State Dept. says Keystone bill raises legal questions

WASHINGTON (Reuters) - A Republican proposal in the House of Representatives to strip President Barack Obama’s authority to rule on the permit for the Keystone XL Canada-to-Texas oil pipeline raises serious legal issues, a top State Department official said on Wednesday.

The Keystone Oil Pipeline is pictured under construction in North Dakota in this undated photograph released on January 18, 2012. REUTERS/TransCanada Corporation/Handout

Obama denied TransCanada’s application for the oil pipeline on January 18 because he said there was not enough time for the State Department to review an alternate route that would avoid a sensitive aquifer in Nebraska within a 60-day window set by Congress.

TransCanada has reapplied for a permit, and Republicans are working on legislation to try to speed approval for the $7 billion project, which would carry crude from Canada’s oil sands to Texas refineries.

The pipeline would help lower gasoline prices and create “tens of thousands of jobs,” said Fred Upton, chairman of the House Energy and Commerce Committee.

One bill, proposed by Representative Lee Terry of Nebraska, would give authority to approve the project to the Federal Energy Regulatory Commission, an energy regulator.

But the State Department official charged with reviewing the Keystone plan said authority for the pipeline should stay with the administration because of the foreign policy and complex economic, environmental and safety issues involved.

Terry’s bill “just imposes narrow time constraints and creates automatic mandates that prevent an informed decision” on the pipeline, said Kerri-Ann Jones, an assistant Secretary of State for the Bureau of Oceans and International Environmental and Scientific Affairs.

Jones told lawmakers the legislation “raises serious questions about existing legal authorities, questions the continuing force of much of the federal and all of the state and local environmental and land use management authority over the pipeline, and overrides foreign policy and national security considerations.”

She said, “We don’t even have a complete route for this pipeline.”


The hearing got off to a fiery start, with Democratic members accusing Republicans of taking direction on the issue from oil companies and other corporate donors.

“The legislation we’re considering today is an earmark that benefits just one project,” said Henry Waxman, the top Democrat on the committee.

Six environmental protesters dressed as referees sat in the front row, lifting red flags each time Republicans talked about the thousands of jobs that would be created by the project - jobs numbers that environmental groups dispute.

Environmental groups are trying to stop the pipeline because of concerns about greenhouse gas emissions from processing Canada’s oil sands into crude.


Republicans in the House and Senate have not finalized their strategy on Keystone, which has become an issue in the 2012 U.S. presidential election campaign. But getting a Keystone bill approved faces hurdles in the Democratic-controlled Senate, and also ultimately would need to be signed by Obama to become law.

The nonpartisan Congressional Research Service found in a legal analysis released last week that Congress has the constitutional right to legislate permits for cross-border oil pipelines like Keystone.

Republican Senator John Hoeven is working on legislative language that would let Congress approve the permit, and a group of House Republicans introduced a similar measure on Tuesday.

A senior official with the Federal Energy Regulatory Commission said the agency did not have a position on Terry’s bill, and would implement the law if Congress passes it.

But Jeff Wright, director of FERC’s Office of Energy Projects, said the agency has no experience with siting oil pipelines. He listed several technical issues the agency would have in implementing the bill as it is currently written, and said the agency would need more than the 30 days in the bill to make a determination on the project.

Representative Terry dismissed the State Department’s assertions that his bill poses legal issues, explaining there was a stack of State Department environmental studies “two or three feet” high that could be used by FERC in its review.

“I think FERC brought up some good issues that we’re going to sort through,” Terry told Reuters. “We’re open to some tweaks here and there.”

Editing by Philip Barbara and Vicki Allen