. Mr. Chairman, my time is up but I must
think we are going to change minds in this hearing. Those of us
that are for it are going to be for it, and those of us that
are against it are going to be against it. I would hope that we
would schedule a vote and bring it to the floor and let's get
it out of committee and get to the floor and have a vote and
send it to the Senate.
Mr. Whitfield. Thank you. At this time, I recognize Mr.
McNerney for 5 minutes.
Mr. McNerney. Thank you, Mr. Chairman. I want to thank the
panel for your testimony today. It is even and well-balanced
and I want to thank the chairman for inviting a balanced panel
this morning.
Mr. Swift, how do you believe construction of the Keystone
pipeline would affect domestic gas supply and domestic gas
prices?
Mr. Swift. Well, the important thing to understand is
Keystone XL is really a pipeline intended to get oil out of the
U.S. Midwest and to the Gulf Coast. And so what Keystone XL
will do is it will divert oil from the Midwest where it can be
refined in the Gulf Coast increasing oil prices in the Midwest.
And one thing to understand about the Gulf Coast refineries is
there--sorry about that. The Gulf Coast refineries where
Keystone XL would bring the oil are exporting a significant
amount of their refined product. Nearly 3 million barrels a day
was exported from Gulf Coast refineries in December of 2012.
Mr. McNerney. Anyone else care to answer that question, how
Keystone will affect domestic gas prices?
Mr. Pourbaix. I would be happy to----
Mr. McNerney. Sure.
Mr. Pourbaix [continuing]. Give a brief comment on that.
Mr. Swift did make an accurate characterization with respect to
right now, because there is a lack of pipeline takeaway
capacity in the U.S. Midwest, recently, crude oil prices in the
U.S. Midwest have been lower than they have been on the Gulf
Coast. That is being solved by our Gulf Coast project. Enbridge
has a project; Enterprise has a project. That bottleneck is
being removed. This Keystone XL project we are talking about
today is only from Alberta to Cushing. So it is not going to
exacerbate or change that problem, but that differential
between Gulf Coast prices and Midwest prices is going to be
removed in any event by the projects that are under
construction.
And one other point I would say is the fact that there has
been lower-priced oil in the Midwest has not led to lower gas
prices for Midwest consumers; it has led to higher margins for
refiners that have been benefiting by that. So to suggest that
any of those projects will increase gasoline prices would be
incorrect.
Mr. McNerney. Or to lower them?
Mr. Pourbaix. I would just say on balance what Keystone is
doing is adding another source of supply to a finite demand.
And it has been a long time since I took economics, but
typically, when you add incremental supply to a finite demand,
the impacts should be to reduce prices. But I don't think
anyone is suggesting that it would be a very significant
reduction.
Mr. McNerney. Thank you.
Mr. Swift, how much more carbon is emitted per unit of
gasoline produced and sold to a consumer from tar sands versus
conventional oil?
Mr. Swift. I think the State Department's estimates were
somewhere in the up to 17 percent as far as the lifecycle
emissions for a unit of gasoline and----
Mr. McNerney. Does that include the energy required to get
the oil out of the ground?
Mr. Swift. I believe it does. I believe it does. But much
of that is from the production side of things.
Mr. McNerney. Anyone else care to answer that question?
Mr. Pourbaix. Just one quick comment I would say on that is
that the range I think they had given was somewhere between
about 12 and 17 percent. They base that analysis on a barrel of
oil sands oil versus the average barrel of oil refined in the
U.S. It is worth noting that those Gulf Coast refineries that
Keystone is targeting are presently configured and run heavy
oil so they will not be replacing a barrel of Canadian heavy
with a barrel of light. They will be replacing it with a barrel
of Venezuelan heavy or some other heavy, in which case that
percentage, I would argue, would be smaller.
Mr. McNerney. Thank you.
Mr. Jaccard, I assume that you believe that global warming
is caused to a large degree by human activity.
Mr. Jaccard. I believe in listening to scientists.
Mr. McNerney. Thank you. One of the things in your written
testimony that was brought out was that in order to achieve a
less than 2 degree Celsius change in global temperatures, the
Keystone pipeline needs to be a part of that, whether it is
prevented or not. Could you comment on that?
Mr. Jaccard. That Keystone needs to be part of it. What I
would like to say is that I am involved in a lot of analysis of
what happens to global energy markets to meet the constraints
of 2 degrees Celsius that scientists and political leaders have
talked about. And when we run those, you don't expand oil sands
in Canada, you don't expand the Venezuela heavy oil, and that
means it doesn't mean shutting down the oil sands. It would run
for decades, but you are not trying to triple production. And
that means projects like Keystone and the projects in British
Colombia I mentioned are not part of that feasible future. And
in my testimony I refer to a study by MIT researchers that just
focused on the Alberta oil sands.
Mr. McNerney. Thank you, Mr. Chairman.
Mr. Whitfield. At this time I recognize the gentleman from
Texas, Mr. Hall, for 5 minutes.
Mr. Hall. I thank you, Mr. Chairman.
Mr. Pourbaix, I have a question to ask you but I first want
to just note that the chairman introduced in the record the
impact of climate change, and we have been debating that here
for years. And Dr. Jaccard says he believes in listening to the
scientists. Well, we have listened too much to the scientists.
And the liberal press doesn't always report it to the people
what the scientists on either side say. They say more. We need
more work, more investigation, more hearings. And we have sent
22 bills over to the Senate. One of them got through and the
President vetoed it.
And Mr. Barton says he doesn't deny that the climate is
changing. It is changing so none of us deny that. We know we
have to keep an eye on that. We know we have to be aware of it,
but I will tell you who is keeping an eye on it, it is the
taxpayers of this country. We spent $34 billion and we haven't
changed one iota. So that makes me think I am more concerned
about global warming than I am global freezing.
And the testimony and all the acts of this Congress has
been to look at it, be aware of it, listen to scientists that
come here under oath to tell the truth.
So my question to you, Mr. Pourbaix, in your written
testimony--I am not going to allude to you that you didn't tell
the truth at all--in your written testimony, though, you
mentioned that 60 percent of the southern pipeline segment is
complete. And would you give some of the examples of the
economic impact that that is having?
Mr. Pourbaix. I think it is important to remember that that
small portion of what was originally the Keystone XL pipeline
is in and of itself a 2-1/2 to $3 billion pipeline. We have put
5,000 construction workers directly to work working on that
project and the pipe, the pumps, the consumables, all of that
equipment that is required for that project was largely sourced
from American sources, and so all of those spinoff benefits are
accruing to the communities that supplied that equipment.
Mr. Hall. Tell me specifically how is that affecting Texas?
Mr. Pourbaix. I don't have the specific data right in front
of me, but obviously the lion's share of that project is in the
State of Texas so a large part of those economic benefits would
be accruing in the State of Texas.
Mr. Hall. By the way, are you exercising eminent domain in
Texas at this time?
Mr. Pourbaix. TransCanada----
Mr. Hall. Are you purchasing any land in the State of Texas
at this time?
Mr. Pourbaix. We have purchased massive quantities. We have
purchased easements which give us the right to go on property.
Over 99 percent of those easements were negotiated----
Mr. Hall. Does that easement require you to have the
landowners' right in offering letting you go on the property?
Mr. Pourbaix. Yes, absolutely. And in 99----
Mr. Hall. Well, that is not the way it is occurring in my
family. I live in the smallest county in Texas and you are
going right through the middle of it.
Mr. Pourbaix. Yes.
Mr. Hall. I support the bill's overall thrust. I support
telling the President that we don't agree with him on crossing
the State on the international boundary because of the
influence that this amount of money and jobs would mean to all
of us.
But when they talk about ANWR, little ANWR is just 19
million acres and we want to drill on 2,000 acres. If that runs
at 19 million acres, it is like saying drop a silver dollar in
Yankee Stadium and it ruins the whole outfield. That is
outrageous. What it has done is cost the American taxpayers $34
billion and we haven't changed one iota of global warming. Do
you agree with that?
Mr. Pourbaix. I----
Mr. Hall. If we have changed it, tell me where you have
changed it.
Mr. Pourbaix. No, I think it is a fact that the efforts to
date have had relatively little impact on the global
temperature. I have seen a number of studies done on Keystone
that if Keystone were denied and were not built, it would
have--or sorry, if the oil sands were not developed, it would
have an impact of less than somewhere in the range of \5/100\
of 1 percent.
Mr. Hall. And I will yield back my time in a minute, but I
just have to say that the only changes I have noted is the
change in Al Gore's deposits at the bank and a bunch of
scientists that come here and testify for money. I yield back.
Mr. Terry [presiding]. Thank you, Mr. Hall. At this time we
recognize the full committee ranking member, Mr. Waxman.
Mr. Waxman. Thank you, Mr. Chairman.
Dr. Jaccard, I appreciate your thoughtful testimony today.
Some supporters of the Keystone XL pipeline acknowledge that
using oil from the tar sands produces much more carbon
pollution than conventional oil. And they recognize this extra
carbon pollution will make climate change worse. Some, none on
this committee, but some.
But they argue that building the Keystone XL pipeline to
move this tar sands oil won't make climate change worse. The
argument is that the oil companies will carry out their plans
to triple production of the tar sands whether or not Keystone
XL is built. But oil companies can only do that if they have
real alternatives to Keystone XL. They can't expand the tar
sands if they can't get oil to the market. And right now, that
is a big problem for the oil industry.
So this is a key question. Is Keystone XL necessary to tar
sands expansion plans? If yes, then building the pipeline will
produce more carbon pollution and make climate change worse. Is
there any way that tar sands producers can realize their plans
to triple production levels without building new pipelines or
figuring out other ways to get the tar sands oil to market?
Mr. Jaccard. I don't believe so, not when we are talking
tripling. Yes, of course, you can move some by rail and so on
but that will have its own challenges about allowing massive
amounts of rail transport of oil even as Mr. Pourbaix talked
about what those risks and impacts are. So if you stop building
pipelines--and it won't just be Keystone but it is in my own
jurisdiction--that is how you slow down climate change.
Mr. Waxman. Yes. The State Department draft environmental
analysis acknowledges that the Keystone XL pipeline could
affect the climate. It finds that if currently proposed
pipeline projects were blocked, tar sands production would be
lowered. But the analysis also finds that this effect would be
small. That is because the State Department assumes that if
Keystone XL and other proposed pipelines are not built,
producers will move all the tar sands oil on trains instead.
So let's look at whether these assumptions are realistic.
The first key question is will Canada build other pipelines to
the west coast of Canada? A few years ago the State Department
assumed that if we didn't approve the Keystone XL pipeline, the
oil would simply go west to China. Dr. Jaccard, how good does
that assumption look now?
Mr. Jaccard. One can't be certain, but as I stated in my
testimony, the odds are against it right now.
Mr. Waxman. Why?
Mr. Jaccard. The reasons that I mentioned is that there is
a lot of opposition in British Columbia. When one says that
Canadians support developing the oil sands, yes, in Alberta
they support that, and yes, there is some support elsewhere in
the country, but there many regions of the country where they
don't support that. And British Columbia is where that is much
more difficult to find that support. And opposition to
pipelines crossing British Columbia is very strong and being
manifested politically.
Mr. Waxman. The State Department basically agreed with
that. Instead, the State Department assumed that tar sand
producers would use the railroads to get the tar sands the
Gulf, but my understanding is that this analysis is also
flawed. Mr. Swift, is moving all of this tar sands oil by
railroads really a viable option, and if not, why not?
Mr. Swift. It isn't. And the reason why not, I mean, one
way to evaluate this, the Bakken production and tar sands, they
have been under the same market pressure to move by rail. Tar
sands producers haven't been able to manage it and it is
because there are a lot of unique challenges to moving tar
sands by rail that light oil doesn't have and northern Alberta
is a lot farther away. So simply stated, it is far more
expensive and tar sands producers don't have the margins to
afford it.
Mr. Waxman. The rail option is economic for Bakken oil, but
not for tar sands. Tar sands crude requires specialized
railcars and loading and offloading equipment, must travel
further and is heavier, meaning less can be moved per car.
Current rail costs for tar sands are $31 a barrel versus $8 to
$9.50 a barrel for pipeline. And new tar sands projects have
high breakeven costs, so substantially higher transportation
costs are going to make them much less attractive. Is that
your----
Mr. Swift. That is correct.
Mr. Waxman. Now, approving the Keystone XL tar sands
pipeline is key to getting tar sands oil to market. Without
Keystone XL, producers won't be able to triple the production
of tar sands oil. So approving Keystone XL would give the green
light to a huge amount of additional carbon pollution. We can't
vastly expand use of the dirtiest oil and avoid catastrophic
climate change. The only responsible action is to say no to
Keystone XL tar sands pipeline. I hope the Obama Administration
and others, Secretary Kerry at the State Department understand
this and don't use this well-it-is-going-to-happen-anyway
rationale because it is just not accurate according to you, Mr.
Swift, and Dr. Jaccard. Is that a fair statement?
Mr. Jaccard. Yes.
Mr. Swift. Yes.
Mr. Waxman. Thank you, Mr. Chairman. I yield back.
Mr. Terry. Thank you, Mr. Waxman. And I recognize the vice
chairman of the subcommittee, Mr. Scalise.
Mr. Scalise. Thank you. I want to thank Mr. Terry as well
for your leadership on the Keystone pipeline and trying to get
this approved.
You know, when you look at the jobs number that just came
out last week, again another weak jobs report, more people
unemployed, millions of Americans who have given up looking for
work because the economy is so weak, and yet literally with the
stroke of a pen, President Obama can create more than 20,000
new jobs in America by approving the Keystone pipeline. And it
is just that simple, just with his signature. This doesn't
require an act of Congress.
Unfortunately, we are here today because, for whatever
reason, for more than 4 years the President has refused to
approve the Keystone pipeline. And you are talking about a
program that not only would create 20,000 direct American jobs,
studies show that over 100,000 new jobs to be created in
America. Billions of dollars of private investment would be
spent in America, and then when you talk about America's energy
security, there would be about a million barrels a day of oil
coming from a friend in Canada that we don't have to buy from
Middle Eastern countries who don't like us. It is not like
America's demand for oil has dropped just because the President
said no to the Keystone pipeline. We still use the same number
of barrels of oil a day than if he would have approved it
yesterday.
The problem is, the gas prices are going up every day;
people are paying more at the pump in part because of
volatility in the Middle East. Our trade deficit is up because
we send billions of dollars to Middle Eastern countries who
don't have a great trade relationship with us.
When you talk about approving the Keystone pipeline, there
are many advantages to doing it. Of course, the first is the
great impact to jobs and the reduction of threats to our energy
security. But if you look at the trading relationship we have
with Canada--Canada is a great friend. There is no reason for
the President to be harming our relationship with Canada by
stringing them out for years, bowing to radical
environmentalists, when everybody else who looks at this,
everybody who is impartial that looks at this says it should
have been done years ago. The Keystone pipeline should have
been approved years ago.
But if you look at our relationship with Canada, if we are
trading those same barrels of oil with Canada instead of these
Middle Eastern countries who don't like us, we get about .85 or
.90 on the dollar back from every dollar we send to Canada in
trade. And that same dollar that goes over to Middle Eastern
countries, we get less than .50 on the dollar back.
So again, we are using the same amount of oil. The question
is who are we going to get it from? Are we going to get from
Canada, who has got a great trade relationship with us, who has
got a great historical relationship with us right across the
border, or are we going to continue to send billions of dollars
to Middle Eastern countries who don't like us, who use that
money against us? That is the question before us. And so it
boggles most people's minds when they look at this from a
commonsense perspective and say why does the President continue
to say no to Keystone?
So that is why we are here today. Without action from
Congress, it can be done. But for whatever reason, if the
President doesn't want to do it, when the Congress has
addressed this issue before, it has been large bipartisan votes
in support. This is not a partisan issue. I think the fact that
you look at the panelists today that have been here to support
it, these aren't traditional Republican groups or Democrat
groups. These are people that understand the economic impact.
I want to ask you, Mr. Stelter, because you talked a little
bit in your testimony about what the delays mean to jobs in
America. You know, if you can expand on that. I mean we have
heard about businesses that have either closed down or have had
to delay operations that are waiting, that would do great in
America, American businesses not even Canadian businesses,
American businesses that are being hurt every day by inaction
from the President. Can you expand on that and give some
examples?
Mr. Stelter. As I mentioned in my testimony, my company has
been blessed in that we have been able to expand into other
parts of the world that we weren't selling to previously to
stave off layoffs or cutbacks. But I know some of our
competitors, big American companies, Tyco International,
DeZURIK, some of the big players in the pipeline industry and
labor, even though there is still a high demand up in that area
for labor, it is definitely scaled back because of the delays
and cancellations of a lot of these projects.
Mr. Scalise. And that is a shame. There is no reason for
those jobs to be lost. We could have those jobs today, as I
mentioned earlier.
I want to ask you, Mr. Pourbaix, there has been some
suggestion that this oil is just going to sit there and if the
American President just waits a couple more years, then Canada
is just going to sit and do nothing with this valuable asset
that they have. I have also heard reports to the contrary that
China aggressively wants to get this oil. China wants those
jobs. China wants that energy security that America would be
denied if the President doesn't approve Keystone. Can you talk
to what happens if the President doesn't say yes to Keystone?
Does it just sit there in the ground or is there potential that
this goes to another country and they benefit from it?
Mr. Pourbaix. No. I have said this many times, but the oil
sands are truly the economic engine that will be driving
Canada's economy for the next 50 years. The Canadian Government
has been exceedingly supportive of our project and all the
other projects to get the oil out of the country. We are in a
great situation that we have production far in excess of our
needs and that oil will be developed; it will get to market.
You have already heard me talk about if it can't get by pipe,
it is going to get by rail.
I would take exception to a characterization that these
pipeline projects will not be approved by the regulators. In
Canada, the regulator for pipelines is the National Energy
Board. It is a federal agency. That same federal agency
approved the Canadian portion of Keystone XL years ago,
approved the base Keystone, and the Canadian federal government
has gone on record repeatedly saying that they are in support
of both the western projects and projects to take oil east.
So I think it is absolutely clear that the oil sands are
going to be developed and this oil is going to get to markets.
The only question is what market is it going to get to?
Mr. Scalise. Thank you, Mr. Chairman. I yield back.
Mr. Whitfield. The gentleman's time has expired. At this
time I recognize the gentleman from Texas, Mr. Green, for 5
minutes.
Mr. Green. Thank you, Mr. Chairman. First of all, Mr.
Mallino, I want to thank you for being here and all our panel.
You mentioned that similar legislation was necessary to allow
construction of the trans-Alaska pipeline back in the 1970s.
Could you elaborate on that?
Mr. Mallino. I was a child back then, Congressman. I have
been doing this for 20 some years but I wasn't around. So I
would have to get much more specifics and have to get back to
you on it.
Mr. Green. OK. That is close enough. I was actually a state
legislator in Texas in the '70s, but I did not remember that
Congress had to step in and approve the trans-Alaska pipeline.
Mr. Mallino. I think what the Congress had to do was step
in and kind of clear up some of the final regulatory hurdles.
But again, I am not an expert on it.
Mr. Green. It sounds like what we are trying to do here.
Mr. Mallino. Exactly.
Mr. Green. So we are not breaking new ground by this
particular legislation.
Dr. Jaccard, I visited the oil sands last summer and I
learned that in 2007 the province of Canada actually begin
regulating large industrial sources of greenhouse gas emissions
immediately requesting each unit to reduce their GHG output by
12 percent. And per the March 2012 statistic, over 34 million
tons of emissions have been avoided. They have also indicated
that the province will revisit this in the near future to
strengthen the standard and update the law.
From your testimony, Canada as a nation hasn't made the
decision but obviously the province of Alberta has. Has British
Columbia taken that kind of stance on GHG?
Mr. Jaccard. Yes. British Columbia--and I helped with the
work on those policies--has a carbon tax across the board now
of $30 per ton of CO2. And also we have a
requirement that no electricity be generated that produces
greenhouse gases even though we have very cheap coal and gas.
Mr. Green. OK. Let me interrupt.
Mr. Jaccard. Alberta----
Mr. Green. I only have 5 minutes.
Mr. Jaccard. Yes.
Mr. Green. How much electricity is British Colombia
produced by hydropower? What percentage?
Mr. Jaccard. About 93 percent but----
Mr. Green. Pardon? Pardon?
Mr. Jaccard [continuing]. Ninety-three percent----
Mr. Green. OK.
Mr. Jaccard [continuing]. But we have the cheapest natural
gas and coal in the country.
Mr. Green. Oh, I understand. But if 93 percent of your
electricity comes from hydropower and obviously in Texas we
don't have that topography benefit that some places have. But I
understand that----
Mr. Jaccard. We won't allow any----
Mr. Green [continuing]. It is easier to not use natural gas
and export it because most of their electricity comes from
hydro, just like British Columbia. But Alberta has made an
effort to control the GHG in their province.
Mr. Jaccard. The regulation as I have studied it carefully
basically tracks what our normal efficiency gains that have
happened. The actual cost on a per-ton-of-CO2 basis
is about $1 or $2, effectively close to zero.
Mr. Green. OK. Well, since you have studied this--and I
know the refineries that are my area, typically, we import
heavier crude from Venezuela, from all over the world. Do you
know of any of our importing countries that we have that have
done what Alberta has done? Let's take Venezuela as an example.
Mr. Jaccard. If you mean a dollar per ton of CO2
or $2, no. But it is inconsequential.
Mr. Green. Well, obviously it is not. And so that is our
decision and I appreciate your opinion. Again, the question----
Mr. Jaccard. The number of $1 or $2 is from the Canadian
Association of Petroleum Producers.
Mr. Green. Well, another question for both you, Doctor, and
Mr. Swift, I actually represent refineries where most of the
oil sands product would go. And the fact that the refineries
will continue to seek supplies and heavier crude whether
Keystone XL is approved or not, the problem is that the failure
to secure long-term energy supply from Canada will only cause
these facilities to purchase oil from unstable foreign
countries that do not have anywhere near the environmental
regulations that Alberta does. Is that correct, Mr. Swift?
Mr. Swift. The 2010 incident report actually suggested that
Venezuela imports into the Gulf were going to decline either
way.
Mr. Green. Well, and I agree with you. Venezuela is losing
production just like Mexico. But again, the question is, are
those countries that we are going to import from have stronger
standards or even equal standards of what Alberta has?
Mr. Swift. Well, we are seeing those imports being replaced
by domestic production. I mean, Eagle Ford shale, there have
been plants that actually replace heavy production capacity
with light production capacity. Our imports are declining
independent of Keystone XL.
Mr. Green. Well, but they would even decline more if we had
TransCanada pipeline.
Mr. Pourbaix, as a pipeline developer and operator working
in western Canada, do you agree with Mr. Mallino and Mr.
Swift's assessment that neither of the two eastern pipelines
through British Columbia will be built?
Mr. Pourbaix. No, as I said, I believe there is a very high
likelihood that Canada's National Energy Board will find a need
for those pipelines and will approve those pipelines.
Mr. Green. Well, I have to admit coming from Houston,
Texas, that we have a Houston company that has an interest in
one of those pipelines so we either get the crude oil to our
refineries or I guess we will send it to Asia through Kinder
Morgan has that pipeline. So Mr. Chairman, thank you for your
time.
Mr. Whitfield. At this time I recognize the gentleman from
Nebraska, Mr. Terry, for 5 minutes.
Mr. Terry. Thank you. Mr. Pourbaix, I appreciate you being
here again.
Besides the need to obtain a presidential permit, which is
the basis of H.R. 3, can you discuss some of the other
outstanding permitting issues?
Mr. Pourbaix. The obvious biggest issue is the presidential
permit. We do require some other federal approvals, key among
them would be some issues with respect to migratory birds and
endangered species and water crossing, those type of issues.
Mr. Terry. And what specific permits are required for
those? Take crossing waterways----
Mr. Pourbaix. We----
Mr. Terry. Who do you have to get a permit from?
Mr. Pourbaix. That is the Army Corps of Engineers. And we
require a permit that will allow us to cross any major wetlands
or water bodies.
Mr. Terry. Then for which agency would permit any
endangered species issues?
Mr. Pourbaix. That is Fish and Wildlife.
Mr. Terry. Yes. I appreciate that. And if TransCanada fails
to receive any one of those permits, what impact would it have
on the construction of the pipeline?
Mr. Pourbaix. Well, we are not able to proceed with the
construction of the pipeline until we are in receipt of all
those required federal permits. So it would continue to remain
on hold until we received those permits.
Mr. Terry. So in that regard, what litigation has
TransCanada already faced in federal courts over the
construction of this pipeline?
Mr. Pourbaix. I don't have the exact number of lawsuits but
the opponents of this project have long come to the conclusion
that ultimately delay means denial. So generally, their
strategy has been at every possible stage in the process to put
legal claims up against the project. To this point, we have won
every one that has been brought against us, but there have been
many, many legal suits filed.
Mr. Terry. And you participate anymore?
Mr. Pourbaix. I fully anticipate there will be many more.
Mr. Terry. What is your basis of your feeling that there
would be many more?
Mr. Pourbaix. Just the fact that our opponents--they truly
are focused on a strategy of delay with the view that
eventually either the project proponents or the shippers will
give up.
Mr. Terry. Yes, the opponents have not been shy about
saying that they have petitions sitting on their desk ready to
file.
Mr. Pourbaix. Yes, absolutely.
Mr. Terry. Now, could these lawsuits and others that have
yet to be filed if the presidential permit is approved,
seriously delay or impact this pipeline?
Mr. Pourbaix. You know, this is nothing new. Our opponents
have brought these same suits in all major pipeline and energy
infrastructure projects, and in all cases that we have been
involved in, we have been able to succeed in all of those legal
cases and we would expect we will succeed in these. So once we
receive the presidential permit, we will commence construction
and fight the lawsuits.
Mr. Terry. All right. Since I represent Omaha, Nebraska,
that has a history with rail, in fact, we grew into a corporate
town because of the railroad----
Mr. Pourbaix. Yes.
Mr. Terry [continuing]. They have told me that even with
the Keystone pipeline, and they as Union Pacific and BNSF, have
said that even with the pipeline, they still expect to be
hauling from both the Bakken and Alberta oil sands. Can you
tell us your understanding of how, even with the pipeline, the
rails and trucks would still be involved?
Mr. Pourbaix. You know, there will always be a role for
trucking and rail in moving oil around. They serve a legitimate
purpose. The point that I have always taken is that as the
distances get very long and the volumes to be moved get very
large, the benefits of pipelines become very apparent with
respect to their cost-benefit. It is much cheaper to move oil
through pipelines. Their safety record is higher, there is less
likelihood of spill, and there is significantly less greenhouse
gas emissions when you move large volumes of oil a long
distance. So there will still be real movements and truck
movements to get oil to those main collection points where the
pipelines can take it away from.
Mr. Terry. All right. Thank you, and I yield back.
Mr. Whitfield. The gentleman yields back.
At this time I recognize the gentleman from Michigan, Mr.
Dingell, for 5 minutes.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
My question is for Anthony Swift. Mr. Swift, most of these
will be yes or no because of our limited amount of time. Is
there currently an open comment period for draft Supplemental
Environmental Impact Statement regarding the Keystone XL
pipeline? Yes or no?
Mr. Swift. Yes.
Mr. Dingell. When does this period end?
Mr. Swift. At the moment I believe it is April 21.
Mr. Dingell. OK. Is the draft Supplemental Environmental
Impact Statement currently open for public comment, the same as
the one referenced in H.R. 3? Yes or no?
Mr. Swift. Yes.
Mr. Dingell. Now, this legislation deems approval of
certain permits within the jurisdictions of the Department of
State, Interior, and Defense and prohibits EPA from being
involved in providing input for permits under the Clean Water
Act. Is that so?
Mr. Swift. Yes.
Mr. Dingell. Are we certain that all the information has
been gathered to justify issuing these permits? Yes or no?
Mr. Swift. No.
Mr. Dingell. All right. Mr. Chairman, never have the
American people being comforted by the words I am from the
government and I am here to help. President Bush established a
process to issue these types of permits and I believe that
allowing the public to know how this project will affect their
communities is simple common sense.
I would point out that they were going to go through in
Nebraska over a very, very, very sensitive aquifer and they
found out that it posed enormous risk. That information was not
available to the public. And as a House author of NEPA, on
which I labored long and hard, I can tell you that it was
created to create transparency so that the people would know
the impact of a project and what it would be on their
communities.
However, this bill will circumvent that transparency even
as a public comment period is in progress and is only going to
create more delays. Instead of allowing the process to properly
play out, Congress is choosing to rush the Administration
without allowing the established process to run its course.
This has already caused us trouble on one occasion. And now, by
rushing the Administration to make a decision at the beginning
of last year, they were forced to start this process back again
at square one further delaying a final decision.
I repeatedly said that I support the building of this
pipeline. I believe it is in the national interest. It is also
in the national interest that we should comply with the law,
should know the facts, and should see that the permits are
properly issued and that they reflect the need for us to
address the public interest. That is why we passed the Clean
Water Act, why we passed Endangered Species, and why we passed
the National Environmental Policy Act.
Now, I would much rather see the manufacturing,
construction, and other jobs that are going to be created in
this construction to go down south through the United States
rather going west to China where the oil will be processed and
spent and burned in a very dirty way. However, the bill that we
have passed already, this bill would do exactly the opposite.
It circumvents the established process and potentially opens
the process and the project to a plethora of lawsuits where the
lawyers are going have a wonderful time delaying the process
and the construction even further.
Instead of legislating the permitting process where it is
not needed, this committee should instead be focusing on
comprehensive energy legislation and on supervising the
processing of this to see that it goes forward properly. As I
have observed, the Keystone pipeline, in my opinion, should be
a useful part of our national energy strategy and not be given
into litigation of this kind. It should be viewed as an
opportunity to make technological advances, changes in the
economy, to gather new information, and we should be giving
consideration to this as a part of our national energy policy,
including spurring a large number of things like nuclear,
renewable, and fossil fuel.
Let us stop helping where it is not needed. The bill is a
solution to a problem that does not exist. I very much want to
support the pipeline. I believe it is in the national interest.
But you are compelling me and many other Americans to oppose
this legislation and to oppose the construction of the pipeline
because you do not choose to do it in a proper way in
conformity with the law. These unnecessary changes that you are
making to hasten the process are counterproductive in the
extreme, and I beg the committee not to engage in this kind of
silly activity.
Mr. Whitfield. Thank you, Mr. Dingell.
At this time I recognize the gentleman from Texas, Dr.
Burgess, for 5 minutes.
Mr. Burgess. I thank the Chairman for the recognition.
Mr. Pourbaix, did I pronounce that correctly?
Mr. Pourbaix. Yes, sir.
Mr. Burgess. Let me just ask you, you heard Chairman
Emeritus Dingell just speak about this. Do you feel rushed? Do
you feel like we are rushing you? I feel like it is Groundhog
Day. I mean every time I come into the subcommittee, Mr.
Chairman, we are talking about the Keystone pipeline. It has
been like that for 2-1/2 years.
Mr. Pourbaix. I think it is without dispute that the
environmental review process for this process has been
certainly the most involved, the longest certainly in any
experience I have ever had with energy infrastructure projects.
We have had dozens of public hearings. We have had hundreds of
thousands of pages of public comment in testimony. I don't
think anyone could argue that every material issue related to
this project has not been exhaustively analyzed.
Mr. Burgess. Let me just tell you one of the things that
troubles me. Texas is my home State. March 22 of last year,
President Obama went to Cushing, Oklahoma, and said he wanted
the pipeline built from here to the Gulf of Mexico, meaning
Oklahoma to the Gulf of Mexico. So your company has been doing
that work. It has not been without some anxiety at home, and I
will admit that. There are people who have had their lands
disrupted by the placement of the pipeline. But OK. It is in
the national interest and the interest for our economy to get
this going and Texans, we are understanding of energy issues
and the necessity of getting energy to market.
But here is the problem that I have. Why is it OK to build
the pipeline from Oklahoma to the Gulf of Mexico, disrupt the
lives of hard-working Texans, when the Administration
apparently never had any intention of completing the other part
of the pipeline that would actually make it economically
relevant and economically beneficial to the Nation?
Mr. Pourbaix. Yes.
Mr. Burgess. We have asked Texans to give of their land for
the pipeline and yet the Administration still seems immobile in
its ability to make a decision for the betterment of the
country. Am I missing something here?
Mr. Pourbaix. No. And I think at the time the President
denied the permit early last year, TransCanada took the
initiative. We saw the opportunity to sever the southern
portion from the larger Keystone XL application because there
was an independent need in the industry to reconnect Cushing to
the U.S. Gulf Coast. So we took that opportunity. That was not
something that the Federal Government encouraged. It was an
opportunity we saw to take that portion of the project that had
independent utility and remove it from this presidential permit
application process.
One comment I would just say on your comment about the
land, there is no company that takes those issues with right-
of-way and landowners more serious than TransCanada. In Texas
alone, more than 99 percent of our landowners we reached
voluntary negotiated easements and did not have to go to any
eminent domain procedure. We are down to literally a handful of
landowners.
Mr. Burgess. And I appreciate that. I appreciate the fact
that this was a privately instigated and funded venture but
still, the President want to Cushing, Oklahoma, and with 200
invited guests, did a photo op in March of last year. It was an
election year, you may recall. And I have always felt a little
bit of unease by the willingness of the Administration to
capitalize on, hey, I am here for creating jobs in America,
building in America, and all the right things, and yet, really
if America is going to capitalize on the promise of delivering
this energy where it can be refined in Mr. Greene's district,
the rest that pipeline has to be built.
You know, I don't know that I am smart enough to do this.
We will have the GDP figures coming out for the first quarter
of this year. Last quarter of last year was pretty
disappointing. I will just submit if you were to subtract the
Texas component to the GDP for this quarter we just finished
and the last quarter, I wouldn't be at all surprised if the
country was not still in a recession with negative growth in
two successive quarters, which is the definition. It is Texas'
forward-leaning activities in the energy field that have really
prevented the recession from being so much more desperate in
the entire country.
When people talk about the re-industrialization of America,
they need to look at what is happening in the shale plays in
north Texas and south Texas. It has been a game-changer. And if
we really were serious about re-employing Americans, this is
where we would concentrate our efforts.
I thank you for your indulgence, Mr. Chairman. I will yield
back the balance of my time.
Mr. Whitfield. The gentleman yields back.
At this time I recognize the gentlelady from California,
Ms. Capps, for 5 minutes.
Mrs. Capps. Thank you, Mr. Chairman.
And thank you, each of you, for your testimony. After
multiple hearings and markups on this committee in recent
years, this is an issue that we are all very familiar with. And
that is why I must say that I am disappointed that one of our
first legislative hearings is again on this well-vetted issue
when there are so many other important issues that we could be
considering.
I continue to have serious concerns about this legislation
and the potentially devastating impacts of the Keystone
pipeline on public health and the environment. Of course, one
of the main issues in this discussion is jobs, and rightfully
so. There is no denying that construction of the pipeline will
create temporary jobs. And these jobs are still desperately
needed, especially in the construction industry.
But as policymakers, I believe we must also look at the big
picture. When we are facing estimated job losses of 750,000 due
to sequestration, creating a few thousand temporary jobs,
though helpful, does not constitute the comprehensive jobs
legislation our Nation needs right now. It is our
responsibility to pursue policies that advance the long-term
interests of our Nation as a whole. Doubling down on limited
fossil fuels is a dead-end policy that pollutes our planet and
only delays the inevitable, especially considering the serious
impacts Keystone could have on public health and the
environment.
As our witnesses have testified, development of oil sands
is even more carbon-intensive than traditional oil development.
So this is a big step in the wrong direction. To me it makes
far more sense to focus on promoting the development of clean
renewable technologies we all know we are going to need down
the road. These new technologies reduce our dependence on oil,
but also create quality long-term jobs that cannot be shipped
overseas.
I see this all the time on my district in the central coast
of California. Local companies like Infinity Wind, REC Solar
are harnessing clean renewable energy sources to create jobs
and strengthen economic growth. So Dr. Jaccard, or Jaccard. How
do I say it?
Mr. Jaccard. Jaccard.
Mrs. Capps. Jaccard. In your testimony, you focus on the
environmental and economic impacts of developing the Alberta
oil sands and how the Keystone pipeline plays into that. And I
have a second question to ask as well. Could you briefly
discuss some of the economic and environmental benefits of
developing clean and renewable energy resources compared to
fossil fuels? Make a comparison for us if you will.
Mr. Jaccard. Yes. Well, in California certainly I follow
the numbers. I don't have numbers at the tip of my finger for
California but I do for British Columbia because when we passed
the rule of clean electricity, it meant that two coal plants
and a natural gas plant that were going to be built in the 2007
to 2011 period were not built. Instead, we develop run-of-the-
river hydro, a small-scale hydro, wind, and wood waste power
and they produced three times as many jobs.
Mrs. Capps. Perfect. Thank you very much.
I have a question for you, Anthony Swift. Jobs are
obviously critical to economic growth, but we must remember
that environmental and public health are also critical to a
strong workforce and resilient economy. In 1969, my home
district was a victim to one of the worst oil spills in the
United States history offshore. So I know firsthand that local
communities bear the brunt of industrial accidents for a long
time after they occur.
The proposed pipeline would cut straight through America's
heartland, putting numerous communities at risk. These farmers
and ranchers depend on clean soil and clean water to grow the
crops and raise their livestock that are feeding our entire
Nation. A spill here could have devastating effects on local
wildlife, public health, the economy, and our Nation's food
supply.
Mr. Swift, would you elaborate on this, and what are some
of the economic impacts a spill could have on the communities
along the pipeline?
Mr. Swift. Certainly. There are over 500,000 agricultural
jobs along the pipeline and they depend on clean water, clean
lands. And we have learned, unfortunately, through two major
spills, one in Kalamazoo, Michigan, and another in Arkansas,
that tar sands spills have significantly different and longer-
term impacts. In Kalamazoo, Michigan, nearly 3 years after that
spill of 800,000 gallons of tar sands and nearly $1 billion in
cleanup activities, 38 miles of that river are still
contaminated. And spill responders don't think that they are
going to build up at the river back to the state it was before
the spill. So tar sands pipelines and tar sands spills pose
unique and pretty dramatic risks to sensitive waterways and the
places they crossed it. Regulators have not got a handle over
it.
Mrs. Capps. And if I could ask you very briefly, with a few
seconds left, to discuss some of the differences between the
safe use of tar sands, if there is such a thing, that would
flow through the Keystone pipeline, and the crude that we
normally know. Would you go into the difference on that?
Mr. Swift. Yes. Tar sands is being moved as something
called diluted bitumen. And bitumen is basically solid at room
temperature. It has to be mixed with light petrochemicals and
is moved as a thick substance through the pipeline. You know,
the State Department estimated that frictional heating on
Keystone XL will send the temperature to between 130 and 150
degrees in some places. We have learned in California that
high-temperature pipelines are much more likely to spill. And
when a spill occurs, the light stuff gases off, and if the
heavy stuff, the heavy bitumen tar, hits a water body, it sinks
below the water body. And at that point spill responders have a
very difficult time either containing it or cleaning it.
Mrs. Capps. So tar sands and conventional crude are very
different----
Mr. Swift. Dramatically different, yes.
Mr. Whitfield. At this time I recognize the gentleman from
Texas, Mr. Olson, for 5 minutes.
Mr. Olson. I thank the chair, and good afternoon and
welcome, witnesses. I represent a suburban Houston district, so
as you can imagine, the Keystone XL pipeline coming into the
Port of Houston and the Port of Port Arthur is very important
to my State. And we are all entitled to have our own opinions,
but none of us are entitled to have our own facts. So before I
start my questions, I just want to reiterate a few facts that
seem to be forgotten in this debate.
Fact number one, Canadian oil from Alberta is already
coming to the United States. The Keystone pipeline, Mr.
Pourbaix, I think, called it the base Keystone pipeline. That
pipeline is bringing over 500 million barrels a day for our
country right now. The Alberta clipper is bringing about
450,000 barrels a day to Superior, Wisconsin.
Fact number two, there are 25,000 miles of pipeline over
the Ogallala Aquifer right now, 25,000, 2,000 over Nebraska.
Fact number three, this Canadian oil will be brought to
market. Either it comes to the United States or it goes to
China or India or some other country. White House Press
Secretary Jay Carney echoed my reasons to support Keystone XL
when he said last year, ``moving oil from the Midwest to the
world-class, state-of-the-art refineries on the Texas Gulf
Coast will modernize our infrastructure, create jobs, and
encourage Americans' energy production. We look forward to
working with TransCanada.'' I inserted Texas there, just a
literary preference. But those are the facts.
Mr. Pourbaix, TransCanada now is almost halfway done with
the southern leg of the pipeline through East Texas. Can you
please describe the steps that you are taking to ensure the
safety of his pipeline?
Mr. Pourbaix. Sure. I mean right off the bat I think it is
very important to understand that the Keystone pipeline system
is truly a state-of-the-art pipeline system. It uses modern
high-strength steel, fusion bond epoxy coating, multiple
redundant leak detection technologies.
You heard me say this in my prepared statements, but in
addition to following federal code, we have voluntary agreed to
follow 57 additional special conditions. Those are things like
reduced spacing of isolation valves, burying the pipe deeper,
doing more inspections. All major river crossings where it is
feasible to do so, we are in fact doing horizontal directional
drill. So we are 20 to 40 feet below the bottom of the river in
bedrock, so we don't ever have to worry about the kind of
problems that occurred at Kalamazoo or the Yellowstone problem
that Exxon had. I mean these modern pipelines have incredible
records with respect to spill and safety, and we are building
the most modern pipeline ever built in the U.S.
Mr. Olson. So again, in your opinion, the Keystone XL
pipeline is designed to be the safest pipeline in the history
of the world?
Mr. Pourbaix. Yes, and you don't have to take my word for
it. That is actually the finding of the Department of State in
the Environmental Impact Statements.
Mr. Olson. And a question for you, Mr. Mallino, in your
opening statement you said the Keystone XL is not a pipeline,
it is a lifeline. And you mentioned that opponents say that
many of these jobs being created are going to be temporary. Can
you explain how a lifeline is not a temporary job?
Mr. Mallino. In our industry, our members work job-to-job.
The job starts, the job ends. Sometimes you go on to the job,
off the job, and go do something else and come back to that
job. Not just your pay but the way your benefits package is
structured, the way you earn your health insurance, the way you
earn your pension credits are determined by the number of hours
you work in a given quarter. So without a project that creates
hours, whether it is a highway project, a bridge project, an
infrastructure project for energy, water, without projects, our
members don't work, and if our members don't work, they don't
earn a living and they don't earn benefits. And in that sense
it is a lifeline. A temporary job has been used to dismiss
these jobs and that is unfortunate because it truly doesn't
take into account how the construction industry works. It is
done in a very derogatory way by people who want to dismiss the
importance of these jobs.
Mr. Olson. One final question for you, sir. What is the
salary range of these lifeline jobs and the educational level
necessary to have these jobs? Because I made $75,000 max as a
pilot in the United States Navy. That is over all my training
and all these things--I suspect that those salaries are in that
range. Can you comment----
Mr. Mallino. It varies by craft so depending upon what your
skill set is and which union craft you work for, it would vary.
In some parts of the country our pipeline workers make about 20
bucks an hour plus a benefits package. In other parts of the
country that is much, much higher. If you are with the
operating engineers who may still be back in the back of the
room somewhere, their benefits package is structured and salary
are structured entirely different. Their salary and benefits
are going to be much higher. So it depends upon what you are
doing on the project. But they are good jobs and they are some
of the best jobs in the construction industry.
Mr. Olson. And I am out of time. So just to sum up, 800,000
barrels a day, 20,000 good-paying jobs, energy security,
national security. I yield back.
Mr. Whitfield. At this time I recognize the gentlelady from
the Virgin Islands, Ms. Christensen, for 5 minutes.
Mrs. Christensen. Thank you, Mr. Chairman.
There is a lot that really bothers me about the bill we are
considering today but one is that I am concerned that the
committee is proposing to give one project a regulatory
earmark. And I don't see why one particular project owned by a
foreign corporation should get special treatment. My
constituents in the U.S. Virgin Islands are American citizens.
We are experiencing extremely high energy price spikes in a
community with limited resources. My constituents are
suffering.
While help is being offered, there is no special
legislation for the Americans in the U.S. Virgin Islands or
support for my bill, H.R. 92. But the subcommittee is proposing
to move yet a third bill in 2 years granting special treatment
to TransCanada's Keystone XL pipeline and has held four
hearings on this project in the same period.
As a physician, I am also concerned about how the Keystone
XL tar sands pipeline would affect public health. Of course,
crude oil pipelines can directly harm public health when there
is an accident. We are reminded of the pictures of oil flowing
down the streets of Mayflower, Arkansas, and Mr. Swift, I
believe, talked about Kalamazoo, Michigan. So despite Mr.
Pourbaix's----
Mr. Pourbaix. Pourbaix.
Dr. Christensen [continuing]. Pourbaix's testimony,
TransCanada's safety record doesn't provide a tremendous amount
of reassurance that Keystone XL would operate without
accidents.
The Keystone XL tar sands pipeline threatens human health
in other ways as well. I understand that low-income and
minority communities near the refineries in Houston and Port
Arthur, Texas, already have a 50 percent higher chance of
contracting leukemia and other diseases linked to pollution.
These communities are worried that refining more tar sands
crude will add to the pollution that is already harming their
health.
So Mr. Swift, let me ask you. Are these communities right
to be concerned and does the State Department's analysis
adequately address the impacts on those communities, minority
and poor communities?
Mr. Swift. To the first question I would answer yes. Tar
sands bitumen has some of the dirtiest crude in the world both
in carbon emissions but it also has higher sulfur content, much
higher heavy metal content. The sort of emissions that you
expect from refining these complicated, heavy, high sulfur
bitumen would be at the top of the scale. And the State
Department did not adequately address the impact of these
increased emissions on communities in the refinery areas. They
basically assumed that these refineries would be processing oil
either way and so they didn't really evaluate how much more
pollution would be generated by these refineries if Keystone XL
goes through.
Mrs. Christensen. And we were refining up to about a year-
and-a-half ago Venezuela heavy crude and our toxic emissions
inventory was out of the roof in the Virgin Islands. So I
suspect it will be the same.
And Dr. Jaccard, we know that Keystone XL pipeline will
exacerbate climate change, as you stated, and that also has
devastating health impacts. So could you also please speak to
this? And also if granting special treatment to TransCanada
will benefit our constituents and do those benefits really
outweigh the harm?
Mr. Jaccard. Right. The point I was trying to make is that
it is very difficult to deal with climate change so you have to
have political courage to say we start here and we have to push
for things to happen in Canada, things to happen in China.
There is no other way to solve it. When you do that, what you
are trying to do is prevent acidification of oceans, dramatic
changes in extreme weather events, and all sorts of problems
with ecosystems as well, which all come back to human health
types of issues. And the science is very clear on this.
Mrs. Christensen. I agree. And coming from a place that is
prone to natural weather disasters and also where we rely on
our reefs for food, and for recreation, the acidification of
the oceans is very devastating to communities like mine. So
thank you for your answers and I yield back the balance of my
time.
Mr. Whitfield. Thank you, Dr. Christensen. At this time I
recognize the gentleman from West Virginia, Mr. McKinley, for 5
minutes.
Mr. McKinley. Thank you, Mr. Chairman.
I have heard several comments today here, Mr. Chairman,
about these temporary jobs. And quite frankly, I come from the
construction industry, 47 years. I started in construction in
'65. I never thought of my job back then as being a temporary
job. That was my way of life and the people I worked with. So I
find it almost a demeaning, demoralizing comment when people
make that statement that these are just temporary jobs. I
disagree with that.
So having vented a little bit on that, I want you to know I
am just one of two engineers in Congress and I concur that
there is global warming and there is climate change. The issue,
however, I think, still has to be debated, is it manmade or is
it natural cyclical? I am not convinced that I am going to join
the chorus of those that are trying to build a consensus around
manmade.
And because of that, I am troubled by the fact that we are
holding back because the Administration believes it is manmade.
He is holding back 20,000 jobs in this market. A thousand more
jobs likely would occur afterwards doing maintenance and taking
care of the line. I can remember the testimony over the last 2
plus years of how many things we have talked about, how many
more jobs all because we are focused on an ideology.
So I am asking Mr. Swift and Dr. Jaccard, when I have
talked with climatologists, they often will refer to, in trying
to address this issue, they say go back to the Bering Strait.
And I would like to hear from your perspective. The Bering
Strait 25,000 years ago, the ocean levels dropped 150 feet, 50
some meters. We weren't using the Keystone pipeline, we weren't
driving too many SUVs, and we weren't creating electricity with
coal, but there was a natural cyclical change in the globe that
caused the temperatures to be at such a level that the water
levels dropped all in the oceans all across the waters. Can you
enlighten me or tell me where the paleoclimatologists are wrong
on that? That the----
Mr. Jaccard. Yes.
Mr. McKinley [continuing]. Waters dropped so that the
landmass became exposed and people from Asia came over and
populated North America?
Mr. Jaccard. Yes. I am sorry.
Mr. McKinley. Go ahead, please.
Mr. Jaccard. I feel that I would be arrogant to pick and
choose among the science that I wanted to believe that was
convenient for me and that was inconvenient for me. So when I
take the body of climate science, which I read very carefully,
it will tell you that climate has changed over long time
periods in the past and sometimes accelerated. And the climate
science also says we are making something happen very quickly,
that we are causing it. And we are acidifying the oceans as
well, so I don't know what you pick or choose from what the
climate scientists are telling you. I have read the reports. I
interact with leading scholars in the world who are very honest
people, who don't have any particular agenda, and they are
saying, climate, we are causing the change. We can do something
about it.
Mr. McKinley. I would concede that there are people that
agree with you. But there is a document floating around right
now, 32,000 scientists that disagree with you on that. So I am
still torn over it because, here, we are still arguing over
this. Science has not been determined. The conclusion is not
determined yet. But yet, we are holding up 20,000 jobs in
America where people want to go to work. That is their
livelihood and we are holding it up because we have got an
ideological base, a disagreement. I am troubled with that. I
really am.
Yes, I can talk about the Bering Strait. We can talk about
the Medieval warming period. What caused that? Again, I don't
think there were too many SUVs, I don't think we were burning
much coal there, or gas or oil to create electricity, but yet
we had the globe heated up, Earth heated up. I am somewhat more
in that field. I am leaning that way more--is this a natural,
cyclical issue? And could man be contributing? Of course we
could be. I agree with you, we could be. But are we the one
causing it? And what are the ramifications of it? There are too
many disagreements on that. I am hoping sometime in the balance
of this year that will have some opportunities to discuss
global warming more. But in the meantime, why are we costing
20,000 jobs to people that could be working?
Mr. Jaccard. So we create jobs as we reduce carbon
pollution, just as we did as we reduced acid pollution and
urban smog and so on. So I am sorry. I have seen so much
evidence I can buy that we can't create jobs while reducing
carbon pollution and maybe even use more fossil fuels while
doing it. But the----
Mr. McKinley. Are you with this pool of Lisa Jackson that
said that we create, what is it, one job for every million
dollars in EPA standards, making it the more rigid the standard
is that we are going to create a job and that and so
therefore--or one-and-a-half jobs for every million dollars
spent on enforcement? Is that----
Mr. Jaccard. Is this talking about the historical analysis?
Mr. McKinley. Are you a disciple of that school?
Mr. Jaccard. I haven't read that. I am talking about
historical analysis that I have been involved in.
Mr. McKinley. OK. I am sorry, my time is up.
Mr. Whitfield. The gentleman's time has expired.
At this time, I recognize the gentleman from New York, Mr.
Engel, for 5 minutes.
Mr. Engel. Well, thank you. Thank you very much, Mr.
Chairman.
Gentlemen, I am an anomaly here because I see both sides of
the coin, and to tell you the truth, I am torn. I have a lot of
environmental concerns but I also have concerns about energy
independence. I am the ranking member on the Foreign Affairs
Committee, I was the founder of the Oil and National Security
Caucus, and I think it would be important if we could safely
develop this, that North America become energy independent. So
I kind of see both sides. I have some questions as to why we
want to circumvent the process here. There is a process. And
jump the gun and say that this project should be done.
But I think the larger issue is how do we guarantee or try
to guarantee that America is energy independent and at the same
time try to guarantee that our environment is not despoiled. It
is kind of hard to me to see everybody there, but let me ask
Mr. Pourbaix. Why cannot we guarantee that the oil that is
refined in Texas stay in the United States? I mean you have
heard here today, and we always hear colleagues express
concerns----
Mr. Pourbaix. Yes.
Mr. Engel [continuing]. That if we are going to take the
chance of the oil pipeline--and it is always a chance. I mean I
know there are safeguards and this is new technology and
everything else. I am willing to kind of go with it but I would
like to know that if we are taking the risk we get the benefit
and that the oil isn't simply going to come down the pipeline,
be refined in Texas, and get exported to China.
Mr. Pourbaix. Yes.
Mr. Engel. So why can we get a guarantee, maybe 100 percent
of it can't stay but maybe we can get some kind of percentage
that gives Americans a guarantee that we are taking the chance
but it is a worthwhile chance to take?
Mr. Pourbaix. Yes. Well, I guess I would have a couple of
comments on that. The first is that the draft supplemental EIS
went into great detail in examining this issue and came to the
conclusion that it was highly unlikely that Keystone XL would
be an export pipeline. And so I think you have that side of it.
I think, when you think about exports, it is very important
to understand that the U.S. Gulf Coast is the largest refining
center. It has about half of the refining capability in the
U.S., but the U.S. itself typically needs more gasoline and
less diesel. When you refine a barrel of oil you get a certain
component of oil and of diesel, certain of gasoline. The U.S.
needs more gasoline. So to get enough gasoline, it tends to
produce an excess of diesel which it then tends to import to
Europe because Europe needs respectively more diesel than it
gets gasoline. So I think you have to be careful about
unintended consequences of putting in place any kind of hard
and fast rules.
Mr. Engel. Well, let me just say--I am sorry to interrupt
but----
Mr. Pourbaix. Yes. Yes.
Mr. Engel [continuing]. Five minutes is not a lot of time.
You know, if my constituents knew, for instance, that by having
this pipeline they would get a reduction a year down the line
or 2 years down the line, of a dollar a gallon in their
gasoline----
Mr. Pourbaix. Yes.
Mr. Engel [continuing]. People would see something
tangible.
Mr. Pourbaix. Yes.
Mr. Engel [continuing]. But people are very skeptical and
so am I to a degree, as to if we are looking at--if we are
talking about making North America energy independent, which is
obviously something we would all like to see----
Mr. Pourbaix. Yes.
Mr. Engel [continuing]. Then what would be the benefit to
the taxpayers who are taking this kind of risk if in fact, we
are getting more oil but we are then exporting more oil as
well? So it is the same equation. Technically, we could be
energy independent but we are exporting oil as well.
Mr. Pourbaix. I understand the issue. I think the important
point, though, is once the pipeline system is set up where this
oil is going to the Gulf Coast refineries, it is entirely open
to the U.S. Congress should they choose at some point in the
future--for example, if there was a war and there was a
requirement to keep that oil or those refined products in the
country, the only place that oil can go is where it is being
pipelined to. So just by having that infrastructure, the U.S.
has the comfort that they have that energy independence and
that energy security.
Mr. Engel. Can somebody also--and perhaps you are the one,
Mr. Pourbaix, or anybody else, the pipeline we are told by
people who oppose it--they are saying it has to come through
the United States because Canada doesn't want to allow it to
come west and go out to the Pacific Ocean on the West Coast.
Can anybody answer? Has it been answered? I didn't know.
Mr. Pourbaix. I mean, I would be happy to just--the
practical reality is the U.S. Gulf Coast is the largest
refining center on the planet and the refiners are largely
configured to run heavy crude that the oil sand production out
of Canada is overwhelmingly heavy crude. So it was natural to
connect the large supply with the large demand. And that is why
it goes the direction it goes. And I think that is the most
rational and economic place for it to go. But if it can't go to
the U.S., then it will go to China, it will go to India.
But I mean I think from the Canadian Government's
perspective, from the Alberta government's perspective, the
view is the right place for it to go is the Gulf Coast.
Mr. Engel. Mr. Swift, I see you shaking your head no.
Mr. Swift. Yes. We know it is not going to China in large
volumes because a) China doesn't have the heavy crude
processing potential to process Canadian tar sands; and b)
there is a small pipeline going West through British Columbia.
It is about 300,000 barrels a day. And we know that 99 percent
of the crude on that pipeline is going to the U.S. So if there
was an interest by China to receive this crude, it would be
buying it from the pipeline they already have going to the West
Coast and they are not.
So this argument that it is either the U.S. or China is a
false one. And you look at the pipeline going through, Keystone
XL through the U.S. to the Gulf Coast, the fact of the matter
is, I believe, the number is 600,000 barrels of gasoline was
exported from Gulf Coast refineries and the State Department
indicated that over half of the refined products from the
refineries getting oil from Keystone XL would likely be
exported internationally. So it is not an issue. This is not
energy that is going to benefit primarily the American
consumer.
Mr. Whitfield. The gentleman's time has expired.
I might also add that the Department of Energy did a study
as well that was significantly lower on what they estimate the
exports would be.
But, Mr. Griffith, I will recognize you, the gentleman from
Virginia, for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman. I appreciate the
opportunity. I appreciate the witnesses being here today.
I do have a lot to get through so I apologize if I seem
short at times. I would say in response to the answer to Mr.
McKinley's question by Dr. Jaccard, in your written testimony
you indicated that China might not have grown at 10 percent per
year but energy economic models predict this growth would still
have been well above 5 percent while avoiding the dramatic
increase in carbon pollution. So you do acknowledge that using
a lot of fuel does in fact create jobs. Would that not be
correct? Yes or no, please.
Mr. Jaccard. It would have created more jobs in that same
scenario.
Mr. Griffith. Well you----
Mr. Jaccard. It would have been more labor-intensive.
Mr. Griffith. Well, your testimony was that there economic
growth is 5 percent----
Mr. Jaccard. About economic growth.
Mr. Griffith. Right.
Mr. Jaccard. But it would be more labor-intensive, more
jobs.
Mr. Griffith. Right. That being said, I think that at
times, particularly in regard to Keystone XL pipeline, we are
straining out the gnat while swallowing the camel. I would
compliment you, Dr. Jaccard, that you at least pay attention to
the camel. And I point to your work with the China Council on
International Cooperation on Environment and Development, of
which you were the co-chair of the 2009 task force for
sustainable use of coal.
Mr. Jaccard. Yes.
Mr. Griffith. And while today we are talking about the XL
pipeline, I support the pipeline. I also support the use of
coal. There is some really interesting data in there. And I
would point to the data out of that report, 2009, which I have
a copy of it and read through while listening to the testimony
that China has increased its production of coal 43 times since
1949, that it passed the U.S. as being the world's number one
coal producer in 1996, that Chinese coal profits are now over
100 billion yuan a year, that 2002 saw them having an 11-fold
increase in those profits.
And then I am going to take a couple of quotes out of here
because I think it is instructive long-term to what we are
dealing with. Nevertheless, the energy efficiency and pollution
control of the coal power industry in China is still behind the
most advanced level in the world. For example, the fraction of
power capacity within unit scales smaller than 100 megawatts is
24.8 percent in 2007 while it is only 7 percent in the USA in
2007. The average coal consumption per unit, coal-powered
electric supply in China 2008 is 11 percent higher than that of
Japan in 2005, and the emissions of sulfur dioxide and oxygen
dioxide per unit of electric supply of coal power in China in
2007 is 30 percent and 150 percent higher than the U.S.
respectively. I go on in later quote on the same page--I am on
page 13 of 47--``normally, thermal efficiency designed for
boilers is between 72 and 80 percent, which is close to the
design level of developed countries. But in reality, most of
the actual thermal efficiencies are between 60 to 65, 10 to 15
percent lower than identified thermal efficiency of boilers.
Some boilers only have efficiency of 30 to 40 percent actual
application, which is 30 to 50 percent lower than that of
developed countries.''
3.5 billion tons of coal are mined China, just under a
billion in the U.S. And so I think it is instructive because I
don't believe that the Chinese are going to--while you paid
attention in the report and suggested some reforms, I don't
believe that the Chinese are going to take away jobs in order
to make everything better and more efficient. And I would also
submit to you that in that same report on page 19, beginning at
the bottom of that page--and I am going to edit this a little
bit. There are five recommendations or five problems. One, the
existing laws, regulations, and policies are insufficient,
mostly stating principles without practical value; four, the
existing regulations and policies are issued by different
government offices resulting in ineffective supervision on
environmental protection work. Five, the existing regulations
and policies have no means of encouraging the widespread use of
key techniques for sustainable development of the coal
industry.
I have a solution for China's problem and that is that we
use our energy in this country and our energy in North America,
and we bring those jobs to the United States because we do it
much more efficiently, and the bottom line is we can do it with
less pollution in this country. There is a NASA study that says
that the pollution from China takes about 10 days to get from
the Gobi desert, where actually camels, I think, still exist in
an indigenous state, all the way to the eastern shore of
Virginia.
Folks, we have got to bring those jobs back. Keystone XL
pipeline is one way to do it. We reduced the world's carbon
footprint by doing so because the Chinese are using a whole lot
more by being less efficient. They are using a whole lot more
energy to produce the same goods that we could produce if we
were allowed to use our resources in this country. Wouldn't you
agree with me, Mr. Stelter?
Mr. Stelter. Yes, I would.
Mr. Griffith. Thank you very much. I yield back.
Mr. Whitfield. Thank you very much.
At this time I recognize the gentleman from New York, Mr.
Tonko, for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair, and thank you to the
witnesses for inspiring interesting discussion here this
morning.
When we consider actions that drive climate change, I
believe that we can't just focus on short-term emissions. We
also have to consider how major infrastructure investments
impact a sustained, long-term, carbon emissions agenda.
Investment in a pipeline of this size would only be worthwhile
if oil were going to move through it for decades, perhaps 30 to
50 years. Dr. Jaccard, could you please talk about the Keystone
XL pipeline in that context?
Mr. Jaccard. In the context of infrastructure?
Mr. Tonko. Of infrastructure and long-term carbon
emissions.
Mr. Jaccard. Oh, absolutely. So one thing is when you put
that infrastructure in place, you are committing yourself to
pollution for a long time to come into the future. And Mr.
Pourbaix might agree with me that pipeline economics change--I
used to regulate pipelines--once you have already built them.
In other words, even if the economics change, people don't need
nearly as much return to keep a pipeline operating as opposed
to initially building it.
Mr. Tonko. So that being said, with the Keystone XL line,
are we committing ourselves to many years of high emissions and
creating a major incentive for further tar sands production?
Mr. Jaccard. Absolutely. That is exactly what you are
doing.
Mr. Tonko. Then how would a comprehensive climate policy
help avoid that?
Mr. Jaccard. A comprehensive planet policy would make sure
that just as the Chinese told me that they wouldn't act unless
the U.S. was acting. How else would they act? So you have to
have a situation where what they said very clearly, we will act
if the U.S. acts and starts to pressure--encourage us to act.
And in fact, when there were times when it looked like the U.S.
would act, that is when I helped the Chinese develop a
renewable portfolio standard, eliminate coal subsidies, and
several other policies. And so simply, you have to have a
situation where the most powerful country in the world takes a
first step, creating jobs as well, but takes a first step and
then starts to push other countries to go in the same
direction. It doesn't happen any other way.
Mr. Tonko. Thank you. Our highest priority undeniably is
bringing about more jobs, needing more jobs and requiring many
more jobs. Is the Keystone XL tar sands pipeline addressing
that jobs policy?
Mr. Jaccard. I might leave this to Mr. Swift because of the
specifics, but I have already given testimony that moving away
from a carbon pollution future, which doesn't necessarily
meaning stop using fossil fuels, is a job-intensive future. It
is a false idea that you trade one off against the other.
Mr. Tonko. So thank you. And Mr. Swift, how many permanent
jobs do you quantify that Keystone XL would create according to
the State Department?
Mr. Swift. The State Department found that Keystone XL
would create 35 permanent jobs.
Mr. Tonko. And I understand there would also be several
thousand construction jobs over 1 to 2 years?
Mr. Swift. That is right. The State Department found that
there would be 3,900 construction jobs. On the national level,
one of the ways to think about this is it is the chance of
getting a Keystone XL construction job is similar to the chance
of being struck by lightning when considering the labor force.
Mr. Tonko. Well, I understand any of those jobs to be
important but I sense that it is not the best path to follow if
we rely on Keystone XL as the job creator. Let me put it into
this context, CBO estimates that the sequester will cost
750,000 jobs this year alone. If this were really about jobs,
we would not have gone forward with sequester. We could have
passed our President's jobs bill in the last Congress. I
believe we would be taking the advice of many economists and
making infrastructure investments and energy investments that
we need to support a modern economy as the best way to create
jobs and advance a safe climate.
This project is not about jobs; it is about committing us
to an oil-based economy for another 50 years or more. It is
about committing us to serious disruption of our climate
system, our agriculture, our fisheries, our coastlines, our
water supplies. I believe that we don't have to choose. We can
have it both ways. We can have safe climate and good jobs.
And I believe I am almost up but I would ask, Dr. Jaccard,
with the right policies can we shift to low carbon energy and
grow jobs at the same time?
Mr. Jaccard. Absolutely. When you look at independent
analysis at MIT, University of Maryland, Stanford University,
these are independent studies. We involve oil fossil fuel
companies in the projects and in the work. We continuously show
if you start now, a transition over many decades--doesn't mean
shutting down production or coal mines or oil sands today--it
means not expanding and transitioning towards cleaner energy,
that that is a jobs future and it is a climate future as well.
Mr. Tonko. Thank you very much. Thank you Mr. Chairman.
Mr. Whitfield. The gentleman's time has expired. Well, that
concludes today's hearing. Mr. Rush?
Mr. Rush. Mr. Chairman, if I might with your indulgence.
Mr. Chairman, I want to just kind of clarify a comment that you
made earlier in the hearing where you referenced an article in
the Economist and the reason that we don't need to worry about
climate change.
Mr. Whitfield. I didn't say we didn't need to worry about
climate change. I did reference the article in the Economist.
Mr. Rush. I would like to clarify the article just a little
bit more, Mr. Chairman. I think you are referencing a March 30
article which describes the correlation between mean global
temperatures and greenhouse gas emissions. Mr. Chairman, I
think you should read the entire article which explains that we
are currently heading towards a temperature increase that would
``be extremely damaging'' with more areas affected by drought
with up to 30 percent of species at greater risk of extinction,
which will likely increase of intense hurricanes like super
storm Sandy and with much higher sea levels.
You might also want to read the editorial in the Economist
from the same date which advocates for our government policies
to cut carbon pollution.
Finally, Mr. Chairman, if you want to look at an article in
a scientific journal, nature climate change that came out just
this week, the article explains this scientific issue and is
about anything but comforting.
And I think, Mr. Chairman, this highlights the need to have
a series of hearings, not just one hearing 2 years ago, but a
series of hearings on climate change science so that this
committee can better understand all the issues and better
understand what is at stake. Thank you, Mr. Chairman, for your
indulgence.
Mr. Whitfield. Well, you know I am delighted that you
raised that issue and I really appreciate your referring
everybody to this article. I think everyone should read this
article. And all of us could pick out specific parts of this
article to buttress the argument that we want to make, and
there is no question about that. And that is why I think--for
example, let me just read this: this is from the article.
``Lastly, there is evidence that the natural non-manmade
variability of temperatures may be somewhat greater than the
international Panel on Climate Change has thought. A recent
paper by a group of Chinese in the proceedings of the National
Academy of Sciences links temperature changes from 1750 to
natural changes such as sea temperatures in the Atlantic Ocean
and suggests that the anthropogenic global warming trends might
have been overestimated by a factor of two.''
Now, we here today can't answer this question. And so I
know that you all have asked--I mean we have had a lot of
hearings on climate change, and it may make you feel good to
know that this morning I talked to our staff and said, maybe we
should have another hearing about it because the temperatures
have been flat for 10 years according this article. And maybe
we need to address the issue. And so I, for one, am perfectly
happy to bring in scientists because this is an ongoing issue.
Things are changing every day, every year, and I don't think
any of us have all the answers. So I appreciate your raising
the issue. And you have any other comments?
Mr. Rush. No, Mr. Chairman, I would just like to know when
will the hearing be scheduled? And I look forward to the
hearing that would bring some scientists in so that we would
stop getting opinions from industry officials and those who
have a self-interest in it. Let us bring some scientists who
can offer independent conclusions about climate change.
Mr. Griffith. Mr. Chairman?
Mr. Whitfield. Yes.
Mr. Griffith. Mr. Chairman, I just want to point out that
while he may not call himself a scientist per se, Dr. Jaccard
actually was a part of that team that received the Nobel Prize
working on climate change----
Mr. Whitfield. Right.
Mr. Griffith [continuing]. So he is no stranger to the
issue.
Mr. Whitfield. Right.
Mr. Griffith. So I do feel it is a mischaracterization to
say that we only have industry folks coming in when we have a
couple of scientists here today who take counter view----
Mr. Whitfield. Right.
Mr. Griffith [continuing]. But also one who shared in a
Nobel Prize.
Mr. Whitfield. And we have had a multitude of hearings on
climate change over the last 5 years.
Mr. Rush. Mr. Chairman, I really respect Dr. Jaccard and I
respect his accomplishments but that doesn't nullify our
request that we have a hearing specifically with scientists to
discuss climate change, not Keystone but climate change itself
and----
Mr. Whitfield. Well, they don't have to be mutually----
Mr. Rush. If you want to invite Dr. Jaccard to come in to
be a part of that panel, I have no objections to that. But the
focus of it would be climate change and not Keystone.
Mr. Whitfield. Well, we are all----
Mr. Rush [continuing]. Of which we are really deliberating
not Keystone itself but whether or not this Congress is going
to or wanting to jeopardize the international relationships
between Canada and the U.S., whether or not we want to just
hijack the process. And this committee will begin to just write
international policy without the input of the Administration or
the Secretary of State. That is what this hearing is about.
Mr. Whitfield. Well, we asked for agencies to send
representatives to this hearing and they refused.
Mr. Rush. But, Mr. Chairman, the nature and the subject of
this hearing I want to be real clear is not climate change; it
is Keystone.
Mr. Whitfield. Well, Keystone is very important. Isn't that
right, Mr. Mallino?
Mr. Mallino. Yes, sir.
Mr. Rush. I am not in opposition that Keystone is very
important. All right. But I don't want to see the process
short-circuited by the actions of this committee in favor of
this bill that is before us.
Mr. Whitfield. Well, I really appreciate you raising the
issue, Mr. Rush.
Mr. Rush. Well----
Mr. Whitfield. And you know we are very sensitive to your
concerns. And I know that you and Mr. Waxman have written a
number of letters, and we have a lot of issues to visit
together, so thank you.
And once again I want to thank the members of the panel for
being with us today. We appreciate all of your testimony and
you responding to our questions. And we will keep the record
open for 10 days in the event that some additional material
that someone may want to offer.
And with that, we will conclude today's hearing and thank
you once again. Today's hearing is concluded.
[Whereupon, at 12:43 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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