Enhesa - Global EHS & Product Compliance Assurance

Keystone rejection likely to drive state EHS pipeline regulation


Courtesy of Courtesy of Enhesa - Global EHS & Product Compliance Assurance

On 18 January 2012, President Obama rejected the proposed plans for the Keystone XL oil pipeline, a project which has drawn much debate throughout the United States and Canada.  Although the debate concerning the Keystone XL hinged largely on political divides, the denial of the project will likely drive state regulation of environmental, health, and safety issues concerning pipelines.  The proposed Keystone XL pipeline consisted of 1700 miles of proposed pipeline, related facilities, and refineries.  The Keystone XL pipeline proposed construction through the states of Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas.

Department of State’s Reasons for denial

The U.S. Department of State, acting in an advisory role to the President, recommended the denial of the proposed pipeline.  The Department of State determined it did not have sufficient time to properly review the plans and alternatives for the pipeline to determine whether the proposed pipeline served the national interest.

The denial of the permit by the Department of State hinged on two key factors.  The first, the 60 day time limit set by Congress on 23 December 2011 in the Temporary Payroll Tax Cut Continuation Act of 2011, required President Obama to determine whether the Keystone XL was in the national interest within 60 days.  Since the President’s decision relied upon findings from the Department of State, determinations made by the agency were required in order for the President to approve or deny the pipeline.  Based on statements made by the Assistant Secretary for the Bureau of Oceans and International Environmental and Scientific Affairs Kerri-Ann Jones, the Department of State did not believe it could adequately address alternatives in a 60 day time frame.  The second factor for denial was that alternatives to the pipeline traversing the Sand Hills area of Nebraska had not been adequately identified or researched.  Upon receipt of the Department of State’s recommendation to deny proposal, President Obama denied the Presidential Permit for the pending Keystone XL pipeline.

TransCanada, the company behind the Keystone XL pipeline, plans to reapply for a new permit to build the pipeline along the same or similar route.  The new application for Presidential Permit would require a completely new review process under the National Environmental Policy Act (NEPA).  The decision to deny the permit means the Department of State is unlikely to review new plans for the Keystone XL prior to 2013.

What does this mean for EHS pipeline regulation?

The delay in the pipeline provides state legislatures, state agencies, and federal agencies with more time to develop regulatory programs that will address environmental implications of the pipeline and limit environmental impacts.  If recent rulemaking is any indication, state legislatures will require agency action to prepare for any pipelines through the states initially impacted by the proposed path of the pipeline.  For example, on 29 December 2011, the Nebraska Department of Environmental Quality (NDEQ) released a geographic map with areas designated as the “Nebraska Sandhills”, which NDEQ was required to release under the 22 November 2011 Legislative Bill 4 entitled the Oil Pipeline Route Certification Act.  The law provided new responsibilities to the NDEQ relating to supplemental environmental impact statements for oil pipelines, and also added provisions for eminent domain and the role of the governor in pipeline route certification.

When the proposed Keystone XL reappears before the Department of State, it will face new regulations that have emerged at the state level in light of the denial of the Presidential Permit.  Additionally, the regulations have the potential to be different, given each state’s interest in the impacts on pipeline development on the state’s environment and citizens.

Enhesa’s team of seasoned experts provides companies with the most current regulatory information around the world. Enhesa also offers tailored solutions to industry-specific needs. If you are interested in finding out more on Enhesa’s tailored solutions for your industry, please contact us at info@enhesa.com.

Customer comments

No comments were found for Keystone rejection likely to drive state EHS pipeline regulation. Be the first to comment!