[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
  THE AMERICAN ENERGY INITIATIVE, PART 14: EXPEDITING THE KEYSTONE XL 
                   PIPELINE--ENERGY SECURITY AND JOBS

=======================================================================


                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 2, 2011

                               __________

                           Serial No. 112-106



      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana              Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia


                                  _____


                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman

JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JAY INSLEE, Washington
GREG WALDEN, Oregon                  KATHY CASTOR, Florida
LEE TERRY, Nebraska                  JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas            EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California         ELIOT L. ENGEL, New York
STEVE SCALISE, Louisiana             GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
PETE OLSON, Texas                    MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia     CHARLES A. GONZALEZ, Texas
CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
H. MORGAN GRIFFITH, Virginia
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
Prepared statement...............................................     4
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     7
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     8
Prepared statement...............................................    10
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................    13
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    13
Prepared statement...............................................    15
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, prepared statement......................................   104
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, prepared statement.............................   106

                               Witnesses

Alex Pourbaix, President, Energy and Oil Pipelines, TransCanada 
  Corporation....................................................    33
    Prepared statement...........................................    36
    Answers to submitted questions...............................   109
David L. Barnett, Special Representative, United Association of 
  Journeymen and Apprentices of the Plumbing and Pipe Fitting 
  Industry of the United States and Canada, Pipe Line Division...    42
    Prepared statement...........................................    45
    Answers to submitted questions...............................   116
Brent Booker, Director, Construction Department, Laborers' 
  International Union of North America...........................    54
    Prepared statement...........................................    57
    Answers to submitted questions...............................   121
Jeffrey Soth, Assistant Director, Department of Legislative and 
  Political Affairs, International Union of Operating Engineers..    65
    Prepared statement...........................................    67
    Answers to submitted questions...............................   128
Bruce Burton, International Representative, International 
  Brotherhood of Electrical Workers..............................    72
    Prepared statement...........................................    74
    Answers to submitted questions...............................   154
Jerome Ringo, Chief Business Officer, BARD Holdings, Inc.........    78
    Prepared statement...........................................    80
Jane Fleming Kleeb, Executive Director, Bold Nebraska............    81
    Prepared statement...........................................    83

                           Submitted Material

Statement, dated December 2, 2011, of K. Dean Hubbard, Jr., 
  Senior Counsel for Strategic Research, Transport Workers Union 
  of America, submitted by Mr. Waxman............................    18
Statement, dated December 2, 2011, of Lara Skinner, Associate 
  Director of Research, Global Labor Institute, School of 
  Industrial and Labor Relations, Cornell University, submitted 
  by Mr. Waxman..................................................    19
Statement, undated, of M. Ray Perryman, submitted by Mr. 
  Whitfield......................................................    22


  THE AMERICAN ENERGY INITIATIVE, PART 14: EXPEDITING THE KEYSTONE XL 
                   PIPELINE--ENERGY SECURITY AND JOBS

                              ----------                              


                        FRIDAY, DECEMBER 2, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:40 a.m., in 
room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Sullivan, 
Shimkus, Terry, Burgess, Olson, McKinley, Griffith, Upton (ex 
officio), Rush, Inslee, Castor, Markey, Engel, Green, and 
Waxman (ex officio).
    Staff present: Charlotte Baker, Press Secretary; Jim 
Barnette, General Counsel; Michael Beckerman, Deputy Staff 
Director; Patrick Currier, Counsel, Energy and Power; Garrett 
Golding, Professional Staff Member, Energy and Power; Cory 
Hicks, Policy Coordinator, Energy and Power; Ben Lieberman, 
Counsel, Energy and Power; Dave McCarthy, Chief Counsel, 
Environment and the Economy; Gib Mullan, Chief Counsel, 
Commerce, Manufacturing, and Trade; Andrew Powaleny, Assistant 
Press Secretary; Lyn Walker, Coordinator, Admin/Human 
Resources; Alex Yergin, Legislative Clerk; Jeff Baran, Minority 
Senior Counsel; Caitlin Haberman, Minority Policy Analyst; 
Angela Kordyak, Minority DOE Detailee; and Alexandra Teitz, 
Minority Senior Counsel, Environment and Energy.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. I call today's hearing to order.
    Today's hearing on the Keystone XL pipeline is a direct 
response to the administration's failure to issue a permit to 
build this pipeline.
    Earlier this year, the Obama administration led us to 
believe they would make a decision on the pipeline by December 
31st, 2011. Now the administration says they are incapable of 
making a decision before 2013. And I might add that the 
original application was filed in April of 2008. In the 
meantime, tens of thousands of American workers are forced to 
wait at least another year for possibly the most shovel-ready 
of all projects.
    The announcement to delay a decision until after next 
year's election to me appears to be blatantly political. The 
President had a golden opportunity to take bold action and 
create jobs for America, and he declined to do so. It appears 
that he is appeasing environmentalists and casting aside the 
opportunity to create jobs.
    Opponents of the Keystone pipeline continually deceive the 
public with a series of misguided statements, such as how 
pipelines transporting diluted bitumen are dangerous or that 
the pipeline will increase gasoline prices or how killing the 
pipeline will stop oil sand production.
    Rather than confront those opinions with my own words, I 
want to simply read a series of quotes:
    ``Having Canada as a supplier of our oil is much more 
comforting than having other countries supply our oil''--
Secretary of Energy Steven Chu.
    ``Both synthetic crude oil and diluted bitumen are similar 
in composition and quality to the crude oils currently 
transported in pipelines in the U.S. and being refined in Gulf 
Coast refineries.'' That was in the State Department's Final 
Environmental Impact Statement.
    ``Gasoline prices in oil markets served by the Gulf Coast 
and the East Coast refiners would decrease, including the 
Midwest.'' That was the Deputy Assistant Secretary of Energy 
for Policy and Analysis, Carmine Difiglio.
    ``It is a bit naive to think the oil sands would not be 
developed if they don't build that pipeline.'' That was former 
White House economic advisor Austan Goolsbee.
    So while the President's own advisors make numerous 
statements about the Keystone pipeline that completely rebut 
all arguments against it, why does the administration insist on 
waiting another minimum of 12 to 15 months to make a decision 
on this project?
    But even without their answers, I think it is very safe to 
assume this latest delay has nothing to do with pipeline 
safety, oil sands production, or even the State of Nebraska. 
Instead, it has everything to do with appeasing a small, vocal 
group of opponents of this project.
    We in Congress, like the President, make policy decisions 
based on our best information and best judgment. Most important 
decisions that we make involve economic and policy risks. Since 
the President did not act, Congress, in my view, must act. And 
if we do nothing, the American people will have to wait at 
least another year, until after the election, to enjoy the 
benefit of the energy security and jobs that the pipeline can 
bring.
    So we must find a way forward, and we must find it fast. 
And today we want to explore what the pipeline means to our job 
creation and the economy. We want to know what remains of the 
review process and how it can be corrected.
    I might also say that the Pipeline and Hazardous Materials 
Safety Administration has suggested 57 additional safety 
measures for this pipeline, which TransCanada has agreed to 
meet. This is the most technologically advanced and safest 
pipeline ever proposed. It has 16,000 data points along its 
1,661-mile route to monitor flow rates and pressure and detect 
leaks. That is a sensor for every 548 feet.
    I want to thank all of the witnesses for being here with us 
today to explore this important project, and we look forward to 
your testimony.
    And, at this time, I would like yield time and recognize 
the ranking member of the subcommittee, Mr. Rush, for his 
opening statement.
    [The prepared statement of Mr. Whitfield follows:]

    [GRAPHIC] [TIFF OMITTED] 75114.001
    
    [GRAPHIC] [TIFF OMITTED] 75114.002
    
    [GRAPHIC] [TIFF OMITTED] 75114.003
    
 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman.
    And today we are holding a hearing to discuss ways to force 
the Obama administration to recklessly and expeditiously make a 
decision on the Keystone XL pipeline, even after the 
Republican-controlled legislature and the Governor in Nebraska 
just recently voted to reroute the pipeline away from the 
ecologically sensitive Sand Hills region in their district.
    As I understand it, Mr. Chairman, the Nebraska bill was 
just signed into law 2 weeks ago, on November 22nd, I might 
add. And it formalizes the State's plans to conduct its own 
supplemental environmental review of a yet-to-be determined new 
route for the pipeline. And that State-level review would not 
even be completed before mid to late 2012.
    Mr. Chairman, it is hard for me to believe that a party 
that espouses States' rights wants to trample over the rights 
of the State of Nebraska. Mr. Chairman, I believe that it is 
entirely appropriate, even necessary, for the administration to 
conduct a thorough review of the pipeline's new proposed route 
before they issue a final decision.
    We all understand that under the current Republican 
majority in the Congress issues such an environmental 
protection, safety laws, and health safeguards are all 
secondary in importance to allowing industry to move forward 
unfettered and unrestricted. But I, for one, believe the Obama 
administration is acting prudently and responsibly and legally, 
as the law requires, in allowing the State of Nebraska to 
conduct its own environmental review of the new route, making 
its own decision on this new proposed route.
    If this was truly solely about jobs for my Republican 
colleagues, then they would not be trying to stifle each and 
every aspect of every job-creating program that President Obama 
has been begging, pleading, and pushing the Congress to act on, 
including new infrastructure projects which would put thousands 
of construction workers back to work. If this committee, if my 
Republican colleagues wanted to work on creating jobs, then why 
not support the American Jobs Act?
    It appears to me that this is just one more in a long line 
of opportunities for my Republican colleagues to try to hammer 
the Obama administration and portray the President as not doing 
enough to spur job creation, when, in fact, it is the majority 
party in this House--your party, Mr. Chairman--who have stated 
that it is their number-one priority, their highest priority, 
their definite chief aim, their main goal is to make President 
Obama fail, regardless of how it affects the rest of the 
country.
    With that said, Mr. Chairman, I am very interested to hear 
from all of our panelists on the issue of jobs stemming from 
this pipeline as well as the research and development of green 
alternative fuel projects.
    Mr. Chairman, I yield the rest of my time to Mr. Green of 
Texas.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman.
    I thank the ranking member for allowing me to give a 
statement.
    I am extremely disappointed with the State Department's 
announcement there would be an additional delay of at least 15 
months on the grant permit for the Keystone XL pipeline. It has 
been 38 months, 3 years and 2 months since TransCanada first 
filed an application to the Department of State to build and 
operate the Keystone project. This demonstrates that already an 
extensive review has gone toward the project, given that other 
international pipelines were granted within 18 to 24 months.
    It is in our national interest to have a secure and stable 
source of crude oil now, and there are thousands of jobs on the 
line, and our economy is still trying to recover. I represent 
five refineries in the Houston area who would like to be a 
customer of our closest neighbor to the north. I am 
disappointed with the direction the administration has taken, 
and I hope the project can afford this unnecessary delay. I 
unfortunately do know that our construction workers cannot 
afford delay.
    And, Mr. Chairman, I appreciate you inviting all my friends 
to be our witnesses today before our committee.
    My hope is this committee will develop thoughtful, 
bipartisan legislation that can pass both the House and the 
Senate. This issue has become so contentious, and yet it is 
simply about jobs and energy security. We have worked together 
on this in the past, and hopefully we will be able to continue 
to work on it.
    And I thank the gentleman for the time.
    Mr. Whitfield. At this time, I recognize the chairman of 
the full committee, Mr. Upton of Michigan, for his opening 
statement.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman. And I want to 
thank you for holding this hearing, although it is a hearing 
that I wish was not necessary.
    For months, the White House assured us a final decision on 
Keystone XL pipeline would come by the end of 2011. In fact, 
when we approved earlier legislation on the House floor to 
guarantee a timely decision on the long-overdue project, a 
formal statement of administration policy called the bill 
``unnecessary'' because the State Department was committed to 
reaching a decision by December 31st.
    Then, as we know, last month the White House announced what 
many of us had feared: that this administration had no 
intention of making a decision on this vital project. You see, 
the longer the project has been delayed, the louder the 
advocates and detractors have become. And while 
environmentalists wage an aggressive campaign against the 
pipeline in a futile attempt to halt oil sands production that 
will continue regardless of this decision, workers represented 
by some of today's witnesses are clamoring for the immense job-
creation potential of the pipeline.
    Unwilling to take a position, the White House simply put it 
off until after the Presidential election next November. And 
just a few yards from scoring the go-ahead touchdown, the 
administration called a 14-month timeout.
    The President had a chance to green light a private-sector 
project that would immediately create 20,000 pretty high-wage 
construction jobs, strengthen our Nation's energy security, and 
create perhaps as many as another additional 118,000 spinoff 
jobs. But he didn't do that. Instead, he placed election-year 
politics perhaps above jobs and the good of the country.
    The President has been using the slogan, ``We can't wait,'' 
as he travels around the country, but ``wait'' is exactly what 
he told the workers who want to build and support the pipeline. 
``Wait'' is what he told families and industries looking for 
secure, reliable energy supplies.
    And, unfortunately, this wait could last forever. That is 
because another lengthy delay could, in fact, kill the project, 
at least for the United States. We are not the only country in 
need of Canada's oil supplies, and our northern neighbor could 
very well look to other customers around the globe if we 
continue to stall. Canadian Prime Minister Stephen Harper 
recently talked about, and I quote, ``the necessity of Canada 
making sure that we are able to access Asian markets for our 
energy products,'' saying that will be an important priority of 
his government going forward, particularly if we continue to 
say no.
    This pipeline is a rare opportunity for us to access energy 
from our closest friend and ally, Canada; reduce dependence on 
less reliable sources, such as Venezuela, Nigeria, the Middle 
East. Have we learned nothing since 1973? A steady stream of 
oil from Canada, North Dakota, and Montana delivered to U.S. 
refineries at the lowest transportation cost could help 
stabilize not only U.S. oil prices but also the price of gas 
and other refined products. It just makes sense to keep the 
refining here at home, which obviously means jobs and stable 
supplies.
    I recently visited a pipe manufacturer who has miles of 
pipe ready to go for use on this very pipeline. Without a 
decision, it sits idle in a stockyard, waiting for the White 
House to do the right thing, waiting for the White House to 
take American workers off the bench, and say ``yes'' to a 
project that not only creates American jobs but also increases 
our energy security.
    Today's hearing allows us to discuss where we go from here, 
take a closer look at this pipeline, the promise for job 
creation. I look forward to hearing from our witnesses.
    And I yield the balance of my time to the gentleman from 
Nebraska, Mr. Terry.
    [The prepared statement of Mr. Upton follows:]
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   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. I thank the chairman for yielding some time to 
me.
    This is about jobs--good, high-paying labor jobs. And I 
think we have a good solution going forward, a bill that will 
be introduced after this hearing today, with the support of the 
full committee chair, subcommittee chair, and I think everybody 
that is sitting here right now, which would recognize 
Nebraska's compromise to move the pipeline off of the Sand 
Hills area and reroute it.
    It is the goal of those that are engaged in the 
negotiations--our State legislature, DEQ, Governor's office, 
TransCanada--that they think they could have the siting and the 
environmental study finished within about 6 months. Frankly, it 
is a move of about 50 or 60 miles off of some sensitive area. 
It is a good compromise.
    So the bill that I am introducing, with the support of the 
people I just mentioned, recognizes that when the Nebraska 
Department of Environmental Quality is finished, they will 
submit that then, according to our legislation, to FERC, who is 
the expert agency in pipelines and understands pipeline safety 
and will understand much greater than the State Department 
about pipeline safety. And then we will have a shot clock of 30 
days to review that supplemental to the supplemental to the 
EIS, to determine whether it is appropriate. And then we will 
issue the permit.
    The point of this is to avoid the politics and get to the 
jobs.
    I yield back.
    Mr. Whitfield. Thank you.
    At this time, I recognize the ranking member of the full 
committee, Mr. Waxman of California, for his opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman.
    We all want more jobs. And that is why I support and I 
think probably all of our witnesses support the President's 
jobs program, which is being blocked by the Republicans because 
they don't want it to be paid for by any increases on taxes for 
billionaires in this country. Instead, they want to get jobs 
from areas that benefit some of their best friends, the oil 
companies particularly.
    My greatest concern is that Keystone XL would make us more 
reliant on the dirtiest source of fuel currently available. On 
a lifecycle basis, tar sands emit far more carbon pollution 
than conventional oil--almost 40 percent, by some estimates. 
And what this pipeline would do would be to carry a sludge made 
from Canadian tar sands through the middle of America, a 2,000-
mile pipeline. That is because it takes huge amounts of energy 
to take something of the consistency of tar, which they mine in 
Canada, and turn it into a synthetic oil.
    We should be reducing our oil dependence and using cleaner 
fuels, but Keystone is a big step in the opposite direction. By 
moving tar sands oil to Gulf Coast refineries, the Keystone XL 
pipeline would open world markets to tar sands oil. The 
pipeline would remove existing constraints on tar sands 
production, dramatically increasing carbon pollution for 
decades. It would be the equivalent to building five large 
coal-fired power plants.
    Last month, the International Energy Agency issued its 
authoritative World Energy Outlook for 2011. IEA found that, in 
just 5 years, business-as-usual investments in energy 
infrastructure will lock in enough carbon pollution to commit 
the world to potentially devastating warming of 11 degrees 
Fahrenheit or more. The IEA's chief economist called such an 
outcome, quote, ``a catastrophe for all of us,'' end quote.
    We face a choice: business as usual and climate 
catastrophe, or making the necessary changes in our energy 
infrastructure to mitigate the damage. Keystone XL is the wrong 
choice.
    Supporters of this project make a number of arguments that 
just don't stand up to scrutiny. They say this pipeline will 
enhance energy security for the United States, but the 
Department of Energy found that we will have excess pipeline 
capacity from Canada for the next decade or more, even without 
Keystone XL. And there is nothing to stop Gulf Coast refineries 
from simply exporting the refined product. That doesn't improve 
our energy security.
    The Obama administration's fuel economy standards will do 
more to boost our energy security, by saving 1.8 billion 
barrels of oil while saving consumers money at the pump. And 
yet the Republicans--some Republicans in the leadership here in 
the House are beating up the Obama administration for 
establishing these fuel economy standards.
    Supporters also say that if we don't build Keystone XL, the 
oil will go west to Asia. Well, that is far from certain. There 
are legal and political hurdles for a large new pipeline to 
Canada's west coast, including unified opposition from more 
than 70 First Nations with aboriginal land and water rights in 
the pipeline route. A de facto tanker ban also exists off the 
British Columbia coast. In June, Alberta's energy minister said 
that, absent new pipelines, quote, ``Our greatest risk in 
Alberta is that by 2020 we will be landlocked,'' end quote.
    One argument we will hear today is legitimate: The project 
would produce several thousand short-term construction jobs. It 
is on all of our minds, and it is certainly on the minds of our 
witnesses today. People in this country need jobs, particularly 
in the hard-hit construction industry. But with this project, 
we will be paying a very high price over a very long time for 
some short-term benefits. Instead, we should be focusing on 
good clean energy jobs that are going to last.
    There is going to be $38 trillion invested in new energy 
infrastructure over the next 20 years. Our new economic growth 
and our national security will be determined by whether we 
succeed in building these new industries. I support the 
administration's decision to take some additional time to do a 
thorough evaluation of the climate and other environmental 
impacts of this proposed pipeline. It is imperative that we 
start to move to a clean energy economy now. Keystone XL will 
take us in the opposite direction.
    I yield back the time.
    Mr. Chairman, I would like to ask unanimous consent my full 
statement be made a part of the record.
    [The prepared statement of Mr. Waxman follows:]
    [GRAPHIC] [TIFF OMITTED] 75114.109
    
    [GRAPHIC] [TIFF OMITTED] 75114.110
    
    Mr. Waxman. And, further, I would like to ask unanimous 
consent that we enter into the record written statements from 
the Transport Workers Union of America and the Cornell 
University's Global Labor Institute. The Transport Workers 
Union testimony discusses the reasons for their opposition to 
the Keystone XL pipeline. And the Global Labor Institute 
testimony discusses their analysis of the job estimates 
associated with this project. The Institute's conclusion is 
that the pipeline will produce far fewer jobs than has been 
claimed.
    Mr. Whitfield. Without objection.
    [The statements follow:]
    [GRAPHIC] [TIFF OMITTED] 75114.007
    
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    [GRAPHIC] [TIFF OMITTED] 75114.009
    
    Mr. Whitfield. And I would also like to ask unanimous 
consent that a rebuttal of the Cornell University study by Dr. 
Ray Perryman be placed into the record, as well.
    [The rebuttal follows:]
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    Mr. Whitfield. At this time, I would like to introduce our 
witnesses.
    We do thank you very much for taking time to be with us 
today on this very important issue.
    We have with us today Mr. Alex Pourbaix, president, Energy 
and Oil Pipelines, TransCanada Corporation.
    We have Mr. Brent Booker, who is the director of the 
Construction Department for Laborers' International Union of 
North America.
    We have Mr. Jeffrey Soth, who is the assistant director, 
Department of Legislative and Political Affairs, the 
International Union of Operating Engineers.
    We have Mr. David Barnett, who is special representative, 
United Association of Journeymen and Apprentices of the 
Plumbing and Pipefitting Industry of the United States and 
Canada, Pipe Line Division.
    We have Mr. Bruce Burton, who is international 
representative for the International Brotherhood of Electrical 
Workers.
    We have Mr. Jerome Ringo, who is the chief business officer 
of BARD Holdings, Incorporated.
    And then we have Ms. Jane Kleeb, executive director of Bold 
Nebraska.
    So, once again, we welcome all of you.
    We are going to recognize each one of you for 5 minutes for 
your opening statement. In the middle of the desk, there is a 
little light. So when it goes red, then your 5 minutes are up.
    We are going to try to get through these opening statements 
before we have votes on the floor, and I don't know if we will 
be successful or not.
    But, Mr. Pourbaix, I will recognize you for 5 minutes for 
your opening statement.

    STATEMENTS OF ALEX POURBAIX, PRESIDENT, ENERGY AND OIL 
 PIPELINES, TRANSCANADA CORPORATION; DAVID L. BARNETT, SPECIAL 
     REPRESENTATIVE, UNITED ASSOCIATION OF JOURNEYMEN AND 
 APPRENTICES OF THE PLUMBING AND PIPE FITTING INDUSTRY OF THE 
  UNITED STATES AND CANADA, PIPE LINE DIVISION; BRENT BOOKER, 
  DIRECTOR, CONSTRUCTION DEPARTMENT, LABORERS' INTERNATIONAL 
   UNION OF NORTH AMERICA; JEFFREY SOTH, ASSISTANT DIRECTOR, 
DEPARTMENT OF LEGISLATIVE AND POLITICAL AFFAIRS, INTERNATIONAL 
   UNION OF OPERATING ENGINEERS; BRUCE BURTON, INTERNATIONAL 
    REPRESENTATIVE, INTERNATIONAL BROTHERHOOD OF ELECTRICAL 
 WORKERS; JEROME RINGO, CHIEF BUSINESS OFFICER, BARD HOLDINGS, 
  INC.; JANE FLEMING KLEEB, EXECUTIVE DIRECTOR, BOLD NEBRASKA

                   STATEMENT OF ALEX POURBAIX

    Mr. Pourbaix. Thank you, Mr. Chairman.
    TransCanada is a $50 billion energy infrastructure company 
with more than 60 years of experience in the responsible 
development and reliable operation of North American energy 
infrastructure. We employ over 4,200 employees, with half of 
those employees in the United States. In addition, we operate 
the largest gas pipeline system in North America, over 40,000 
miles, with the capability to transport 20 percent of the 
natural gas produced in North America every day.
    Keystone will bring many benefits to the United States, but 
I believe the most important role that Keystone will play is to 
bring energy security to the United States during what has been 
recently some very unsettling times overseas. When you boil 
down the debate on this project, I believe it comes down to a 
simple question for Americans: Do they want secure, stable oil 
from a friendly neighbor in Canada, or do they want to continue 
to import high-priced conflict oil from unfriendly regions, 
such as the Middle East or Venezuela?
    Keystone XL will help secure that stable supply of oil by 
linking Canadian and U.S. crude supplies with the largest 
refining markets in the U.S. Canada's oil reserves are vast--
175 billion barrels. This compares to the United States 
reserves of 21 billion barrels.
    And I think a lot of people forget that, while transporting 
oil from Canada, Keystone will also transport domestic U.S. 
crude oil. We expect to move 100,000 barrels a day of oil from 
the North Dakota and Montana area to Cushing in the Gulf Coast, 
and we further expect to pick up 150,000 barrels of oil from 
Cushing to transport back to the Gulf Coast.
    Growing domestic U.S. oil production has long been a goal 
of the United States, but this production cannot grow 
effectively if it cannot reach market. The fact that this 
pipeline access is needed is apparent in the very significant 
price discount that U.S. mid-continent producers have been 
receiving for their production.
    This project will also create valuable jobs for Americans. 
Construction of the segment from Cushing to the Gulf Coast 
would have created over 4,000 construction jobs next year in 
Kansas, Oklahoma, and Texas. These are high-paying jobs: 
pipefitters, welders, mechanics, electricians, heavy-equipment 
operators. Construction of the northern segment through 
Montana, South Dakota, and Nebraska would have created an 
additional 9,000 construction jobs. On top of that, there are 
7,000 manufacturing jobs associated with this project--20,000 
jobs in all.
    These thousands of direct construction jobs were planned to 
begin next year. The majority of them were union jobs. They 
would have started only a couple of months from now. Contracts 
and subcontracts have already been awarded to dozens of U.S. 
companies. Americans were hired and ready to go to work.
    Local businesses along the route would have also benefited 
from the 118,000 spinoff jobs Keystone would have created 
through increased business for local restaurants, hotels, and 
suppliers.
    Keystone is expected to add $20 billion to the U.S. 
economy, and the project will pay over half a billion dollars 
in taxes just during construction alone.
    The need for prompt approval of the Keystone project is 
particularly crucial today, when U.S. consumers are struggling 
to keep cope with the high cost of gasoline. Specifically, the 
Keystone XL project has the capability to reduce by almost 50 
percent U.S. dependence on OPEC oil supply.
    The type of Canadian crude that Keystone would ship is very 
similar to the heavy crude that is already refined by Gulf 
Coast refiners. Canadian oil is not new or different. At 
present, more than 2 million barrels a day of Canadian crude is 
imported and refined daily at refineries all over the U.S.
    I wanted to take 1 minute to talk about pipeline safety. 
Many people have talked about pipeline safety, and I want to 
assure everybody that one of TransCanada's core values is to 
ensure the safety of our facilities for our employees and the 
communities that we go through.
    Keystone will be safe. We are using the latest technologies 
and the strongest steel pipe to build the pipeline. We have 
agreed to implement 57 additional pipeline safety and integrity 
conditions that significantly exceed the current Federal 
standards. They include such requirements as burying the pipe 
deeper in ground, conducting increased inspections, and placing 
more isolation valves along the route.
    This pipeline will be monitored 24 hours a day, 7 days a 
week. We have 21,000 data points along the entire route of the 
pipeline that are linked to satellites which feed data to our 
control center every 5 seconds. In if any of these sensors 
detect a drop in pressure, the control center will remotely 
close valves, isolating the line and shutting it down within 
minutes.
    I will emphasize that the project has already gone through 
a thorough review process. This has been by far the most 
exhaustive and detailed review ever conducted of a crude oil 
pipeline in the U.S. In fact, the State Department in the FEIS 
concluded that Keystone XL would be the safest pipeline ever 
constructed in the U.S.
    We submitted our Presidential permit 40 months ago and are 
now faced with a potential delay of a further 12 months or 
more, bringing the total time period for this process to 50 
months. The length of this review was unprecedented and was 
certainly beyond anyone's reasonable expectations.
    Mr. Whitfield. The gentleman's time has run out. If you 
want to conclude, respectfully.
    Mr. Pourbaix. I am happy to do so.
    Once again, just to finish off, the fundamentals of this 
project have not changed. Keystone will help reduce the U.S. 
reliance on higher-priced, unstable foreign oil from Venezuela 
and the Middle East and replace it with secure supplies from 
Canada. We are going to create 20,000 American jobs at a time 
when unemployment is high.
    This project is needed. The benefits are clear. But time is 
absolutely of the essence to receive the approvals we need so 
Americans can begin to experience the benefits of Keystone. We 
can create jobs immediately, and we would very much like to get 
started.
    Thank you.
    [The prepared statement of Mr. Pourbaix follows:]
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    Mr. Whitfield. Thank you very much.
    I wasn't aware of it; we do have a vote on the floor right 
now, and we have about 3 minutes left in the vote. And we are 
going to have a total of about seven votes, which means it will 
probably be an hour before we get back. So I want to apologize 
to you in advance.
    We do have some marvelous little delicatessens downstairs, 
where you can get yogurt and drinks and cookies. Mr. Rush said 
on my dime.
    But, anyway, we will look forward to hearing all of your 
testimony when we come back, and then we will start our 
questioning.
    Thank you very much.
    [Recess.]
    Mr. Terry [presiding]. Thank you for all of your patience. 
If there are witnesses out in the hallway, if we can roust 
them.
    And I think Mr. Booker was next. Since Mr. Booker is not in 
place and the fumes are already taking over, Mr. Barnett, do 
you mind if we start with you?
    So, at this time, Mr. Barnett, if you would give us your 
statement, 5 minutes. Go ahead.

                 STATEMENT OF DAVID L. BARNETT

    Mr. Barnett. Thank you, Congressman Terry.
    Good morning, Chairman Whitfield, Ranking Member Rush, 
Chairman Upton, Ranking Member Waxman, members of the 
subcommittee. My name is David Barnett, and I am a special 
representative with the United Association of Plumbers and 
Pipefitters, which represents more than 340,000 members in the 
United States and Canada. I want to thank you for allowing me 
to testify today.
    On a personal note, I am a third-generation, 35-year member 
of the United Association. I began my career 35 years ago on 
the Trans-Alaska pipeline project alongside my father. 
Pipelines is all I have ever constructed, and I guess that is 
what brought me here today.
    United Association is the leading trade union representing 
piping crafts, including pipeline workers, in the United States 
and Canada. My home local union, 798, based in Tulsa, Oklahoma, 
is a nationwide local of pipeliners, which would comprise the 
largest single craft working on the Keystone XL project. As an 
organization, United Association invests roughly $200 million 
in training to assure that our pipeliners and other members are 
the best trained and most highly skilled our industry has to 
offer.
    The United Association strongly supports the Keystone XL 
pipeline for several good reasons.
    Keystone XL is a project that represents billions of 
dollars in capital investment, hundreds of millions in tax 
revenue, and approximately 13,000 construction jobs. I cannot 
emphasize enough how important these jobs are. The construction 
industry has wrestled with unemployment as high as 27 percent 
over the last 2 years. During this time, we have seen countless 
working families lose their livelihoods, their homes, and, in 
some cases, their hope of building a better life. These are not 
just jobs we are talking about today, they are American 
families.
    One of the best parts about this project is that it is 
funded entirely with private-sector dollars, which means that 
all of these benefits come at zero cost to the taxpayer.
    According to the U.S. Department of Energy's Energy 
Information Administration, oil and natural gas will be needed 
to meet over half of our energy needs through at least 2035. 
For this reason, it is critical for us to secure a reliable, 
long-term supply of crude oil. Standing in the way of this 
objective, however, are significant supply-side challenges, 
including Middle East instability in key oil-producing regions, 
as well as substantial growth in worldwide demand due in large 
part to emerging economies like China and India.
    Keystone XL will help us overcome these challenges. Our 
friends in Canada command the third-largest oil reserves in the 
world and already provide us with more oil than any other 
country. With Keystone, we will be able to get more of our oil 
from Canada and less from places like the Middle East, which I 
think is good for America.
    A variety of claims have been made about the environmental 
impact of the Keystone XL. The fact of the matter is that the 
Keystone XL project has been subjected to the most extensive 
review of any pipeline project in recent memory, including a 
careful review by the State Department, which concluded that it 
would have no significant impact on the environment.
    Canada's oil sands are going to be developed whether we 
build this pipeline or not. In fact, it appears that 
TransCanada's next best option after a pipeline south to the 
U.S. would be a pipeline west to serve China. It is hard to see 
how the environment is better off with the oil from Canada 
being processed by China rather than the U.S.
    As noted, the members of the United Association represent 
one of the most highly trained and qualified pipeline 
workforces in the world. In addition, while pipelines are 
already the most environmentally safe method for transporting 
petroleum products, TransCanada has pledged to make Keystone XL 
the safest of all pipelines in America by using puncture-
resistant steel, coating the pipeline with a corrosion-
resistant shell, burying it deeper under the ground, installing 
24-hour monitoring systems, and, yes, signing a project labor 
agreement with the best workforce in the world.
    Let me make one additional point in closing. There are 
pipelines in the U.S. that we should be concerned about. Across 
the country there are thousands of miles of 50- and 100-year-
old oil and gas pipelines that are well beyond their useful 
life. We have seen increasing numbers of these pipelines 
explode or burst, causing senseless deaths and jeopardizing 
public health. One example, the Kalamazoo River. That is an 
older pipeline that should have been replaced some time ago.
    Our whole country--business, labor, and government--should 
be able to get behind efforts to repair or replace these unsafe 
pipelines. However, in focusing attention on the Keystone XL, 
we have zeroed in on the model pipeline rather than the problem 
pipelines. Our hope in the United Association is that we can 
move forward with the Keystone XL pipeline and on to a 
discussion of those pipelines which do pose a problem.
    Thank you again for the opportunity to testify today.
    [The prepared statement of Mr. Barnett follows:]
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    Mr. Terry. Perfect timing.
    We are going to move back, then, from our left to right as 
we see it.
    Mr. Booker, you have 5 minutes. Thank you.

                   STATEMENT OF BRENT BOOKER

    Mr. Booker. Mr. Chairman, on behalf of the half-million 
members of the Laborers' International Union in North America, 
I want to thank you and the members of the committee for 
holding this hearing.
    LIUNA strongly supports the construction of the Keystone XL 
pipeline, which will move oil from deposits in Canada to 
existing refineries into Texas, Oklahoma, and the Midwest. Our 
union has been involved with this project for 3 years, and we 
believe that the benefits of this pipeline are too many to 
allow it to be derailed by environmental extremists.
    The Keystone XL will create good-paying jobs here in the 
United States and Canada and will increase the Nation's energy 
security by providing a reliable source of crude oil from a 
friendly and stable trading partner. And it will provide State 
and local governments with new revenue that can help them 
provide the needed services to the public.
    For many members of the Laborers, this project is not just 
a pipeline; it is, in fact, a lifeline. As you may know, the 
construction sector has been particularly hard-hit by the 
economic recession. Unemployment in construction is far higher 
than any industry sector, with over 1.1 million construction 
workers currently without a job in the United States. Too many 
hardworking Americans are out of work, and the Keystone XL 
pipeline will change that dire situation for thousands of them. 
No one can argue that this project won't create thousands of 
good jobs for construction workers almost immediately, and the 
construction economy desperately needs the massive infusion of 
private capital generated by the Keystone XL pipeline.
    TransCanada has executed a project labor agreement that 
will cover nearly all of the pipeline construction, 
guaranteeing that the overwhelming majority of the work is the 
kind of high-road employment that allows workers to earn 
family-supporting wages and benefits.
    It is also clear that additional jobs will be created in 
the extraction and refining of the oil, as well, and the 
manufacturing and service sectors. While economic experts may 
disagree as to the scale of the impact, there is no dispute 
that the construction and maintenance of the Keystone XL will 
have a ripple effect of consumer spending that will have a 
positive impact on the States and communities where the 
pipeline will be located.
    We know there are many groups outside the construction 
industry that do not understand the positive impact that the 
Keystone XL pipeline will have for workers. These groups hold 
the unrealistic belief that if the project is not built, the 
development of the oil sands will cease. However, the evidence 
is overwhelming that, with or without the Keystone XL pipeline, 
there will likely be no effect on the production of oil from 
western Canada.
    Unfortunately, many of these groups have resorted to 
attacking the nature of the work that members of unions have 
chosen as careers. They believe that construction jobs are of 
lesser value because, by its very nature, a construction 
project has a completion date, and therefore that individual 
job will come to an end eventually. They call these jobs 
``temporary'' in order to diminish their importance. And they 
recruit others to join with them in a chorus of negativity, 
proclaiming that those jobs have no real value to society. They 
should be ashamed of themselves.
    Even in these terrible economic times, most employees in 
the construction industry work full-time, and many work over 40 
hours a week. Construction workers may work evenings, weekends, 
and holidays to finish jobs or take care of an emergency. 
Inclement weather can halt construction work, which workers 
usually do not get paid for. Construction projects also create 
work for people with many different talents and educational 
backgrounds--managers, clerical workers, accountants, 
engineers, inspectors, for instance.
    I would suggest to those that seek to dismiss the nature of 
the work that LIUNA members are engaged in should perhaps think 
long and hard about the people whose value they seek to 
diminish before so quickly dismissing the nature of their 
professions.
    Construction of this pipeline will also produce needed 
government revenue at the Federal, State, and local levels. 
These new resources can help our local governments protect 
their communities from harmful budget cuts that have led to 
layoffs and the elimination of much-needed services.
    There are also considerable environmental benefits 
associated with the transport of oil imports from Canada via 
the Keystone XL pipeline. Regardless of where it comes from, 
Gulf Coast refineries will continue to seek supplies of heavy 
crude oil. Failure to secure crude oil from Canada will force 
these facilities to continue their reliance on oil supplied by 
foreign regimes where environmental regulations scarcely exist. 
The oil will be carried by oil tankers that often employ low-
wage workers largely drawn from nations other than our own.
    The Keystone XL pipeline will be the safest pipeline built 
in the world. The 57 special conditions voluntarily agreed to 
by TransCanada have a degree of safety greater than any 
typically constructed domestic oil pipeline system.
    It should also be noted that a significant portion of oil, 
about 85 percent, that spills from inland pipelines goes to 
containment areas around breakout tanks or to solid ground 
rather than directly into surface waters. This minimizes the 
environmental impact of these unfortunate spills as compared to 
discharges or spills that occur at sea.
    If the Keystone XL pipeline is not built, Canadian 
producers will seek alternatives to American markets. This oil 
will not sit idle. Producers will find ways to move the oil to 
market. Several projects are in the planning and permitting 
phases that allow the movement of this valuable energy resource 
to Canadian ports for shipment to China and other Asian 
markets. Denial of a Presidential permit to the Keystone XL 
increases the likelihood that American markets will miss the 
opportunity to secure long-term commitments for this North 
American resource, which could be forever lost to China and 
other Asian international competitors.
    Without this Canadian oil, our Nation will continue to rely 
on unstable and unfriendly nations to meet our petroleum-based 
energy needs. The Keystone XL pipeline will allow our Nation to 
develop a safe and reliable energy from a stable and friendly 
neighbor.
    Unfortunately, the administration seems to have mistaken 
volume and theatrics for the actual will of the American 
people. Just last week, a poll prepared by Rasmussen Reports 
found that 60 percent of likely U.S. voters are at least 
somewhat in support of building the Keystone XL and just 24 
percent are opposed.
    If the opponents of the American jobs succeed in preventing 
the Keystone XL from being built, the socioeconomic benefits of 
the project will not be realized. There will be no additional 
income to property owners and businesses along the pipeline 
route. Our Nation will continue to import oil from unstable 
regimes that continue to try to undermine the wellbeing of our 
citizens. And, critically important to our members, the jobs 
that will be created by this massive private investment will be 
lost.
    Thank you for inviting us to participate.
    [The prepared statement of Mr. Booker follows:]
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    Mr. Terry. Thank you.
    Mr. Soth?

                   STATEMENT OF JEFFREY SOTH

    Mr. Soth. Thank you, Mr. Terry, Ranking Member Rush, and 
members of the subcommittee.
    My name is Jeffrey Soth. I am here on behalf of the 
International Union of Operating Engineers, a trade union 
representing approximately 400,000 men and women in the United 
States and Canada, most of whom work in the construction 
industry. Thousands of IUOE members who operate heavy equipment 
in the sector hope to build the Keystone XL pipeline.
    The IUOE is profoundly disappointed by the State 
Department's action to postpone a decision on Keystone XL until 
2013. The decision leaves in question the creation of thousands 
of jobs for operating engineers and other workers. As IUOE 
general president Vincent Giblin said in his recent letter to 
Secretary Clinton, ``Because of the unique authority the 
administration possessed to create jobs almost immediately 
without congressional action or a dime of public investment, 
this decision will reverberate throughout the membership of the 
Operating Engineers.''
    We believe that the best way to analyze the project's 
impacts, particularly in light of the State Department's recent 
decision, is to consider what will happen without the Keystone 
XL pipeline. That is to say, what will happen if the State 
Department's action kills the project?
    First, without the Keystone XL pipeline, American crude oil 
from the Bakken formation, the fastest-growing oil field in the 
United States, will continue to move out of the region in the 
most dangerous, most expensive way possible: by tanker truck. 
The State Department's environmental review of the Keystone XL 
says that trucking is 87 times more likely to result in a 
fatality than a pipeline. Trucks are 35 times more likely to 
result in a fire and/or an explosion than a pipeline.
    The rapid growth in crude production in the Bakken 
formation has outstripped the infrastructure to move it. Today, 
according to the State Department's environmental review, 
25,000 barrels per day of Bakken crude move to refinery by 
truck.
    The Keystone XL, as you have heard earlier from Mr. 
Pourbaix, would provide an on-ramp for this crude in Baker, 
Montana, with contractual commitments to move 65,000 barrels at 
the start of operations for Keystone XL and more expected later 
with the dramatic growth in Bakken oil. Without the Keystone 
XL, this American crude will be transported to refineries in 
ways that increase risk to the environment and to human health 
and safety.
    Second, with or without the Keystone XL pipeline, there 
will likely be no effect on the production of oil sands from 
western Canada.
    The third point, related to the second, is that if the 
pipeline is not built, the United States may lose a chance to 
secure a long-term energy supply from our Canadian allies. If 
the Keystone XL pipeline is not built, Canadian producers of 
oil sands will be forced to seek alternatives to American 
markets, likely sending dramatically more crude to China.
    For those who think Asian options for Canadian crude are 
speculative and unrealistic, I would just make three quick 
observations.
    First, the Northern Gateway project, which would move oil 
sands to Kitimat, British Columbia, for export, is but one 
option to move the commodity to Asia. Kinder Morgan also 
proposes to expand its Trans Mountain pipeline to export oil 
sands to China.
    Second, crude tankers are common at Port of Vancouver 
facilities. In fact, 71 tankers departed Burnaby, British 
Columbia's Westridge Terminal to deliver oil sands to refiners 
in 2010. Kinder Morgan proposed to quadruple the number of 
shipments.
    Third, state-owned Chinese oil companies have dramatically 
increased their presence in Canadian oil sands. Sinopec has 
even gone to extraordinary lengths to offer not only an equity 
investment in the Northern Gateway project but also offer 
technical assistance. Even since the release of the Final 
Environmental Impact Statement, an article in The Globe and 
Mail in September identified a second Chinese state-owned oil 
company that has taken an indirect financial interest in the 
project.
    Fourth, without the pipeline, Gulf Coast refiners will 
continue to demand heavy crude, with all of its attendant 
environmental, economic, and national security consequences.
    And, finally, if the Keystone XL pipeline is not built, the 
socioeconomic benefits of the project will not be realized. 
There will be no local, State, Federal revenue. There will be 
no jobs created. That means there will be no employer 
contributions to the health and welfare funds of members of the 
Operating Engineers and other craft workers. There will be no 
contributions to pension and retirement funds for these 
workers. There will be no investments in the future of the 
industry in apprenticeship and training in our labor management 
training programs for the pipeline sector.
    With the high rate of unemployment in construction 
currently at 14 percent, it is clear that many of these workers 
will remain jobless, relying on unemployment insurance and 
other public assistance. It is no wonder why the State 
Department concludes in the FEIS that the Keystone XL is 
preferable to no project at all. What makes one wonder is why, 
given that finding, the administration postponed the decision 
until 2013.
    Thank you, Chairman Whitfield and members of the committee, 
for the opportunity to testify.
    [The prepared statement of Mr. Soth follows:]
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    Mr. Terry. Thank you, Mr. Soth.
    Mr. Burton, you are recognized for 5 minutes.

                   STATEMENT OF BRUCE BURTON

    Mr. Burton. Good morning, Mr. Terry, Ranking Member Rush, 
and members of the committee. My name is Bruce Burton. I am an 
international representative with the International Brotherhood 
of Electrical Workers. On behalf of the approximately 725,000 
members of the IBEW, I thank you for the opportunity to testify 
in support of the Keystone XL pipeline project.
    As an electrician who began his apprenticeship in 1981, I 
have very distinct memories of members of my local union 
telling stories about their work on the Trans-Alaska pipeline. 
Members of my local union, located in Michigan, spent months 
working on the Trans-Alaska pipeline, which covers 800 miles 
and carries oil from the North Slope of Alaska to Valdez, 
Alaska. Over the 3-year span of the project, approximately 
70,000 jobs were created. And, to this day, depending on the 
season, between 2,000 and 4,500 individuals remain employed on 
the Trans-Alaska pipeline today.
    IBEW members from all across the United States were able to 
save their homes during the rough economic period of the late 
1970s because they were able to work on the Trans-Alaska 
pipeline. The IBEW's primary concern in our Nation's energy 
debate is jobs. Like the Trans-Alaskan pipeline of 35 years 
ago, the Keystone XL pipeline project would create jobs and 
help our members through this difficult economic period.
    In his letter to Secretary of State Hillary Rodham Clinton 
requesting approval of the Presidential permit necessary to 
build Keystone, IBEW President Edwin D. Hill wrote, and I 
quote, ``At a time when job creation should be the top 
priority, the Keystone XL pipeline project will put Americans 
back to work and have ripple effects throughout the economy. 
The shovel-ready pipeline will create 20,000 direct jobs and 
118,000 indirect jobs. IBEW members look forward to being part 
of this historic project and pledge to deliver the highest 
quality of work to make it a success,'' end quote.
    Our highly skilled, trained, and licensed journeymen 
electricians, linemen, apprentices, and instrument control 
technicians would be working on Keystone's pump stations, which 
will move oil through the 1700-mile-long pipeline. The pump 
stations are to be located approximately 50 miles apart and 
built on small parcels of land approximately 5 to 10 acres 
each. Each pump station contains between two to five pumps, 
which are electrically driven, 6500-horsepower high-voltage 
motors. Initially, our members would be working on 15 pump 
stations, with the potential for 15 more stations in the 
future. Each station would require approximately 6,000 
electrical labor hours to complete.
    In addition, many of the pump stations are to be built in 
remote locations. Therefore, new high-voltage transmission 
lines must be built in order to get electrical power to the 
stations. For example, in Nebraska, a new transmission line 
would need to be built that would be 74 miles long and carry 
115,000 volts. This project within a project is valued at $49 
million and will provide approximately 55,500 hours of labor 
for linemen.
    Just like the benefits from the Trans-Alaskan pipeline, the 
benefits from the Keystone XL pipeline will not be localized. 
From pipe manufactured in Arkansas, pump motors assembled in 
Ohio, and transformers built in Pennsylvania, to the men and 
women who will actually work on the pipeline itself, workers 
from all over the United States would benefit from the project.
    The Keystone XL pipeline would be built under a project 
labor agreement with the IBEW, the Laborers International Union 
of North America, the International Brotherhood of Teamsters, 
the United Association of Plumbers and Pipefitters, the 
International Union of Operating Engineers, and the Pipeline 
Contractors Association. Only the highest-skilled workers will 
be employed on the project. This will ensure the most well-
built, safest pipeline possible.
    Today, the United States is experiencing the worst economic 
downturn since the Great Depression. The Keystone XL pipeline 
is shovel-ready. As soon as a Presidential permit is granted, 
jobs would be created--jobs that our country, jobs that our 
members desperately need.
    I thank you for your time and look forward to your 
questions.
    [The prepared statement of Mr. Burton follows:]
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    Mr. Terry. Thank you, Mr. Burton.
    Mr. Ringo, you are recognized for 5 minutes.

                   STATEMENT OF JEROME RINGO

    Mr. Ringo. Thank you very much.
    My name is Jerome Ringo, and I am the chief business 
officer for BARD Holdings, an algae cultivation, harvesting, 
and extraction project that is creating advanced technologies 
as alternative energy and pharmaceutical resources. My thanks 
to the chairman, the ranking member, and members of the 
committee for inviting me to speak today on this most important 
subject.
    I spent over 25 years working in the Louisiana 
petrochemical industry as a member of the Oil, Chemical, and 
Atomic Workers Union, both in construction and operations. I 
spent 13 years on the board of directors of the National 
Wildlife Federation, where I became chairman of that 5-million-
member organization. And I also was the president of the Apollo 
Alliance, a 17-million-member coalition on alternative energy; 
and currently with BARD Holdings. I would like to offer a long-
term perspective on America's energy choices.
    Understanding America's growing appetite for energy and our 
need for economic stimulation, it is important that we meet 
this energy demand with smart choices for our economy and while 
minimizing adverse impact on the safety of the water, the air, 
the lands we depend on. In fact, American workers have proven 
again and again that we can create jobs by pursuing an 
environmentally smart path forward.
    I clearly recognize the job impacts of construction 
projects, but sometimes the best intentions can deliver 
negative results. I agree with President Obama; he got it right 
when he said we need to take the time to understand the impact 
of this project and not rush to build. The obvious destruction 
and contamination of northern Canada, along with the safety 
challenges, health, and environmental risks to the American 
people of such a pipeline, is enormous. The environmental 
justice impacts on communities surrounding gulf refineries have 
never been adequately examined. And, according to NASA 
scientist James Hansen, tar sands are a game-over scenario with 
respect to climate change.
    The Keystone XL pipeline would transfer highly corrosive 
and toxic tar sands under high pressures along more than 2,000 
miles, crossing waterways, sensitive aquifers, and jeopardizing 
the quality of lives of citizens along its routes. TransCanada 
and the State of Nebraska have agreed to move a small part of 
the Keystone XL pipeline. I am not as reassured, however, 
because I now wonder what part of America is now going to be 
willing to sacrifice the next spill of a magnitude.
    According to the State Department's Final Environmental 
Impact Statement, a spill from this pipeline could reach a 
worst-case scenario estimated to be 2.8 million gallons. If we 
pay attention to what is happening in Michigan, we can see the 
consequences because it has happened. Last year, a similar 
pipeline spilled more than a million gallons of tar sand oil 
into Michigan's Kalamazoo River. The river is still closed 
today. It ruined drinking water, harming the health and safety 
of nearby residents and killing wildlife. The EPA recently 
announced that it has already recovered more than 1.1 million 
gallons from the Kalamazoo and that there is no end in sight to 
the cleanup because tar sands is more difficult to clean up 
than conventional oil. We have no idea of how much oil has 
really spilled.
    As we continue our dependency on foreign oil, with the goal 
to declare energy independence, it is critical that we not 
shift our dependency from Middle East oil to Canadian oil. Our 
goal is not to switch seats on a sinking ship. The middle-
ground answer lies in creating jobs to meet America's energy 
demand while simultaneously improving the state of our 
environment and our economy. The answer lies in increased 
investment in the research and development of clean oil 
alternative energy products. This is a win-win-win on jobs, 
national security, and the environment. And that clean fuel 
strategy, as well, is real, powerful, and under way right now.
    The new fuel economy standards recently enacted and 
proposed for cars and trucks together cut America's need for 
oil by 3.4 million barrels per day. That is more than three 
times the proposed capacity of the Keystone XL. Or, put 
differently, that equals oil savings greater than the proposed 
XL pipeline plus all the oil that is currently imported from 
the Persian Gulf. Innovating to build more efficient and 
alternative fuel vehicles and underpinning a renaissance in 
auto and manufacturing sectors that, according to Bureau of 
Labor Statistics, has added more than 125,000 direct jobs in 
the auto industry.
    Energy investment is a long-term investment. We need to 
think long-term, Mr. Chairman. I urge Congress to put the long-
term interests of the American people as a top priority and not 
rush to build the Keystone pipeline.
    Mr. Terry. Thank you, Mr. Ringo.
    Mr. Ringo. Thank you, Mr. Chair.
    [The prepared statement of Mr. Ringo follows:]
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    Mr. Terry. Ms. Kleeb?

                STATEMENT OF JANE FLEMING KLEEB

    Ms. Kleeb. Thank you, Representative Terry and members of 
the committee, for asking me to be with you today on an issue 
that has captivated our State for several years. My name is 
Jane Fleming Kleeb, and I am the head of an advocacy group 
called Bold Nebraska.
    Hearings like today give us citizens an opportunity to not 
only thank you for your dedication to our country but also to 
ask for your help. President Obama made a tough and right 
decision by asking for more time to study this pipeline. He 
stood up for our families, our landowners, our farmers, our 
ranchers, who have been bullied by TransCanada. I am asking you 
today to also stand with us as we figure out a path forward.
    Our broad coalition of individuals and groups speaking out 
against the pipeline has become much more than just a group 
speaking out on an issue. We have become a family. And we are 
doing everything we can to defend our land and our water.
    Some will try to say, because we passed two bills last 
month in our State, that everything is fine in Nebraska. I am 
here to tell you, everything is not fine. TransCanada has yet 
to propose a new route that will avoid the Sand Hills and our 
precious Ogallala Aquifer. Landowners are still on pins and 
needles, knowing that the easements that TransCanada now owns 
for land can be sold to other oil pipeline companies today. We 
have not even started the new State process to study this 
pipeline and yet are being told by Members of Congress that we 
need to rush a decision within 30 to 60 days.
    Simply put, we are looking to you, our elected officials, 
and each of our elected officials back at home to do right by 
landowners like Randy and Susan and to do right by small 
businesses like Clear Creek Organics, which rely on the clean 
and abundant source of water from the Ogallala Aquifer. These 
small businesses, our ranchers and farmers, produce jobs every 
day, tax revenue every day, as well as excellent cheese and 
meat.
    With the TransCanada Keystone XL pipeline, it is all too 
easy to turn this into the all-too-familiar jobs-versus-the-
environment frame. We believe this pipeline represents more 
than one energy project, and we think that it endangers much 
more than any amount of jobs that TransCanada or their allies 
will claim it will produce. We have seen figures ranging from 
3,000 to 1 million. In fact, Stephen Colbert even did a funny 
bit about all of the jobs that would be produced by this 
pipeline.
    Whatever the real figure is--and we still are wondering 
what that real figure is--I stand with President Obama and 
Nebraskans like Randy who know we must figure out a way to 
create jobs while protecting our land and water.
    This pipeline is risky. It is massive. And we literally 
have no long-term studies on how tar sands will affect our 
land, water, and health. Several elected officials, as well as 
PHMSA, have made it clear in other hearings that we literally 
have no idea how tar sands will affect our land, our water, and 
our health. And we are seeing that play out in the Kalamazoo 
River, where hundreds of families have been displaced from 
their homes. They have had to move because of the tar sands 
spill that occurred in their backyard.
    I am asking for your help to get a study done on tar sands 
so it can be firm and we can be clear and so industry can also 
have the answers and there will be very clear answers, so we 
can find a path forward together. While the permit process may 
seem like it is taking too long, we still have no proposed 
route in Nebraska. And, again, we have no study on how tar 
sands affects us.
    Additionally, if this oil is meant for the United States, 
then attach that to a bill. Make it clear that this oil is 
guaranteed for the United States. Because right now there are 
no guarantees. We know that TransCanada and other tar sands 
companies need to get to our ports. Whether it is the Gulf, 
whether it is Maine, whether it is other ports, they want 
access to our ports in order to sell their commodity on the 
international market.
    And so, yes, this process has taken a long time. It has 
been over 3 years since TransCanada has been bullying our 
landowners. It has been 3 years since they have been 
threatening eminent domain, when they have no permit for their 
project. It has been 3 years with our State being bombarded 
with misleading ads about job claims and tax revenue.
    Next week, we will be releasing a new report that shows 
that TransCanada has overpromised on how much they are paying 
our counties in Nebraska. Just because you create jobs does not 
give you the green light to take American land for your private 
gain. That is what TransCanada is doing. Six families right now 
in South Dakota are in court with TransCanada, trying to 
protect their land.
    As a Nation, we are facing our next moon challenge. Energy 
is our moon challenge. And when I look at my three little 
girls, I want to make sure they know that I, as their mom, did 
everything I can to fight for sustainable energy. And I know 
each of you want to do that, as well.
    We want energy that is revitalizing our communities, not 
putting them at risk. And I know as Americans that we can meet 
this challenge. We can do right by landowners, we can do right 
by workers, because we are Americans, and we can do this 
together.
    Thank you.
    [The prepared statement of Ms. Kleeb follows:]
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    Mr. Terry. Thank you.
    I want to thank all of you for your testimony. It was very 
insightful.
    At this time, to begin our questions, I would yield to the 
gentleman from Illinois. You are recognized for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. I appreciate the 
courtesy of letting me go rapidly because I am going to board a 
plane.
    And that plane that--actually, when I fly from St. Louis, 
it is heavy crude from the Canadian oil sands that is already 
piped down to my Conoco-Phillips refinery, which is refined 
there and then piped to the airfield. So, many times, the jet 
fuel that I am using to come back and forth is already 
established. You see in front of me, really, the works of jobs 
already because of this.
    You know, the oil sands is the third-largest oil venue in 
the world. And you talk about North American energy security, 
this is what you talk about. You have Caterpillar. I have been 
up to the oil sands. These things are massive. They are five-
stories tall. The tires are one-story tall. UAW, Teamster 
drivers--this is it. This is what the whole fight is about, oil 
sands. Come see it after the hearing. We mine it, surface 
mining, or you get it in situ. This stuff is already coming 
into the country. It is going to my Marathon refinery in 
Robinson, Illinois. Good-paying, great benefits. Members of 
organized labor already benefiting.
    Ms. Kleeb, how many pipelines go through the aquifer right 
now?
    Ms. Kleeb. Actually, only one crude oil pipeline currently 
goes through----
    Mr. Shimkus. The question is how many pipelines.
    Ms. Kleeb. Well, can I answer your first question?
    Mr. Shimkus. Well, the question is, how many pipelines go 
through the aquifer?
    Ms. Kleeb. In the Ogallala Aquifer in the State of 
Nebraska, there is one crude oil pipeline----
    Mr. Shimkus. Yes. OK. And what is the other ones?
    Ms. Kleeb. There are no other oil----
    Mr. Shimkus. There are three pipelines----
    Ms. Kleeb [continuing]. Pipelines that go through the 
aquifer.
    Mr. Shimkus [continuing]. That go through the aquifer as of 
today, so----
    Ms. Kleeb. You are absolutely incorrect. And I am sure that 
people----
    Mr. Shimkus. I am reclaiming my time.
    Ms. Kleeb [continuing]. This piece of paper, but I live in 
Nebraska. And the oil----
    Mr. Shimkus. Reclaiming my time. Reclaiming my time, ma'am.
    Ms. Kleeb. That is fine.
    Mr. Shimkus. The----
    Ms. Kleeb. That oil causes cancer.
    Mr. Shimkus. Now I would like to go to--again, people can--
they are more than welcome to come view this. I have studied 
this stuff quite a lot, and all I know, it is a lot of jobs.
    So, Mr. Booker, how many jobs do you project will be 
produced from your segment?
    Mr. Booker. For the Laborers International Union, it would 
be a guess, but I can tell you what, of other projects we have 
done, have----
    Mr. Shimkus. Quickly.
    Mr. Booker. Yes. Ruby Pipeline, El Paso was the owner, 680 
miles. We performed 2.1 million man hours on a 680-mile 
pipeline, which generated $24 million in fringe benefit 
contributions for our members.
    Mr. Shimkus. And this is actually a 1,700-mile pipeline 
that this is being produced.
    Mr. Barnett, how many jobs do you think this would produce?
    Mr. Barnett. We expect this project to create over 1,500 
jobs for our welders, pipefitters, and pipeline----
    Mr. Shimkus. And you talk about the Trans-Alaska pipeline. 
One thing that is not--and you all tried to highlight this. My 
father-in-law was a microwave technician. He moved to Alaska 
for those jobs. And that is the side benefits of--and, Mr. 
Burton, you were talking about the engines that are being built 
and the high transmission lines. Same time that my father-in-
law moved to Alaska for this, the high-paying jobs.
    Mr. Soth, do you have a job number for this project?
    Mr. Soth. Contractors have shared with us their proprietary 
estimates for the number of hours that operating engineers 
would perform on the project. In excess of 3 million hours are 
estimated from a number of those contractors.
    Mr. Shimkus. And how much government money is going into 
this? Anyone?
    Mr. Soth. Not a dime.
    Mr. Shimkus. Is this a shovel-ready project, in your view, 
members of organized labor?
    Mr. Booker. Yes.
    Mr. Barnett. Yes.
    Mr. Shimkus. Which sector is the President going to mess 
over by making a decision? Is he going to blow off his 
supporters in organized labor, or is he going to blow off his 
friends in the environmental left after the election? Does 
anybody have any idea? He has to do one, right? He is either 
going to pick environmental left or he is going to pick jobs.
    I am standing with labor, and I am standing with jobs. And 
it is a great environment to be, because sometimes members of 
the Republican side aren't really considered to be total 
friends of organized labor. And we get that. And I do my best, 
as many of you know. But this is not the fight--if you want to 
help the President of the United States win re-election, this 
is the fight that he should have for jobs, 20,000 jobs.
    The last point I will make is, the biggest oil spill 
occurred where? Prince William Sound. How many gallons? I mean, 
not gallons--how many millions of gallons? Fifty-five million 
gallons of oil through a tanker. So don't come and preach to us 
about the spills from a pipeline, when the biggest 
environmental damage that could occur is tankers traveling 
around the world.
    I yield back my time. Thank you, Mr. Chair.
    Mr. Terry. Thank you, Mr. Shimkus.
    Now we recognize another gentleman from Illinois, the 
ranking member, Mr. Rush, for 5 minutes.
    Mr. Rush. Thank you very much, Mr. Chairman.
    And, Mr. Chairman, I want to--I know that this is--the 
issue of jobs is constantly being bandied about here, and I am 
extremely sensitive to that issue of jobs and unemployment. In 
fact, my district, which is the First District of Illinois, the 
unemployment rate is more than twice the national average and 
may be closer to 50 percent for many of my constituents. I have 
multi generations of unemployed people residing in my district. 
So some of the concern about jobs is a concern that I have had 
for many, many years and one that I face daily.
    In numerous hearings on Keystone XL and the pipeline safety 
reauthorization, as well as in private meetings in my office, I 
have asked many of the experts, those who are proponents of 
this and from the American Petroleum Institute to the 
Association of Oil Pipelines to individual industry 
representatives, about the participation of those minority-
owned businesses and contractors in the pipeline industry. And 
it seems like no one, absolutely no one, can give me an answer.
    I am for jobs. I am for the environment. But I am also for 
jobs for minority- and women-owned businesses. And I can't find 
not one scintilla of evidence that there is any minority-owned 
businesses and contractors in this entire industry, not one. 
And I have asked until I am literally blue in the face. The 
fact that none of these so-called experts could give me an 
estimate of the level of minorities involved in the 
construction and operation of pipelines in this country leads 
me to believe that the numbers are so small that they may be 
nonexistent.
    To address this issue and shed more light on it, I am 
working to include a comprehensive study on this issue in the 
pipeline safety reauthorization bill that is currently being 
renegotiated, or being negotiated.
    But I have all my union friends here. And I must say that 
some of them are friends and have supported me in the past. But 
I am really kind of a little disturbed and surprised about some 
of the issues right now. And I am just going to ask you, each 
one of you who are representing labor, can you give me any 
level of participation of minority contractors, workers, or 
businesses that are engaged in each of your respective 
organizations? And if not today, can you forward that 
information to my office within a few weeks?
    I want to know how many minority contractors, how many 
minority workers, and how many minority businesses are 
associated with the pipeline industry.
    And, Mr. Pourbaix, can you answer that question?
    Mr. Pourbaix. I don't have the figures in front of me. I 
would be happy to provide them.
    I think what I could say, showing the support that we have 
from minority businesses and businesspeople and laborers, is, 
we have the full support of the Hispanic Chamber of Commerce, 
the full support of the Hispanic Veterans Association. And I 
think that is just an example that we do have significant 
support among minorities in this country.
    And perhaps some of the other gentlemen from labor may be 
able to shed some further light on that.
    Mr. Booker. I don't have any specific information regarding 
the question you asked. We will be happy to forward it to your 
office upon the conclusion of the hearing.
    Mr. Rush. Mr. Soth?
    Mr. Soth. The Operating Engineers are happy to provide you 
some data, particularly on our apprenticeship programs, where 
we are systematically tracking that data and can provide you a 
good look at what we do for people of color and women in the 
Operating Engineers Union.
    Mr. Rush. OK.
    Mr. Barnett?
    Mr. Barnett. First of all, I would like to say that we are 
a membership-driven organization; we are not contractor-driven. 
We do not track that type of information.
    I can tell you that we have a large number of minorities in 
our local union that we are very proud of, that go out there 
every day, they perform their work. And those are the people 
that we go to bat for every day.
    Mr. Rush. All right.
    Mr. Chairman, I really--I know my time is up, but, again, I 
am coming up with songs that I can't really dance to, and I am 
sorely disappointed. And I think that that is an issue that 
this committee and this subcommittee is going to have to 
address. And for the members of labor to come before me and 
before this subcommittee and not have good, firm information 
for me, I think that that is atrocious.
    And, with that, I yield back the balance of my time.
    Mr. Terry. Thank you, Mr. Rush.
    At this time, we will recognize Mr. McKinley. He also has 
transportation issues. You are recognized for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman.
    Before we had this hearing, I went back to look at some of 
the things that were said, what were in the press back in the 
1970s, before the Alaska pipeline. There the criticism was the 
effects on the tundra, possible pollution, harm to animals, 
geographic features, and the lack of engineering. Then they 
went ahead and they built it--800 miles long, 48 inches in 
diameter, across 3 mountain chains, 30 rivers. It seemed to 
have worked.
    So, today, I am just curious in the last 30-some years 
since that pipeline was put in in the 1970s how much we have 
improved.
    And I have heard all the scare tactics from the friends on 
the other side that this is a very corrosive, difficult product 
to handle, but I think engineers over the years have developed 
ways of handling that. We can have ceramic line pipes. We can 
do a lot of things to handle it. If we can pipe hydrochloric 
acid, we sure as the dickens can pipe crude oil.
    So I am just curious from this panel, from a construction 
background, some of the improvements we have made. I assume 
that now, 30 years later--we didn't have X-80 steel, 80 kip 
steel. We now use that. Some of the welding techniques that we 
have learned about over the years that have developed from our 
friends in the construction industry with the low-hydrogen 
electrodes that we are using.
    Can you amplify a little bit about some of the improvements 
that have happened over the last 30-some years in construction, 
why we should have a greater comfort level?
    Mr. Pourbaix. Yes, I would be happy to.
    I think, if you take a look at pipelines, the majority of 
pipeline incidents come from really two areas. They come from 
corrosion of the pipeline, and they come from third-party 
strikes, sort of, whether it is a backhoe, some third-party 
agency acting on the pipe.
    And since the Alaska pipeline was built--let's talk about 
corrosion, for example. Today, all new pipelines are built of 
much stronger steel. You mentioned X-80 steel. It is far 
stronger, it is more puncture-resistant. On the corrosion side, 
every pipeline built has cathodic protection, which is running 
an electrical current through the pipe to inhibit corrosion. 
And on top of that, every joint of the pipe that we will build 
is coated with fusion-bond epoxy coating. And when you combine 
cathodic protection with fusion-bond epoxy coating, you would 
expect that 50 years from now you would take those joints of 
pipe out of the ground, and they would have no evidence 
whatsoever of corrosion. So that is how far the industry has 
come on corrosion.
    On line strikes, as I said, we are using stronger steel. 
One of the 57 special conditions which we voluntarily agreed to 
with this pipeline is that, instead of burying the pipe 3 feet 
under the surface, we are burying it 4 feet under the surface, 
which should largely remove that risk. And on top of that, we 
have accepted an obligation to continue to maintain that depth 
of cover over the entire pipeline over the entire time it is 
operational.
    And then, you know, finally, when it comes to leak 
detection, you heard other people talk about that today. We 
have 21,000 sensors on this pipeline. They are regenerating 
data every 5 seconds. If there is a drop of pressure, we will 
know immediately, and the pipeline will be shut down 
automatically in literally minutes. And, at that point, you 
have a cleanup situation.
    Mr. McKinley. What was the ratio, what was that like on 
those leak detectors on the Alaska pipeline?
    Mr. Pourbaix. I don't know the exact amount, but it 
certainly would be--we have multiple redundant leak-detection 
systems on this pipeline.
    Mr. McKinley. There was another issue that was raised by 
Bill Erasmus, national chief of the Dene Nation, I guess, if I 
am pronouncing that properly. And he made some very good 
points, excellent points about--one of them had to do with 
tailing ponds. And years ago, back in the 1970s, they weren't 
using EPDM liners. They were using clay liners, primarily, with 
it.
    So our construction knowledge has expanded so much over 
those 30 years that--are you expecting when--are you going to 
be using liners at your impoundment ponds for your tailings?
    Mr. Pourbaix. Well, we don't produce any oil ourselves; we 
just move it. But what I would say, a good number to think 
about that is, going forward, approximately 70 to 75 percent of 
all future oil developments in the oil sands are actually going 
to be done through in-situ drilling with wellbores. And those 
projects do not even require tailings ponds, so----
    Mr. McKinley. So, in summary, then, our welding techniques 
have improved, our steel has improved. You are using Core 10 
steel on areas that we didn't have available 30 years ago. So 
technology has really moved, so if it worked back 30, 40 years 
ago, I don't understand, unless there is another agenda here--
and that is a little bit more sinister--about why we are not 
allowing this to progress and putting our people back to work. 
So I think the technology is fine; it is the other--the 
political side of it is where we are hung up right now.
    Ms. Kleeb. Representative, can I just follow up on the----
    Mr. McKinley. I am over my time. If he will let me----
    Mr. Terry. The gentleman's time has expired.
    At this time, I will recognize the full committee ranking 
member, Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman.
    For those who may be viewing this hearing, I think they 
would be struck, as I am, that the only way Republicans can 
deal with the fact that some people have some questions about 
the pipeline is that it is a conspiracy, there is some hidden 
agenda, it is all politics. One of the Republicans who asked 
questions said, who is President Obama going to choose, the 
environmentalists or the labor unions? They only think in these 
terms, and they want to make this a political issue.
    Well, the question of the decision to go ahead with this 
pipeline is a serious one, and I think we need to fully 
understand the implications of approving energy infrastructure 
that is going to last for decades. And I wouldn't make light of 
it just because the Republicans want to use this hearing for 
their own political purposes. I think it is appropriate for the 
President of the United States to review this matter. I think 
it is appropriate for the government agencies and people in the 
State of Nebraska to review this issue.
    The Republicans put a bill forward that they have already 
put through the House, saying, we should decide this issue in a 
shorter period of time and decide it favorably for the Alaska 
pipeline. They don't really want to know the truth; they just 
want the pipeline.
    And my friend who just asked questions on the Republican 
side talked about how there must be this hidden agenda because 
it is perfectly safe. Well, we do already have one Keystone 
pipeline, and it is certainly a lot later in time than the 
Alaska pipeline because it has been within a year. And this 
last year of operation showed that there were a dozen spills, 
so many spills that it was shut down temporarily.
    But let me go to the question that bothers me the most and 
what the impact will be from this pipeline if we see it go 
forward on the climate problem that we are seeing in this 
country and all around the world. Republicans don't even 
believe it is such a thing. They deny the science, and when 
they hear scientists talk about it, they think it is a hidden 
agenda. So they can't take another point of view seriously 
because they are so convinced that they are right all the time.
    The decision is an important one. They want to short-
circuit the process. Ms. Kleeb, you and your neighbors have 
been fighting for a thorough evaluation of the environmental 
impacts of this proposed pipeline. Do these Nebraska laws 
satisfy your concerns? We have been told Nebraska has passed 
some laws so we ought to let this whole thing go forward.
    Ms. Kleeb. You know, so they are definitely a step in the 
right direction. And I will say, the only reason that we have 
those bills is because citizens and landowners raised hell for 
2 solid years at our State capitol to make sure that those 
bills got passed.
    We still don't have a study on tar sands. And I hoped that 
Representative Terry would introduce that on behalf of 
Nebraskans, to make sure that any tar sands pipeline that does 
get approved, that we make sure that that is safe. We don't 
know how tar sands----
    Mr. Waxman. Well, Representative Terry's position was that 
the original pipeline route was fine, he was for this project--
--
    Ms. Kleeb. That is right.
    Mr. Waxman [continuing]. And he thinks it is important. 
Jobs, jobs, jobs.
    Well, this is a lot different than the Alaska pipeline 
because the Alaska pipeline was taking oil, and it was taking 
it through not verypopulated areas. This is a different kind of 
pipeline because it is going to take the dirtiest source of oil 
available, and it is going to drive a significant increase in 
carbon pollution.
    What was your concern about the original route? I guess the 
original route is not going to happen now. That is not because 
of TransCanada but because of Nebraska. What was your concern 
about the original route?
    Ms. Kleeb. That it was going to cut right through the Sand 
Hills. We have no oil pipelines, tar sands or traditional 
crude, that cross the Sand Hills currently.
    Mr. Waxman. And the Sand Hills is where the aquifer is, the 
Ogallala Aquifer?
    Ms. Kleeb. The Sand Hills have a unique relationship with 
the aquifer. It is a very intricate ecosystem. The aquifer 
essentially lays beneath the entire State of Nebraska. I mean, 
obviously, it provides water for the backbone of our State's 
economy.
    And the detection system, quite frankly, of TransCanada's 
first pipeline we know is not a very good one, since a 
landowner in North Dakota had to be their detection system. 
Their sensors did not work in that scenario.
    Mr. Waxman. When we hear about these jobs, we are hearing 
estimates based on a long period of time. In fact, the job 
estimates assume this whole thing is going to operate for a 
hundred years. Well, that is a century of oil addiction. We 
would be locking in higher carbon pollution for a hundred 
years. And we can't afford to keep building dirty energy 
infrastructure that is going to last decades.
    The IEA, the International Energy Agency, said in 5 years 
we are going to have to make a significant move toward clean 
energy to avoid an 11-degree increase in global temperature. I 
don't know if that is Democratic or Republican, but I think it 
is a perfectly important, legitimate concern and shouldn't be 
just dismissed by the Republicans because they want to wonder 
whether Obama is trying to satisfy one interest group or 
another.
    So I just raise these issues. I think this is an issue that 
is worthy of our serious consideration by all the appropriate 
agencies.
    I yield back my time.
    Mr. Terry. Thank you, Mr. Waxman.
    Mr.--well, before I--Ms. Kleeb, this committee passed a 
pipeline safety bill, and a request for study was part of that. 
I voted for it.
    Mr. Pourbaix, can you tell me, on behalf of--you are the 
representative from TransCanada pipeline. The company builds 
pipelines, right?
    Mr. Pourbaix. Uh-huh.
    Mr. Terry. If a pipeline was not built, would oil sands 
from Alberta still come in to the United States to be refined? 
And if so, how would it be transported?
    Mr. Pourbaix. There is some capacity left on existing 
pipelines that cross the border, and those pipelines can get 
probably a few hundred thousand barrels of incremental oil into 
the Chicago area. The problem is that there are no pipelines 
that are in place that can take that oil from Chicago to where 
it is needed, which is the Gulf Coast. So, yes, the answer is 
more pipeline capacity is needed.
    Mr. Terry. Is that the safer mode of transportation, as 
opposed to--I have heard of rail and trucks.
    Mr. Pourbaix. Well, it is interesting right now--and a lot 
of people have mentioned the Bakken formation in North Dakota 
and Montana, and the Bakken is rapidly growing in production. 
It is anticipated to be 800,000 barrels a day in the next 5 
years. Right now, there are no pipeline options, and all of 
that incremental production is being moved either by truck or 
by rail car. And as you heard some of the other gentlemen speak 
about both of those, not only are they much more costly, they 
are several orders of magnitude more risky, in terms of risk to 
the environment and risk to human life.
    Mr. Terry. And in regard to risk, has the risk of the 
Keystone pipeline, the route that--why we are here today, has 
that been studied? Have there been environmental impact 
studies?
    Mr. Pourbaix. In August of this year, the State Department 
completed their close to 40-month environmental impact review. 
In that, the conclusions of that study, it was the most 
comprehensive study of any oil pipeline in the history of the 
United States, and it came to the conclusion that this pipeline 
would be the safest crude oil pipeline ever built and operated 
in the U.S.
    Mr. Terry. So the route was dictated from the environmental 
study that was done?
    Mr. Pourbaix. Yes. And that final environmental impact----
    Mr. Terry. Your ability to move would probably be 
restrained from the fact that that was deemed the safest 
environmental route?
    Mr. Pourbaix. That was the largest challenge we had in 
Nebraska. Until the State Department came out with their most 
recent delay, they had come to the conclusion that the 
preferred route with the lowest environmental impact--and had 
we voluntarily moved that route, we would have created a 
significant uncertainty as to whether any new route would be 
permitted because, by definition, it would have a higher 
environmental impact.
    Mr. Terry. So that was why it was important that the State 
Department be part of that agreement to move that off the sand 
hills.
    Mr. Pourbaix. Yes.
    Mr. Terry. What is the total investment into the Keystone 
pipeline?
    Mr. Pourbaix. Including the operating?
    Mr. Terry. No. Let's just do it for parts, steel, and 
construction costs.
    Mr. Pourbaix. So we, right now, are $2 billion into this 
project. By the end of next year, we will be close to $3 
billion. The total project cost would be approximately $7 
billion.
    Mr. Terry. $7 billion. And out of the $7 billion, though, 
how much of that would be construction job-related?
    Mr. Pourbaix. $4, $4.5, $5 billion, in that range.
    Mr. Terry. $4.5 to $5 billion going toward workers' 
salaries?
    Mr. Pourbaix. Yes.
    Mr. Terry. Mr. Booker, have you estimated how many man 
hours your union would dedicate to this pipeline?
    Mr. Booker. Rough estimates were well over 3 million man 
hours. Compared on similar projects, Ruby Pipeline, 680 miles, 
we performed 2.1 million man hours on that project.
    Mr. Terry. I am going to interrupt because I only have 37 
seconds left. Mr. Soth, do you have an estimate of how many man 
hours your union hall would supple, or your union totally?
    Mr. Soth. We have been privy to contractor estimates of 
over 3 million worker hours.
    Mr. Terry. Three million. You mentioned that earlier.
    Mr. Barnett.
    Mr. Barnett. Approximately 2.5 to 3 million man hours.
    Mr. Terry. Mr. Burton.
    Mr. Burton. We are probably a little bit on the low side. I 
did some quick math here tallying up just the numbers that I 
talked about, and we are around 63,000--let's say 64,000. We 
are probably the lowest trade.
    Mr. Terry. In my 5 seconds, Ringo, I want to say I support 
the research and development into algae. In fact, the 
University of Nebraska, I have helped them get some grants to 
do research. I hope you are very successful in your operations. 
I actually have a bill, too, to allow biofuels--under current 
law, the loan program can only go to gas and oil pipelines. And 
I have got a bill--would you agree--how would you feel if the 
bill would allow pipelines to be built to carry biofuels, like 
those made from algae?
    Mr. Ringo. Well, I think it is important. But we first have 
to give consideration to whether there is going to be any 
adverse impact of building any type of pipeline on the people 
who live in closest proximity.
    Mr. Terry. Fair enough. All right. Thank you.
    At this time, I think it is Mr. Engel. The gentleman from 
New York is recognized for 5 minutes.
    Ms. Castor was here first. Oh, I am sorry.
    At this time, Ms. Castor.
    Ms. Castor. Thank you, Mr. Chairman.
    And thank you to all the panelists who are here today.
    I would really like to encourage my colleagues on the other 
side of the aisle to organize a bipartisan hearing on jobs 
related to the fastest growing energy sector, and that is clean 
energy and renewables. Clean energy is creating good jobs all 
across America, and it is most often not accompanied by the 
harmful impacts to the health in our communities, environmental 
impacts, impacts to the water that we drink and rely upon. And 
I think Americans are crying out for jobs tied to this growing 
clean energy sector.
    In fact, the International Energy Agency recently reported 
and confirmed what we are all feeling and what we know, that 
the fastest-growing sector is in clean energy. The clean energy 
sector is now providing one-fifth of all electricity global, 
one-fifth of all electricity worldwide, and it is growing. And 
this is where the emphasis in national policymaking should be 
placed now because, think about the divergent views here on the 
impacts to this community. When you talk about clean energy it 
is something that brings us all together. It creates jobs in 
communities that need those jobs. It provides a great shot in 
the arm for utility companies and others. But it safeguards 
community health.
    And I think one of the reasons it is important for the 
Keystone pipeline to continue to undergo review is that there 
are a lot of unanswered questions, and there are a lot of 
serious concerns that have been raised: Carbon pollution, clean 
water impacts, and safety concerns.
    Right now, we know that extracting tar sands bitumen and 
upgrading it to synthetic crude oil produces roughly three 
times greater greenhouse gas emissions and carbon pollution. 
Can we do something about that? Do we need to put all of our 
emphasis on an energy source that is going to aggravate the 
carbon pollution problem facing our country and the globe?
    Water quality, the testimony we are hearing today is folks 
are very concerned about the quality of the clean water that 
they rely on. And the safety concerns are really raising a lot 
of red flags mainly because of the risks that have been covered 
just over the past year. In Michigan, an 800,000 gallon spill; 
plus outside Chicago a 250,000 gallon spill; a 1.3 million 
gallon spill in Alberta tar sands. And on May 7, the Keystone 
tar sands pipeline provided another warning when it spilled 
21,000 gallons of crude in North Dakota. That was its 11th and 
most significant spill. So you can see there are a lot of 
concerns that I think require the administration to continue an 
all-out review of the impact.
    On safety, of course, one of the major concerns is the 
transporting of the diluted bitumen through the middle of the 
United States, and many are concerned that the substance is 
more corrosive than conventional oil and may pose a greater 
threat to pipeline deterioration. When the head of the Federal 
pipeline safety agency testified before this committee, she 
said that the agency hadn't yet studied whether this tar sands 
oil poses unique threats to pipelines.
    Another question is whether the tar sands oil is more 
difficult to clean up after a blowout. Last year, as I 
mentioned, there was a major tar sands oil blowout in the 
Kalamazoo River in Michigan, and I understand that this heavy 
oil sank to the bottom of the river, and it may have made it 
more difficult to clean up.
    Ms. Kleeb, you have reviewed a lot of these concerns, and 
you have raised issues of safety. Can you discuss the safety 
concerns you have heard throughout the communities in Nebraska 
about the tar sands oil, and how do those concerns relate to 
the proposed route?
    Ms. Kleeb. Yes. Absolutely, Ms. Castor. I was born in 
Florida. So I appreciate you being on this committee and asking 
me that question.
    You know, our landowners, our ranchers, and our farmers 
seriously have a lot of concerns about how tar sands--if a 
spill happens, if they have organic certification, for example, 
their organic certification will go away as soon as there is a 
tar sands spill on their land because that just simply does not 
go with organic certification.
    I have personally met families who have been affected by 
the Kalamazoo tar sands spill. They are not only facing from 
the minor, if you will, headaches and bloody noses, people are 
having seizures and are seriously injured from the tar sands 
spill that happened in Michigan. And 150 families had to be 
displaced from their homes because of that oil spill. So these 
are valid concerns.
    And I think if the tar sands industry and TransCanada are 
confident in their product, they will not mind additional 
scrutiny and additional studies that we need to do here in the 
United States because there are two assumptions that are being 
made: One, that tar sands is safe; and two, that this bill is 
going to be used for the United States consumption. And those 
two assumptions don't have and are not backed up by facts. And 
that is what we are asking for. Landowners, ranchers, moms, we 
are all asking for facts.
    Mr. Terry. The gentlelady's time is 1 minute over.
    Mr. Burgess is recognized for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    I am not going to do justice to your name. But Mr. 
Pourbaix, and I apologize if you have answered this question 
before and I missed it. But what is the capacity of the 
pipeline in question to deliver oil--the capacity in, say, 
barrels per day?
    Mr. Pourbaix. It is around 830,000 barrels a day.
    Mr. Burgess. So that is a fairly substantial amount. How 
does that compare with other delivery systems, other pipelines?
    Mr. Pourbaix. It is not different from other large-scale 
oil pipelines in the U.S. There are lots of pipelines in that 
range of 500,000 to 1 million barrels a day.
    Mr. Burgess. For a point of comparison, what does the 
Alaska pipeline deliver?
    Mr. Pourbaix. Geez, I am trying to think. The Alaska 
pipeline is 42 inches, and it is significantly over 1 million 
barrels a day.
    Mr. Burgess. OK. But this is a significant contribution to 
America's energy needs.
    Mr. Pourbaix. Oh, absolutely.
    Mr. Burgess. Presuming the energy is used in America.
    Mr. Ringo, I was fascinated to hear your testimony. I am 
certainly interested in what can be done with using algae as a 
source for a petroleum stock. Where is your plant currently?
    Mr. Ringo. We have opened plants in Calhoun, Georgia. We 
are about to open a plant in Augusta, Georgia. We have plans on 
the drawing board to open plants in Michigan, California. And I 
am in talks in your home State of Texas.
    Mr. Burgess. OK. Just give us an idea of how scalable is 
this production. For example, how many barrels a day can be 
delivered in one of your plants that is up and running and 
mature?
    Mr. Ringo. Well, it is scalable based on demand. Our 
process, without giving away our trade secret here----
    Mr. Burgess. I don't want you to do that.
    Mr. Ringo [continuing]. Is a scalable amount that we can 
increase our production based on demand. And we have the 
extraction process in place that we can extract the oil and 
deliver, as a biofuel, feedstock or in the pharmaceutical 
industry for the omega-3s that are present in the product.
    Mr. Burgess. Do you see a point where one of these plants 
could produce 100,000 barrels a day?
    Mr. Ringo. Absolutely.
    Mr. Burgess. 200,000?
    Mr. Ringo. Absolutely.
    Mr. Burgess. How does it go from there to where you need it 
used?
    Mr. Ringo. Well, normally you can build the plants onsite. 
Where you have a biofuels plant, you can actually build an 
algae manufacturing facility at the plant. But you also can 
move it out there like others by either a pipeline or a truck, 
but you would definitely have to do the studies to make sure 
that, as in any product, that there is not going to be any 
adverse impact on the communities and on people and on the 
environment in the transfer of the product.
    Mr. Burgess. OK. Your company is BARD Holdings, is that 
correct?
    Mr. Ringo. Yes.
    Mr. Burgess. Is that a publicly traded company?
    Mr. Ringo. Not yet, no.
    Mr. Burgess. So it is privately held?
    Mr. Ringo. Yes, it is. It is a brand-new company.
    Mr. Burgess. So the ability for us to, for example, to see 
the financials, is that possible or not possible?
    Mr. Ringo. Not as of yet, but soon.
    Mr. Burgess. Where does your primary financing come from?
    Mr. Ringo. Not from the government. It is privately 
financed, yes.
    Mr. Burgess. You know, it was interesting to hear the 
comments that we ought to have some hearings on clean energy. 
In Oversight and Investigations, we are having a lot of 
hearings on solar energy. It is not good news necessarily, 
though, for the solar energy folks. So I am glad to hear you 
are doing this on your own. You have people who have invested, 
venture capitalists, I presume?
    Mr. Ringo. Yes.
    Mr. Burgess. Who have put their money at risk?
    Mr. Ringo. Yes.
    Mr. Burgess. And they believe in the marketability of this 
product. That is the American story. That is the American way. 
I am glad to see that is happening.
    Mr. Barnett, you talked about transporting fuels over land. 
If you don't have a pipeline, you put it in a truck. Did I 
catch that part of your testimony correctly?
    Mr. Barnett. No. I think that was Mr. Soth.
    Mr. Burgess. Mr. Soth. I beg your pardon.
    But I did understand that correctly, we have just testified 
that there is an inherent risk to overland transport of 
petroleum products?
    Mr. Soth. That is right. The environmental review for 
Keystone XL suggests that fatality is 87 times more likely with 
tanker truck as compared to pipeline, and I believe it was 37 
times more likely to cause a fire and/or explosion than a 
pipeline.
    Mr. Burgess. Yes. My congressional district sits in north 
Texas, Interstate 35; 35 E and 35 W run right through the heart 
of my district. Probably 3 years ago, we had a tanker truck 
that jackknifed and buckled and hit the concrete wall in the 
middle of the freeway and caught on fire. There was a 
significant loss of life. It was impressive in that there were 
so many people that were suddenly immobile. Once they got into 
that mess, they couldn't get out. And it was extremely 
disruptive for a period of days. It wasn't just a traffic jam 
that you hear about in rush hour. This went on for a long time. 
So I can see an upside to getting these off our freeways. I 
think that is a reasonable approach, and I am glad you came and 
shared that with us today.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Terry. The gentleman's time has expired. At this time, 
another gentleman from Texas, Mr. Green.
    Mr. Green. After both of us, you are going to get used to 
our Texas accents.
    I have a number of questions. And I know I will run out of 
time. But my first one, I want to ask Mr. Barnett. And I know 
there is testimony--there is a project labor agreement on the 
pipeline. Does that project labor agreement cover the whole 
part of the pipeline, literally from where it ends in the 
district I represent up through Oklahoma and into Canada?
    Mr. Barnett. At the present time, the project labor 
agreement covers approximately 90 percent of the work. There is 
a Southern in there that is not written into the project labor 
agreement. We are working to get that written in with 
TransCanada.
    Mr. Green. OK. Well, I know I have met with folks from 
Canada, and I would hope that would be dealt with because if we 
have a project labor agreement up north, then I would sure like 
my folks to be able to be covered by it.
    Mr. Barnett. Exactly. And if we are going to sell this 
skill and this craftsmanship on one end of the pipeline, we 
need to sell it all the way through.
    Mr. Green. I agree.
    Mr. Ringo, one, I appreciate you being here. I appreciate 
your work, for your 25 years in the petrochemical industry. You 
heard earlier, I represent a lot of what used to be OCAW, but 
they are all steelworkers now. I used to have steel plants, but 
now they are all refinery workers and chemical plant workers. 
And I know you have been on the board of the National Wildlife 
Federation and the Apollo Alliance and BARD Holdings. And I 
appreciate what you are doing with investment because I know 
some companies in Houston actually are doing some investment in 
algae in Louisiana and in other locations. And that may be 
something we can do many years from now.
    But we have heard testimony today from a number of folks 
about the safety issue. And right now, like North Dakota does, 
they have to truck out all their crude oil they produce in 
North Dakota because there is no pipeline. The National 
Wildlife Federation or the Apollo Alliance, have they ever done 
anything comparing the safety in tanker cars on rail or 
trucking oil out as compared to a pipeline? Because we have 
heard that--87 times more likely to have an accident if you 
truck it out. And I don't know what it is for railcars. But I 
know everything I have learned all these years is that it is so 
much safer to be in a pipeline than it is either on a tanker 
truck on the road or even in a tank car on a train. Do you know 
if the Wildlife Federation has? I know it is not the first time 
we have gone over sensitive wetlands, for example.
    Mr. Ringo. Sure. And during my time as leaders of these 
organizations, our primary focus was to consider other 
alternative energy solutions that a tank truck or a pipeline 
was not an issue. When you are talking about extracting oil 
from algae, when you are talking about growing biofuels 
products, when you are talking about electric cars and energy-
efficient vehicles, you do not face the possibilities of 
environmental impacts of a hydrocarbon----
    Mr. Green. I agree. And I only have 5 minutes. But I also 
understand that--you know, I was so hopeful because of GM and 
the Chevy Volt. But obviously, we have problems with that. So 
every source of energy is going to have a problem. And right 
now though--and no matter who is in charge, the Department of 
Energy says for the next 30 years, we will be on hydrocarbons. 
And of course, I have to admit, I am prejudice because I have 
lots of refineries and chemical plants, and we produce that in 
our district. We also have the downstream. But you don't 
disagree with the testimony that sending it by truck or rail is 
much more dangerous than pipeline?
    Mr. Ringo. And with that, Mr. Green, yes. And I do agree 
with that. There are challenges.
    Mr. Green. I only have a minute and a half now. And I don't 
know if we will get a second round because we keep losing 
members.
    Mr. Pourbaix, I was disappointed in the decision by the 
administration, particularly since I represent those 
refineries. My question is--and it may be speculative. But I 
know there were some contracts signed on 2014 deliveries. Are 
those contracts enough that they could be flexible, that if we 
delayed it--like the President said--until 2013, I don't see 
how you could ever deliver those contracts in 2014.
    Mr. Pourbaix. Obviously, our shippers who were--and 
particularly those refiners that are in your district, the 
reason they signed those contracts is because their traditional 
sources of heavy crude--being Mexico and Venezuela--are 
declining in production and their contracts are expiring in 
2014. That is their primary reason why they signed up with 
TransCanada. We have spoken to all of our shippers. I think it 
is fair to say they were deeply disappointed by the decision to 
delay their----
    Mr. Green. OK. So you can't make those contracts in 2014?
    Mr. Pourbaix. We are working with them in order to have 
them stay with----
    Mr. Green. Mr. Chairman, I know I am out of time. But I 
have those five refineries. They require 1 million barrels of 
oil a day.
    Mr. Pourbaix. That is correct.
    Mr. Green. And one contract with Venezuela ran out with the 
Lyondell refinery, a large refinery I have, months ago. So they 
are buying on the open market. And literally, from the 
Mississippi River down to Corpus Christi, Texas, is where we 
refine a lot of our product for our whole country, and we need 
that pipeline. So, thank you, Mr. Chairman.
    Mr. Terry. Thank you Mr. Green.
    Now the gentleman from New York Mr. Engel is recognized for 
5 minutes.
    Mr. Engel. Thank you, Mr. Chairman.
    I am probably one of the few members of this subcommittee 
that is really in the middle on this. So I have been listening 
to the testimony.
    And on the one hand, I am concerned about the environmental 
impact. I think Mr. Waxman made excellent points. And I think 
we need to be concerned about that.
    On the other hand, we cannot just say ``no'' to everything. 
I, for one, opposed drilling in Alaska because I thought it was 
the wrong thing to do from an environmental point of view. But 
we can't just keep saying ``no'' to everything and then 
complain that gasoline is $4 a gallon and that we are beholden 
to Hugo Chavez and the Saudi royal family. I think we have to 
have a little bit of a balance.
    I was disappointed in the administration's pushing back of 
this deadline because I think it is time to make a move one way 
or the other. We all know what the issues are, and we can make 
a decision. I just think delaying it doesn't benefit anybody.
    Now I am for renewables. I think it is important to have 
clean energy and sustainable energy. But I, frankly, don't 
think we can move from step 1 to step 10 overnight. I don't 
think it is a matter of moving to sustainable energy, clean 
energy and turning off hydrocarbons at the same time. There has 
to be a transition. It is one of the reasons why I have fought 
for legislation to have a renewable fuel standard for all cars 
that are made in America. I think that we should have them 
built so that they can run on ethanol, methanol, and gasoline, 
as is the case in Brazil, and which we would be able to do it 
with $100 or less per car, a cost to manufacture these cars. So 
I don't think it is a black-and-white situation. And that is 
why I am open-minded to this.
    My concerns are environmental. I understand the unions want 
jobs, and I am very pro union. I support their wanting jobs. 
But I think that we need to make sure that the environmental 
impact on this is something that is not going to be negative.
    I wonder if anyone on the panel would like to say--Ms. 
Kleeb in her testimony said that we ought to put in the 
legislation that the oil is guaranteed to be used in the U.S. 
Is there anyone on the panel who can tell me why that can't be 
done?
    Yes, Mr. Pourbaix.
    Mr. Pourbaix. I would be happy to take a shot at that. I 
think right off the bat, you have to recognize that the U.S. 
produces about 5 million barrels of oil a day and consumes 
about 20 million barrels a day of refined products. The U.S. 
is, by far, the largest consumer of refined products on the 
planet. So I just think it is natural that the vast majority of 
this product will stay in the region with the highest demand.
    I would make one point. The U.S. has a preponderance of 
need for gasoline to move motor vehicles. And anytime you take 
a barrel of oil, it will produce a certain proportion of 
gasoline and a certain proportion of diesel. When you see 
exports of refined products coming from the U.S., it is largely 
moving away excess diesel while the U.S. continues to import 
what they need more of, which is gasoline. And I think if you 
were to artificially set requirements that would prevent that, 
you would just prevent the most reasonable allocation of that 
product.
    Mr. Engel. Thank you.
    I want to give Ms. Kleeb, who raised some environmental 
issues--particularly with Nebraska--an opportunity to perhaps 
refute some of the things that you have heard.
    Ms. Kleeb. Essentially the answer is ``no.'' TransCanada 
just told us ``no,'' they will not make a commitment that the 
oil is going to be used by Americans. And so we are assuming 
all of the risks right through the heart of our country and not 
getting any of the rewards of this energy. And quite frankly, I 
don't think that is right, and I don't think that Americans 
when they hear that think that is right either.
    And we do know that the refineries that they do have 
contracts with are ones that are retrofitting their refineries 
in order to export that diesel. That is exactly what he is 
talking about. This is an export pipeline. This is not about 
energy security. This is about TransCanada having oil that they 
need to get on the market.
    Mr. Engel. Thank you.
    I see my time is up Mr. Chairman.
    Mr. Terry. Thank you Mr. Engel.
    At this time, the gentleman from Massachusetts, Mr. Markey, 
is recognized for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    Mr. Pourbaix, you have told us repeatedly that the oil 
coming through this pipeline would enable us to reduce our 
dependence on imported oil.
    In fact, TransCanada's application for its permit even 
states that the proposed pipeline will serve the national 
interests of the United States by providing a secure and 
reliable source of Canadian crude to meet the growing demand by 
refineries and markets in the United States.
    And in your testimony, you posed what you said was the key 
question: Do Americans want secure, stable oil from a friendly 
neighbor in Canada? Or do they want to continue importing high-
priced conflict oil from unfriendly regions, such as the Middle 
East or Venezuela?
    However, some have questioned these assertions of energy 
security benefits, siting plans by Gulf Coast refineries, with 
whom TransCanada has entered into long-term sales contracts, to 
reexport diesel and other refined products made from the 
Keystone crude to Latin America, Europe, and beyond. In other 
words, if this pipeline is approved, the United States may just 
become the middle man for shipping products made from some of 
the dirtiest crude oil on Earth to foreign markets around the 
world.
    In fact, nearly all of the refineries where the Keystone 
crude will be sent are located in Port Arthur, Texas, which is 
a designated foreign trade zone. This being said, if these 
refineries reexported diesel or other refined products, they 
wouldn't even have to pay U.S. taxes on those exports.
    So, Mr. Pourbaix, would TransCanada support legislation 
that ensures that the product can only move forward if the 
diesel or other refined fuels from the pipeline are only sold 
in the United States so that this country realizes all of the 
energy security benefits of your company and others have 
promised it would bring to back out that oil from Venezuela or 
from the Middle East, from the United States of America? Would 
you commit to not having that oil sold outside of the United 
States?
    Mr. Pourbaix. As I said earlier, TransCanada does not 
produce one barrel of oil. Our entire business is safely 
transporting that oil. That would be a question that I think 
would be better put to our shippers, who are largely refiners 
and producers and largely American companies.
    Mr. Markey. Well, would you agree to put a prohibition on 
reexport into your contracts with these refineries, to ensure 
that reexport does not occur? You have the power to do that. 
And then to make that a legal part of the agreement, and then 
that would make us all feel a lot better. Would you be willing 
to commit to making that a condition of being able to use the 
pipeline?
    Mr. Pourbaix. If the concern that we are talking about is 
energy security for the U.S.----
    Mr. Markey. That is right.
    Mr. Pourbaix. If the U.S. Government was to put that kind 
of a criteria on the approval of a pipeline, I would argue that 
would actually reduce the energy security benefits to the U.S. 
because, as I said, the U.S. is, by far, the world's largest 
consumer of refined products----
    Mr. Markey. I don't understand why that reduces our 
security. We are just saying that--and you are willing to 
contractually commit to keeping the oil here. So it is only a 
redundancy at that point. Will you commit to the redundancy of 
having it be put on paper as a condition?
    Then because you are saying it is going to happen anyway--
that is what you are saying--what is your problem with then 
agreeing that that is the way it is going to be? Will you 
commit to agree to put on paper what you say is going to happen 
in terms of keeping the oil here?
    Mr. Pourbaix. As I said before, in order to get enough 
refined products that are needed for the U.S., the refineries 
produce from time to time more diesel than they use, and they 
tend to export that diesel to Europe, and they import 
incremental volumes of refined products.
    Mr. Markey. Would you agree that there would be a net--
there would be no net difference? The total amount of oil that 
is transported through the pipeline then has to have an exact 
corresponding amount that is imported in any other form in 
order to make sure that the amount stays exactly the same so 
that our energy security in the United States--backing out this 
oil from the Middle East--is, in fact, achieved as a goal. 
Would you commit to that?
    Mr. Pourbaix. Once again, in many ways, I can't do that 
because I am merely the shipper of this oil and that is a 
question----
    Mr. Markey. No. I want you to make it a condition of 
shipping, that that is your deal with these people. Can you do 
that?
    Mr. Pourbaix. No, I can't do that. We have already agreed 
to our shipping arrangements with our----
    Mr. Markey. Well, you can see why I am very skeptical and 
the American people are very skeptical. This is going to be a 
conduit to Port Arthur tax-free to send this stuff around the 
planet. And then you will just say, Oh, market conditions 
changed, and there is nothing in the free market that stops us 
from now sending this overseas.
    Meanwhile, all these environmental concerns have now been 
overwritten. So you can see why we are a little bit skeptical. 
We just want a little guarantee that we do get the national 
security benefit from it and a corporation isn't allowed--
because they are not legally bound--to then skirt that 
commitment.
    So I have very serious reservations about this company and 
its real commitment to meeting the national security 
objectives.
    Mr. Terry. I thank the gentleman. Your time has expired.
    And there is no one left to ask questions. Our prearranged 
agreement is that on a get-away day, we aren't going to have a 
second round of questions. So I want to thank all of you for 
your time and effort and coming to this hearing. You have been 
very helpful in the process. And that means all of you. Thank 
you.
    [Whereupon, at 1:58 p.m., the subcommittee was adjourned.]
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