Keystone XL Permit Decision, Take Two: Will "National Interest" Prevail in 2013?


By: Megan Pigman, Staff Member

Important concerns of energy independence, environmental impact, and economic growth fuel the debate surrounding the "Keystone XL Project" - a proposal by TransCanada Corp. to construct a 36" underground pipeline that would transport crude oil from Canada, across the border into Montana, and then down to the oil refineries on the Gulf Coast.[1] However, it was not a conclusion based on the merits of balancing such important concerns that led to the project's original permit application being denied in January 2012.

Pursuant to Executive Order 13337, it is the Department of State's (DOS) responsibility to determine whether granting a permit for a proposed pipeline is in the "national interest."[2] It is generally based on this recommendation that the President will decide whether to grant or deny the presidential permit needed to build across the U.S. border. In order to make its national interest determination, the DOS must consider many factors, including: energy security, health, environmental, cultural, economic, and foreign policy concerns.[3] After receiving the initial permit application from TransCanada Corp. in September 2008, the DOS spent three years looking into these concerns as they related to the Keystone XL proposal before issuing its Final Environmental Impact Statement (FEIS) on the project in August 2011.[4]

Despite a finding in the FEIS that Keystone XL would have "no significant impact" on the environment, the DOS announced in November 2011 that it needed more information in order to make its "national interest" determination.[5] A little over a month later, Congress passed the "Temporary Payroll Tax Cut Continuation Act of 2011" which included a provision requiring the President to determine within 60 days whether the Keystone XL pipeline is in the national interest.[6]

Even though it had been reviewing the project for three years, on January 18, 2012 the DOS stated that because of Congress' 60 day limit, it had not had adequate time to gather information sufficient to make the national interest determination and, therefore, would be recommending to the President that he deny the Keystone XL permit.[7] The President accepted their recommendation and denied TransCanada Corp.'s permit.[8]

Since the denial of the permit did not preclude subsequent permit applications, TransCanada Corp. submitted a new application May 4, 2012 which offered alternate routing in Nebraska to avoid the "Sandhills" region - an area which was of great concern to environmentalists due to its fragile ecosystem.[9] TransCanada Corp. submitted its own environmental report in September 2012 for the DOS to review in making its new determination.[10] According to the Department of State's "Keystone XL Pipeline Project" website, review of the new application is estimated to be completed in the first quarter of 2013.[11]

While those who strongly oppose or support the construction of the pipeline continue to debate its potential impact on the country, there is one notion that both sides should be able to agree on: for better of worse, the Keystone XL Project is significant and, thus, its application for a presidential permit warrants an outcome based on the factors that the DOS is required to consider when making a "national interest" determination. The DOS's 2011 recommendation being based on lack of sufficient information - whether accurate or not - simply didn't offer enough "closure" on the issue for those across the country who feel much is at stake when it comes to this project. Hopefully, a decision based on the merits as to whether construction of the Keystone XL is in the "national interest" of the country will finally be delivered in 2013.
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[1] Application of TransCanada Keystone Pipeline, L.P. for a Presidential Permit, U.S. Department of State Keystone XL Pipeline Project, (May 4, 2012), available at http://keystonepipeline-xl.state.gov/proj_docs/permitapplication/index.htm. 
[2] New Keystone XL Pipeline ApplicationU.S. Department of State Keystone XL Pipeline Project, http://www.keystonepipeline-xl.state.gov/ (last visited Nov. 26, 2012).
[3] Id.
[4] Proposed Keystone XL Project Final Environmental Impact Statement: Special Briefing, U.S. Department of State, Aug. 26, 2011, http://www.state.gov/e/oes/rls/remarks/2011/171117.htm (last visited Nov. 26, 2012).
[5] Briefing on the XL PipelineU.S. Department of State: Diplomacy in Action, (Jan. 18, 2012), http://www.state.gov/r/pa/prs/ps/2012/01/181492.htm.
[6] Id.
[7] Id.
[8] Id.
[9] Application of TransCanada Keystone Pipeline, L.P. for a Presidential Permit, U.S. Department of State Keystone XL Pipeline Project, (May 4, 2012), available at http://keystonepipeline-xl.state.gov/proj_docs/permitaplication/index.htm.
[10] New Keystone XL Pipeline ApplicationU.S. Department of State Keystone XL Pipeline Project, http://www.keystonepipeline-xl.state.gov/ (last visited Nov. 26, 2012).
[11] Id.