[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                         KEYSTONE XL PIPELINE:
                        EXAMINING SCIENTIFIC AND
                          ENVIRONMENTAL ISSUES

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

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON ENVIRONMENT

                             JOINT WITH THE
                         SUBCOMMITTEE ON ENERGY

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                          TUESDAY, MAY 7, 2013

                               __________

                           Serial No. 113-26

                               __________

 Printed for the use of the Committee on Science, Space, and Technology


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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas                 ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR.,         DANIEL LIPINSKI, Illinois
    Wisconsin                        DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
PAUL C. BROUN, Georgia               DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
MO BROOKS, Alabama                   JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois             SCOTT PETERS, California
LARRY BUCSHON, Indiana               DEREK KILMER, Washington
STEVE STOCKMAN, Texas                AMI BERA, California
BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky              MARK TAKANO, California
KEVIN CRAMER, North Dakota           ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
                                 ------                                

                      Subcommittee on Environment

                    HON. CHRIS STEWART, Utah, Chair
F. JAMES SENSENBRENNER, JR.,         SUZANNE BONAMICI, Oregon
    Wisconsin                        JULIA BROWNLEY, California
DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas              MARC VEASEY, Texas
PAUL C. BROUN, Georgia               MARK TAKANO, California
RANDY WEBER, Texas                   ALAN GRAYSON, Florida
                                     EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas
                                 ------                                

                         Subcommittee on Energy

                  HON. CYNTHIA LUMMIS, Wyoming, Chair
RALPH M. HALL, Texas                 ERIC SWALWELL, California
FRANK D. LUCAS, Oklahoma             ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas              JOE KENNEDY III, Massachusetts
MICHAEL MCCAUL, Texas                MARC VEASEY, Texas
RANDY HULTGREN, Illinois             MARK TAKANO, California
THOMAS MASSIE, Kentucky              ZOE LOFGREN, California
KEVIN CRAMER, North Dakota           DAN LIPINSKI, Illinois
RANDY WEBER,Texas                    EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas


                            C O N T E N T S

                          Tuesday, May 7, 2013

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Chris Stewart, Chairman, Subcommittee 
  on Environment, Committee on Science, Space, and Technology, 
  U.S. House of Representatives..................................     9
    Written Statement............................................    10

Statement by Representative Suzanne Bonamici, Ranking Minority 
  Member, Subcommittee on Environment, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........    11
    Written Statement............................................    12

Statement by Representative Lamar S. Smith, Chairman, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................    13
    Written Statement............................................    14

Statement by Representative Eric Swalwell, Ranking Minority 
  Member, Subcommittee on Energy, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................    14
    Written Statement............................................    15

Statement by Representative Cynthia Lummis, Chairwoman, 
  Subcommittee on Energy, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................    70
    Written Statement............................................    71

                               Witnesses:

Mr. Lynn Helms, Director, Department of Mineral Resources, North 
  Dakota Industrial Commission
    Oral Statement...............................................    16
    Written Statement............................................    18

Mr. Brigham A. McCown, Principal and Managing Director, United 
  Transportation Advisors, LLC
    Oral Statement...............................................    23
    Written Statement............................................    25

Mr. Anthony Swift, Attorney, International Program, Natural 
  Resources Defense Council
    Oral Statement...............................................    42
    Written Statement............................................    44

Mr. Paul Knappenberger, Assistant Director, Center for the Study 
  of Science, Cato Institute
    Oral Statement...............................................    59
    Written Statement............................................    61

Discussion.......................................................    70

             Appendix I: Answers to Post-Hearing Questions

Mr. Lynn Helms, Director, Department of Mineral Resources, North 
  Dakota Industrial Commission...................................    91

Mr. Brigham A. McCown, Principal and Managing Director, United 
  Transportation Advisors, LLC...................................    96

Mr. Paul Knappenberger, Assistant Director, Center for the Study 
  of Science, Cato Institute.....................................   102



                         KEYSTONE XL PIPELINE:
                        EXAMINING SCIENTIFIC AND
                          ENVIRONMENTAL ISSUES

                              ----------                              


                          TUESDAY, MAY 7, 2013

                  House of Representatives,
             Joint Hearing with the Subcommittee on
            Environment and the Subcommittee on Environment
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittees met, pursuant to call, at 10:03 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Chris 
Stewart [Chairman of the Subcommittee on Environment] 
presiding.

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    Chairman Stewart. Good morning. The joint hearing on the 
Subcommittee on Environment and the Subcommittee on Energy will 
come to order. Welcome to today's joint hearing entitled 
``Keystone XL Pipeline: Examination of Scientific and 
Environmental Issues.'' In front of each Member are packets 
containing the written testimony, biographies, and truth-in-
testimony disclosures for today's witnesses.
    Before we get started, and since this is a joint hearing 
involving two Subcommittees, I wanted to explain how we will 
operate procedurally, so all Members will understand how the 
question-and-answer period will be handled. As always, we will 
alternate between the majority and minority Members. After 
first recognizing the Chair and Ranking Members of the 
Environment and Energy Subcommittees, we will then recognize 
those Members present at the gavel in order of seniority on the 
Full Committee, and those coming in after the gavel will be 
recognized in order of arrival.
    And I now recognize myself for five minutes for my opening 
statement.
    I would like to thank the witnesses for being with us 
today. We appreciate your service and the sacrifice you made, 
and we look forward to hearing for you--from you.
    The subject of today's hearing, construction of the XL 
pipeline, is of profound economic and national security 
interest. The proposed pipeline has been under continuous 
review for more than four years. Now, let's think about that 
for a moment. More than four years, that is about the length of 
time it took the United States to fight and win World War II. 
You can complete a university degree in four years. A large 
portion of the transcontinental railroad was built in four 
years. You can do a lot of things in four years. The only thing 
we can't do is get this Administration to make a decision about 
building a much-needed pipeline.
    During the past four years, as this project has been 
studied, we have learned that the pipeline is safe and 
environmentally sound. We also know it will create jobs and it 
promotes energy security. In fact, in 2010, then-Secretary of 
State Clinton signaled as much when she said that the State 
Department was likely to approve the project. That, of course, 
sparked an outcry from the Administration's environmental 
allies, resulting in politically driven delay and additional 
review, all of which came at considerable expense and further 
loss of economic opportunity.
    The comment period on the State Department's most recent 
Draft Supplemental Environmental Impact Statement, or SEIS, 
closed just months--for last month. In that report, the State 
Department found that the proposed project is safe. It uses 
state-of-the-art materials, coating, construction practices, 
and monitoring systems. The State Department SEIS goes on to 
say that the pipeline would be one of the safest pipelines ever 
built or operated.
    In regard to its effects on the environment, the Department 
found ``that there would be no significant impacts.'' And 
because the project will have little or no impact on oil sands 
production--the Canadian oil will be brought to market whether 
or not the Keystone pipeline is built--effects on carbon 
emissions would be negligible.
    And while the EPA claims that over a 50-year period the 
additional emissions would create as much as 935 million metric 
tons of greenhouse gases, this is far less than one percent of 
global emissions. As Paul Knappenberger of the Cato Institute 
will tell us today, even using EPA's worst-case scenario 
assumptions, the effect of the pipeline would only increase the 
rate of warming by an imperceptible 1/100,000 of a degree per 
year.
    In regard to jobs, the State Department estimates that the 
pipeline would have significant positive socioeconomic impacts 
in the form of local employment, increased tax revenue, 
ancillary business development, and increased spending by 
workers on goods and services. As the Department states in the 
SEIS, ``the proposed project would potentially support 
approximately 42,100 average annual jobs across the United 
States. This employment would potentially translate to 
approximately $2.05 billion in earnings.''
    And there is also this important point: the President 
frequently urges us to reduce our reliance on foreign oil from 
unstable, undemocratic regimes that are unfriendly to the U.S. 
interests. As a former Air Force pilot, I have personal 
knowledge of how important it is to reduce our reliance on 
sources of energy that emanate from instable and unpredictable 
areas of the world. If you want to enhance our national 
security while decreasing the need to put our sons and 
daughters in harm's way in far-off regions of the world, then 
build the Keystone pipeline.
    Finally, building the pipeline will allow us to increase 
our trading relationships with Canada, a stable and friendly 
democracy with whom we share a long and peaceful border.
    In short, the pipeline is in the national interest. There 
is no logical reason not to allow it to move forward.
    I now recognize the gentlelady from Oregon, the Ranking 
Member, Ms. Bonamici, for her opening statement.
    [The prepared statement of Mr. Stewart follows:]

 Prepared Statement of Environment Subcommittee Chairman Chris Stewart

    The subject of today's hearing, construction of the XL pipeline, is 
of profound economic and national security interest.
    The proposed pipeline has been under continuous review for more 
than four years. Let's think about that for a moment. More than four 
years. That's about the length of time it took for the United States to 
fight and win WW II. You can complete a university degree in four 
years. A large portion of the transcontinental railroad was built in 
four years. We can do a lot of things in four years. The only thing we 
can't do is to get this Administration to make a decision about 
building a much-needed pipeline.
    During the past four years, as the project has been studied, we 
have learned that the pipeline is safe and environmentally sound. We 
also know it will create jobs and that it promotes energy security. In 
fact, in 2010, then-Secretary of State Clinton signaled as much when 
she said that the State Department was likely to approve the project. 
That, of course, sparked an outcry from the Administration's 
environmental allies, resulting in politically driven delay, and 
additional review--all of which came at considerable expense and 
further loss of economic opportunity.
    The comment period on the State Department's most recent Draft 
Supplemental Environmental Impact Statement, or SEIS, closed just last 
month. In that report, the State Department found that:

      The proposed project is safe. It uses state-of-the-art 
materials, coating, construction practices, and monitoring systems. The 
State Department SEIS goes on to say that the pipeline would be one of 
the safest pipelines ever built or operated.

      In regard to its effects on the environment, the 
Department found ``that there would be no significant impacts.'' And 
because the project will have little or no impact on oil sands 
production--the Canadian oil will be brought to market whether or not 
the Keystone pipeline is built--effects on carbon emissions would be 
negligible.

    And while the Environmental Protection Agency claims that over a 
50-year period, the additional emissions ``could be as much as 935 
million metric tons'' of greenhouse gases, this is far less than one 
percent of global emissions. As Paul Knappenberger of the Cato 
Institute will tell us today, even using EPA's worst-case scenario 
assumptions, the effect of the pipeline would only increase the rate of 
warming by an imperceptible one one-hundred-thousandth of a degree per 
year.
    In regard to jobs, the State Department estimates that the pipeline 
would have significant positive socioeconomic impacts in the form of 
local employment, increased tax revenues, ancillary business 
development, and increased spending by workers on goods and services.
    As the Department states in the SEIS, ``the proposed Project would 
potentially support approximately 42,100 average annual jobs across the 
United States . . . This employment would potentially translate to 
approximately $2.05 billion in earnings.''
    And there is also this important point: the President frequently 
urges us to reduce our reliance on foreign oil from unstable, 
undemocratic regimes that are unfriendly to U.S. interests. As a former 
Air Force pilot, I have personal knowledge of how important it is to 
reduce our reliance on sources of energy that emanate from unstable and 
unpredictable areas of the world. If you want to enhance our national 
security, while decreasing the need to put our sons and daughters in 
harm's way in far-off regions of the world, then build the Keystone 
pipeline.
    Finally, building the pipeline will allow us to increase our 
trading relationship with Canada, a stable and friendly democracy with 
whom we share a long and peaceful border.
    In short, the pipeline is in the national interest. There is no 
logical reason not to allow it to move forward.
    I now recognize the gentlelady from Oregon, Ranking Member 
Bonamici, for her opening statement.

    Ms. Bonamici. Thank you very much, Chairman Stewart. I 
don't see Chairwoman Lummis.
    I want to welcome our witnesses and thank you all for 
participating in today's hearing about the Keystone XL 
pipeline. The discussion we are having here today is important 
because the Keystone pipeline project heightens and highlights 
an issue that this Committee has been debating for a long time: 
climate change caused by human activity. There has been 
disagreement with colleagues across the aisle regarding the 
human role in the changing climate. For that reason, I was 
pleased a few weeks ago when the Subcommittee on the 
Environment held a climate change hearing in which all of the 
witnesses agreed in their testimony that global warming is 
happening, humans are contributing to it, and the country must 
take action to address it.
    This is relevant to today's hearing because the Keystone XL 
pipeline showcases our continued dependence on fossil fuels, 
the use of which contributes greatly to anthropogenic climate 
change. I am pleased that this hearing will also address 
potential negative impacts of the pipeline on those living and 
working along the proposed pipeline route, including those 
engaged in agricultural activities.
    I am glad that the witnesses will also be discussing the 
pipeline's impact on land use and that they will discuss 
potential threats that large-scale pipeline projects can pose 
to fragile water resources.
    Also significant are local concerns about the cleanup of 
potential spills from the pipeline. I joined many of my 
colleagues who know that we must be thoughtful and informed 
before we give the go-ahead to traverse the thousands of miles 
of the American countryside with new infrastructure for an old 
energy source. According to the State Department's Draft 
Environmental Impact Statement, the Keystone XL pipeline will 
bring thousands of temporary construction jobs and positively 
impact local economies at a time when our country is navigating 
through a slow economic recovery. These short-term benefits to 
our economy should not be overlooked, but they should be 
considered alongside with the substantial environmental and 
safety challenges presented by the pipeline, including the 
potentially disastrous impact on the local economy if they 
still were to occur.
    That happened not too long ago in Michigan. A pipeline 
transporting oil from Canada to the United States' destinations 
ruptured and spilled about 800,000 gallons of crude oil into 
the Kalamazoo River. Now, three years later, cleanup is yet to 
be completed because of the difficult task of getting the heavy 
oil sands out from the river floor where much of it remains 
submerged. The EPA recently recommended that the State 
Department take a closer look at how spills of oil sands may 
require different response actions or equipment from response 
actions for conventional oil spills. That is why Congress 
requested that the National Academy of Sciences study this type 
of oil, and it is my hope that we will soon know more about 
what differences exist between oil sands and conventional 
crudes.
    In closing, although I would never claim to speak for all 
the Democrats about the Keystone project specifically, we do 
all agree that our country must set ambitious goals to combat 
anthropogenic climate change. Fossil fuels will continue to 
play a role in powering our economy for the foreseeable future, 
but we must also invest more in renewable energy as a 21st 
century solution to combat climate change, boost our job 
markets, and reduce our dependence on fossil fuels over the 
long term. I look forward to hearing the witnesses' 
perspectives on the environmental and safety issues associated 
with that project.
    And with that, Mr. Chairman, I yield back.
    [The prepared statement of Ms. Bonamici follows:]

 Prepared Statement of Environment Subcommittee Ranking Member Suzanne 
                                Bonamici

    Than you, Chairman Stewart and Chairwoman Lummis. I want to welcome 
our witnesses and thank you all for participating in today's hearing 
about the Keystone XL Pipeline. The discussion we are having today is 
important because the Keystone pipeline project highlights an issue 
that this Committee has been debating for a long time: climate change 
caused by human activity. There has been disagreement with colleagues 
across the aisle regarding the human role in the changing climate. For 
that reason, I was pleased two weeks ago when the Subcommittee on the 
Environment held a climate change hearing in which all the witnesses 
agreed in their testimony that global warming is happening, humans are 
contributing to it, and the country must take action to address it.
    This is relevant to today's hearing because the Keystone XL 
Pipeline showcases our continued dependence on fossil fuels, the use of 
which contributes greatly to anthropogenic climate change. I am pleased 
that this hearing will also address potential negative impacts of the 
pipeline on those living and working along the proposed pipeline route, 
including those engaged in agricultural activities. I'm glad that the 
witnesses will also be discussing the pipeline's impact on land use and 
that they will discuss potential threats that large-scale pipeline 
projects can pose to fragile water resources. Also significant are 
local concerns about the clean-up of potential spills from the 
pipeline. I join many of my colleagues who know that we must be 
thoughtful and informed before we give the go-ahead to traverse 
thousands of miles of the American countryside with new infrastructure 
for an old energy source.
    According to the State Department's Draft Environmental Impact 
Statement, the Keystone XL Pipeline will bring thousands of temporary 
construction jobs and positively impact local economies at a time when 
our country is navigating through a slow economic recovery. These 
short-term benefits to our economy should not be overlooked, but they 
should be considered alongside the substantial environmental and safety 
challenges presented by the pipeline, including the potentially 
disastrous impact on the local economy if a spill were to occur.
    That happened not too long ago in Michigan. A pipeline transporting 
oil from Canada to U.S. destinations ruptured and spilled 800,000 
gallons of crude oil into the Kalamazoo River. Now, three years later, 
cleanup has yet to be completed because of the difficult task of 
getting the heavy oil sands out from the river floor where much of it 
remains submerged. The EPA recently recommended that the State 
Department take a closer look at how spills of oil sands may require 
different response actions or equipment from response actions for 
conventional oil spills. That's why Congress requested that the 
National Academy of Sciences study this type of oil, and it is my hope 
that we will soon know more about what differences exist between oil 
sands and conventional crudes.
    In closing, although I would never claim to speak for all Democrats 
on the Keystone projct specifically, we do all agree that our country 
must set ambitious goals to combat anthropogenic climate change. Fossil 
fuels will continue to play a role in powering our econmoy for the 
foreseeable future, but we must also invest more in renewable energy as 
the 21st century solution to combat climate change, boost our job 
markets, and reduce our dependence on fossil fuels over the long term. 
I look forward to hearing the witnesses' perspectives on the 
environmental and safety issues associated with this project. And with 
that, Mr. Chairman, I yield back.

    Chairman Stewart. I thank you, Ms. Bonamici.
    Noting that the Chair of the Subcommittee on Energy, Mrs. 
Lummis, is on her way but not here yet, we will now turn to the 
Full Committee Chair, Mr. Smith.
    Chairman Smith. Thank you, Mr. Chairman.
    In December 2008, then-President-elect Obama announced a 
massive new economic stimulus proposal, which he said would 
focus on ``shovel-ready'' construction projects. Less than 
three months earlier, TransCanada submitted to the Federal 
Government what might be considered the epitome of all shovel-
ready projects: the request to build a 1,700 mile Keystone 
pipeline from Alberta to the Texas Gulf. Four-and-a-half years 
have passed since the President made ``shovel-ready'' part of 
the political discussion.
    Today, TransCanada still waits for the Federal Government 
to decide whether allowing the company to create more than 
40,000 jobs building a pipeline to deliver oil from an ally is 
in our national interest. Many Americans would consider such a 
decision to be simple, but the Federal Government has required 
millions of dollars, years of study, and thousands of pages of 
reports. Fortunately, the end is in sight. In the coming 
months, the Obama Administration will decide the future of the 
pipeline.
    Today, we will discuss the scientific and environmental 
factors at the center of the debate that surrounds this 
decision. Ultimately, there are two major concerns in this 
debate: (1) whether we have the ability to construct and 
operate the pipeline safety, and (2) whether the pipeline's 
construction will contribute significantly to climate change. 
On both of these questions, extensive analysis undertaken by 
the State Department has affirmed the safety and environmental 
soundness of the project. For example, with respect to 
greenhouse gas emissions, the worst-case scenario projected 
that approval of the pipeline could result in a U.S. annual 
carbon dioxide emissions increase of only 12/1000 of one 
percent.
    The Keystone pipeline creates jobs and enhances our energy 
independence with minimal impact on the environment. This 
project, which is been thoroughly evaluated, should be approved 
immediately. I hope today's discussion will provide Members a 
useful scientific and environmental background for decision 
making as we move to consider legislation regarding Keystone on 
the House floor later this month.
    Thank you, Mr. Chairman, and I will yield back.
    [The prepared statement of Mr. Smith follows:]

      Prepared Statement of Full Committee Chairman Lamar S. Smith

    In December 2008, then-President-elect Obama announced a massive 
new economic stimulus proposal, which he said would focus on ``shovel-
ready''construction projects. Less than three months earlier, 
TransCanada submitted to the Federal Government what might be 
considered the epitome of all shovel-ready projects: a request to build 
the 1,700-mile Keystone Pipeline from Alberta to the Texas Gulf.
    Four and a half years have passed since the President made ``shovel 
ready'' part of the political discussion. Today, TransCanada still 
waits for the Federal Government to decide whether allowing a company 
to create more than 40,000 jobs building a pipeline to deliver oil from 
an ally is in our national interest. Many Americans would consider such 
a decision to be simple. But the Federal Government has required 
millions of dollars, years of study, and thousands of pages of reports.
    Fortunately, the end is in sight. In the coming months, the Obama 
Administration will decide the future of the pipeline. Today, we will 
discuss the scientific and environmental factors at the center of the 
debate that surrounds this decision.
    Ultimately, there are two major concerns in this debate: (1) 
whether we have the ability to construct and operate the pipeline 
safely, and (2) whether the pipeline's construction will contribute 
significantly to climate change.
    On both of these questions, extensive analysis undertaken by the 
State Department has affirmed the safety and environmental soundness of 
the project. For example, with respect to greenhouse gas emissions, the 
worst-case scenario projected that approval of the pipeline could 
result in a U.S. annual carbon dioxide emissions increase of only 12 
one-thousandths of one percent.
    The Keystone Pipeline creates jobs and enhances our energy 
independence with minimal impact to the environment. This project, 
which has been thoroughly evaluated, should be approved immediately. I 
hope today's discussion will provide Members a useful scientific and 
environmental background for decision making, as we move to consider 
legislation regarding Keystone on the House floor later this month.
    Thank you, and I yield back.

    Chairman Stewart. Thank you, Mr. Smith.
    The Chair now recognizes the Ranking Member of the 
Subcommittee on Energy, Mr. Swalwell.
    Mr. Swalwell. Thank you, Chairman Stewart and Chairwoman 
Lummis, for holding this hearing today. I also want to thank 
our witnesses for being here, and I do appreciate the 
opportunity to examine the costs and benefits of this project 
in greater detail.
    And Chairman Stewart, you did point out the length of time 
it has taken, which I do appreciate. We want to move projects 
along as quickly as possible. But I do think when you are 
dealing with so many miles, almost 1,000 miles with this 
particular project, it is in our interest to make sure that we 
get it right because, although it has taken four years to look 
at this project, it could take only a matter of seconds to 
cause devastating consequences to our environment, our Earth, 
and people around the pipeline. And I think it is worth making 
sure that we get it right.
    And I will take the opportunity to point out that it has 
been over two months now that we have been waiting for a 
Secretary of Energy to be approved by the Senate, and that 
confirmation of Ernest Moniz has been held up in the Senate and 
has been blocked by one individual. So I am also frustrated 
about how long it takes for things to happen. I think it is an 
antiquated, bizarre system where one individual can block a 
Secretary from being approved, and that individual, the 
Secretary of Energy, would play a prominent and important role 
in this project and other renewable projects. So I hope that 
the Senate starts to move along this nominee so that we can get 
to work and see what this project's impact will continue to be, 
and I am in favor of moving things along as well.
    I also think it has been pretty clear and I have made it 
known from this position that I believe in a balanced, all-of-
the-above approach when it comes to our energy production, but 
when it comes to determining whether we should approve a 
project as large and long-lasting as a pipeline that would 
transport 830,000 barrels of tar sands oil from Canada to the 
Gulf Coast every day, I want to make sure that we have a full 
and clear understanding of the total number of U.S. jobs we can 
expect the Keystone XL pipeline to create, the impacts on 
climate change, and the chances and consequences of a major 
spill.
    I always have said that if we can make it safe, we should 
make it happen. If we find we can't make it safe, we should 
find ways to make it happen. And ultimately, if there is no way 
to make it environmentally safe, then I don't think we should 
make it happen. I also think that if we are looking forward and 
we are looking at that pie chart of where our energy supply is 
coming from, it is in our best interest to continue to expand 
the part of the chart that comes from renewables, which, right 
now, I believe is too small and there is a lot greater 
potential for us to expand that part of the chart, which I also 
believe and history has shown can create made-in-America jobs, 
just as many jobs as the Keystone pipeline would create.
    So I look forward to discussing these important issues with 
you today. And with that, I yield back the balance of my time.
    [The prepared statement of Mr. Swalwell follows:]

 Prepared Statement of Ranking Member of the Committee on Energy Eric 
                                Swalwell

    Thank you, Chairman Stewart and Chairwoman Lummis, for holding this 
hearing today, and I also want to thank the witnesses for being here. I 
appreciate the opportunity to examine the costs and benefits of this 
controversial project in greater detail.
    I agree with those who say we need an``all-of-the-above'' approach 
to energy production. But when it comes to determining whether we 
should approve a project as large and long-lasting as a pipeline that 
would transport 830,000 barrels of tar sands oil from Canada to the 
Gulf Coast every day. I want to make sure that we all have a clear 
understanding of the total number of U.S. jobs we'd expect the Keystone 
XL Pipeline to create, the impacts on climate change, and the chances 
and consequences of a major spill.
    I look forward to discussing these important issues with each of 
you today. With that, I yield back the balance of my time.

    Chairman Stewart. Thank you. Thank you, Mr. Swalwell.
    We will--it is now time to introduce the members of our 
panel today and once again with our gratitude for you being 
here. It takes me a little bit to introduce them because they 
are very distinguished with long resumes.
    Our first witness is Mr. Lynn Helms, the Director of the 
Department of Mineral Resources, the North Dakota Industrial 
Commission. Previously, he has worked as a Production Engineer, 
a Reservoir Engineer, and an Asset Team Leader on projects in 
Abu Dhabi, Alaska, North Dakota, Texas, and Wyoming.
    Our second witness is Mr. Brigham A. McCown, the Principal 
and Managing Director of United Transportation Advisors. Mr. 
McCown has over 25 years of executive, legal, and operations 
management experience in areas pertaining to energy, 
transportation, and the environment. He most recently served as 
the first acting Administrator of the Pipeline and Hazardous 
Materials Safety Administration at the U.S. Department of 
Transportation.
    Our third witness is Mr. Anthony Swift, an attorney for the 
International Program at the Natural Resources Defense Council. 
Prior to working at the NRDC, Anthony worked as a Policy 
Analyst for the Department of Transportation where he worked on 
alternative fuels, efficiency standards, and a National 
Environmental Policy Act review process.
    And our final witness today is Mr. Paul ``Chip'' 
Knappenberger, the Assistant Director at the Center for the 
Study of Science at the Cato Institute. Mr. Knappenberger has 
over 25 years of experience in climate research and public 
outreach, including 13 years with the Virginia State 
Climatology Office and 17 years as a Research Coordinator for 
the New Hope Environmental Services, Incorporated.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, after which Members of the Committee have 
five minutes each to ask questions. Your written testimony will 
be included in the record of the hearing.
    And I now recognize our first witness, Mr. Helms, for five 
minutes.

             STATEMENT OF MR. LYNN HELMS, DIRECTOR,

                DEPARTMENT OF MINERAL RESOURCES,

               NORTH DAKOTA INDUSTRIAL COMMISSION

    Mr. Helms. Good morning, Mr. Chairman and Members of the 
Committee. Thank you for the invitation to speak to the 
Committee on Science, Space, and Technology. I love that title. 
We try to do our things in North Dakota on a science basis. We 
try--this one obviously the science is in, and now we are into 
the political phase of the Keystone XL pipeline.
    Why does North Dakota have a stake in this? North Dakota is 
the home of the Bakken, as you well know, the largest 
unconventional resource discovered in the United States of 
America. We are currently producing 780,000 barrels of oil per 
day. We have a commitment to place 60,000 barrels of oil per 
day on Keystone XL the day that it opens, and that can be 
expanded to 100,000 barrels a day. That was a tough negotiation 
with TransCanada to get that on ramp in our neighbor in Baker, 
Montana.
    The shortfall in pipeline capacity out of the State of 
North Dakota has resulted in a very disrupted transportation 
system, and you see that on page two of my testimony. Seventy-
one percent of our oil now moves out of the State by rail. And 
I personally authored a paper in 2006 that said I couldn't 
believe that would ever happen. It was uneconomic, it was too 
expensive, it didn't make sense, it was impractical, but 71 
percent of our crude oil now moves by rail out of the State of 
North Dakota.
    In addition to that, 10,000 barrels a day gets trucked into 
Canada to find a pipeline and another 35,000 barrels travels by 
semi back into North Dakota to reach those rail facilities to 
move out of the State, so it's a very disrupted system that we 
have in North Dakota.
    What does Keystone mean to western North Dakota? It would 
mean 300 to 500 less long-haul truck trips per day from oil and 
gas wells to rail stations in western North Dakota. Now, our 
figures show that those trucks emit 2.9 times the greenhouse 
gases, they commit three to four times the number of spills 
that a pipeline does. They produce dust; they produce 
accidents. So Keystone XL, for every year that it is in 
service, it is going to reduce North Dakota's greenhouse gas 
emissions by almost one million kilograms per day. It is going 
to reduce oil spills by 60 to 80 per year. It is going to 
reduce traffic fatalities by three to six and injury accidents 
by 85 to 100.
    So let's turn that around. For every year the Keystone is 
delayed, we emit one million kilograms per day of greenhouse 
gases that could not be emitted. We suffer 60 to 80 oil spills 
per year that don't have to happen, three to six people die on 
North Dakota highways unnecessarily, and 85 to 150 people 
suffer serious traffic injuries, and that doesn't need to 
happen.
    I took a look at the SEIS. The spill frequency and impact 
analysis are consistent with our experience in North Dakota 
with pipeline construction and what we have seen. The 
greenhouse gas evaluation is consistent with North Dakota's 
experience. As I stated, I co-authored a paper in 2006 that was 
pretty dismissive of rail transportation for Bakken crude oil, 
and yet, changes in the market, changes in rail efficiency, and 
people being innovative in the way they move crude oil now puts 
71 percent of our oil on the rails.
    One last thing: my experience with Keystone XL goes a 
little bit beyond the borders of North Dakota. My family lives 
in Harding County, South Dakota. They built a brand-new school 
based on the property taxes the Keystone XL is expected to pay. 
My sister-in-law is a teacher in that school. My son-in-law is 
a farmer in York County, Nebraska. Keystone XL will go right 
across 1/4 of his land. We have had lots of discussions about 
it. He has no qualms about it. He irrigates out of the Ogallala 
aquifer, and he is completely prepared for the pipeline to 
transverse his farmland.
    So we believe in the State of North Dakota that it is time 
to build Keystone XL. I yield the remainder of my time for 
questions. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Helms follows:]

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    Chairman Stewart. Thank you, Mr. Helms.
    Mr. McCown.

              STATEMENT OF MR. BRIGHAM A. MCCOWN,

                PRINCIPAL AND MANAGING DIRECTOR,

              UNITED TRANSPORTATION ADVISORS, LLC

    Mr. McCown. Chairman Stewart, Ranking Member Bonamici, 
Chairman Lummis, and Ranking Member Swalwell, thank you--and 
distinguished Members, thank you for the invitation to be here 
today to testify at this joint hearing on Keystone XL.
    You know, this process is important and, I think, even 
crucial to better understanding the role that pipelines play in 
our everyday lives. The Pipeline and Hazardous Materials Safety 
Administration, an agency within the USDOT, is responsible for 
overseeing the safe and secure movement of over one million 
hazardous material shipments each and every day by air, by 
land, by sea, by rail, and yes, by pipeline. You know, and at 
no point in our Nation's history has the role and future of our 
national pipeline infrastructure been subject to more careful 
review and scrutiny.
    We have 2.6 million miles of pipeline in this country and 
that is enough to circle the Earth 100 times. And we have, for 
close to half a century, transported the lion's share of our 
Nation's energy supplies via pipeline. And for most of that 
time, our underground energy highways, if you will, have 
remained out of sight and out of mind. That, of course, is no 
longer the case, given the heated debate surrounding the 
approval of the remaining portion of the Keystone pipeline 
system. Last year, pipelines transported 11.3 billion barrels 
of crude--that is B as in billion--barrels of crude and refined 
products. Of that amount, pipeline operators safely transported 
these supplies 99.999952 percent of the time. Yes, pipeline 
releases can and do occur, but we also have to understand that 
the goal of our robust and mature pipeline safety regulations 
is zero accidents, zero releases. And when a pipeline upset 
does occur, comprehensive federal regulations exist to minimize 
the consequences of any such releases.
    That record is strong and even getting better. In fact, 
thanks to strong government oversight by PHMSA, new 
technologies, and a shared approach to risk management by all 
stakeholders, pipeline accidents continue to decline. Over the 
last decade, pipeline spills have decreased--the number--by 59 
percent and total volume of releases has decreased by 43 
percent even as the overall production has increased, both the 
mileage of active pipelines and the freight tons shipped by 
them. I think this is an extraordinary figure when you consider 
that pipelines transport almost 2/3 of all the energy supplies 
consumed in our country each year.
    Although the Draft EIS dedicates 200 pages to the rail 
alternative, Federal Government statistics on accident data 
reveal that pipelines are approximately 4-1/2 times safer than 
rail and 64 times safer than commercial motor vehicle if you 
look at freight tons shipped. To take it a step further, on a 
per-ton-mile basis, those figures translate that pipelines are 
over five times safer than rail and almost 500 times safer than 
commercial motor vehicles or trucks.
    Pipelines are also unique in that they are the only 
transportation system we have that does not require a round-
trip to load and deliver supplies. Rail and truck have their 
place as an integral component of a tightly interwoven supply-
chain system. That said, pipelines represent the best when it 
comes to hauling large volumes of energy products over great 
distances.
    Critics of Keystone are quick to highlight the claim that 
oil sands resources like those transported by Keystone are more 
corrosive than traditional crude oil, thus, more likely to 
spill. This is simply not true. The Federal Government has not 
documented a single instance where the release of oil sands 
crude was caused by internal corrosion of the pipeline. The 
characteristics of diluted oil sands crude are similar to 
conventional crude and, in fact, Canadian diluted bitumen, 
sometimes called dilbit, is actually less corrosive than oil 
from Mexico, Colombia, and even California.
    While opponents claim the opposite, no studies have 
validated such an assumption. While it may be tempting and 
politically expedient to point to corrosiveness as something to 
be feared, the fact that it makes for a good talking point 
doesn't make it true. Scrutiny is, of course, welcome and a 
warranted thing, but in the face of this analysis, it is of 
utmost importance that we as a Nation recognize the 
indispensable role that pipelines play. Let there be no 
mistake, energy plays a crucial role in our Nation's economy, 
and energy security depends on important infrastructure 
projects like Keystone.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. McCown follows:]

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    Chairman Stewart. Thank you, Mr. McCown.
    Mr. Smith? I am sorry, Mr. Swift.

                STATEMENT OF MR. ANTHONY SWIFT,

                ATTORNEY, INTERNATIONAL PROGRAM,

               NATURAL RESOURCES DEFENSE COUNCIL

    Mr. Swift. Thank you. Thank you for today's opportunity to 
testify on the environmental issues associated with the 
Keystone XL tar sands pipeline. My name is Anthony Swift. I am 
an Energy Policy Analyst with the Natural Resources Defense 
Council. NRDC is a national, nonprofit organization dedicated 
to protecting public health and the environment.
    Keystone XL would transport tar sands crude, primarily in 
the form of deluded bitumen through the United States to the 
Gulf Coast where the State Department forecasts most of it will 
be refined and exported internationally. Diluted bitumen is a 
mixture of bitumen tar sands, which is heavier than water and 
too thick to move by pipeline and light volatile natural gas 
liquids. Tar sands of diluted bitumen differ substantially from 
the lighter conventional crude historically moved on the U.S. 
pipeline system. Pipelines moving thick, diluted bitumen 
operate at higher temperatures than pipelines moving less 
viscous, lighter crudes.
    In the United States, the only area with history moving 
heavy crudes with similarities to tar sands is a small network 
of pipelines in California. Studies of California's pipeline 
system show that the higher a pipeline's operating temperature, 
the higher its spill risk. Pipelines operating at temperatures 
above 100 degrees Fahrenheit spilled up to 23 times more often 
due to external corrosion than conventional pipelines. The 
State Department's Draft Environmental Review estimated that 
Keystone XL would operate at between 130 and 150 degrees 
Fahrenheit.
    The U.S. pipeline system may already be showing the strain 
of moving tar sands. The first imports of diluted bitumen came 
from pipelines in northern Midwest in the late 1990s and have 
increased exponentially since then. Accident reports show that 
the northern Midwestern States moving the largest volumes of 
diluted bitumen for the longest period of time spilled 3.6 
times more crude per mile than the national average over the 
last three years. The Enbridge mainline, the first pipeline to 
move significant volumes of diluted bitumen into the United 
States, spilled nearly a million gallons into the Kalamazoo 
River in 2010 after a rupture caused by external corrosion and 
stress corrosion cracking. In March, the Pegasus pipeline 
spilled over 200,000 gallons of tar sands crude into the 
suburban Arkansas community of Mayflower. This week, another 
spill on the same pipeline was discovered in Missouri.
    We have seen with recent pipelines that special conditions 
do not translate--necessarily translate to safer pipelines. 
TransCanada's Keystone I and Bison pipelines are examples. 
Though both carry special conditions, the first leaked 14 times 
in its first year and the second exploded.
    In addition to the risk of ruptures, investigators have 
shown major gaps in leak-detection technology and regulations. 
These gaps are most apparent with high-capacity pipelines like 
Keystone XL. According to State, Keystone XL's real timely 
detection system cannot detect leaks smaller than half-a-
million gallons a day. Once spilled, tar sands diluted bitumen 
has proven significantly more damaging and difficult to clean 
than conventional crude, particularly in water bodies. After 
nearly three years and $1 billion have been spent cleaning the 
Kalamazoo tar sands spill, over 38 miles of that river are 
still contaminated with tar sands. Spill responders have found 
that conventional methods prove ineffective for containing and 
cleaning tar sands spills.
    In addition to the risk of spills, Keystone XL is a 
lynchpin for tar sands expansion and the climate emissions 
associated with it. Without Keystone XL, tar sands production 
growth will take a substantially reduced trajectory. North 
Dakota producers have found rail to be feasible and, in many 
cases, preferable as a transportation option. Late last year, a 
200,000-barrel-a-day pipeline proposal was canceled due to lack 
of interest by North Dakota producers using rail. There is a 
litany of reasons why rail isn't feasible to supply tar sands 
production growth.
    The lack of alternatives for Keystone XL has been observed 
by tar sands producers themselves, the financial industry, and 
Canada's own Natural Resources Minister. The impact of--tar 
sands would have on U.S. climate emissions is substantial. The 
Keystone XL tar sands pipeline would, if approved, be 
responsible for at least 181 million metric tons of carbon 
dioxide each year, comparable to the tailpipe emissions for 
more than 37 million cars or 51 coal-fired power plants.
    The significance of these emissions to global climate 
change can be summed up in this way: if you find your house is 
on fire, the question of how much gasoline you would have to 
pour on the fire to really make a difference given its size is 
a wrong one to ask, at least if your goal is to put the fire 
out. Tar sands are significantly more carbon-intensive than 
conventional crude, and the choice to replace our conventional 
fuel stock with tar sands is the wrong one if we are serious 
about addressing climate change. Simply stated, the Keystone XL 
pipeline is not in the Nation's interest.
    NRDC thanks you for the opportunity to present its views, 
and I would be pleased to answer any questions you may have.
    [The prepared statement of Mr. Swift follows:]

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    Chairman Stewart. Thank you, Mr. Swift.
    And now, our final witness, Mr. Knappenberger.

              STATEMENT OF MR. PAUL KNAPPENBERGER,

               ASSISTANT DIRECTOR, CENTER FOR THE

                STUDY OF SCIENCE, CATO INSTITUTE

    Mr. Knappenberger. Good morning. Chairman Stewart, 
Chairwoman Lummis, and other distinguished Members of the 
Subcommittee, I thank you for the opportunity to offer 
testimony this morning. I am Paul Knappenberger, Assistant 
Director of the Center for the Study of Science at the Cato 
Institute, a nonprofit, nonpartisan public policy research 
Institute located here in Washington, D.C.
    Before I begin my testimony, I would like to make clear 
that my comments are solely my own and do not represent any 
official position of the Cato Institute.
    Climate change results from a variety of factors, both 
human and natural. The primary concern raised over the pipeline 
involves the carbon dioxide emissions that will result from the 
production and use of the oil that the pipeline will carry. In 
its Supplemental Environmental Draft--Environmental Impact 
Statement, the State Department finds--and I think that there 
is broad agreement on this point--that a barrel of oil produced 
from the Canadian tar sands carries about a 17 percent carbon 
dioxide emissions premium compared to the average barrel of oil 
finding its way into the U.S. market.
    Now, the disagreement between the State Department, the 
Environmental Protection Agency, and several environmental 
groups involves how many new carbon dioxide emissions this 17 
percent premium results in when it is applied to the 830,000 
barrels of oil that the pipeline will carry each day. The State 
Department concludes that the economy of the tar sands is such 
that it will come to market one way or another whether or not 
the Keystone XL pipeline is ever built. It thus finds virtually 
no additional carbon dioxide emissions resulting from the 
project.
    The EPA contends that the State Department is too quick to 
reach such a conclusion. The EPA argues that without the 
pipeline, much of the oil will remain in the ground, and thus, 
while the existence of the pipeline won't result in more oil 
being used in the United States, it will result in a 17 percent 
emissions premium on the pipeline's portion of that oil. The 
EPA gives this extra amount as 18.7 million metric tons of 
carbon dioxide per year.
    And several environmental organizations take the viewpoint 
that while the pipeline may not increase the amount of oil used 
in the United States, the oil that it displaces from the U.S. 
market will be consumed by other countries as the global demand 
for oil continues to grow. They calculate that the pipeline 
will result in about 181 million metric tons of additional 
carbon dioxide each year.
    So in these terms, the differences among the groups appear 
large and contentious, and much of the protestation involving 
the Keystone XL pipeline focuses on these emissions numbers. 
But these protests are largely misplaced. It is imperative to 
keep in mind that the endgame is climate change, and carbon 
dioxide emissions are not climate change. They influence 
climate change but they are not a measure of it. Therefore, 
before any type of assessment as to the potential climate 
impact of the pipeline can be made, it is essential to 
translate carbon dioxide emissions into some sort of climate 
unit, like the global average temperature change. In other 
words, how much global warming will the pipeline produce? Isn't 
that what everyone wants to know?
    Now, why is it then that such numbers are absent in the 
discussions of the impacts of the pipeline? It is not as if 
there is no good way of calculating them. This is precisely 
what climate models are designed to do. Climate models emulate 
the Earth's climate system and allow researchers to change 
various influences upon it, such as adding additional carbon 
dioxide emissions, and then seeing what happens in the computer 
simulations.
    So why haven't they been applied to predict the climate 
impact of the pipeline? Because if they were, the answer would 
be exceedingly tiny. For example, using a climate model 
emulator that was developed under support of the EPA, I find 
that in the case of the State Department's analysis, as there 
are very few additional carbon dioxide emissions resulting from 
the pipeline, there are essentially--there is essentially no 
associated climate change. Under the EPA's assumptions, the 
average temperature rise works out to less than 0.00001 degree 
C per year. That is 1/100,000 of a degree.
    And even under the assumption that all the Keystone XL oil 
was additional oil in the global supply, the extra warming is 
still less than 1/10,000 of a degree per year. In other words, 
if the pipeline were to operate at full capacity for the next 
1,000 years, it would raise the global average temperature by 
less than 1/10 of a degree.
    It is this kind of information, not information on carbon 
dioxide emissions, that is required to properly assess the 
climate change aspect of this or any other proposed project or 
regulation. In these terms, the difference between the State 
Department's Environmental Impact Statement and those of its 
critics all but vanished. No matter whose carbon dioxide 
emissions estimate is used, the climate impact of the oil 
transported by the pipeline is too small to measure or carry 
any physical significance. In deciding the fate of the Keystone 
XL pipeline, it is important not to let symbolism cloud these 
facts.
    Thank you very much.
    [The prepared statement of Mr. Knappenberger follows:]

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    Chairman Stewart. Thank you, Mr. Knappenberger.
    To all the witnesses, thank you again for your testimony, 
for your expertise.
    I would remind the Members that when we do ask our 
questions, Committee rules limit the questioning to five 
minutes. And we look forward to asking and prodding you a 
little bit on that, but before we do, we are going to back up 
just a little bit and with agreement with the Ranking Minority 
Member, we are going to go to the Chairwoman of the 
Subcommittee on Energy, Mrs. Lummis, and allow her to provide 
her opening statement.
    Mrs. Lummis. Well, thank you, Chairman Stewart. And I 
apologize for my conflicting meetings this morning. And thank 
you for allowing me to join you late. I was over at the Natural 
Resources Committee.
    This is such an important subject for our country, and so I 
really want to thank you for scheduling this hearing on the 
science and technical issues related to the Keystone XL 
pipeline, which falls squarely within the jurisdiction of this 
Committee. And I want to thank the witnesses for being here 
today as well.
    As we all know, the energy landscape is changing 
dramatically. We have gone in the United States from being a 
net importer to a net exporter of petroleum products. At the 
same time, we have gone from being a net exporter of food to a 
net importer, so lots of things changing in our country. We 
have now become a global leader in natural gas production and 
are expected to lead in oil production by the end of the 
decade. Instead of building import terminals for LNG, we are 
modifying these facilities to export our abundant natural gas. 
And we have countries all over the world that would be so happy 
to receive our abundant natural gas resources.
    And despite these changes, the Keystone XL pipeline 
languishes. Now, this project would allow us to decrease our 
reliance on unfriendly sources of oil and increase our trade 
relationship with Canada. Approval of the pipeline would also 
carry Bakken crude being produced in North Dakota. I deeply 
appreciate the comments of our witness, Mr. Helms, on that 
subject earlier.
    The pipeline offers a safe and permanent solution to 
alleviate the bottleneck of U.S. crude oil in the midcontinent. 
In fact, it is the safest solution that exists. And I can say 
that as a person who grew up and still ranch next to an oil 
refinery. And we have lots of problems with the oil refinery, 
and I am grateful for RCRA and other environmental laws and for 
environmental regulators that help us regulate our neighborly 
relationship with a refinery. The pipelines have never been the 
problem. The pipelines have been the safest part of that 
operation.
    The State Department, in fact, has concluded that the 
Keystone XL pipeline, with its 57 extra safety features, would 
have a degree of safety over any other domestic pipeline. Yet 
this Administration persists in stopping the project, saying in 
2012 that a deadline requiring the President to approve or deny 
the pipeline ``prevented a full assessment of the pipeline's 
impact.'' Now, this was after thousands of pages of analysis 
and tens of thousands of public comments over a four-year 
period.
    Now, we have had another year and another report, still no 
response from the Administration other than to stall the 
project to death. Now, that is not too surprising to some of 
us, because we are finally of the realization that all-of-the-
above to this President must mean something other than 
hydrocarbons. But I don't understand how the President can 
claim to be committed to job creation and economic growth and 
still obstruct this project because it would support both. 
According to the State Department, the project would support 
over 42,000 jobs and result in $2 billion in the pockets of 
hard-working Americans. That would be such a shot in the arm to 
our economic recovery.
    And that is just beginning. Direct expenditures on 
construction and materials could amount to $3.3 billion, and 
sales and use tax could generate another $65 million in revenue 
for States, not to mention the positive impact that trade with 
Canada has on our U.S. economy. According to the U.S. Census 
Bureau, for every dollar the United States spends on Canadian 
goods and services, Canada spends approximately 89 cents on 
U.S. goods and services.
    So this testimony today is deeply appreciated. It is very 
helpful. It is going to be very interesting for us to have the 
opportunity to quiz you about the very disparate conclusions 
that you have drawn and expressed in your opening statements, 
but I do want to thank you, Mr. Chairman, for allowing me to 
present opening remarks.
    And I yield back.
    [The prepared statement of Mrs. Lummis follows:]

  Prepared Statement of Chairwoman of the Energy Subcommittee Cynthia 
                                 Lummis

    Good morning and welcome to today's hearing, ``Keystone XL 
Pipeline: Examination of Scientific and Technical Issues.'' I want to 
thank Chairman Stewart for holding this hearing with me on such an 
important and pressing issue. I also want to thank the witnesses for 
being here today, and I look forward to their testimony.
    In the last few years, the U.S. energy landscape has changed 
dramatically. We have gone from a net importer to a net exporter of 
petroleum products; we have become the global leader in natural gas 
production and are expected to lead in oil production by the end of the 
decade. Instead of building import terminals for LNG, we are modifying 
these facilities to export our abundant nautral gas resources.
    Despite these changes, one issue has remained stagnant over the 
last four years, and that is the approval of the Keystone XL Pipeline. 
This project would allow us to decrease our reliance on unstable or 
unfriendly sources of oil and increase our trading relationship with 
Canada, a friendly, democratic, and stable ally. Approval of the 
pipeline would also facilitate our own oil development, as the pipeline 
would also carry Bakken crude being produced in North Dakota.
    In addition to increasing our energy security, the pipeline offers 
a safe and permanent solution to alleviate the bottleneck of U.S. crude 
oil in the midcontinent. In fact, it's the safest solution that exists. 
The State Department concluded Keystone XL, with its 57 extra safety 
features, would have a degree of safety over any other domestic 
pipeline. Yet President Obama has slow-walked the project, saying in 
2012 that a deadline requiring him to approve or deny the pipeline 
``prevented a full assessment of the pipeline's impact.'' This was 
after thousands of pages of analysis and tens of thousands of public 
comments over a four-year period.
    Another year and another report later, the Administration has yet 
to approve the project. That the Administration would slow-walk a 
project that supports fossil fuels is perhaps no surprise to some of 
us. However, what I cannot understand is how the President can 
rhetorically claim to be committed to job creation and economic growth, 
and in practice obstruct a project that would support both. According 
to the State Department, the project would support over 42,000 jobs and 
result in two billion dollars in the pockets of hardworking Americans. 
This would represent a significant contribution to our slow economic 
recovery.
    And that is just the beginning. Direct expenditures on construction 
and materials could amount to $3.3 billion dollars, and sales and use 
taxes could generate another $65 billion dollars in revenue for the 
affected States. Yet another often-overlooked economic benefit is the 
positive impact that trade with Canada has on the U.S. economy--trade 
with Canada benefits the U.S. economy more than trade with any other 
nation in the world. According to the U.S. Census Bureau, for every 
dollar the U.S. spends on Canadian goods and services, Canada spends 
approximately 89 cents on U.S. goods and services. I hope this 
Administration realizes that actions speak louder than words. To voice 
support for job creation and economic growth is one thing; to actually 
do something about it is another. I hope the President will prioritize 
action over empty rhetoric and approve the project as soon as possible. 
We have waited long enough.
    Thank you, Mr. Chairman. I yield back.

    Chairman Stewart. Thank you, Ms. Chairwoman.
    If there are other Members who wish to submit additional 
opening statements, your statements will be added to the record 
at this point.
    And now, we come to the questioning of the panel, and as 
all of us look forward to this, I recognize myself for five 
minutes for my questions.
    You know, I have to say, just as an aside, this problem 
puzzles me. It seems to me that this is something that there 
should be broad and bipartisan support for. That the objections 
to the pipeline are a great example of straining at a gnat and 
swallowing a camel, I just think you have to work--you have got 
to work hard to find real objections to this project.
    And I understand the keys are, you know, can we operate it 
safely and is it going to increase CO2 emissions in 
a meaningful way? And I think that you have done a great job of 
answering those questions. And when you weigh that against 
the--you know, the cost-benefit analysis of the economic 
impacts and the national security interests, again, it is 
difficult for me to understand why this is not an easy decision 
and, frankly, a decision that should have been made, well, 
sometime ago, certainly within the last four years.
    The environmental groups rest their opposition on the 
proposed project on the assumption that it will contribute to 
climate change, and I think there are two false assumptions 
here. One of them is very meaningful to me as a former business 
owner, the presumption that in the absence of the pipeline, 
this natural resource will remain in the ground, and I just 
can't imagine an economic analysis or an economic model that 
would prove that. I mean it would work against everyone's self-
interest that are involved in this project to say that, well, 
they can't pipe it; therefore, they are going to leave it.
    And the second one would be that the emissions from the 
sands production would have a significant impact on climate 
change, which is what many of you have addressed here today. I 
guess I would ask maybe Mr. Helms or maybe, you know, other 
members of the panel if you want, Mr. McCown or Mr. 
Knappenberger, if you want to jump in on this. And you have 
answered it on some level already but I would like to go into 
just a little more detail, first, your opinion on the first 
presumption that is this oil would remain in the ground if we 
are not able to pipe it. Mr. Helms, you look anxious to answer 
this.
    Mr. Helms. Thank you, Chairman Stewart. I am anxious to 
answer it because people believe that the Bakken crude oil 
would remain in the ground in the absence of pipeline 
transportation, but the fact is that innovations in 
transportation systems and innovations in markets seeking the 
ideal market for the crude oil that was tailored to the crude 
oil led to an abundance of rail transportation out of North 
Dakota. So, as I stated, 71 percent of our crude oil now moves 
by rail in the absence of pipelines. I think it is a faulty 
presumption that the oil will stay in the ground in the absence 
of Keystone XL pipeline. I think innovations will be put in 
place by industry to move that oil some other way----
    Chairman Stewart. And in this case----
    Mr. Helms [continuing]. And those ways will be less safe 
and more environmentally risky.
    Chairman Stewart. And that is what I was going to re-
emphasize. In this case, the options are much, much worse than 
having a pipeline.
    Mr. Helms. That is right.
    Chairman Stewart. Yes. Any other comments then?
    Mr. McCown. Now, Mr. Chairman, I was just going to echo 
those comments that, you know, this oil will find its way to 
the market, and it is already flowing through other pipelines. 
It is traveling by barge down the Mississippi River. Those 
efforts will continue, so it is in our interest to make sure it 
is transported as safely as possible, and that is with a brand-
new, state-of-the-art pipeline.
    Chairman Stewart. To the--to other world markets, and the 
Pacific Rim, for example, isn't it safe to say that our 
standards on air quality and other environmental thresholds are 
more stringent than if this oil were refined in India or China?
    Mr. McCown. Absolutely. And, you know, the EPA is not in 
China yet to my knowledge.
    Chairman Stewart. Yes. So if you are interested in global 
climate change and recognize that this is a global market and a 
global problem, wouldn't you be advocating for this product to 
be refining here in the United States where we have very strict 
refining standards?
    Mr. McCown. Absolutely. And that is my argument as well, 
that, you know, this displaces oil from less stable nations, it 
displaces oil that is being brought in from overseas, and I 
think you have made a critical point on not only the emissions 
but also on the energy security component as well.
    Chairman Stewart. Okay. All right. Thank you. Thank you for 
your responses.
    And I now recognize Ms. Bonamici for her five minutes.
    Ms. Bonamici. Thank you very much, Mr. Chairman.
    Just in response to your comments, Mr. Chairman, I do want 
to point out that the president of Canadian Natural Resources 
Limited recently said long term we do need Keystone to be able 
to grow the volumes in Canada. So I just wanted to point that 
out, that there will be growth because of the Keystone pipeline 
and we would need to keep that in mind.
    Mr. Swift, in your testimony you talked about the number of 
permanent jobs that are anticipated from the Keystone XL 
pipeline, and there is no question that there will be several 
thousand temporary construction jobs, no doubt about that, but 
in terms of permanent jobs, you mentioned----
    Mr. Swift. The State Department estimated that there would 
be 35 permanent jobs.
    Ms. Bonamici. Thirty-five jobs. And just to put that in 
perspective, the Congressional Budget Office estimated that 
there will be 750,000 jobs lost because of sequestration, so I 
just want to put that in perspective. We are talking about 35 
permanent jobs.
    In your testimony, Mr. Swift, as well as in the EPA's April 
22, 2013, letter to the State Department commenting on the 
Draft Environmental Impact Statement, there is a brief but, I 
think, a significant discussion regarding the Enbridge spill at 
the Kalamazoo River in Michigan and what has been learned so 
far about spills of oil sands or diluted bitumen into water 
bodies. And the EPA expressed its concern about the Keystone 
project by suggesting on page three of the letter, ``spills of 
diluted bitumen, dilbit, may require different response actions 
or equipment from response actions for conventional oil 
spills.''
    They go on to suggest that the State Department address 
this in greater detail and they state on page four of the 
letter that dredging of the bottom sediments was determined to 
be the best way to clean up the Kalamazoo River, which three 
years later they are still working on. But if you read the 
EPA's response in its entirety--and I certainly don't want to 
speak for them because they are not here--the letter seems to 
suggest a concern that we may not know enough about how to 
clean up this material. So are you aware of any other best 
practices for cleanup of diluted bitumen besides dredging the 
river, or are you aware of whether the State Department 
discussed any alternatives in the Draft Environmental Impact 
Statement for best practices of cleanup of diluted bitumen?
    Mr. Swift. The State Department recognized that the 
Kalamazoo spill poses unique risks that conventional practices 
had been inadequate to contain and remediate the spill, but 
they made the point that they were looking toward future 
innovations to be able to deal with tar sands spill. And 
unfortunately, those innovations haven't happened. We are no 
further now than we were in 2010 when it comes to dealing with 
diluted bitumen tar sands. And the problem there is that, you 
know, once you have a release in a water body, the bitumen is 
heavier than water. It sinks into the water column. And most 
conventional practices rely on the idea that oil will float on 
the water's surface.
    Ms. Bonamici. All right. Thank you. And also, Mr. Swift, as 
I mentioned in the opening statement, we had a hearing a couple 
weeks ago in the Environment Subcommittee on relevant issues 
related to climate change. We had Dr. Bill Chameides here, a 
well-respected atmospheric scientist who studies global warming 
and climate change, and he is suggesting an iterative risk-
management approach, meaning that we must constantly reevaluate 
whether we are making the right decisions to address climate 
change as we learn more as technologies change.
    And we have heard today from some of the witnesses who now 
say that Keystone XL will not matter much to the amount of 
global greenhouse gas emissions. However, each new project, 
without strong controls, will add more greenhouse gases into 
our atmosphere. So will you provide your views on how the 
Keystone XL project would affect global greenhouse gas 
emissions given that we estimate that the substance transported 
by Keystone is 17 percent more greenhouse gas-intensive than 
conventional crudes?
    Mr. Swift. Well, so EPA estimates that it would add, you 
know, a billion metric--a million metric tons of carbon in the 
atmosphere over its lifetime just simply by replacing tar 
sands--or conventional crude with tar sands at the Gulf Coast. 
One of the important things to recognize is here we have a 
project in which you can map--and, you know, my--Chip would 
agree that you can actually determine an impact on global 
temperatures from building this pipeline. And in the scheme of 
climate change where one degree Celsius is the difference 
between significant environmental changes that have significant 
impacts on how we are able to live our lives in the future, a 
little bit over the top makes a big difference when it comes to 
whether we reach our climate goals or not.
    Ms. Bonamici. Thank you. And just in my remaining few 
seconds, I would like to hear from each witness quickly, 
please. I have heard that building the Keystone XL might 
actually increase gas prices in the Midwest. Is that correct?
    Mr. Swift. I will say that TransCanada noted that building 
Keystone XL would increase oil prices in the Midwest. And one 
of the tar sands producers, the President of Cenovus, noted 
that the lack of pipelines from Alberta was constituting a 
subsidy to U.S. energy consumers of over $30 billion a year.
    Ms. Bonamici. I am sorry. My time is expired. I yelled 
back. Thank you, Mr. Chairman.
    Chairman Stewart. Did any of the others want to address 
that last question? She left it open for any of you.
    Mr. McCown. I will just mention that because of the 
constraints, there is a discount on crude but the refining 
margin is greater, but that doesn't necessarily translate into 
cheaper retail prices. So the refining margins may decrease 
once Keystone, but I don't see a direct impact to added retail 
price at the pump.
    Chairman Stewart. Okay. All right. Thank you. I would just 
note quickly if you are unemployed right now and hoping for a 
job, having a job to only last two or three years is not a bad 
deal when you are looking at that or nothing.
    Mrs. Lummis, the Chairwoman of the Subcommittee on Energy.
    Mrs. Lummis. Thank you, Mr. Chairman.
    Mr. McCown, some of the opponents of the project have 
argued against a piece of infrastructure, pipeline, that is 
widely used in the United States. I would like to know if you 
agree that oil sands pose greater risks for pipeline integrity.
    Mr. McCown. I do not believe that they do. Canada has been 
transporting this type of crude since 1968. The United States 
has about ten years of experience transporting this crude. The 
Integrity Management Program for pipeline safety has come a 
long way--a long way in the last decade to now where corrosion 
is no longer the leading cause of pipeline accidents. Serious 
pipeline accidents are caused by third-party damage. That being 
said, there are multiple studies out on dilbit corrosivity. I 
have several of them here. Each one of them says, you know, 
pipeline steel wet by oil does not corrode. The pH values of 
the dilbit do not contribute to stress corrosion cracking, 
which is what Mr. Swift was talking about, so long as a 
different epoxies are used, different type of bonding 
materials, which we are going to see in this pipeline.
    So, you know, this oil has been transported safely for a 
very long time, and, you know, have there been spills that have 
been referenced? Yes, but it is a little bit of a leap to then 
say then they must because to because of this type of oil. In 
fact, like I said, we know that most pipeline accidents are not 
caused by the pipelines themselves.
    Mrs. Lummis. Follow-up question: the State Department's 
assessment was that the possibility for spills is rare and 
relatively small. Do you agree with the State Department's 
assessment, and do you know what they base their conclusions 
on?
    Mr. McCown. I do agree. I mean, they based their 
conclusions on the review of the pipeline process and the 
pipeline design specs, which it is my understanding the State 
Department was aided significantly by the USDOT, who are the 
pipeline experts and--in assessing this pipeline. You know, the 
57 special conditions frankly, you know, go well above and 
beyond what federal law currently requires in many areas with 
respect to the design and the operation of the pipeline. That 
doesn't mean we shouldn't be vigilant. It doesn't mean that we 
shouldn't hold the accountable responsible for how they operate 
the pipeline, but, you know, I have looked at this pipeline. I 
have looked at the specifications. I have talked to them, and I 
feel confident that this will, in fact, be the safest pipeline 
ever constructed, and that enhances security. And, as we know, 
pipelines are the safest mode of transportation. To me, this is 
a no-brainer.
    Mrs. Lummis. One more question, this one for Mr. 
Knappenberger. Regarding the EPA's comments on the State 
Department report, the EPA questions the finding that Keystone 
XL would not substantially affect greenhouse gas emissions or 
contribute to climate change. Could you comment further on why 
you believe the State Department is correct rather than the 
EPA?
    Mr. Knappenberger. Well, I don't take a strong opinion on 
which is correct when it comes to the carbon dioxide emissions 
from the pipeline. When you translate carbon dioxide emissions, 
though, into some sort of climate unit, which is what everyone 
is interested in, the climate impacts of the pipeline, you find 
that the differences between next-to-no emissions and EPA's 
analysis, which turned out to be 18.7 million metric tons of 
extra emissions, it sounds like a lot, but when you translate 
those extra emissions into carbon units or into climate change 
units, they turn out to be hardly any difference between them 
at all. We are talking about hundreds of thousandths of degrees 
here.
    Mrs. Lummis. Is it true that we now meet Kyoto Protocol 
numbers?
    Mr. Knappenberger. I don't believe that is the case, no.
    Mrs. Lummis. Okay. Is it true that the Clean Air Act has 
produced cleaner air every year since it has been in effect?
    Mr. Knappenberger. Well, the Clean Air Act, until recently, 
wasn't designed to regulate carbon dioxide emissions, so I 
think the Clean Air Act probably successfully cleaned up what I 
consider traditional pollutants in the air. I don't think that 
carbon dioxide is--sort of meets the definition of a 
traditional pollutant.
    Mrs. Lummis. Is it a pollutant? Is carbon dioxide a 
pollutant?
    Mr. Knappenberger. Not in my opinion.
    Mrs. Lummis. Okay. Mr. Chairman, I yield the balance of my 
time.
    Chairman Stewart. Thank you, Mrs. Lummis.
    We now recognize Mr. Swalwell.
    Mr. Swalwell. Thank you, Mr. Chair.
    And my concern is primarily environmental safety and 
economic growth and how we balance the two of those. And I 
understand and appreciate the need for jobs. And our brothers 
and sisters in the building trades will tell you that right now 
in these tough economic times that any job is a good job, even 
a temporary job, because we know, in the construction trades, 
they move from temporary project to temporary project. And I 
certainly appreciate that.And what I want to talk about is just 
kind of weighing the environmental impacts against economic 
growth and whether the long-term impacts outweigh the short-
term gains in economic growth.
    Also, my friends from the other side have expressed 
concerns about the Administration and frustration with the 
Administration going forward, but I think what we have seen 
here is two conflicting reports, one from the State Department 
and one from the EPA. And I would suggest and put forward that 
if there was a conspiracy by the Administration against this 
project, they are not doing it in a very good way because they 
certainly would not have two conflicting reports.
    And so I ask you, Mr. Swift, does it seem like there is a 
conspiracy against this project from the Administration, or is 
it more complicated than that because of such a large-scale 
project?
    Mr. Swift. Certainly no conspiracy. And I would also 
mention that this phase of the Keystone XL pipeline has really 
only been in review for about 12 months after it was rejected. 
This is a new presidential permit application. It restarts the 
process.
    Mr. Swalwell. Great. Mr. Swift, in your testimony you 
describe some significant environmental concerns associated 
with this project, including increased greenhouse gas emissions 
and potential risks to pipeline safety. Is there any way we can 
address or mitigate these impacts while still allowing Keystone 
XL to move forward?
    Mr. Swift. Well, certainly, one of the key issues is a 
higher carbon content of tar sands. And, to some extent, we 
have seen very little progress in Canada at reducing the carbon 
content of tar sands production paths. Canada agreed with us to 
reduce our--their emissions by 17 percent of 2005 levels by 
2020, and they are on track of--to increasing theirs by five 
percent while we are on track to meeting ours. So, to some 
extent, one of the issues is the nature of tar sands 
production.
    Mr. Swalwell. Also, an argument I have heard in favor of 
this project is that from a national security standpoint it is 
better that we are receiving extracted oil from allies like 
Canada rather than volatile areas like the Middle East. But 
given that the price of crude oil is set globally and world oil 
production was about 89 million barrels per year last year 
according to the Energy Information Administration, how would 
Keystone impact gas prices in the United States and, let's say, 
if we had a major supply disruption somewhere else in the 
world?
    Mr. Swift. Keystone would not buffer us from supply 
disruptions, because when you have a supply disruption, there 
is a global market. Canadian oil prices go up despite the fact 
they have no other market to sell it to than the United States. 
I should mention that over the last five or six years, the one 
thing that has begun to protect the U.S. energy market is our 
reduced consumption of fossil fuels. We have reduced our use by 
over two million barrels a day, which is quite a bit more than 
Keystone would carry.
    Mr. Swalwell. Is there any guarantee in any of the 
contracts you have seen or specs you have seen that would 
promise that U.S. consumers would have access and rights to the 
oil first?
    Mr. Swift. There is no guarantee whatsoever, and in fact, 
TransCanada has been asked to make such a guarantee and they 
have refused to do so. One of the areas of State's analysis 
indicates that over half of the crude oil in Keystone XL will 
be refined and exported internationally.
    Mr. Swalwell. And so when it comes to the impacts of oil 
supply disruptions and price volatility on our national 
security, do you think it is fair to say that the big issue is 
not so much America's dependence on foreign oil but rather it 
is our dependence on oil, period?
    Mr. Swift. That is exactly how I see it.
    Mr. Swalwell. Great. Thank you. And I will yield back the 
balance of my time.
    Chairman Stewart. Thank you. The Chair now recognizes Mr. 
Rohrabacher.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman. And 
thank you for holding this hearing.
    Let me just note, I was a young reporter before I got 
involved in working with President Reagan and coming here, and 
my memory has it that almost every single oil and gas project 
that has been proposed in my adult lifetime has been opposed 
by--and strenuously opposed by a certain group of people within 
our society. And I will have to say that most of the opposition 
to oil and natural gas, which, of course, provides us as 
Americans with--well, with the energy we need for--to have an 
agricultural system that provides us food and the fuel that we 
need for commerce and we have national defense and national 
security and industry. All of these things depend on oil and 
natural gas now. Yet, during my lifetime, there has been a 
group of people opposing every single new project. There is 
always some reason.
    And I noted when I was younger--I covered a story when they 
were talking about oil spills, and there was an oil spill off 
of my coast, and I was concerned about it. And the oil 
companies did a study to see what the problems were, and when 
they had a hearing on it, they had a hearing--I happened to be 
a young reporter at the time and, Mr. Chairman, I will never 
forget this hearing. The oil companies were really boring and 
didn't give us much copy, but there was a young girl outside 
the hearing who was holding up a rubber duck covered with oil 
screaming ``murderer'' at the guys who were going in to 
testify. And you can imagine who got the press coverage.
    This is really a significant--this is really significant to 
whether or not we are going to have prosperity in our country, 
because at that time the American people took for granted that 
we were going to be prosperous, and we were going to be secure, 
and there would be these fundamental building parts of our 
economy that would develop as they always had been. That is not 
the case anymore. The American people understand how fragile we 
are economically and understand how, even with supposedly a 7.5 
unemployment rate--anybody who believes that probably also 
believes in global warming--we have to take this seriously. And 
let's just note of all these objections what they have 
accomplished, Mr. Chairman, is that we have hired a lot more 
lawyers, and the lawyers have made a lot of money over the 
years on this, which is then added to the bill that costs for 
energy, of course.
    The one other thing that I remember is also that the 
horrendous predictions of what would happen if we built the 
Alaskan pipeline. It just happened to be at that time. Now, I 
want everybody to think what our economy would have done in the 
last 20 years had we not built the Alaskan pipeline. But we 
heard the same thing and we heard the caribous were going to 
disappear because the pipeline was going right through their 
breeding area. And now, what have we found out after the 
pipeline? They love the pipeline, and in fact, there are more 
caribous than ever because they sort of snuggle up to it when 
it gets cold.
    We have got to start using our heads on this when we are 
making decisions, because it is going to impact on more than 
just the caribous. It is going to impact on whether or not the 
United States is a prosperous and secure country. And I find 
the arguments that we faced about pipeline--about this 
particular project, it has nothing to do with safety; it has 
everything to do with the global warming theory that human 
beings are causing the planet to change and get warmer and 
warmer, I might add. The predictions that we have had is by now 
it would be five degrees warmer than it is, and actually, it is 
getting cooler.
    So with those--that type of--I think I will--I have got 
exactly 25 more seconds, and instead of leaving it up to the 
panel, I will just--with one last little shot here, and that is 
I believe that global--the global warming theory based that 
mankind is impacting on our climate has been so exaggerated 
just beyond--obviously, mankind has some impact because we all 
exhale carbon dioxide. And--but it has been so exaggerated that 
it will bring down the standard of living of the American 
people, this fraudulent idea that we are the primary factor in 
climate change and then the predictions of climate change just 
never happened. I mean it is--we are going in the opposite 
direction.
    Thank you very much, Mr. Chairman.
    Chairman Stewart. I thank you, Mr. Rohrabacher.
    And we now turn to your companion from California, Mr. 
Takano.
    Mr. Takano. Thank you, Mr. Chairman. And I share the 
gentleman's concern and love of caribou.
    Mr. Rohrabacher. I eat the caribou.
    Mr. Takano. I will leave it at that. I live somewhat inland 
from the gentleman in California. I live in a region of 
California that is in a basin surrounded by mountains, and so I 
am very grateful for strong EPA standards that have helped 
clean up the air. I remember as a little boy that we would have 
days where we couldn't go to physical education because the air 
quality was so bad. The air has gotten better through the 
standards, and the air may not be cleaner air from year to 
year, but certainly standards have helped us clean up the air 
in our region.
    Now, my question to Mr. Swift: Is it the case that this 
bitumen--and I have learned a lot more about bitumen here--will 
this oil be refined within the United States, or do we expect 
the bitumen to be exported abroad on ships to be refined in 
other countries?
    Mr. Swift. Well, in the short term, we are expecting it to 
be refined in the Gulf Coast of the United States. There is 
nothing--there are prohibitions to exporting crude produced in 
the United States. Canadian producers could export the bitumen 
for refinery--for refinement elsewhere, but the general 
expectation is it will move to the Gulf Coast, be refined 
there, and then many of the products from that would be 
exported internationally.
    Mr. Takano. When you say the Canadians could export crude 
bitumen without being refined in the United States, what do you 
mean by that? You mean that even though it is transported 
through this pipeline, it could be exported even from the 
endpoint in the United States directly in its crude form?
    Mr. Swift. There is no legal basis for preventing them from 
doing that once they get it to the--to Houston.
    Mr. Takano. Okay. Well, Mr. McCown, you are shaking your 
head. Do you disagree with that answer?
    Mr. McCown. I do--yes, sir, I do disagree with that answer. 
You have to have an oil export license if you want to export 
raw crude. So I think it is--if the oil does not come here, and 
Canada built a different pipeline system or a rail system to 
somewhere else, sure, it can be exported. But if it comes to 
the United States, it has to be at least refined here.
    Mr. Swift. The export license requirement is for crude 
produced in the domestic 48 States of the United States. It 
doesn't apply for crude produced in Alberta.
    Mr. Takano. Okay. Mr. Chairman, you raised the point about 
the--you know, the preference--the desirability of having crude 
refined in our country rather than other countries, which may 
have less stringent standards. I am just wondering if there is 
consensus that perhaps--or this point to me brings up, you 
know, the possibility that maybe we should look at tightening 
up that provision, that all oil that leaves our shores should 
be refined here and meet the more stringent standards set by 
our EPA.
    Mr. Swift. Well, one point I would make--was that a 
question for me?
    Mr. Takano. Yes, yes, go ahead.
    Mr. Swift. Well, one point I would make is that Canada has 
proven--there has been significant opposition to pipelines that 
would move tar sands across Canada's west coast to the point 
that even industry observers are saying that those pipelines 
are unlikely to move forward. And the other point to keep in 
mind is that China doesn't have the capacity to process heavy 
crude. So based on the refinery market that we see in the world 
today, the real question is does it get refined in the United 
States or does production expansion slow down? The question 
isn't whether, you know, we see zero tar sands production in 
2030; the question is does production go from two million to 
three million barrels a day or two million to six million 
barrels a day? And when it comes to the environmental impacts, 
that makes a big difference, which is an area you land on.
    Mr. Takano. So it is the increased capacity that this 
pipeline would facilitate. It would stimulate far more rapid, 
intensive development of this source of bitumen?
    Mr. Swift. That is exactly right.
    Mr. Takano. How much experience do we have with bitumen 
flowing across oceans?
    Mr. Swift. When it comes to Canadian tar sands bitumen, I 
don't think we have much experience.
    Mr. Takano. Are there comparable source of bitumen that are 
transported in large container ships?
    Mr. Swift. There are some heavy sources of crude from 
Venezuela that have some similar properties that move into Gulf 
Coast refineries.
    Mr. Takano. Okay. Have there been any spills of this sort 
of bitumen of any note?
    Mr. Swift. Not to my knowledge.
    Chairman Stewart. And, Mr. Takano, if I could, you may have 
noticed that your--we didn't start the clock----
    Mr. Takano. Oh, I am sorry.
    Chairman Stewart. We didn't start on time. I think you are 
about out of time, but if you want to finish this question----
    Mr. Takano. Okay. So, you know, my concerns are mainly 
about the Chairman's concern about China and India having 
lesser standards in terms of refining. Is that a significant 
reason why the environmental community is concerned about--is 
this what adds to the global climate change?
    Mr. Swift. Well, certainly one of the key issues is, again, 
China and India don't have the capacity to process this crude, 
and Canada currently doesn't have the ability to send it to 
those markets. So, to some extent, the real issue is whether--
the only way that tar sands crude or its refined products get 
to the international market right now is via Keystone XL.
    Mr. Takano. Okay. Thank you. Mr. Chairman, thank you.
    Chairman Stewart. Okay, thank you. Yes. It would surprise 
me if they--China and India don't develop that capability very 
quickly if the opportunity arose for them.
    Mr. Weber.
    Mr. Weber. Thank you, Mr. Chairman.
    For the panel, any of you all think that pipeline DB that 
wealth flowing through a pipeline produces as much CO2 
as 300 to 500 diesel 18-wheeler truckloads a day? Mr. Helms, 
somebody, yes or no?
    Mr. Helms. Well, Congressman Weber, I don't believe that it 
does and----
    Mr. Weber. Thanks. Mr. McCown.
    Mr. McCown. It is not.
    Mr. Weber. Mr. Swift.
    Mr. Swift. I----
    Mr. Weber. Your mike is not on.
    Mr. Swift. Truck transport is more energy intensive than 
pipeline.
    Mr. Weber. So you would agree that it does produce more 
CO2? Mr. Knappenberger.
    Mr. Knappenberger. Yes, I agree.
    Mr. Weber. You agree, thank you.
    Next question for the panel, an industry safety rating of 
99.999525 percent safe, Mr. Helms, are you aware of any other 
industry that has that kind of safety record?
    Mr. Helms. Congressman, I am not aware of any----
    Mr. Weber. Thanks. Mr. McCown.
    Mr. McCown. I am not. And I think that will even go higher.
    Mr. Weber. Mr. Swift.
    Mr. Swift. Industry is hoping to improve that record. When 
you think about the amount of oil----
    Mr. Weber. I will take that as a no. Mr. Knappenberger.
    Mr. Knappenberger. I don't know of any, no.
    Mr. Weber. I don't either. Next question. Mr. Swift, you 
said that the likelihood--it seemed like you raised a lot of 
discussion about the likelihood of the bitumen oil leaking, and 
so that seems to be a great degree of your argument against the 
pipeline is based on the leakage. So you are not as concerned 
about the climate issues as you are the leakage. Is that fair 
to say?
    Mr. Swift. No, we are also very concerned about the 
climate.
    Mr. Weber. More so than the leakage?
    Mr. Swift. I would say one of the primary environmental 
impacts is the climate issue.
    Mr. Weber. Well, that is one of your primary environmental 
impacts. So if they--we can make the pipeline safer and if we 
can make climate emissions lesser, then you would be good?
    Mr. Swift. Yeah, if we can do--if we can--yeah, if we lower 
the climate emissions and make the pipeline safer.
    Mr. Weber. Great. Are you familiar with the--and acronym 
BACT?
    Mr. Swift. You may have to refresh my memory.
    Mr. Weber. Mr. Helms, do you know what BACT stands for?
    Mr. Helms. Yes, Mr. Congressman. It is best available 
control technology.
    Mr. Weber. Okay. And so is it safe to say that while we are 
developing--using this bitumen that we can improve our BACT, 
our best available control technology, so that we can reduce 
those emissions? In fact, I am somewhat amused by your 
discussion with my colleague from California talking about 
bitumen and how there wasn't much experience in moving it and 
all that those implications, because if we refrained from new 
innovations, indeed we would not--you all would not be so 
intent on green technology, would you not? Solyndra wouldn't 
have got half a billion dollars because they didn't have a 
track record, no experience.
    So the truth of the matter is, in my opinion, that this 
very pipeline that comes into my district by the way--and it is 
not Houston; it is Port Arthur; Nederland, Texas, down on the 
Gulf Coast where XL pipeline terminates, just FYI. Under that 
assumption, the fact that we don't know how to handle bitumen, 
we would have never, ever embarked upon trying to improve on 
batteries, on wind power, on solar power because we don't have 
that experience. I am amused, Mr. Swift, that you said after 
the Kalamazoo spill in 2010 there have not been any 
innovations. I am thinking, my gosh, only somewhat three years 
later there are no innovations, and yet, in your very 
discussion points, you say that you are concerned about the 
pipeline going out 50 years and how long out do we worry about 
global warming?
    Mr. Swift. Quite some time.
    Mr. Weber. Quite some time, yet you are lamenting the fact 
that there is no new innovations in handling that you have seen 
over the scant two or three years. That seems antithetical to 
me.
    How many of you all saw--did any of you all see the article 
in the Wall Street Journal yesterday about California and Texas 
producing oil? No? Okay. Well, let me make this point. My time 
is running short here. California--Texas produces more oil than 
the next four oil-producing States combined. California has 
been oil-averse, as my colleague over here said, people that 
were against everything about fossil fuel basically in his 
tenure. Texas' unemployment rate is 6.4 percent while 
California's is 9.4 percent. Texas has been the recipient of 
taxes of $20 billion from the oil industry and has no income 
tax, while California has an unbelievable--has an income tax 
rate and a capital gains tax rate of 13.3 percent. So the 
economic impact for our working Americans is huge.
    I am out of time. We need this pipeline. Mr. Chairman, I 
yield back eight seconds.
    Chairman Stewart. Eight seconds. Thank you, Mr. Weber.
    We now turn to Ms. Brownley from California.
    Ms. Brownley. Thank you, Mr. Chair.
    I wanted to follow up on the line of questioning that 
Congresswoman Bonamici started at the beginning of the hearing 
and just talk a little bit more about job creation. And I am 
directing my question to you, Mr. Swift. You had mentioned that 
35 jobs would be created from the Keystone pipeline. I wanted 
to really just explore a little bit about looking at job 
creation at Keystone compared to the job creation potential, I 
think, for sustainable alternative energy projects. And by the 
way, the comparison of Texas and California--I am from 
California--and we have been very focused on sustainable 
alternative energies and it is job creation as well. So if you 
could comment on that, I would appreciate it.
    Mr. Swift. Certainly. In 2011 a Brookings study showed that 
clean energy jobs are one of the fastest-growing sectors in the 
United States growing twice as fast as the economy. There are 
over 2.7 million clean energy jobs today and a consortium of 
about 800 clean energy entrepreneurs recently reported that in 
2012 their companies hired over 100,000 personnel. And these 
jobs tend to be--I mean, in clean energy, you tend to see a 
higher manufacturing base element to them. And in another 
recent study, they evaluated the job creation impact by dollar 
invested. It found that clean energy, for every dollar 
invested, you got more than three times as many jobs produced 
than the fossil fuel industry.
    Ms. Brownley. Thank you for that. Also, on the 
environmental side of this particular project, in your 
testimony I think you wrote and spoke to that the high-
temperature tar sands pipelines are at a greater risk of leaks, 
and I think you cited a study in Kern County, California. And 
so the question is is it fair to say that railroad trains 
carrying tar sands are also at greater risk of leaks?
    Mr. Swift. Well, one of the key things to keep in mind when 
it comes to railroads moving tar sands, while many railroads 
are moving Bakken crude, there has been very little tar sands 
by rail. A Reuters story just a few weeks ago showed that, you 
know, around 20,000 barrels a day was being moved to the Gulf 
Coast by rail or barge, and one of the--I mean the northern 
Albertan tar sands producers have been under many of the exact 
same market incentives to move their product by rail. The 
difficulty is they don't have the profit margins to afford the 
higher costs. They are more than 900 miles farther away from 
refinery markets. And, in fact, the mere process of moving tar 
sands by rail is more expensive. It requires specialized 
infrastructure, and you can actually fit less tar sands crude 
in each rail car relative to light crude. And we are not seeing 
the infrastructure being built out yet.
    Ms. Brownley. Thank you. And my last question is--I think 
Mr. Helms testified that his son-in-law is a farmer, I believe, 
and said he had no objection to the Keystone pipeline. And so I 
just, you know, wanted to hear your comments vis-a-vis rural 
areas, and will operators in rural areas be able to respond 
quickly in the event that there was some kind of accident or 
spill?
    Mr. Swift. You know, I have talked to folks in Nebraska and 
South Dakota. The--one of the farmers who discovered the 20,000 
gallon spill on the Keystone I pipeline was a first responder. 
He had no idea what to do in the event of a tar sands spill. 
And first responders are often the ones that detect leaks, that 
have to deal with it initially, and they don't have the 
training to deal with it.
    And as far as farming goes, farmers in Nebraska are very 
opposed to the project, and they are concerned about its impact 
to their water and also looking at the climate impacts of, you 
know, warmer temperatures, disrupted weather on farming. Last 
year, we had the hottest year on temperature. Half of our corn 
crop was destroyed in a drought. So farmers are on both ends, 
concerned about their water quality and also feeling the brunt 
of climate change.
    Ms. Brownley. And do we have evidence of what your 
statement that you just made about ranchers', farmers' concerns 
and----
    Mr. Swift. Certainly. Certainly. And statements and I can 
provide additional evidence of that.
    Ms. Brownley. Thank you. And I will yield the balance of my 
time.
    Chairman Stewart. Thank you, Ms. Brownley.
    Mr. Cramer from North Dakota, who has some interest in 
this, I suppose.
    Mr. Cramer. Yes, thank you, Mr. Chairman, and Ranking 
Member as well. Thank you to all of the witnesses. Special 
thank you to my friend, Lynn Helms, whose intellect is matched 
only by his integrity as a regulator.
    And I might add that while North Dakota enjoys the fastest-
growing personal per capita income and the lowest unemployment 
rate and a huge budget surplus in the State's coffers and more 
jobs available then people to fill them, we also were recently 
ranked by the American Lung Association with an A rating for 
clean air. We meet all ambient air quality standards as 
prescribed by the EPA. We have the cleanest water, cleanest 
land, most productive topsoil in the country. We feed a hungry 
world, and we do it all pretty well, and most of the time we 
would like to tell the Federal Government we will call if we 
need your help, but they seem to want to impose themselves 
quite regularly.
    I think. as an opening statement beyond that, I want to 
remind the Committee or those of you that maybe don't know, for 
nearly 10 years I was on the North Dakota Public Service 
Commission, carried the pipeline portfolio, have sited billions 
of dollars and thousands of miles worth of pipelines. Perhaps 
the biggest challenge in that tenure was siting the original 
Keystone pipeline. We talk about this like this is the first 
time it has been invented, as though no one ever thought about 
moving oil sands to market before.
    The first 260 miles in the United States of the original 
Keystone pipeline are through North Dakota. If you hired 
Sacajawea to find a worse route, she couldn't have. They chose 
a lousy greenfield route in eastern North Dakota through some 
of the richest farmland in the country, two scenic rivers, 
eight counties, 600 landowners, none of whom benefited a bit 
from oil other than using it in their combines and their 
tractors and heating their homes and all the things that we all 
use oil products for.
    The great part of that experience for me was that, while 
there were 600 landowners involved in the original TransCanada 
Keystone pipeline, all 600 willingly signed a contract. We did 
not have to go to condemnation for one inch of that pipeline. 
That is not because we are great regulators or great 
politicians; it is because we have citizens who understand the 
value of this important product and understand it is the safest 
way to move it.
    Now, it is interesting, perhaps, for somebody from 
TransCanada to hear me expose the virtues of that process, 
because at the time they thought I was the biggest pain in the 
backside that they had ever come across because we did require 
them to do a lot of things that they weren't necessarily 
inclined to do, including pulling under rivers as opposed to 
cutting through them.
    But I also think it is important to note that we did have a 
spill at one of the pumping station, but the good news was that 
after the spill everything worked. The SCADA system worked. The 
balance shut down. Eyewitnesses saw the oil. The berms kept it 
in. The little bit that got out was cleaned up at TransCanada's 
expense to the point where PHMSA was satisfied and the health 
department was satisfied in the Public service commission was 
satisfied with the repairs to the point that they were up and 
running within days. I think to talk about it as though there 
would never be a spill would be inaccurate, but I think it is 
also to talk about as though a spill is somehow going to ruin 
the world is also inaccurate. We always want to do better and 
always can.
    I could talk about a lot of things, including siting the 
Bridger pipeline, which is the onramp to the Keystone XL. And 
wouldn't we love to have Bakken crude get to that market where 
they pay a premium as opposed to a discount, which is what we 
get in many of the markets?
    That said, I want--I do have a technical question and 
probably start with you, Mr. Helms, anybody else that could 
help with this. We talked about this dilbit or bitumen as 
though it is some sort of a foreign substance, but there has 
been some disagreement both here and in the Natural Resources 
Committee, and I think the E&C Committee as well. Could you 
tell us the difference and is it that dramatically different? 
Because I really do not know. Mr. Helms, if you could, you 
understand this production as well as anybody.
    Mr. Helms. Mr. Chairman, Congressman Cramer, I have been to 
the oil sands in Fort McMurray and looked at the dilbit. It is 
not all that different than the crude oil that I produced when 
I worked for Texaco in central Montana and northwestern 
Montana. Those were heavy crude oils that were produced out of 
the Sawtooth sands, and we transported them by truck to Great 
Falls, Montana, and had them refined there. It is not some 
foreign alien substance. It is a mixture of light hydrocarbon 
and heavy hydrocarbon, and you can move it in pipelines or tank 
trucks or railcars.
    Mr. Cramer. Mr. McCown, do you have anything to add?
    Mr. McCown. I completely agree with everything Mr. Helms 
just said.
    Mr. Cramer. Well, then, let me just in my remaining seconds 
cite a couple of other things. I think in situ process is 
interesting. It has become better and better and it always will 
be. China builds coal-fired power plants like we build stick 
houses. They are not going to not build refineries for this 
stuff. And I have been to enough funerals of North Dakota 
soldiers fighting in the Middle East to remind everybody that 
this is a matter of national security, not just economic 
security. And I yield back.
    Chairman Stewart. Thank you, Mr. Cramer.
    Then it looks like our last questioning from Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman.
    I wanted to ask Mr. McCown a question about best practices 
and what his opinion was on best industry practices being used 
to build this pipeline. And more specifically, I want to know 
would somebody be able to come back, you know, after the 
pipeline is built a year later, two years later and say, well, 
actually, this could have been done to make the pipeline safer 
and even industry agreeing to that to a certain extent.
    I know that with some of the environmental issues that we 
have had in the North Texas area, not just with oil and gas but 
others--take, for instance, flaring. Someone will say, well, it 
is too expensive to pipeline the gas out and so we will just 
flare it. We know environmentally that flaring is not the best 
thing to do, but sometimes, it is just done for efficiency and 
for maximizing profits. So are the very best practices being 
used as it relates to the environment and the safety of this 
pipeline?
    Mr. McCown. That is a very good question. And yes, they 
are. And I share your concern. I have been a planning and 
zoning commissioner in North Texas where I have voted against 
pipelines that didn't seem to make sense in places. But yes, 
the--yeah, the 57 special conditions that TransCanada has come 
up with, they did that before the passage of the last pipeline 
safety improvement bill. And a lot of the things that are in 
here are now lost. So they were cutting edge ahead of the law.
    I think the key component is to make sure that the 
regulator not only holds them to the highest standard but 
requires continual refinement of that process. As technology 
includes--if you look at cars 20, 30 years ago, we didn't have 
airbags, we didn't have different things. As technology 
increases, then we hold the entire infrastructure system 
accountable as well. But the question isn't, you know, should 
we rebuild the pipeline? The question is this will be the 
state-of-the-art as we have today far exceeding anything else 
that is out there. And that makes it safer.
    Mr. Veasey. Mr. Swift, what is your opinion on the best 
practices and this being the safest possible pipeline to move 
crude?
    Mr. Swift. Well, we heard this same language used with 
regard to Keystone I and TransCanada's natural gas Bison 
pipeline, both constructed in 2010, both with special 
conditions. Both said they were state-of-the-art and would 
unlikely to spill in the first 30 or 40 years. And with 
Keystone I, we saw 14 spills in the first year; and with the 
Bison pipeline, a 60-foot section of it exploded. Now, 
TransCanada was recently put under a sweeping review by 
Canadian regulators for what one whistleblower, who was a--
quality control personnel, claims to be systematic violation of 
minimum safety standards in the building of pipelines.
    So, on one hand, we have questions of whether they use the 
best methods available and this--or will they--will the specs 
be the best available? And the second is will they build to 
spec? And both of these issues seem to be a problem with regard 
to TransCanada.
    And as a final note on these 57 conditions, as Brigham 
mentioned--as Mr. McCown mentioned, you know, many of the 
special conditions are now minimum safety standards set by the 
2012 pipeline safety law. Many of these special conditions are 
conditions that TransCanada was already required to abide by 
because of the--its Canadian sections. So while there are a 
large number of conditions, if you really look at which ones 
add any, you know, bar above what the current bar is, it is a 
much smaller list.
    Mr. Veasey. And I would like for Mr. McCown to respond 
specifically to what Mr. Swift said about the specs.
    Mr. McCown. Sure. Well, there is a lot of spin going on 
there, but the fact that the Canadian portion is built to 
whatever spec, it doesn't require the U.S. portion to be built 
to that same spec. Two, the--PHMSA oversees the construction 
and the placement and service through its own inspections and 
through third-party validators both that the company uses and 
PHMSA uses so it is built to spec.
    Secondly, you know, when I was at PHMSA, we moved the 
``spill criteria'' down to basically, I think, anything more 
than five gallons. So when people say it was a spill, there is 
a big difference between a little spill and a big spill, and 
these numbers get thrown around like they are candy and it is a 
little misleading, frankly.
    Mr. Veasey. Mr. Chairman, thank you.
    Chairman Stewart. Thank you. All right, thank you. It 
appears that that is the end of our questioning then. I would 
like to thank the witnesses one more time for your valuable 
testimony and for your time, your expertise. We appreciate it.
    To the Members of the Committee, there may be those who 
have additional questions for you, and if that is the case, we 
will ask you to respond to those in writing. The record will 
remain open for two weeks for additional comments and written 
questions from the Members.
    The witnesses are excused and this hearing is now 
adjourned.
    [Whereupon, at 11:37 a.m., the Subcommittees were 
adjourned.]


                               Appendix I

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                   Answers to Post-Hearing Questions


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