[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
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[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
[GRAPHIC] [TIFF OMITTED] 75114.008
[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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[GRAPHIC] [TIFF OMITTED] 75114.020
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:]
[GRAPHIC] [TIFF OMITTED] 75114.053
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:]
[GRAPHIC] [TIFF OMITTED] 75114.054
[GRAPHIC] [TIFF OMITTED] 75114.055
[GRAPHIC] [TIFF OMITTED] 75114.056
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.]
[Material submitted for inclusion in the record follows:]
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