Portfolio

Master of Science

Environmental Policy & Management

University of Denver – University College

National Environmental Policy Act

The National Environmental Policy Act (NEPA) was created to ensure environmental factors are given the same consideration as other factors when federal agencies are making decisions. The environmental impact statements (EIS) required by NEPA radically changed federal agency decision making (Bell et. al 2019, 681). A federal agency should have interest in successful completion of the of the EIS to avoid delays and costly litigation (Bell et al. 2019, 684). The Council of Environmental Quality (CEQ) require agencies to integrate NEPA requirements with the rest of the planning requirements at the earliest possible time. The agencies are required to abide by a systematic and interdisciplinary approach per section 102(2)(A). This is followed by the requirement to develop alternatives to recommended courses of corrected action for areas of conflict 102(2)(E)); which will be discussed more with the route through Nebraska. 102(2)(C) requires an Environmental Impact Statement (EIS) be on every report on proposals for legislation and significant federal actions that pose a risk to the quality of the human environment (Bell et al. 2019, 685). Before the EIS an environmental assessment (EA) needs to be conducted to determine the need for the proposal, potential alternatives, environmental impacts, and a listing of agencies and people consulted.  If the agency finds there will not be any significant environmental impact then the agency can issue a Finding of No Significant Impact (FONSI), which outlines the rationale for coming to this determination. If the EA determines there will be significant environmental impacts, then an EIS is conducted (EPA 2020). The requirements of NEPA heavily dictated the decision making and aspects of the Keystone XL Pipeline. Ultimately delaying construction and requiring multiple EISs.

Keystone XL Pipeline

The Keystone XL Pipeline is a pipeline system stretching from Alberta, Canada to Oklahoma and Texas. The purpose of the pipeline is to transport crude oil extracted from tar sands (Gasser 2012, 490). The U.S. Department of State’s Executive Summary of the EIS describes the details of the pipeline. The pipeline addition will be 36 inches in diameter and overall will span 327 miles in Canada and 1,384 miles in the United States. Depending on the market, capacity of oil transported could be increased from 700,000 barrels per day (bpd) to 830,000 bpd (Gasser 2012, 490). The tar sands are a mixture of clay, water, sand, and viscous black oil. The tar sands require more processing and energy to produce crude oil, compared to conventional crude oil. The oil will be blended with light hydrocarbons for form heavy crude, which will then be transported through the pipeline (Parfomak et. al 2013, 22-23).

TransCanada announced their plans to build and expand their existing Keystone pipeline to the Gulf Coast in 2008. Initially the bill was passed in 2011, but President Obama delayed the ultimate decision until after the 2012 election. In January 2012, President Obama rejected the TransCanada permit; followed by the senate rejection in March 2012. TransCanada submitted their second request for a permit to construct the pipeline to the U.S. State Department. The permit request was followed by Senate and House approval in 2013 but was rejected by a district judge in Nebraska declaring the pipeline construction unconstitutional (CBC 2017). The U.S. State Department extended their review of the pipeline, citing the Nebraska law litigation occurring. After Senate and House approval in early 2015, President Obama vetoed the bill on February 24^th, 2015. President Obama rejected TransCanada’s application to build the Keystone XL Pipeline on November 6^th, 2015, which was followed by two lawsuits filed by TransCanada against President Obama. The first filed to a Houston Federal Court, accusing President Obama of exceeding his authority (CBC 2017). The other filed through the North American Free Trade Agreement (NAFTA) hoping to recover $15 billion in costs and damages.

President Trump immediately signed an executive action to expedite the approval of the pipeline on January 24^th, 2017, followed by State Department approval. The process was delayed once again by District Judge Brian M. Morris, ruling that a supplemental environmental review was needed before construction. The Nebraska Supreme Court then approved of the  pipeline construction on August 23^rd, 2019 (CBC 2017).

Currently the pipeline construction has been completed over the U.S.-Canada border, but on May 28^th, 2020 the U.S. Supreme Court (SCOTUS) has rejected requests for a stay, further delaying the construction of the pipeline (TransCanada 2020).

This lengthy timeline of the legal actions and delays to the Keystone XP Pipeline is important to summarize in order to better understand how NEPA has played a vital role throughout this process.

Support of Keystone XL Pipeline

Republicans in Congress fully support the construction and use of the pipeline based on job creation (Huber and Bowe 2014). They have also stated support because of the improved energy security, importing from Canada provides more stability since they are a U.S. ally and steady trading partner (Gravelle & Lachapelle 2015, 100). TransCanada claims the Keystone XL Pipeline project will create 13,000 employment opportunities during its construction and 7,000 more jobs in manufacturing (Yadullah 2012). TransCanada also has contracts with over fifty suppliers across the United States, which would also be a boost in the economy during a time of 8.5% unemployment (Yadullah 2012). A study conducted by the Energy Policy Research Foundation concluded that the pipeline would improve efficiencies in transportation and processing of crude oil; overall increasing oil profits to $100 million -$600 million annually (Parfomak et al. 2013, 28). Another study conducted by the Canadian Energy Research Institute concluded that the investment in oil sands would quicken economic activity and increase the demand for U.S. goods and services, resulting in 343 thousand new U.S. jobs between 2011 to 2015. The increased demand for U.S. goods would increase GDP by $40.4 billion by 2020 (Parfomak et al. 2013, 28).

In opposition to lawsuits by the Northern Plains Resource Council, on behalf of the state of Montana the Attorney General Tim Fox petitioned to prevent the lawsuits in support of the pipeline. Fox claims the pipeline will bring jobs and economic development, while also bringing in millions of dollars in tax revenue to Montana. The Montana Petroleum Association claims if this lawsuit were to win there would be endless litigation when any infrastructure project were to cross any body of water (Montana Department of Justice 2019).

Regarding NEPA, the Trump Administration and GOP have been working on overhauling NEPA and the Endangered Species Act (ESA). The GOP and fossil fuel  industries view both NEPA and ESA policies as impediments to energy development (Kusnetz 2018).

Opposition to Keystone XL Pipeline

On November 6^th, 2015 the Secretary of State John Kerry denied the permit submitted by TransCanada to build the Keystone XL Pipeline. He stated the critical factor for denying the permit was due to the pipeline undermining the ability for the United States to lead the world in combatting climate change (Kerry 2015). Kerry went on to discuss how the pipeline would not contribute significantly to the crude oil extraction or effect the demand of oil in the United States (Kerry 2015).

Most Democrats in the Senate oppose the proposal and have joined environmental groups such as No Tar Sands Oil Coalition, Sierra Club, National Wildlife Federation, and Friends of the Earth; on the basis of increased greenhouse gas emissions and potential oil releases into the environment and aquifers (Gravelle & Lachapelle 2015, 100).  There are two main environmental concerns surrounding the Keystone Pipeline. First being the potential for oil spills and the enlarged greenhouse footprint. Second is the increased energy demands for extracting oil from the Canadian tar sands, compared to hydraulic fracturing which is more productive (Ceccoli 2018, 647-648). According to the 2016 EPA report there is still public skepticism towards oil extraction in general, especially concerns over water pollution. Offshore drilling and the Keystone XL Pipeline raises more questions than answers (Wolfgang 2016).

The State of Nebraska and Nebraska residents were concerned about the pipeline crossing over the Sand Hills, which is a national natural landmark and fragile ecosystem. Due to this opposition, TransCanada had to conduct a supplemental  EIS to account for an alternate route through Nebraska, avoiding the Sand Hills (Dawley 2012). The Sand Hills have a high concentration of wetlands, shallow aquifers, and it has a sensitive ecosystem. The Ogallala Aquifer is below the Sand Hills and is one the largest aquifer systems in the world (Parfomak et al. 2013, 18). The supplemental EIS identified groundwater contamination after an accidental spill or leak of crude oil, during the construction or operation  of the pipeline. There are areas where the original pipeline route covered where groundwater was less than ten feet from the surface, for about 65 miles of the pipeline. The new route proposed by TransCanada avoids the Sand Hills but still runs over a portion of the Ogallala Aquifer (Parfomak et al. 2013, 19). The pipeline will cross land that is 95% privately owned, and to accompany the pipeline is a fifty feet wide permanent road. TransCanada agreed to compensate landowners they will affect, but there is concern about the potential for an oil release on their land or near their water sources; also some of these properties are located in remote locations (Parfomak et al. 2013, 30).

Along with the risk of pollution from spills, the highly toxic chemical diluents in the tar sands oil pose a higher risk and have led to increased opposition. These concerns were made into realities when the Enbridge Energy Partners Alberta Pipeline near Marshall, MI  malfunctioned and released an estimated 1.1 million gallons of dilbit crude into a creek leading to the Kalamazoo River. This spill resulted in over 220 thousand cases of moderate to heavy contamination, over 200 acres of submerged oil in the riverbed, and over 300 solidified oil deposits. The dilbit crude oil is diluted with benzene and other hazardous constituents, and the benzene contaminated the air. This resulted in voluntary evacuation of residents in the area (EPA 2020). The dilbit crude in the Enbridge spill is similar to the crude that will be transported in the Keystone XL Pipeline. This type of oil is also a heavy crude oil mixture, which makes it more difficult to clean up.

The Northern Plains Resource Council have filed lawsuits against the Trump administration for approval of the Keystone XL Pipeline. The main concern is similar to Nebraska’s, the pipeline will cross the Ogallala aquifer and both the Yellowstone and Missouri rivers. In combination with these concerns, private landowners oppose this section of the pipeline since a spill could detrimentally impact their agriculture and drinking water (Kidston 2017).

U.S. District Court Judge Brian Morris of Montana rebuked the pipeline’s construction, going against the Trump Administration. He claimed the alternate route through Nebraska drastically changes the potential impacts of the pipeline. The extended route will cross five different counties and different bodies of water and would require an additional pumping station. Judge Morris demanded the federal government follow the requirements of NEPA and conduct a new EIS for the alternative route (Kusnetz 2018).

 Analysis of Arguments

The idea of national interest has been extensively discussed regarding the Keystone XL Pipeline. President Obama made it clear he wanted to develop an “All of the Above” energy strategy and planned to up 75% of offshore resources and increase development along the Offshore Continental Shelf (White House Press Release 2012). With other executive orders President Obama has set a goal to reduce oil imports by 33 percent by 2025 (Houser & Mohan 2011). President Obama had set goals in what his vision of what constitutes the national interest of the United States. The State Department has a few factors they need to consider when reviewing the Keystone XL Pipeline proposal; these include energy security, environmental, cultural, economic, and foreign policy. The State Department declared the Keystone XL Pipeline was in the national interest. (U.S. Dept of State 2008). The analysis conducted by the State Department to determine national interest was minimal, focusing on reductions in travel distance and avoiding ocean transport for crude oil as the main benefits. There was little consideration for the lifetime of the pipeline and the future of oil use, and if demand will still be high in the future. There is a strong argument supporting the Department of Energy should have been the agency making the final determination (Kalent 2012, 23). The State Department is suited to assess border security and geopolitics, the department of energy is better suited to critically review of oil consumption, production, refinery need, and pipeline capacity (Kalent 2012, 24). The focus here is the effectiveness of the pipeline in the future. There is concern about the demand of oil decreasing with the push for more fuel efficient automobiles by President Obama, which would not justify the investment of the pipeline and potential risks.

The main opposition covered in this paper focuses on the potential environmental impacts of the pipeline. From the analysis above it can be assumed the State Department is not suitable to evaluate the EIS and SEIS of the pipeline. The Kalamazoo River example of what could potentially occur when a spill happens is enough to deter construction of the pipeline. Especially since the type of oil released into the Kalamazoo River was highly toxic and difficult to cleanup, and similar oil will be transported through the Keystone XL Pipeline. Along with this spill, the TransCanada Keystone Pipeline experienced. Unfortunately, this spill was reported by local citizens and was somehow missed by the spill detection equipment on the pipeline itself (Parfomak et al. 2013, 31). It is cases like this that have ignited more opposition for the pipeline where it runs through remote locations. The Enbridge Oil spill and the Keystone Pipeline spill are great examples of what could wrong with the Keystone XL Pipeline. I would argue the SEIS and EIS for the Keystone XL Pipeline need to address the spill prevention and spill response procedures in order to prevent these kinds of releases into the environment.

This argument justifies the opposition from the State of Nebraska and the Northern Plains Resource Council, since they were concerned about spills polluting water sources and damaging unique ecosystems. This led to an alternative route being proposed by TransCanada and was eventually approved by the Nebraska Supreme Court in 2019 (Hammel 2019).

The support of the pipeline focuses on economic growth and job increases associated with construction and operation of the pipeline. The support and opposition of the pipeline have been mostly partisan, democrats opposing the pipeline while republicans support it. I would argue the opposition has made a more powerful argument for the economics of the pipeline by discussing the future of oil demand and whether or not the investment in the pipeline is justified. The opposition also claims that the pipeline would increase dependence on oil when the country is moving towards more sustainable sources of energy and more fuel-efficient vehicles; essentially taking steps backwards as a society.

The opposition brings forth more compelling arguments compared to the support of the Keystone XL Pipeline. Even though this process has been delayed due to requirements of NEPA, these requirements are vital to ensure every stone is turned regarding environmental impacts and health. The GOP and Trump administration view NEPA and ESA as hurdles and barricades to energy development. I believe this proves the importance of both policies, because without them we run the risk of implementing these projects hastily, disregarding the environmental impacts and posing a risk to the environment and human health. The potential risks outweigh the potential economic growth of the pipeline, especially when the economic growth appears to be short term and not guaranteed.

References

CBC. 2017. A chronological history of the controversial Keystone XL Pipeline. CBC Politics. Accessed June 5^th, 2020. https://www.cbc.ca/news/politics/keystone-xl-pipeline-timeline-1.3950156

Ceccoli, Stephen. Explaining Attitudes Toward U.S. Energy Extraction: Offshore Drilling, the Keystone XL Pipeline, and Hydraulic Fracturing. Social Science Quarterly. Vol. 99, pp. 644-664

Dawley, Joseph. 2012. The Keystone XL Pipeline Debate: Local Concerns or Global Cause. American Bar Association. https://www.americanbar.org/groups/environment_energy_resources/publications/trends/2011_12/january_february/keystone_xl_pipeline_debate_local_concerns_global_cause/

Environmental Protection Agency. 2020. EPA Response to Enbridge Spill in Michigan. Accessed June 3^rd, 2020. https://www.epa.gov/enbridge-spill-michigan

Gasser, Kurt. 2012. The TransCanada Keystone XL Pipeline: The Good, the Bad, and the Ugly Debate. Utah Environmental Law Review. Vol. 32, pp. 489-512.

Gravelle, Timothy., Lachapelle, Erick. 2015. Politics, proximity and the pipeline: Mapping public attitudes toward Keystone XL. Energy Policy. Vol. 83, pp. 99-108.

Hammel, Paul. 2019. Nebraska Supreme Court upholds route of controversial Keystone XL pipeline. World Herald. https://www.omaha.com/news/state_and_regional/nebraska-supreme-court-upholds-route-of-controversial-keystone-xl-pipeline/article_29d3ae44-f235-57f9-a895-1f94534b75dc.html

Houser, Trevor and Mohan, Shashank. 2011. America’s Energy Security Options. Peterson Inst. For Int’L Econ. Policy Brief. http://iie.com/publications/pb/pb11-10.pdf

Huber, Albert., Bowe, Peter. 2014. The Keystone Pipeline Would Create Thousands of Jobs. Forbes. Accessed June 5^th, 2020. http://www.forbes.com/sites/realspin/2014/ 02/07/the-keystone-pipeline-would-create-thousands-of-jobs/

Kalent, Sam. 2012. Thirst for Oil and the Keystone XL Pipeline. Creighton Law Review. Vol. 46.

Kerry, John. 2015. Keystone XL Pipeline Permit Determination. Press Statement: U.S. Department of State. Accessed June 4^th, 2020. https://2009-2017.state.gov/secretary/remarks/2015/11/249249.htm

Parfomak, P. W., Pirog, R., Luther, L., & Vann, A. (2013). Keystone XL pipeline project: Key issues. Washington, DC: Congressional Research Service.

Kidston, Martin. 2017. Montana’s Northern Plains lead lawsuit against Keystone XL. Missoula Current. https://missoulacurrent.com/business/2017/04/montana-northern-plains-keystone/?print=print

Kuznetz, Nicholas. 2018. Keystone XL Pipeline Hit with New Delay: Judge Orders Environmental Review. Inside Climate News. Accessed June 5^th, 2020. https://insideclimatenews.org/news/16082018/keystone-xl-oil-pipeline-map-new-route-environmental-impact-statement-nepa-transcanada-tar-sands

Montana Department of Justice. 2019. Montana to Intervene in Keystone XL Pipeline Lawsuit. Department of Justice. https://dojmt.gov/montana-to-intervene-in-keystone-xl-pipeline-lawsuit/

U.S. State Department. 2008. Record of Decision and National Interest Determination: TransCanada Keystone Pipeline, LP Application for Presidential Permit. http://puc.sd.gov/commission/dockets/hydrocarbonpipeline/2007/hp-07-001/111908/signed.pdf

White House Press Release. 2012. Fact Sheet: Obama Administration’s All-of-the-Above Approach to American Energy. http://www.whitehouse.gov/sites/default/files/email-files/fact_sheet_obama_administraton_92s_all_of _the_above_a_windows_approach_to_american_energy.pdf

Wolfgang, Ben. 2016. “EPA’s Final Report on Fracking Raises More Questions than it Answers.” Washington Times December 13.

Yadullah, Hussain. 2012. 20,000 U.S. jobs, TransCanada says; Keystone XL pipeline. Postmedia Network Inc.