Regulatory compliance at the state and federal level grows infinitely more complex when the laws and regulations of six U.S. states, U.S. federal regulations, and the Canadian regulatory regime are intertwined. TransCanada’s proposed Keystone XL Pipeline, currently awaiting approval from the U.S. Department of State, is gaining as much attention for its regulatory complexity as it is for its media opposition. The proposed liquid hydrocarbon pipeline crosses the U.S.—Canadian border, which must be approved by Presidential Permit prior to construction in the United States. Executive Order 13337 directs the Secretary of State to determine whether a proposed project is in the national interest before granting a Presidential Permit. Once the project has been approved by the U.S. Department of State via Presidential Permit, the pipeline will be subject to all applicable federal and state regulations, permits, and monitoring requirements.
What is the Keystone XL & why is it controversial?
The proposed TransCanada Keystone Pipeline (Keystone XL) consists of a 1700 mile crude oil pipeline and related facilities and refineries. The pipeline, if approved, would run from Alberta, Canada to refineries in Houston and Port Arthur, Texas. The plans for the proposed pipeline currently traverse through land in Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas, and would connect to existing Keystone pipeline in Nebraska and Oklahoma known as the Keystone Cushing Extension. The Keystone XL will carry a coarse mixture that includes bitumen drawn from the oil sands in Canada. Oil sands increase environmental risks, as the process to refine the sands has the potential to increase carbon output. Additionally, oil sands are more corrosive to pipelines and more difficult to remediate when spilled.
The sheer number of regulations applicable to the proposed pipeline, paired with the number of U.S. states affected by the proposed pipeline, has garnered much public attention in the U.S. For example, Nebraska residents have expressed concern because the proposed pipeline route crosses the Ogallala Aquifer, which supplies drinking water to approximately 2 million people. Similarly, the U.S. EPA has expressed concerns because significant impacts were not evaluated in preliminary and supplemental Environmental Impact Statements (EIS) as required by the National Environmental Policy Act (NEPA).
Primary regulatory authority for the proposed pipeline in the US would normally fall within the authority of the Pipeline and Hazardous Materials Safety Administration (PHMSA). The PHMSA is an agency within the Department of Transportation, responsible for establishing
regulations for the construction, operation, maintenance, monitoring, inspection, repair, and closure of liquid pipeline systems in the U.S. However, these concerns and risks involve regulatory authorities beyond the PHMSA, extending into the regulatory authority of the U.S. EPA and state agencies. The potential risks associated with the Keystone XL—which include air emissions, safe drinking water protection, spill prevention risks and spill remediation, health impacts to adjacent communities, current pipeline monitoring regulations, and construction and operating requirements for pipelines and refineries—would create a complex regulatory scheme that would necessitate compliance at the state, federal, and international levels alike.