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

                    H.R. 3, THE NORTHERN ROUTE APPROVAL ACT

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

                                    HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON ENERGY AND POWER

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 10, 2013

                                   __________

                               Serial No. 113-26

          Printed for the use of the Committee on Energy and Commerce
                            energycommerce.house.gov

                                   ----------

                             U.S. GOVERNMENT PRINTING OFFICE

    82-179 PDF                       WASHINGTON : 2013
    -----------------------------------------------------------------------
      For sale by the Superintendent of Documents, U.S. Government Printing
       Office Internet: bookstore.gpo.gov Phone: toll free (800) 512-1800;
              DC area (202) 512-1800 Fax: (202) 512-214 Mail: Stop IDCC,
                          Washington, DC 20402-0001

                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman
    RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
    JOE BARTON, Texas                      Ranking Member
      Chairman Emeritus                  JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky                 Chairman Emeritus
    JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
    JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
    GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    TIM MURPHY, Pennsylvania             GENE GREEN, Texas
    MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
    MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
      Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
    PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
    STEVE SCALISE, Louisiana             JIM MATHESON, Utah
    ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
    CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
    GREGG HARPER, Mississippi            DORIS O. MATSUI, California
    LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin
    BILL CASSIDY, Louisiana                  Islands
    BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
    PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
    DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
    CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
    MIKE POMPEO, Kansas                  PETER WELCH, Vermont
    ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
    H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
    GUS M. BILIRAKIS, Florida
    BILL JOHNSON, Missouri
    BILLY LONG, Missouri
    RENEE L. ELLMERS, North Carolina
                        Subcommittee on Energy and Power

                             ED WHITFIELD, Kentucky
                                     Chairman
    STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
      Vice Chairman                        Ranking Member
    RALPH M. HALL, Texas                 JERRY McNERNEY, California
    JOHN SHIMKUS, Illinois               PAUL TONKO, New York
    JOSEPH R. PITTS, Pennsylvania        EDWARD J. MARKEY, Massachusetts
    LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
    MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
    ROBERT E. LATTA, Ohio                LOIS CAPPS, California
    BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
    PETE OLSON, Texas                    JOHN BARROW, Georgia
    DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
    CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin
    MIKE POMPEO, Kansas                      Islands
    ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
    H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan
    JOE BARTON, Texas                    HENRY A. WAXMAN, California (ex
    FRED UPTON, Michigan (ex officio)        officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Ed Whitfield, a Representative in Congress from the
      Commonwealth of Kentucky, opening statement....................     2
        Prepared statement...........................................     2
    Hon. Lee Terry, a Representative in Congress from the State of
      Nebraska, opening statement....................................     3
        Prepared statement...........................................     4
    Hon. Bobby L. Rush, a Representative in Congress from the State
      of Illinois, opening statement.................................     5
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     6
        Prepared statement...........................................     7
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................     8

                                   Witnesses

    Alexander Pourbaix, President, Energy and Oil Pipelines,
      Transcanada....................................................    10
        Prepared statement...........................................    14
    Anthony Swift, Attorney, Natural Resources Defense Council.......    29
        Prepared statement...........................................    31
    Keith Stelter, President, Delta Industrial Valves, Inc...........    37
        Prepared statement...........................................    39
    David Mallino, Jr., Legislative Director, Laborers International
      Union of North America.........................................    46
        Prepared statement...........................................    48
    Mark Jaccard, Professor and Research Director, Simon Fraser
      University.....................................................    54
        Prepared statement...........................................    56

                               Submitted Material

    Articles submitted by Mr. Stelter................................    97
    H.R. 3...........................................................   102

                    H.R. 3, THE NORTHERN ROUTE APPROVAL ACT

                                  ----------

                           WEDNESDAY, APRIL 10, 2013

                      House of Representatives,
                      Subcommittee on Energy and Power,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:05 a.m., in
    room 2322 of the Rayburn House Office Building, Hon. Ed
    Whitfield (chairman of the subcommittee) presiding.
        Members present: Representatives Whitfield, Scalise, Hall,
    Shimkus, Pitts, Terry, Burgess, Latta, Cassidy, Olson,
    McKinley, Gardner, Griffith, Barton, Upton (ex officio), Rush,
    McNerney, Tonko, Engel, Green, Capps, Barrow, Matsui,
    Christensen, Dingell, Waxman (ex officio), and Jackson Lee.
        Staff present: Nick Abraham, Legislative Clerk; Gary
    Andres, Staff Director; Charlotte Baker, Press Secretary; Mike
    Bloomquist, General Counsel; Sean Bonyun, Communications
    Director; Allison Busbee, Policy Coordinator, Energy & Power;
    Patrick Currier, Counsel, Energy & Power; Tom Hassenboehler,
    Chief Counsel, Energy & Power; Jason Knox, Counsel, Energy &
    Power; Nick Magallanes, Policy Coordinator, CMT; Brandon
    Mooney, Professional Staff Member; Mary Neumayr, Senior Energy
    Counsel; Andrew Powaleny, Deputy Press Secretary; Chris Sarley,
    Policy Coordinator, Environment & Economy; Phil Barnett,
    Democratic Staff Director; Greg Dotson, Democratic Staff
    Director, Energy and Environment; Caitlin Haberman, Democratic
    Policy Analyst; and Alexandra Teitz, Democratic Senior Counsel,
    Environment and Energy.
        Mr. Whitfield. I would like to call this hearing to order
    this morning, and I will be introducing our witnesses after the
    opening statements. Before we actually start the hearing
    formally, I wanted to make a little presentation as just a note
    of my sympathy to the Chairman of the full committee, Mr.
    Upton. I don't know if some of you may remember that Louisville
    beat Michigan in the NCAA championship game. And so I just hope
    that this would make him feel a bit better, this----
        Mr. Upton. You know, this is a true story. A couple people
    asked about where you were yesterday because you missed an
    important meeting on the chair, vice chair meeting. You missed
    the first of three votes on the House Floor. And I said have
    you talked to Whitfield? And he said I did. I gave him some
    food little bit earlier this afternoon but I haven't given him
    the antidote yet. But now I know what the antidote is, Maker's
    Mark.
        Mr. Whitfield. Yes, well, that particular product is made
    in my district----
        Mr. Upton. Yes.
        Mr. Whitfield. So we just wanted to help make you feel
    better.
        Mr. Upton. I think that that may have.

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

        Mr. Whitfield. But I want to thank all of you for being
    here today on this very important hearing. We are going to be
    discussing H.R. 3, the Northern Route Approval Act, which would
    remove the federal delays that continue to block the Keystone
    XL pipeline expansion project.
        Keystone pipeline has become a household name across the
    country. Unfortunately, this is far from the first hearing on
    the topic and far from the first bill designed to grant
    Keystone its long overdue federal approval. But this project is
    too important to give up on, and we again offer legislation to
    green-light it.
        Remember, TransCanada first made an application on this
    project in September 2008, almost 5, 6 years ago. Our first
    legislative attempt to approve Keystone was criticized by some
    as unnecessary on the grounds that the Obama Administration was
    already committed to make a final decision by the end of the
    year, and by that year, I mean 2011. Well, the bottom line is
    we still do not have a final decision.
        Next, we were told that a dispute over a portion of the
    route through Nebraska needed to be addressed. Early this year,
    the governor of Nebraska notified the President that the
    intrastate issues have been resolved. And the Secretary of
    State's office, through their Supplemental Environmental Impact
    Statement, have noted that this project would not have negative
    environmental impacts.
        So to be truthful, at this point we believe that the
    Administration has continued to delay this because we invited
    to testify today someone from the U.S. Department of State, the
    Bureau of Land Management, the U.S. Fish and Wildlife Service,
    the U.S. Army Corps of Engineers, and U.S. EPA, and no one
    would agree to come.
        But throughout all of the delays, two things have not
    changed. The Nation still faces unacceptable levels of
    unemployment. This project would provide employment. And we
    know, going into the summer, we are going to have higher
    gasoline prices. This would provide additional oil for our
    consumers.
        So to put it in a nutshell, any energy project today
    basically turns out to be a fight between environmentalists and
    people who want to expand and make available energy
    independence in America. We have a unique opportunity to be
    energy independent in America. And there are more safeguards
    put on this pipeline than any that has been proposed to be
    built ever.
        [The prepared statement of Mr. Whitfield follows:]

                    Prepared statement of Hon. Ed Whitfield

        Today, we will be discussing H.R. 3, the ``Northern Route
    Approval Act,'' which would remove the federal delays that
    continue to block the Keystone XL pipeline expansion project.
    The Keystone XL pipeline has become a household name across the
    country. Unfortunately, this is far from the first hearing on
    the topic and far from the first bill designed to grant
    Keystone XL its long-overdue federal approval. But this
    projectis too important to give up on, and we again offer
    legislation designed to green-light it.
        The timeline of this project is a bit ironic. Our first
    legislative attempt to approve Keystone XL was criticized by
    some as unnecessary on the grounds that the Obama
    administration was already committed to making a final decision
    by the end of the year--and by year I mean 2011. As we all
    know, that did not happen.
        Next, we were told that a dispute over a portion of the
    route through Nebraska needed to be addressed prior to any
    presidential decision. But early this year, the Governor of
    Nebraska notified the president that the intra-state issues
    have been resolved. And following the first Environmental
    Impact Statement released in August 2011, the latest
    Supplemental Environmental Impact Statement from the State
    Department that incorporates the Nebraska re-route, concludes
    that the project would have limited adverse environmental
    impacts.
        At this point, we are led to believe that the
    administration has come up with a new excuse for further
    delays. But unfortunately we are unlikely to learn about it
    today since none of the federal agencies we asked to testify
    accepted our invitation. For the record, we asked the following
    agencies to attend: The U.S. Department of State, the Bureau of
    Land Management, the U.S. Fish and Wildlife Service, the U.S.
    Army Corps of Engineers, and the U.S. Environmental Protection
    Agency. However, we are pleased that an excellent group of non-
    governmental experts are with us today, and we look forward to
    hearing theirperspectives.
        Throughout all of the delays two things have not changed--
    the nation still faces unacceptable levels of unemployment as
    well as high gasoline prices. Keystone XL would help address
    both. Whether you are an unemployed welder or a low-income mom
    struggling to afford each fill-up at the pump, the delays are
    particularly unfair to the least fortunate among us. Little
    wonder the American people overwhelmingly favor this project-
    Democrats, Republicans, and Independents. America is a nation
    of builders, and the American people want to see Keystone XL
    built.
        Yet, the approval process has dragged on for over four
    years and there is still no clear end in sight. And even if the
    president does eventually approve the pipeline, there is a real
    risk of litigation from environmental groups creating
    additional years of delays. The Northern Route Approval Act
    addresses all of these potential impediments and expeditiously
    approves the project.
        I might add that this year marks the 40th anniversary of
    the Trans-Alaska Pipeline Authorization Act of 1973. Much like
    Keystone XL, the Alaska pipeline was held up for several years
    by federal red tape. It took an act of Congress to remove the
    roadblocks and finally approve the project. 40 years later, we
    now know that the Alaska pipeline has been a tremendous
    success, delivering over 16 billion barrels of oil to the
    American market while creating jobs and amassing an excellent
    environmental and safety record.
        In retrospect, it seems ridiculous that the Alaska pipeline
    was nearly prevented from being built. And it is just as
    ridiculous that Keystone XL is taking this long. Once again, it
    is time for Congress to act.
        By passing H.R. 3, we will soon see the 20,000 direct jobs
    and 100,000 indirect jobs, and then the million barrels per day
    of much-needed oil flowing from Canada to refineries in the
    Midwest and Gulf Coast.
        I'd like to thank my friend Lee Terry of Nebraska for his
    leadership on this issue and for his sponsorship of H.R. 3. I
    hope that this bipartisan Keystone bill is the last one that
    will be necessary to start the project and that the next thing
    we hear about regarding the Keystone XL pipeline is the sound
    of thousands of workers building it.

                                    #  #  #

        Mr. Whitfield. So with that, at this moment, I would like
    to yield such time as he may consume, the gentleman from
    Nebraska who introduced H.R. 3, Lee Terry.

       OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEBRASKA

        Mr. Terry. Well, thank you, Mr. Chairman, for holding this
    hearing.
        We have been involved with this issue for now over 2 years
    in this committee. What is interesting is that not until
    Congress got involved did the Administration even begin to move
    the process at the State Department. And of course, with one of
    the bills that actually passed and was signed into law, we know
    that they stalled the process when the State Department
    recommended denial and the President in fact denied the permit
    in January of 2012.
        So here we are, April 2013, still mired in the process. My
    bill H.R. 3 puts an end to that. The bill declares that no
    presidential permit shall be required for the project and deems
    the final Environmental Impact Statement of August 26, 2011,
    along with the additional work of the Nebraska DEQ of January
    2013, as sufficient.
        The additional provisions of the bill will ensure the
    pipeline is built. History is a great educator. In 1973,
    Congress passed, and President Nixon signed into law, the
    transatlantic Alaska pipeline. Authorized to ensure that
    because of the ``extensive governmental studies already made of
    this project and the national interest in early delivery of
    North Slope oil to domestic markets, the trans-Alaska pipeline
    be constructed promptly without further administrative or
    judicial delay or impediment.'' Sound familiar? That is what we
    are saying now.
        In effect, Congress ended the paralysis by analysis and
    green-lighted the project. Keystone XL is the trans-Alaska
    pipeline of our day. We need to cement our relationship with
    our best trading partner and friend in Canada, and secure our
    national security interests and energy security interests by
    approving this pipeline. And I yield back.
        [The prepared statement of Mr. Terry follows:]

                      Prepared statement of Hon. Lee Terry

        Mr. Chairman -
        Thank you for holding this hearing today. As you know, I
    have been involved in this issue for close to two years. What
    is interesting is that not until Congress got involved did the
    Administration even begin to move the process at the State
    Department. Of course, we all know that they also stalled the
    process when they recommended to the President that he deny the
    pipeline application in January 2012. So hear we are--April
    2013, still mired in process.
        My bill, HR 3, puts an end to that.
        The bill declares that no presidential permit shall be
    required for the project and deems the Final EIS of August 26,
    2011 along with the additional work of the Nebraska DEQ of
    January 2013 sufficient. The additional provisions of the bill
    will ensure the pipeline gets built.
        History is a great educator. In 1973, Congress passed and
    President Nixon signed the Trans-Alaska Pipeline Authorization
    Act to ``to insure that because of the extensive governmental
    studies already made of this project and the national interest
    in early delivery of North Slope Oil to domestic markets, the
    trans-Alaska pipeline be constructed promptly without further
    administrative or judicial delay or impediment. In affect,
    Congress ended paralysis-by-analysis and green-lighted the
    project.
        Keystone XL is the Trans-Alaska pipeline of our day. We
    need to cement our relationship with our best trading partner.

        Mr. Whitfield. At this time I would like to recognize the
    gentleman from Illinois, Mr. Rush, for a 5-minute opening
    statement.

     OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Mr. Rush. Thank you, Mr. Chairman. And Mr. Chairman, I
    watched the game on Monday night and anecdotally, I thought of
    this hearing and I thought of my colleagues on the other side
    and I think that the one thing that Mr. Pitino showed that he
    could adjust his game according to the dictates of the game,
    and I see my Republican friends cannot adjust their game to the
    dictates of what is happening to the American people. And so
    where Mr. Pitino is going to the Hall of Fame, my Republicans
    on the other side there will be inducted into the hall of shame
    for their refusal to have hearings with scientists on climate
    change.
        Mr. Chairman, we can appreciate, I am sure those on the
    other side can appreciate the irony that we are here today for
    the umpteenth time debating a bill that will circumvent the
    ongoing State Department review process mandating any approval
    of the Keystone pipeline, and limit citizens' abilities to file
    lawsuits against the project. Shame. And while at the same
    time, Exxon and Mobil are still scrambling to clean up the
    Pegasus oil spill in Mayflower, Arkansas, which ruptured on
    March 29 while carrying crude oil from my home State of
    Illinois to the Gulf Coast intention. Shame.
        Currently, it is still unclear exactly why the Pegasus leak
    occurred. But yet my Republican colleagues are here trying to
    force through another major pipeline project before the
    American people even have the answers for what caused the most
    current oil spill. Shame.
        Mr. Chairman, let me state the obvious, that the timing of
    this hearing does very little to bolster the majority side's
    arguments for circumventing the review process and forcing
    through another major pipeline project. Shame. I must admit
    that this subcommittee would be much better served by holding
    hearings on issues that affect American families and consumers.
    From farmers on the plains and the Midwest States of America
    who have seen record drought and crop loss, to the business
    owners and homeowners on the Gulf and mid-Atlantic Coast who
    have seen their homes and their livelihoods engulfed in regular
    floods, to the firefighters who have been fighting severe
    wildfires in Colorado, Arizona, and California over this past
    year.
        Mr. Chairman, as you know, Ranking Member Waxman and I have
    sent to you two dozen letters to you and Chairman Upton, since
    May 2011 requesting that this subcommittee hold hearings into
    the science of climate change and the likely impacts of raising
    temperatures so that members of this body can better understand
    the nature of the threat that faces this Nation.
        In your March 14 response, you and Chairman Upton state
    that ``in the 112th Congress, the Committee frequently
    addressed climate change issues and that the Committee heard
    from more than 30 witnesses, including climate scientists, who
    testified concerning climate change-related matters.'' Mr.
    Chairman, however, your letter to me and Mr. Waxman failed to
    acknowledge that out of the dozens of hearings and 30-plus
    panelists that have testify before this subcommittee, the vast
    majority of those invited represented electric utilities, coal
    companies, oil refineries, and chemical manufacturers. Mr.
    Chairman, not one unbiased, unaffected scientist was ever
    invited to testify to any hearings.
        Today, we have scheduled only one hearing dedicated to
    learning about the actual science of climate change and that
    was held way back in 2011 and only after so many Democrats
    decided to exercise our right and demand a minority hearing
    under House Rule 11. Mr. Chairman, everybody in this room
    understands that the bill before us will never, ever see the
    light of day. So why are we here?
        With that, I yield back the balance of my time.
        Mr. Whitfield. Thank you, Mr. Rush.
        At this time I recognize the Chairman of the full
    committee, Mr. Upton, for a 5-minute opening statement.

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

        Mr. Upton. Well, thank you, Mr. Chairman. When my friend
    Mr. Rush started talking about change, I thought maybe it was
    the change that we went from 56 votes in the Senate to now 62
    votes in support of the Keystone bill as was illustrated with
    the vote on the budget as one of the amendments last month.
        Today, we take an important step in support of the Keystone
    XL pipeline. It is called jobs and affordable energy. And I
    want to remind folks that one of our goals is to develop a
    North American Energy Independent Plan so that we are not at
    the mercy of the Middle East or countries like Venezuela. In
    much of this country, gas prices have more than doubled since
    January '08, and this Administration has predicted that the
    average gas prices are going to be over $4.15 very soon. Our
    most vulnerable cannot afford these prices on top of an already
    weak economy that only created 98,000 jobs last month.
        The President said last year that he would do whatever it
    takes to create U.S. jobs. Well, here is a $7 billion
    construction project with more than 20,000 direct jobs and
    100,000 indirect jobs, and after more 4 years, what are we
    waiting for? As policymakers, our job is to ensure that America
    can take full advantage of our Nation's valuable resources by
    unlocking the power of our innovators and entrepreneurs.
        This committee has embarked on a path to explore this new
    era of North American energy abundance and rapid technological
    innovation. And the ability to successfully unlock these
    resources will lead to increased American prosperity and less
    energy imports from geopolitically unstable regions of the
    world.
        We should be measuring our energy policy proposals by
    whether they help contribute to increasing American energy
    self-sufficiency. Do they help to reduce volatility from
    foreign sources, keep costs low for consumers, help maintain or
    contribute to a diverse energy supply portfolio, and are
    protective of the environment? By those standards, I am happy
    to say that this bill, H.R. 3, passes the test.
        We have all heard the unemployment numbers associated with
    this project and the tens of thousands of direct and indirect
    jobs that will be created, but today, I am pleased to welcome
    somebody who will help put a face to those numbers, Keith
    Stelter of Delta Industrial Valves in Niles, Michigan. Delta's
    made-in-America valves and jobs that go with them, which I have
    witnessed, are an important part of Keystone XL energy. But
    these jobs don't happen unless the pipeline gets built.
        This pipeline will also include a number of state-of-the-
    art features that will make it the safest oil pipeline in
    existence. The pipeline would incorporate some 57 additional
    safety standards proposed by the Pipeline and Hazardous
    Materials Safety Administration and adhere to the strongest new
    pipeline safety standards that were signed into law by
    President Obama last year, the product of legislation that I
    helped developed along with my colleague John Dingell and
    supported by every member of this committee. Even the Obama
    Administration's State Department concluded in its EIS that the
    project poses minimal environmental risk. Not building Keystone
    elevates risk as tankers and trains have significantly higher
    spill rates than pipelines.
        The project has broad bipartisan support in the House and
    the Senate with nearly 100 cosponsors and enjoys broad public
    support as well among Republicans and Democrats. It is time for
    Congress to come together and help make this legislation a
    reality. This important bill takes the lessons that we learned
    from the trans-Alaskan pipeline when it was met with
    unnecessary roadblocks. Just as the TAP pipeline was a game
    changer in the '70s, the Keystone project will be a game
    changer in our pursuit of North American energy independence.
        I want to particularly thank Chairman Whitfield for his
    tireless efforts, Lee Terry and the other cosponsors on both
    sides of the aisle. And I would yield my balance of my time
    to--who was seeking time--Joe Barton.
        [The prepared statement of Mr. Upton follows:]

                     Prepared statement of Hon. Fred Upton

        Today, we take an important step in support of the Keystone
    XL pipeline, its jobs and affordable energy. I want to remind
    folks that one of our goals is to develop a North American
    energy independence plan to ensure we are not at the mercy of
    the Middle East or countries like Venezuela.
        Gas prices have more than doubled in many parts of the
    country since January 2009, with numerous communities enduring
    $4 a gallon today and prices are expected to only go up this
    summer. Our most vulnerable cannot afford these prices on top
    of an already weak economy that only created 88,000 jobs last
    month. The president last year declared that he'd do ``whatever
    it takes'' to create U.S. jobs. Well, here's a $7 billion
    construction project that will put thousands of Americans back
    to work. After more than four years--what are we waiting for?
        As policymakers, our job is to ensure America can take full
    advantage of our nation's valuable resources by unlocking the
    power of our innovators and entrepreneurs. The committee has
    embarked on a path to explore this new era of North American
    energy abundance and rapid technological innovation. The
    ability to successfully unlock these resources will lead to
    increased American prosperity and less energy imports from
    geopolitically unstable regions of the world.
        We should be measuring our energy policy proposals by
    whether they help contribute to increasing American energy
    self-sufficiency. Do they help to reduce volatility from
    foreign sources, keep costs low for consumers, help maintain or
    contribute to a diverse energy supply portfolio, and are
    protective of the environment? By those standards, I am happy
    to say H.R. 3 passes the test overwhelmingly.
        We have all heard the employment numbers associated with
    this project, the tens of thousands of direct and indirect jobs
    that will be created, but today I am pleased to welcome
    somebody who will help put a face to those numbers, Keith
    Stelter of Delta Industrial Valves in Niles, Michigan. Delta's
    made-in- America valves and the jobs that go with them are an
    important part of the Keystone XL story. But these jobs can't
    happen unless Keystone XL gets built.
        Keystone XL will also include a number of state-of-art
    features that will make it the safest oil pipeline in
    existence. The pipeline would incorporate 57 additional safety
    standards proposed by the Pipeline and Hazardous Materials
    Safety Administration and adhere to stronger new pipeline
    safety standards that were signed into law, the product of
    legislation I helped develop along with my colleague Rep. John
    Dingell. Even the Obama administration's State Department
    concluded in its Environmental Impact Statement (EIS) that the
    project poses minimal environmental risks. Not building
    Keystone elevates risks as tankers and trains have
    significantly higher spill rates than pipelines.
        The project has broad bipartisan support in the House and
    Senate and enjoys broad public support as well. It is time for
    Congress to come together and help make Keystone a reality by
    approving the Northern Route Approval Act. This important bill
    takes the lessons we learned when the Trans-Alaskan Pipeline
    was met with unnecessary roadblocks. Just as the Trans-Alaskan
    Pipeline was a game changer in the 1970s, the Keystone XL
    project will be a game changer in our pursuit of North American
    energy independence.
        I would like to thank my friend Ed Whitfield and his
    subcommittee's tireless efforts to break the administration's
    four-year long impasse and approve Keystone XL. I also would
    like to thank my friend Lee Terry for his sponsorship of this
    bipartisan and commonsense bill.

                                    #  #  #

        Mr. Barton. Which I support what the chairman just said and
    I want to yield to Mr. Barrow of Georgia.
        Mr. Barrow. Well, I thank you, Mr. Barton. I thank the
    Chairman for convening this hearing. I am proud to be an
    original cosponsor of this legislation. Every day we don't act
    on this project the United States becomes more dependent on
    countries that don't like us for the transportation energy that
    we absolutely need. And we are missing out on the opportunity
    to put thousands of people to work here in America.
        Critics believe that this project will only make us more
    dependent upon oil as our primary source of transportation
    energy in this country, but you can't be more dependent on
    something than we already are dependent upon oil. The only
    issue here is whether or not we are going to become dependent
    on countries that are friendly to us, to allies and commercial
    partners, or become more dependent on folks who are rivals of
    ours who do not like us.
        In that light I am proud to support this legislation. It is
    good for this country, it is great for the economy, and I look
    forward to moving this legislation forward. Thank you, sir. And
    I yield back the balance of my time.
        Mr. Whitfield. The gentleman's time has expired. At this
    time I recognize the gentleman from California, Mr. Waxman, for
    5 minutes.

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

        Mr. Waxman. Thank you, Mr. Chairman. Today, this
    subcommittee is holding a hearing on legislation to make
    climate change worse by giving preferential treatment to
    TransCanada's Keystone XL tar sands pipeline. I believe this
    would be a terrible mistake.
        Step outside today. The temperature is going to be around
    90. The normal high temperature for April 10th in the District
    of Columbia is 65, according to the National Oceanic and
    Atmospheric Administration. This isn't an isolated incident.
    Last year alone, the United States broke or tied 34,000 high
    temperature records.
        We know climate change is happening now, and the costs are
    beginning to mount. The Government Accountability Office added
    climate change to its high risk list, due to the huge financial
    exposure it poses for the United States. In 2011 and 2012, our
    country experienced weather and climate disasters from
    Hurricane Sandy, to droughts, to floods, to all sorts of
    problems that affected not only our farmers but the coastal
    areas all over this country. And if you add up the costs of
    these disasters, it came to around $188 billion. These
    disasters aren't over. We are going to expect far more
    disasters in the future.
        So faced with a climate change issue, this committee, you
    would expect, would be holding hearings and trying to work
    together on legislation. But that is not what we are doing. We
    won't even hold a hearing on the science of this issue. Look at
    the record of this committee. In the last Congress, the House
    Republicans voted to say that climate change was a hoax. They
    voted 53 times to block any action on climate change. They
    voted to defund research. They voted to block action by the EPA
    to control pollution, to prevent energy efficiency measures
    from going into effect, and to stop the Administration from
    encouraging developing countries to do their part to address
    this serious international global issue.
        Well, this is a problem. And we asked the Republicans to
    hold a hearing with the experts, because they have said over
    and over again the science is not clear. But they won't bring
    in the scientific experts to talk about the matter.
        They say we need a North American energy independence.
    Well, part of our energy independence is to be independent of
    using oil. And we could fuel our motor vehicles by electricity
    and hybrids and other sources, natural gas. Instead, we want to
    develop more oil.
        Well, we are going to need oil for the foreseeable future
    and I wish we didn't need as much of it, but why do we need the
    source of oil to be from the dirty tar sands of Canada? Just to
    get the tar sands out of the ground and ready to go through a
    pipeline, it goes through an enormous process that takes a lot
    of energy to make the oil available to go through the pipeline.
    And if we do not agree to import this tar sands oil, Canada is
    going to find a difficulty in what to do with it because they
    can't get it to the coast of Canada to take it to China. They
    want to take it through the United States in a pipeline, with
    all sorts of problems that pipelines offer, and then bring it
    to the Gulf of Mexico where it likely will be, taken on
    freighters to China to help them with their demand for oil.
        They say we are going to need more oil--that is right. But
    market economics actually tell us that the most competitive oil
    will be produced. Tar sands oil is expensive to extract, land-
    locked, and highly polluting. Producers are already facing
    lower prices for their product because of transportation
    constraints. Absent the Keystone XL pipeline, getting tar sands
    to market will cost more, and tar sands will be less
    competitive with the alternatives. Thos alternatives now
    include a lot more U.S. shale oil from the Bakken and other
    areas.
        So I think it would be a mistake to agree to the tar sands
    pipeline. But this decision is under consideration right now by
    the State Department under the Obama Administration. Rather
    than let them make a deliberate decision--and I hope they don't
    make a decision that I would disagree with--this committee
    would like to legislate a special earmark to help this
    particular project. No other project is going to get this
    special treatment. In this committee, the oil people get
    special treatment. Those who are worried about climate change
    don't even get a chance to be heard from.
        Our job is to do something about problems that are going to
    affect the future of our country, our children, and
    grandchildren. This committee is absent without leave on the
    issue of climate change.
        Mr. Whitfield. The gentleman's time has expired.
        At this time I would like to introduce the witnesses that
    we have with us today. First of all, I want to thank all of you
    for joining us on this important hearing as we explore ways for
    America to be more energy independent. First of all, we have
    with us today Mr. Alexander Pourbaix, who is the president of
    the Energy and Oil Pipeline at TransCanada. We have Mr. Keith
    Stelter, who is the president of Delta Industrial Valves. And I
    passed over Mr. Swift, but Mr. Swift is with us, Anthony Swift,
    who is the attorney for Natural Resources Defense Council. And
    then we have Mr. David Mallino, who is the legislative director
    for the Laborers International Union of North America. And then
    we have Dr. Mark Jaccard, who is professor and research
    director at Simon Fraser University.
        So thank all of you for being with us this morning, and I
    am going to recognize each one of you for a period of 5 minutes
    for your opening statement. And there is a little box on the
    table that will turn red when your time has expired so you can
    be aware of that, not that we won't let you finish, but Mr.
    Pourbaix, we will recognize you first for 5 minutes for your
    opening statement.

      STATEMENTS OF ALEXANDER POURBAIX, PRESIDENT, ENERGY AND OIL
       PIPELINES, TRANSCANADA; ANTHONY SWIFT, ATTORNEY, NATURAL
      RESOURCES DEFENSE COUNCIL; KEITH STELTER, PRESIDENT, DELTA
       INDUSTRIAL VALVES, INC.; DAVID MALLINO, JR., LEGISLATIVE
     DIRECTOR, LABORERS INTERNATIONAL UNION OF NORTH AMERICA; AND
      MARK JACCARD, PROFESSOR AND RESEARCH DIRECTOR, SIMON FRASER
                               UNIVERSITY

                    STATEMENT OF ALEXANDER POURBAIX

        Mr. Pourbaix. Thank you, Mr. Chairman.
        I would like to thank this subcommittee for the opportunity
    to testify once again today on behalf of TransCanada, the
    developer of the Keystone XL pipeline project, and the operator
    of the Keystone pipeline system.
        We are very excited to be developing the $14 billion
    Keystone pipeline system, which will link securing growing
    supplies of U.S. and Canadian crude oil with the largest
    refining markets in the United States, thereby significantly
    improving North American energy security.
        The first two phases of the Keystone pipeline system
    already are in service with the capacity to deliver almost
    600,000 barrels a day of crude oil to U.S. refineries every
    day. To date, the existing Keystone system has safely delivered
    over 400 million barrels of oil, meeting a vital market need.
        In 2008, TransCanada filed its presidential permit
    application with the State Department for the proposed 830,000
    barrel-a-day Keystone XL pipeline. The State Department
    conducted a comprehensive environmental review over the next 3
    plus years, concluding with a final EIS in August 2011. The
    final EIS concluded that, first, the project would have no
    significant impacts to most resources along the proposed
    project corridor; second, the project would be safer than any
    other typically constructed domestic oil pipeline system; and
    third, construction and operation of the pipeline would not
    constitute a substantive contribution to U.S. or global carbon
    emissions.
        Before completing its national interest review however, the
    Administration announced last January that it was denying
    TransCanada's application because it could not complete its
    review by the deadline imposed in the 2011 payroll tax
    legislation. Last May, TransCanada re-filed its presidential
    permit application to allow construction of the northern leg of
    the XL pipeline from the U.S.-Canada border to Steele City,
    Nebraska. The application maintained the previously studied and
    approved project route through Montana and South Dakota.
        In Nebraska, we committed to reroute the pipeline to move
    it out of the Sandhills region. Following completion of the
    public review process established by the Nebraska Legislature
    in January of this year, Governor Heineman approved the new
    route, which is incorporated in our pending State Department
    application. In June, the State Department announced its intent
    to prepare a Supplemental Environmental Impact Statement for
    KXL. The State Department is now conducting a public comment
    period on the March 1, 2013, draft SEIS which continues through
    the 22nd of this month.
        As we understand the State Department review process, a
    number of further procedural steps are expected to follow upon
    completion of the current public comment period. It appears now
    that a decision on the pending presidential permit application
    could be many more months down the road. I would like to
    express TransCanada's appreciation for the sentiments behind
    the recently proposed Northern Route Approval Act.
        This morning, I would just like to very briefly highlight
    the need for, and the benefits of, the Keystone XL pipeline.
    The project is fundamentally about meeting the needs of U.S.
    crude oil refiners, enhance U.S. consumers for a reliable and
    sustainable source of crude oil to supplement or replace
    declining foreign supplies without turning to greater reliance
    on Middle East sources. The primary purpose of the Keystone XL
    project is to transport heavy crude oil from Western Canada for
    delivery to Cushing, Oklahoma, and Gulf Coast refineries.
        In addition, the proposed KXL project would provide needed
    transportation capacity for Bakken and midcontinent crude oils.
    There can be little dispute that these purposes enhance U.S.
    energy security at a critical juncture. The need for the
    project is clearly demonstrated by the existing firm long-term
    contracts for more than 500,000 barrels a day of western
    Canadian crude oil to be transported through the Keystone XL
    pipeline in the Gulf Coast project to Texas refineries.
        Keystone has also made available up to 100,000 barrels a
    day of capacity on the proposed project for domestic U.S. crude
    oil produced in the Bakken area of Montana and North Dakota,
    and has signed long-term contracts to transport 65,000 barrels
    per day of Bakken production.
        I should also point out that by transporting crude oil from
    growing, secure North American basins in Canada, Montana, North
    Dakota, Oklahoma, and West Texas to the U.S. refining market,
    Keystone could serve as part of the solution to higher U.S.
    consumer energy prices by increasing crude oil supply to the
    United States and improving the perception of future U.S.
    supply availability.
        Construction and operation of the Keystone XL project would
    provide significant economic benefits with no government
    subsidy or expenditures. The project is privately funded and
    financed and is shovel-ready, waiting only for the pending
    presidential permit decision.
        The March 2013 draft SEIS recognizes a wide range of
    socioeconomic benefits that would be derived for construction
    and operation of the project, including the following:
    construction of the project would contribute approximately 3.4
    billion to U.S. GDP. Construction contracts, materials, and
    support purchased in the U.S. would total approximately 3.1
    billion. Approximately 10,000 construction workers engaged for
    4- to 8-month seasonal construction periods would be required
    to complete the proposed project. A total of 42,100 jobs
    throughout the United States would be supported by construction
    of the proposed projects. And total earnings of workers
    supported by the proposed project would be approximately 2.05
    billion.
        The Keystone pipeline system is subject to comprehensive
    pipeline safety regulation under the jurisdiction of the U.S.
    Department of Transportation Pipeline and Hazardous Materials
    Safety Administration. To protect the public and environmental
    resources, Keystone is required to construct, operate,
    maintain, inspect, and monitor the pipeline in compliance with
    the PHMSA regulations, as well as relevant codes and standards.
        Above and beyond the PHMSA regulations, Keystone has agreed
    to comply with 57 additional special conditions developed by
    PHMSA for the XL project. Taking these 57 special conditions
    into account, the draft SEIS specifically recognizes that these
    measures provide for an additional safety factor on the
    proposed project that exceeds those typically applied for in
    domestic oil pipeline projects.
        Finally, I wanted to reiterate that the XL project has
    undergone a thorough and comprehensive environmental review
    over the last 4 plus years. After all of this review, the March
    2013 draft Supplemental EIS yet again concluded that ``the
    analyses of potential impacts associated with construction and
    normal operation of the proposed project suggest that there
    would be no significant impacts to most resources along the
    proposed project route.''
        With respect to carbon emissions, a draft SEIS found that
    it is unlikely the proposed project would have a substantial
    impact on the rate of western Canadian oil sand development and
    that if the project were approved, there be no substantial
    change in global GHG emissions. Thanks for the time.
        [The prepared statement of Mr. Pourbaix follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Whitfield. Yes. Thank you, Mr. Pourbaix. And the lights
    evidently are not working so I let him go over quite a bit, so
    you all take your time.
        Mr. Swift, you are recognized for 5 minutes.

                       STATEMENT OF ANTHONY SWIFT

        Mr. Swift. Thank you. Chairman Whitfield, Ranking Member
    Rush, and members of the committee, thank you for today's
    opportunity to testify on Congressman Terry's proposal.
        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.
        The Keystone XL tar sands pipeline is a lynchpin for the
    expansion of tar sands production in Canada. On this point,
    market analysts, the tar sands industry, and the environmental
    community agree. Industries plan to triple tar sands production
    by 2030, and the significant environmental impacts of that plan
    simply cannot take place without the approval of Keystone XL.
    Alternative proposals will not allow the same level of tar
    sands expansion, and the associated climate emissions is a
    Keystone XL pipeline.
        Pipelines to the West and East Coast are stalled by
    entrenched public and First Nations opposition. Several
    proposals would require the use of aging pipelines to move tar
    sands to communities in sensitive watersheds. After the rupture
    of the Pegasus pipeline in the Arkansas community of Mayflower,
    the risks of these projects is becoming more apparent to the
    public.
        In its draft environmental review of Keystone XL, while the
    State Department acknowledged that tar sands is significantly
    more carbon-intensive over its lifecycle than conventional
    crude, the agency mistakenly suggested that rail could provide
    an economic alternative to Keystone XL. We should remember the
    State Department made a similar prediction in 2011. We now know
    the agency's conclusions and underlying assumptions were wrong.
    Two years later, they continue to be wrong. A cornerstone of
    State's conclusion that rail is a feasible alternative to
    Keystone XL is the example of rail use by oil producers in
    North Dakota. From 2009 to 2013, North Dakota producers
    increased their use of rail to move light crude from a few
    thousand barrels a day to over half-a-million barrels per day.
    Now, over \2/3\ of North Dakota's total production moves by
    rail.
        As they turn to rail, North Dakota's domestic light oil
    producers have even rejected major pipeline proposals. The
    dramatic increase of crude by rail in the United States and
    southern Canada is almost entirely light crude moving from the
    Bakken oil fields. It is not northern Alberta's tar sands. Data
    from the U.S. Energy Information Administration shows that no
    more than 21,000 barrels per day, less than 1 percent of
    Canadian tar sands and conventional heavy crude, moved by rail
    to U.S. refineries and markets in the Gulf Coast in December of
    2012.
        There are two major reasons why tar sands producers haven't
    turned to rail to move their product to market. First, it is
    significantly more expensive for them to do so; and second,
    they have significantly tighter profit margins than Bakken
    light crude producers. Tar sands diluted bitumen is
    significantly more expensive to move by rail than Bakken light
    crude. After all, northern Alberta is about 1,000 miles farther
    from refineries than North Dakota.
        Moreover, moving heavy tar sands by rail has additional
    complications. Producers can't fit as much heavy crude on a
    rail car. Specialized real cars are required. Specialized on-
    loading and offloading facilities are required. And by and
    large, they are not being built to handle tar sands. All of
    these factors increase the cost of moving a barrel of tar sands
    to the Gulf Coast refineries by rail. That is why the rate
    producers are actually paying to move tar sands to the Gulf by
    rail is twice that of what State estimated. New tar sands
    projects have very tight margins. Some have breakeven costs
    above $100 a barrel. Many of these projects won't move forward
    with substantially higher transportation costs.
        In addition to its impacts on climate, Keystone XL would
    endanger critical jobs on ranches and farms in the Plains
    States in order to transport tar sands to the Gulf Coast where
    can be refined and then exported internationally. I want to
    make the point that the State Department has indicated Keystone
    XL would have no impact on gasoline prices, and in fact, it
    will increase oil prices in the Midwest by significant margins.
        In exchange for 35 permanent jobs, Keystone XL would pose a
    permanent risk to American communities, sensitive water
    resources, and the agricultural industry. We need to protect
    those jobs, not put them at risk for the type of tar sands
    blowout that has poisoned nearly 40 miles of the Kalamazoo
    River in Michigan or the recent spill in Arkansas which sent up
    to 420,000 gallons of tar sands oil flowing through the
    community of Mayflower.
        The substantial risks of the Keystone XL tar sands pipeline
    outweigh its marginal benefits. Keystone XL is a lynchpin for
    tar sands expansion and the substantial climate pollution
    associated with it. The pipeline would threaten American
    communities, lands, and water resources in order to transport
    tar sands to the Gulf where it can be refined and exported
    internationally.
        Simply stated, Keystone XL is not in the Nation's interest
    and should be rejected on that basis. NRDC thanks you for the
    opportunity to present its views and I would be pleased to
    answer any and all of your questions.
        [The prepared statement of Mr. Swift follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Whitfield. Thank you, Mr. Swift.
        Mr. Stelter, your recognized for 5 minutes.

                       STATEMENT OF KEITH STELTER

        Mr. Stelter. Thank you. I have never done anything like
    this before. I am not an expert at anything, just ask my wife.
        I think Mr. Upton probably invited me here because, as we
    have gotten to know each other, I am in a kind of unique
    position. We are a manufacturer of American-made valves that
    are used in oil production. I also am a person who holds
    patents on valve design so I know the technology. I also
    probably spent more time in Alberta, Canada, at the oil sands
    than possibly everybody else in this room combined, other than
    my associate from that region.
        I guess I would just say that, first and foremost, the
    Canadians are completely perplexed and stymied why--I am just
    talking about the general public and the executives of the
    companies and such, why America is just thumbing their nose at
    this ability to have this crude. One of the guys said it would
    be like if you owned a catering company and your best friend
    was throwing a wedding and he chose an enemy of both of you to
    do the catering for your daughter's wedding instead of your
    friend.
        The need for crude oil is not going to go away anytime
    soon. I do agree that it is in everybody's best interest to get
    away from it for many reasons, but that is technology that
    needs to be developed and brought forward.
        I can tell you as a member of the private sector, when
    things are in demand and when the technology is there, we will
    grab a hold of it and run with it. If other sources of power
    were available and were practical and consumers wanted them, we
    would be all over it.
        My company has benefited as a manufacturer. We started out
    back in the oil sands back in the early '90s when it was really
    just a handful of crazy guys that had gone up there and had
    this idea of getting the oil out of this frozen tundra. Now
    they have developed it. If you have looked at my testimony,
    they are the world-low producer cost-per-barrel if not one of
    the. I am not exactly sure on a month-by-month basis.
        If the XL pipeline doesn't go through, the oil sands
    production companies are not going to close up and go away.
    China wants that oil. Like I say, I am up there constantly.
    PetroChina is making investments, they are up there lobbying,
    they are buying out entire oil production facilities, and they
    are also buying portions of others. They will get pipelines put
    in to the West Coast; there is no doubt about that. I mean it
    is a done deal if we don't do the XL pipeline.
        Knowing manufacturing, I can tell you that companies like
    mine, with the help of Mr. Upton and other people in the
    government, are taking steps to make our plants more efficient,
    whether it is the lighting we use. We have gone away from toxic
    chemicals with our cooling for our machining. I can tell you
    that our counterparts in Asia and China in particular are not
    doing those things.
        So I guess to call a lesser of two evils, if somebody is
    going to get their hands on that crude oil and use it, which
    they are, I think it is in our best interest that companies in
    America who are trying to do the right thing, are trying to be
    more efficient, are able to get a hold of that.
        I will comment also that in the time I spent up there and
    in just the last few years, a majority of the products that we
    sell up in the oil sands region are going into the
    environmental portion as opposed to the direct production of
    oil sands oil crude. Their recent thing is tailings
    reclamation. Back in the '70s, '80s, and such up until the
    early 2000s, basically the oil sands companies, tar sands
    companies were just pumping their tailings out in these big
    ponds and kind of just leaving them. They would put some air
    cannons out there to keep birds from landing on them or animals
    going through them.
        But the Canadian Government has gotten very strict and now
    they are the fast track thing called the tailings reclamation.
    And because of that, they are reclaiming these large oil
    tailings reclamation ponds and they have gotten to the point
    where they have to--before they go and extract from an area,
    they take pictures of it and they literally--I have seen this--
    they have to go and replant, replace dead trees in that area,
    and when you go by there now, you would never know that
    anything ever took place there as far as oil production.
        The technology is sound for the pipeline. As I mentioned, I
    hold some patents in valve design, own a company that
    manufactures them. Like anything else, the problem is in the
    maintenance. If you buy a tire, if the technology of that tire
    is sound, if you put it on your car and run it for 100,000
    miles and don't rotate it or anything, it is going to blow out.
    And the same is true of a pipeline. You know, it is the problem
    with every--I can't say every, but every one I have ever seen--
    pipeline problem has been a maintenance issue where they
    weren't maintained properly or something has caused the earth
    to shift and cracked the pipeline. But the technology is sound.
        [The prepared statement of Mr. Stelter follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Whitfield. Well, thank you very much, Mr. Stelter.
        And Mr. Mallino, you are recognized for 5 minutes.

                    STATEMENT OF DAVID MALLINO, JR.

        Mr. Mallino. Thank you, Mr. Chairman.
        On behalf of the 500,000 members of the Laborers
    International Union of North America, I would like to thank
    you, Ranking Member Rush, and all the members of the
    subcommittee for allowing me to testify today on the union's
    behalf.
        My union strongly supports the construction of the Keystone
    XL pipeline. The benefits of this privately funded
    infrastructure project are too great to allow it to be derailed
    by environmental extremism. The Keystone XL will create
    millions of hours of work with good wages and benefits for the
    union construction workers who build this pipeline.
        For many members of LIUNA, this project is not just a
    pipeline; it is in fact a lifeline. The construction sector was
    hit particularly hard by the recession with unemployment in the
    industry reaching over 27 percent in 2010. Joblessness in
    construction remains far higher than any industry or other
    sector of the economy. It is nearly double the national
    unemployment rate with over 1 million construction workers
    currently sidelined. Too many Americans are out of work and the
    Keystone XL pipeline will change that dire situation for
    thousands of them.
        TransCanada has executed a project labor agreement with
    LIUNA and four other construction unions, guaranteeing that
    this pipeline will be built with the best-trained, highest-
    skilled construction workers in the world. Regardless of the
    characterizations by the project's opponents, it is
    indisputable that jobs will be created and supported by the
    building of this pipeline. These jobs will have a ripple effect
    of consumer spending that will have a positive impact on the
    States and communities where the pipeline is going to be
    located.
        Unfortunately, some of the pipeline's opponents have
    resorted to attacking the nature of the work that our members
    have chosen as careers. They have imposed a value judgment that
    holds these construction jobs to be of a lesser value because
    by its very nature a construction project has a completion
    date, and therefore, that individual job will come to an end at
    some point. They call these jobs temporary in order to diminish
    their importance and they recruit others to join in a chorus of
    negativity in the mistaken belief that these jobs have no real
    value to society. To attack the project, they have called these
    jobs dirty and dangerous.
        The fact of the matter is construction is in fact a
    dangerous occupation, and when not perform by trained workers,
    it can lead to unacceptable levels of environmental harm.
    However, when construction is performed by well-trained union
    workers, it is less dangerous and can be conducted in a more
    environmentally sensitive manner.
        Construction of this pipeline will also produce needed
    government revenue at the federal, state, and local levels.
    These new resources can help our state and local governments
    protect their communities from harmful budget cuts that have
    led to layoffs and elimination of much-needed services.
        The Keystone XL pipeline will be the safest pipeline in the
    world, as you have heard. The 57 special conditions that have
    been mentioned before have a degree of safety higher than any
    typically constructed domestic oil pipeline under the current
    regulations.
        Additionally, in order to address environmental concerns
    about the Nebraska Sandhills and the Ogallala Aquifer,
    TransCanada rerouted 195 miles of the pipeline. The Nebraska
    governor, Dave Heineman, once an opponent of the pipeline
    because of environmental concerns, recently sent a letter to
    the President approving TransCanada's new 195-mile reroute.
        If the Keystone XL pipeline is not built, Canadian
    producers will seek alternatives to the American markets. This
    oil will not remain in the ground. Producers will find ways to
    move it to market. Denial of a presidential permit of the
    Keystone XL increases the likelihood that American markets will
    miss the opportunity to secure long-term commitments for this
    North American resource.
        The Laborers support H.R. 3, the North American Route
    Approval Act, a bipartisan bill which will clear away the
    remaining roadblocks preventing construction of the pipeline.
    As mentioned, similar legislation was necessary to allow
    construction of the trans-Alaska pipeline which has been a
    great boon for our members in particular, as well as other
    unions that worked on the project.
        If opponents of American jobs succeed in preventing the
    Keystone XL pipeline from being built, the socioeconomic
    benefits of this project will not be realized. No local, state,
    or federal revenues will be generated by the construction and
    operation of the pipeline, and there will be no additional
    income to property owners and businesses along the pipeline
    route. And critically important to LIUNA and our members, the
    jobs that will be created by this massive private investment
    will be lost.
        I appreciate the opportunity to testify and I will be happy
    to try to answer any questions you may have.
        [The prepared statement of Mr. Mallino follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Whitfield. Thank you, Mr. Mallino.
        Dr. Jaccard, you are recognized for 5 minutes.

                       STATEMENT OF MARK JACCARD

        Mr. Jaccard. Thank you, Mr. Chairman.
        The State Department assumes that denying Keystone XL will
    not slow development of the Alberta oil sands, yet a great deal
    of evidence contradicts this assumption. And ironically, much
    of the evidence comes not from environmentalists but from
    industry analysts, Canadian politicians, and even the oil sands
    producers themselves. Quite simply, plans to triple oil sands
    production over the next two decades cannot be realized without
    increased pipeline capacity. In addition to Keystone XL, two
    key proposals to ship Alberta bitumen across the province of
    British Columbia are the northern gateway of Enbridge and the
    Trans Mountain expansion of Kinder Morgan.
        I happen to live in Vancouver, British Columbia, where I am
    a professor of energy economics, former chair of the Utilities
    Commission, and a frequent advisor on energy and climate
    policy. Industry analysts now rate the probability of these two
    projects at below 50 percent and with good reason. Aboriginal
    bands along the overland routes and on the coast where oil
    tanker traffic would increase dramatically are strongly
    opposed. And because these native bands have never signed
    treaties to extinguish their land title, they have a powerful
    legal position in the Canadian courts.
        Just as important, there is strong public opposition in
    B.C. to both projects. The city of Vancouver opposes the use of
    its port to export oil. And the provincial opposition party
    vows to stop northern gateway if it forms the next government.
    It has a 20-point lead in the opinion polls and the election is
    next month.
        So if we ask if denial of Keystone XL will slow oil sands
    development and the carbon pollution it causes, the answer is a
    resounding yes. Without these three projects, oil sands
    expansion will be slowed as producers scramble to develop less
    effective, more costly alternatives.
        But this is not the most important question to ask when
    considering a project like Keystone XL. We must have the
    honesty and political courage to ask a more important question.
    We must ask what we must be doing today to slow the global rise
    of carbon pollution and ask what role the decision about
    Keystone XL can play in this difficult but hugely important
    challenge. It is not an easy question. Oil industry executives
    don't want to talk about it. They prefer to discuss jobs and
    wealth from extracting more fossil fuels from the Earth's
    crust. But rising carbon pollution in our atmosphere is a
    classic tragedy of the commons. Since each source of carbon
    pollution is only some percentage of the whole, each polluter
    argues that it may as well continue, even expand.
        China says it should burn coal as long as North America
    still burns fossil fuels. Canada says it should develop oil
    sands as long as China still burns coal. Next, with this logic,
    Venezuela will argue it should develop all of its enormous
    deposits of heavy oil. Given the incredible amount of fossil
    fuels in the Earth's crust, scientists have been quite clear
    that this game's end state is a dramatically hotter, more
    unstable planet than the one we have based our economies on. A
    planet we are hurtling toward with great momentum.
        And if we are honest about this tragedy of the commons
    conundrum, U.S. political leaders know that domestic efforts to
    reduce carbon pollution are meaningless if they are not taken
    in concert with serious efforts by others. Yet Canada and the
    province of Alberta in particular are not doing their share.
    And this is very unpopular in a large percentage of the
    Canadian population.
        In 2009, President Obama stressed the urgency of U.S.
    action as part of a global effort, and on that basis, set a
    target for the U.S. to reduce its emissions by 2020 to 17
    percent below their 2005 level. Independent sources now confirm
    the U.S. is on track to achieve this target. In solidarity, the
    Canadian Government promised to achieve the same target for
    2020. But last year, the Canadian auditor general reported that
    emissions in 2020 are likely to be 7 percent higher rather than
    17 percent lower. And the main reason, not surprisingly, is the
    projected oil sands growth.
        The Keystone XL decision provides the ideal opportunity for
    the U.S. Government to signal to its allies, trading partners,
    and the rest the world that the climate tragedy of the commons
    cannot be addressed if we are not pulling together. It cannot
    be addressed if we accelerate the extraction of fossil fuels
    from the Earth's crust. It cannot be addressed if countries
    like Canada are free-riding on the efforts of countries like
    the U.S.
        In denying Keystone XL, the U.S. Government would simply
    explained to Canada that it is extremely concerned with rising
    carbon pollution and with the fact that it is incurring costs
    to keep its pollution reduction promises and expects other
    countries to meet their promises, too. It would also explain
    that it will next be talking to other countries like China
    about free-riding on U.S. efforts.
        In solving this extremely difficult global climate tragedy
    of the commons, we should expect nothing less from the world's
    most powerful Nation.
        Thank you. I will be pleased to answer questions.
        [The prepared statement of Mr. Jaccard follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Whitfield. Thank you, Dr. Jaccard. And thank all of you
    for your testimony.
        At this time, the members of the panel will be asking
    questions, and I will recognize myself for 5 minutes.
        I think Dr. Jaccard did make a good point and that is, as
    we know in America, for example, our CO2 emissions
    are the lowest they have been in 20 years, and yet we know
    China and some other countries' CO2 emissions
    continue to increase dramatically. And it is difficult to talk
    about any energy project today anywhere without a discussion
    about the impact on climate change.
        And many of you may have read the five-page article in the
    most recent issue of the Economist in which it talks about
    climate change scientists are puzzled that the temperature rise
    has been flat for the last 10 years even though carbon dioxide
    emissions are going up significantly in most other countries
    around the world except in the U.S. and maybe some in Europe.
        So there are some interesting developments coming right now
    on this issue, and one of the problems we have in the U.S., we
    feel like that we don't have to take a backseat to anyone on
    the good job that we have done with the environment. But the
    question is China talks a good game but they are burning more
    fossil fuels now than ever, and here in the U.S., we are the
    only country in the world that technically you cannot even
    build a new coal-fired plant in this country if the greenhouse
    gas regulations are finalized, which they will be soon, and so
    we are sort of shooting ourselves in the foot.
        But this is about Keystone pipeline and our ability to be
    energy independent. So Dr. Pourbaix, one question I would like
    to ask you--we had a hearing on this a year or so ago and one
    of the members raised an interesting point and was talking
    about that they estimated 800,000 tons of steel would be used
    in this project. And this member had indicated that he was
    upset because he understood that TransCanada was not going to
    be buying U.S. steel, not buying steel produced in the U.S. He
    specifically pointed out that they would be coming from an
    Indian multinational company called Welspun Corporation, and
    also a Russian company. And this member said that he would feel
    a little bit better if just one small amount of the steel for
    this project would be coming from America. Would you address
    that issue? Would there be steel coming from America if this
    project is approved?
        Mr. Pourbaix. Sure, I would be happy to, Chairman.
        In order to be in a position to build this pipeline, we had
    to start the procurement of pipe for the pipeline years ago,
    and we have procured approximately 75 percent of the pipe for
    this project from North American suppliers mixed between a
    Canadian supplier in Saskatchewan and a supplier in Arkansas.
    And we would have procured more, but at the time, those were
    the two companies that had the ability to produce steel with
    the very sophisticated specifications we require. Since that
    time, we have announced a number of expansions to the Keystone
    XL project and 100 percent of the pipe for those projects,
    40,000 tons, has been sourced directly from American suppliers.
        Mr. Whitfield. And you all have already purchased the
    steel?
        Mr. Pourbaix. Yes.
        Mr. Whitfield. And could you share with us the amount of
    money that that cost roughly?
        Mr. Pourbaix. It would be in the ballpark of somewhere
    between probably 1 \1/2\ and $2 billion.
        Mr. Whitfield. Two billion?
        Mr. Pourbaix. Yes.
        Mr. Whitfield. And one thing about Keystone, there is not
    any government money involved in the Keystone project, is
    there?
        Mr. Pourbaix. No, not at all.
        Mr. Whitfield. It is all private dollars?
        Mr. Pourbaix. Yes.
        Mr. Whitfield. OK. Now Mr. Mallino, you had mentioned in
    your testimony that the labor unions had signed a project labor
    agreement with TransCanada. That is the case, right?
        Mr. Mallino. It is. And also, can we get a couple more heat
    lamps on me? If my mom is watching and if I am not truly
    crimson she will be disappointed if I can't even out the red in
    my face.
        TransCanada has been a great partner in this and the
    project labor agreement was executed probably close to 2 years
    ago and it will guarantee that the construction on the U.S.
    portion of this pipeline will be built 100 percent union. And
    there are five unions totally involved.
        Mr. Whitfield. How many jobs would you anticipate that
    would bring?
        Mr. Mallino. Well, this has been an issue and I don't take
    up too much of the time. In the construction sector, we talk
    about hours because depending upon how many people you have on
    a job, you can get it done much more quickly.
        Mr. Whitfield. Right.
        Mr. Mallino. It will be millions of hours for the laborers.
        Mr. Whitfield. OK.
        Mr. Mallino. Right now, we have done about a half-a-million
    on the Southern Gateway project just in the last 6 months of
    last year. There is probably an equal number down there on that
    project.
        Mr. Whitfield. OK.
        Mr. Mallino. Keystone XL is a multiple of that.
        Mr. Whitfield. OK, thanks. Mr. Rush, you are recognized for
    5 minutes.
        Mr. Rush. Thank you, Mr. Chairman.
        Dr. Jaccard, I am in kind of a difficult position. Maybe
    you can help me out. It seems as though the environmental
    community of which I have had a lot of respect for and a lot of
    collaboration with over the years, it seems to me that they are
    really downplaying the impact in importance of jobs as it
    relates to this particular issue. And I represent a district
    that is struggling economically, multigenerational
    unemployment, and it seems as though there is no concern or any
    contemplation of the problems that my constituency and other
    constituencies across the country have in terms of economic
    plight. Where do the environmentalists place as a priority on
    this particular project the creation of jobs?
        Mr. Jaccard. Thank you. I don't represent environmental
    community, but I am an economist who studies how economies
    respond to different kinds of policies. Ten years ago, I wrote
    a book called ``Sustainable Fossil Fuels.'' I wrote that book
    because I have nothing against any fossil fuel. I actually
    believe that fossil fuels are a very valuable resource for
    humanity. I just refuse to close my eyes to the impacts of
    carbon pollution if we burn those fossil fuels and don't
    capture the carbon.
        Mr. Rush. Thank you. Thank you.
        Mr. Jaccard. And so therefore----
        Mr. Rush. Thank you. I----
        Mr. Jaccard. I looked at the jobs. There are a lot of jobs
    created in capturing carbon, burying it, in making alternatives
    to fossil fuels.
        Mr. Rush. Thank you. Mr. Swift, will you answer that, my
    question?
        Mr. Swift. Yes. Well, in the United States, the
    environmental jobs, green jobs, have been one of the fastest-
    growing sectors in the U.S. economy. It was one of the only
    sectors that grew during the recession. If you look at the
    dollar investment in clean energy generates about three to four
    times as many jobs as a dollar invested in the fossil fuel
    industry. And these are the sort of jobs that tend to be jobs
    that stay with us, that are manufacturing jobs, jobs that allow
    us to export the solutions to the energy dependence or oil
    dependence issue that United States----
        Mr. Rush. Thank you, very much. Thank you.
        Mr. Mallino, how many of the jobs that is now in the
    southern sector of this project that is currently operating,
    what is the percentage of minority participation in terms of
    contracts and also jobs?
        Mr. Mallino. You know, we have answered this question for
    you in the past, Congressman. We responded for the record last
    time we don't track those numbers, but our union reflects the
    communities where we are located. So in areas where there is
    high diversity, our union is very diverse. In areas of low
    diversity, we are not as diverse. We reflect the communities
    where our locals are located, but we don't track that number.
        Mr. Rush. All right. Mr. Pourbaix, do you track those
    numbers?
        Mr. Pourbaix. We do try to track those numbers, and my
    experience is that on the southern leg of the Gulf Coast it
    does depend by community, but I had asked for this information
    a day or so ago and I saw ranges. Depending on what community,
    it was anywhere between 12 percent minority participation in
    the workforce and 55 percent minority participation in the
    workforce. So we do have significant minority participation in
    the southern leg.
        Mr. Rush. All right. Mr. Chairman, I yield back.
        Mr. Whitfield. Thank you, Mr. Rush. At this time I
    recognize the gentleman from Texas, Mr. Barton, for 5 minutes.
        Mr. Barton. Thank you. Thank you, Mr. Chairman.
        I don't think it is a secret that I am a proponent and
    supporter of the Keystone pipeline, so it is somewhat redundant
    for me to ask too many questions. So I would point out, though,
    that people like me that support hydrocarbon development don't
    deny that the climate is changing. I think you can have an
    honest difference of opinion on what is causing that change
    without automatically being either all in that it is all
    because of mankind or it is all just natural. I think there is
    a divergence of evidence.
        I would point out that if you are a believer in the Bible,
    one would have to say the great flood is an example of climate
    change. And that certainly wasn't because mankind had
    overdeveloped hydrocarbon energy.
        So in any event, I would ask the gentleman from the
    Canadian Government if you agree with the professor at the
    other end of the table that if we don't do Keystone that these
    projects won't be developed that get the oil to the west coast
    of Canada and onto Japan and China. Do you agree that it is
    Keystone or nothing, or do you think that the energy will be
    developed and sent somewhere?
        Mr. Pourbaix. I think I would disagree with that that
    characterization and the similar characterization made by Mr.
    Swift. In fact, I mean, I think what we are seeing, the reason
    that there has been so much more rail transport out of the
    Bakken is that there were very few existing pipelines and so
    rail was the only option. Until very recently in Alberta, the
    existing pipelines had the capacity to take away that oil.
        As those pipelines are reaching capacity--and I am speaking
    with the senior people in these oil companies on an almost
    daily basis and all of them are executing on strategies to
    build more rail terminals and to move more oil by rail. The
    typical number that we see quoted is $15 a barrel to get that
    oil from the oil sands to the U.S. Gulf Coast. I would also add
    that comes with a three times higher emission of greenhouse gas
    to move a barrel of oil by rail than by pipeline and a much
    significantly higher risk of a spill by doing it that way.
        So in fact if the oil is going to be produced and is going
    to be moved by rail, which I think the evidence is clearly in
    favor of that, by denying the Keystone XL permit, you are
    almost certainly going to increase global GHG as these rail
    sources proliferate. And that is exactly what we are seeing
    right now. And if you talk to the major Canadian rail
    companies, they see it as their largest area of growth is
    moving oil out of the oil sands to U.S. markets.
        Mr. Barton. Of what we call the Keystone pipeline, which is
    not a legal term, it is just a general term, how much of that
    is either in existence or already permitted and in the process
    of being built?
        Mr. Pourbaix. So we have already--we call it base-Keystone
    that has been service since 2010. That was a project that was
    in the range--it is about a $7 billion project that is moving
    600,000 barrels of oil a day to Cushing and refining markets in
    the Midwest. We are presently building the southern leg of what
    was originally Keystone XL from Cushing to the Gulf Coast, and
    all of that is soon to be in service. The only thing we are
    here----
        Mr. Barton. How many miles is that?
        Mr. Pourbaix. Oh, gee. I would probably get it wrong, but
    it would be of the----
        Mr. Barton. This is the government. It doesn't have to be
    exact. I mean----
        Mr. Pourbaix. I mean probably if you add it all up, it is
    probably somewhere in the range of over 2,000 miles of pipe.
        Mr. Barton. You got about 2,000 either built or being
    built. How much is in question in this permit that we are----
        Mr. Pourbaix. Just that portion from the Alberta border to
    Nebraska, and so probably about 800 miles.
        Mr. Barton. So about \2/3\ of it is built----
        Mr. Pourbaix. Yes.
        Mr. Barton [continuing]. Or ready to be built and about 1/3
    is under debate.
        Mr. Pourbaix. Exactly.
        Mr. Barton. OK. Mr. Chairman, my time is up but I must
    think we are going to change minds in this hearing. Those of us
    that are for it are going to be for it, and those of us that
    are against it are going to be against it. I would hope that we
    would schedule a vote and bring it to the floor and let's get
    it out of committee and get to the floor and have a vote and
    send it to the Senate.
        Mr. Whitfield. Thank you. At this time, I recognize Mr.
    McNerney for 5 minutes.
        Mr. McNerney. Thank you, Mr. Chairman. I want to thank the
    panel for your testimony today. It is even and well-balanced
    and I want to thank the chairman for inviting a balanced panel
    this morning.
        Mr. Swift, how do you believe construction of the Keystone
    pipeline would affect domestic gas supply and domestic gas
    prices?
        Mr. Swift. Well, the important thing to understand is
    Keystone XL is really a pipeline intended to get oil out of the
    U.S. Midwest and to the Gulf Coast. And so what Keystone XL
    will do is it will divert oil from the Midwest where it can be
    refined in the Gulf Coast increasing oil prices in the Midwest.
    And one thing to understand about the Gulf Coast refineries is
    there--sorry about that. The Gulf Coast refineries where
    Keystone XL would bring the oil are exporting a significant
    amount of their refined product. Nearly 3 million barrels a day
    was exported from Gulf Coast refineries in December of 2012.
        Mr. McNerney. Anyone else care to answer that question, how
    Keystone will affect domestic gas prices?
        Mr. Pourbaix. I would be happy to----
        Mr. McNerney. Sure.
        Mr. Pourbaix [continuing]. Give a brief comment on that.
    Mr. Swift did make an accurate characterization with respect to
    right now, because there is a lack of pipeline takeaway
    capacity in the U.S. Midwest, recently, crude oil prices in the
    U.S. Midwest have been lower than they have been on the Gulf
    Coast. That is being solved by our Gulf Coast project. Enbridge
    has a project; Enterprise has a project. That bottleneck is
    being removed. This Keystone XL project we are talking about
    today is only from Alberta to Cushing. So it is not going to
    exacerbate or change that problem, but that differential
    between Gulf Coast prices and Midwest prices is going to be
    removed in any event by the projects that are under
    construction.
        And one other point I would say is the fact that there has
    been lower-priced oil in the Midwest has not led to lower gas
    prices for Midwest consumers; it has led to higher margins for
    refiners that have been benefiting by that. So to suggest that
    any of those projects will increase gasoline prices would be
    incorrect.
        Mr. McNerney. Or to lower them?
        Mr. Pourbaix. I would just say on balance what Keystone is
    doing is adding another source of supply to a finite demand.
    And it has been a long time since I took economics, but
    typically, when you add incremental supply to a finite demand,
    the impacts should be to reduce prices. But I don't think
    anyone is suggesting that it would be a very significant
    reduction.
        Mr. McNerney. Thank you.
        Mr. Swift, how much more carbon is emitted per unit of
    gasoline produced and sold to a consumer from tar sands versus
    conventional oil?
        Mr. Swift. I think the State Department's estimates were
    somewhere in the up to 17 percent as far as the lifecycle
    emissions for a unit of gasoline and----
        Mr. McNerney. Does that include the energy required to get
    the oil out of the ground?
        Mr. Swift. I believe it does. I believe it does. But much
    of that is from the production side of things.
        Mr. McNerney. Anyone else care to answer that question?
        Mr. Pourbaix. Just one quick comment I would say on that is
    that the range I think they had given was somewhere between
    about 12 and 17 percent. They base that analysis on a barrel of
    oil sands oil versus the average barrel of oil refined in the
    U.S. It is worth noting that those Gulf Coast refineries that
    Keystone is targeting are presently configured and run heavy
    oil so they will not be replacing a barrel of Canadian heavy
    with a barrel of light. They will be replacing it with a barrel
    of Venezuelan heavy or some other heavy, in which case that
    percentage, I would argue, would be smaller.
        Mr. McNerney. Thank you.
        Mr. Jaccard, I assume that you believe that global warming
    is caused to a large degree by human activity.
        Mr. Jaccard. I believe in listening to scientists.
        Mr. McNerney. Thank you. One of the things in your written
    testimony that was brought out was that in order to achieve a
    less than 2 degree Celsius change in global temperatures, the
    Keystone pipeline needs to be a part of that, whether it is
    prevented or not. Could you comment on that?
        Mr. Jaccard. That Keystone needs to be part of it. What I
    would like to say is that I am involved in a lot of analysis of
    what happens to global energy markets to meet the constraints
    of 2 degrees Celsius that scientists and political leaders have
    talked about. And when we run those, you don't expand oil sands
    in Canada, you don't expand the Venezuela heavy oil, and that
    means it doesn't mean shutting down the oil sands. It would run
    for decades, but you are not trying to triple production. And
    that means projects like Keystone and the projects in British
    Colombia I mentioned are not part of that feasible future. And
    in my testimony I refer to a study by MIT researchers that just
    focused on the Alberta oil sands.
        Mr. McNerney. Thank you, Mr. Chairman.
        Mr. Whitfield. At this time I recognize the gentleman from
    Texas, Mr. Hall, for 5 minutes.
        Mr. Hall. I thank you, Mr. Chairman.
        Mr. Pourbaix, I have a question to ask you but I first want
    to just note that the chairman introduced in the record the
    impact of climate change, and we have been debating that here
    for years. And Dr. Jaccard says he believes in listening to the
    scientists. Well, we have listened too much to the scientists.
    And the liberal press doesn't always report it to the people
    what the scientists on either side say. They say more. We need
    more work, more investigation, more hearings. And we have sent
    22 bills over to the Senate. One of them got through and the
    President vetoed it.
        And Mr. Barton says he doesn't deny that the climate is
    changing. It is changing so none of us deny that. We know we
    have to keep an eye on that. We know we have to be aware of it,
    but I will tell you who is keeping an eye on it, it is the
    taxpayers of this country. We spent $34 billion and we haven't
    changed one iota. So that makes me think I am more concerned
    about global warming than I am global freezing.
        And the testimony and all the acts of this Congress has
    been to look at it, be aware of it, listen to scientists that
    come here under oath to tell the truth.
        So my question to you, Mr. Pourbaix, in your written
    testimony--I am not going to allude to you that you didn't tell
    the truth at all--in your written testimony, though, you
    mentioned that 60 percent of the southern pipeline segment is
    complete. And would you give some of the examples of the
    economic impact that that is having?
        Mr. Pourbaix. I think it is important to remember that that
    small portion of what was originally the Keystone XL pipeline
    is in and of itself a 2-1/2 to $3 billion pipeline. We have put
    5,000 construction workers directly to work working on that
    project and the pipe, the pumps, the consumables, all of that
    equipment that is required for that project was largely sourced
    from American sources, and so all of those spinoff benefits are
    accruing to the communities that supplied that equipment.
        Mr. Hall. Tell me specifically how is that affecting Texas?
        Mr. Pourbaix. I don't have the specific data right in front
    of me, but obviously the lion's share of that project is in the
    State of Texas so a large part of those economic benefits would
    be accruing in the State of Texas.
        Mr. Hall. By the way, are you exercising eminent domain in
    Texas at this time?
        Mr. Pourbaix. TransCanada----
        Mr. Hall. Are you purchasing any land in the State of Texas
    at this time?
        Mr. Pourbaix. We have purchased massive quantities. We have
    purchased easements which give us the right to go on property.
    Over 99 percent of those easements were negotiated----
        Mr. Hall. Does that easement require you to have the
    landowners' right in offering letting you go on the property?
        Mr. Pourbaix. Yes, absolutely. And in 99----
        Mr. Hall. Well, that is not the way it is occurring in my
    family. I live in the smallest county in Texas and you are
    going right through the middle of it.
        Mr. Pourbaix. Yes.
        Mr. Hall. I support the bill's overall thrust. I support
    telling the President that we don't agree with him on crossing
    the State on the international boundary because of the
    influence that this amount of money and jobs would mean to all
    of us.
        But when they talk about ANWR, little ANWR is just 19
    million acres and we want to drill on 2,000 acres. If that runs
    at 19 million acres, it is like saying drop a silver dollar in
    Yankee Stadium and it ruins the whole outfield. That is
    outrageous. What it has done is cost the American taxpayers $34
    billion and we haven't changed one iota of global warming. Do
    you agree with that?
        Mr. Pourbaix. I----
        Mr. Hall. If we have changed it, tell me where you have
    changed it.
        Mr. Pourbaix. No, I think it is a fact that the efforts to
    date have had relatively little impact on the global
    temperature. I have seen a number of studies done on Keystone
    that if Keystone were denied and were not built, it would
    have--or sorry, if the oil sands were not developed, it would
    have an impact of less than somewhere in the range of \5/100\
    of 1 percent.
        Mr. Hall. And I will yield back my time in a minute, but I
    just have to say that the only changes I have noted is the
    change in Al Gore's deposits at the bank and a bunch of
    scientists that come here and testify for money. I yield back.
        Mr. Terry [presiding]. Thank you, Mr. Hall. At this time we
    recognize the full committee ranking member, Mr. Waxman.
        Mr. Waxman. Thank you, Mr. Chairman.
        Dr. Jaccard, I appreciate your thoughtful testimony today.
    Some supporters of the Keystone XL pipeline acknowledge that
    using oil from the tar sands produces much more carbon
    pollution than conventional oil. And they recognize this extra
    carbon pollution will make climate change worse. Some, none on
    this committee, but some.
        But they argue that building the Keystone XL pipeline to
    move this tar sands oil won't make climate change worse. The
    argument is that the oil companies will carry out their plans
    to triple production of the tar sands whether or not Keystone
    XL is built. But oil companies can only do that if they have
    real alternatives to Keystone XL. They can't expand the tar
    sands if they can't get oil to the market. And right now, that
    is a big problem for the oil industry.
        So this is a key question. Is Keystone XL necessary to tar
    sands expansion plans? If yes, then building the pipeline will
    produce more carbon pollution and make climate change worse. Is
    there any way that tar sands producers can realize their plans
    to triple production levels without building new pipelines or
    figuring out other ways to get the tar sands oil to market?
        Mr. Jaccard. I don't believe so, not when we are talking
    tripling. Yes, of course, you can move some by rail and so on
    but that will have its own challenges about allowing massive
    amounts of rail transport of oil even as Mr. Pourbaix talked
    about what those risks and impacts are. So if you stop building
    pipelines--and it won't just be Keystone but it is in my own
    jurisdiction--that is how you slow down climate change.
        Mr. Waxman. Yes. The State Department draft environmental
    analysis acknowledges that the Keystone XL pipeline could
    affect the climate. It finds that if currently proposed
    pipeline projects were blocked, tar sands production would be
    lowered. But the analysis also finds that this effect would be
    small. That is because the State Department assumes that if
    Keystone XL and other proposed pipelines are not built,
    producers will move all the tar sands oil on trains instead.
        So let's look at whether these assumptions are realistic.
    The first key question is will Canada build other pipelines to
    the west coast of Canada? A few years ago the State Department
    assumed that if we didn't approve the Keystone XL pipeline, the
    oil would simply go west to China. Dr. Jaccard, how good does
    that assumption look now?
        Mr. Jaccard. One can't be certain, but as I stated in my
    testimony, the odds are against it right now.
        Mr. Waxman. Why?
        Mr. Jaccard. The reasons that I mentioned is that there is
    a lot of opposition in British Columbia. When one says that
    Canadians support developing the oil sands, yes, in Alberta
    they support that, and yes, there is some support elsewhere in
    the country, but there many regions of the country where they
    don't support that. And British Columbia is where that is much
    more difficult to find that support. And opposition to
    pipelines crossing British Columbia is very strong and being
    manifested politically.
        Mr. Waxman. The State Department basically agreed with
    that. Instead, the State Department assumed that tar sand
    producers would use the railroads to get the tar sands the
    Gulf, but my understanding is that this analysis is also
    flawed. Mr. Swift, is moving all of this tar sands oil by
    railroads really a viable option, and if not, why not?
        Mr. Swift. It isn't. And the reason why not, I mean, one
    way to evaluate this, the Bakken production and tar sands, they
    have been under the same market pressure to move by rail. Tar
    sands producers haven't been able to manage it and it is
    because there are a lot of unique challenges to moving tar
    sands by rail that light oil doesn't have and northern Alberta
    is a lot farther away. So simply stated, it is far more
    expensive and tar sands producers don't have the margins to
    afford it.
        Mr. Waxman. The rail option is economic for Bakken oil, but
    not for tar sands. Tar sands crude requires specialized
    railcars and loading and offloading equipment, must travel
    further and is heavier, meaning less can be moved per car.
    Current rail costs for tar sands are $31 a barrel versus $8 to
    $9.50 a barrel for pipeline. And new tar sands projects have
    high breakeven costs, so substantially higher transportation
    costs are going to make them much less attractive. Is that
    your----
        Mr. Swift. That is correct.
        Mr. Waxman. Now, approving the Keystone XL tar sands
    pipeline is key to getting tar sands oil to market. Without
    Keystone XL, producers won't be able to triple the production
    of tar sands oil. So approving Keystone XL would give the green
    light to a huge amount of additional carbon pollution. We can't
    vastly expand use of the dirtiest oil and avoid catastrophic
    climate change. The only responsible action is to say no to
    Keystone XL tar sands pipeline. I hope the Obama Administration
    and others, Secretary Kerry at the State Department understand
    this and don't use this well-it-is-going-to-happen-anyway
    rationale because it is just not accurate according to you, Mr.
    Swift, and Dr. Jaccard. Is that a fair statement?
        Mr. Jaccard. Yes.
        Mr. Swift. Yes.
        Mr. Waxman. Thank you, Mr. Chairman. I yield back.
        Mr. Terry. Thank you, Mr. Waxman. And I recognize the vice
    chairman of the subcommittee, Mr. Scalise.
        Mr. Scalise. Thank you. I want to thank Mr. Terry as well
    for your leadership on the Keystone pipeline and trying to get
    this approved.
        You know, when you look at the jobs number that just came
    out last week, again another weak jobs report, more people
    unemployed, millions of Americans who have given up looking for
    work because the economy is so weak, and yet literally with the
    stroke of a pen, President Obama can create more than 20,000
    new jobs in America by approving the Keystone pipeline. And it
    is just that simple, just with his signature. This doesn't
    require an act of Congress.
        Unfortunately, we are here today because, for whatever
    reason, for more than 4 years the President has refused to
    approve the Keystone pipeline. And you are talking about a
    program that not only would create 20,000 direct American jobs,
    studies show that over 100,000 new jobs to be created in
    America. Billions of dollars of private investment would be
    spent in America, and then when you talk about America's energy
    security, there would be about a million barrels a day of oil
    coming from a friend in Canada that we don't have to buy from
    Middle Eastern countries who don't like us. It is not like
    America's demand for oil has dropped just because the President
    said no to the Keystone pipeline. We still use the same number
    of barrels of oil a day than if he would have approved it
    yesterday.
        The problem is, the gas prices are going up every day;
    people are paying more at the pump in part because of
    volatility in the Middle East. Our trade deficit is up because
    we send billions of dollars to Middle Eastern countries who
    don't have a great trade relationship with us.
        When you talk about approving the Keystone pipeline, there
    are many advantages to doing it. Of course, the first is the
    great impact to jobs and the reduction of threats to our energy
    security. But if you look at the trading relationship we have
    with Canada--Canada is a great friend. There is no reason for
    the President to be harming our relationship with Canada by
    stringing them out for years, bowing to radical
    environmentalists, when everybody else who looks at this,
    everybody who is impartial that looks at this says it should
    have been done years ago. The Keystone pipeline should have
    been approved years ago.
        But if you look at our relationship with Canada, if we are
    trading those same barrels of oil with Canada instead of these
    Middle Eastern countries who don't like us, we get about .85 or
    .90 on the dollar back from every dollar we send to Canada in
    trade. And that same dollar that goes over to Middle Eastern
    countries, we get less than .50 on the dollar back.
        So again, we are using the same amount of oil. The question
    is who are we going to get it from? Are we going to get from
    Canada, who has got a great trade relationship with us, who has
    got a great historical relationship with us right across the
    border, or are we going to continue to send billions of dollars
    to Middle Eastern countries who don't like us, who use that
    money against us? That is the question before us. And so it
    boggles most people's minds when they look at this from a
    commonsense perspective and say why does the President continue
    to say no to Keystone?
        So that is why we are here today. Without action from
    Congress, it can be done. But for whatever reason, if the
    President doesn't want to do it, when the Congress has
    addressed this issue before, it has been large bipartisan votes
    in support. This is not a partisan issue. I think the fact that
    you look at the panelists today that have been here to support
    it, these aren't traditional Republican groups or Democrat
    groups. These are people that understand the economic impact.
        I want to ask you, Mr. Stelter, because you talked a little
    bit in your testimony about what the delays mean to jobs in
    America. You know, if you can expand on that. I mean we have
    heard about businesses that have either closed down or have had
    to delay operations that are waiting, that would do great in
    America, American businesses not even Canadian businesses,
    American businesses that are being hurt every day by inaction
    from the President. Can you expand on that and give some
    examples?
        Mr. Stelter. As I mentioned in my testimony, my company has
    been blessed in that we have been able to expand into other
    parts of the world that we weren't selling to previously to
    stave off layoffs or cutbacks. But I know some of our
    competitors, big American companies, Tyco International,
    DeZURIK, some of the big players in the pipeline industry and
    labor, even though there is still a high demand up in that area
    for labor, it is definitely scaled back because of the delays
    and cancellations of a lot of these projects.
        Mr. Scalise. And that is a shame. There is no reason for
    those jobs to be lost. We could have those jobs today, as I
    mentioned earlier.
        I want to ask you, Mr. Pourbaix, there has been some
    suggestion that this oil is just going to sit there and if the
    American President just waits a couple more years, then Canada
    is just going to sit and do nothing with this valuable asset
    that they have. I have also heard reports to the contrary that
    China aggressively wants to get this oil. China wants those
    jobs. China wants that energy security that America would be
    denied if the President doesn't approve Keystone. Can you talk
    to what happens if the President doesn't say yes to Keystone?
    Does it just sit there in the ground or is there potential that
    this goes to another country and they benefit from it?
        Mr. Pourbaix. No. I have said this many times, but the oil
    sands are truly the economic engine that will be driving
    Canada's economy for the next 50 years. The Canadian Government
    has been exceedingly supportive of our project and all the
    other projects to get the oil out of the country. We are in a
    great situation that we have production far in excess of our
    needs and that oil will be developed; it will get to market.
    You have already heard me talk about if it can't get by pipe,
    it is going to get by rail.
        I would take exception to a characterization that these
    pipeline projects will not be approved by the regulators. In
    Canada, the regulator for pipelines is the National Energy
    Board. It is a federal agency. That same federal agency
    approved the Canadian portion of Keystone XL years ago,
    approved the base Keystone, and the Canadian federal government
    has gone on record repeatedly saying that they are in support
    of both the western projects and projects to take oil east.
        So I think it is absolutely clear that the oil sands are
    going to be developed and this oil is going to get to markets.
    The only question is what market is it going to get to?
        Mr. Scalise. Thank you, Mr. Chairman. I yield back.
        Mr. Whitfield. The gentleman's time has expired. At this
    time I recognize the gentleman from Texas, Mr. Green, for 5
    minutes.
        Mr. Green. Thank you, Mr. Chairman. First of all, Mr.
    Mallino, I want to thank you for being here and all our panel.
    You mentioned that similar legislation was necessary to allow
    construction of the trans-Alaska pipeline back in the 1970s.
    Could you elaborate on that?
        Mr. Mallino. I was a child back then, Congressman. I have
    been doing this for 20 some years but I wasn't around. So I
    would have to get much more specifics and have to get back to
    you on it.
        Mr. Green. OK. That is close enough. I was actually a state
    legislator in Texas in the '70s, but I did not remember that
    Congress had to step in and approve the trans-Alaska pipeline.
        Mr. Mallino. I think what the Congress had to do was step
    in and kind of clear up some of the final regulatory hurdles.
    But again, I am not an expert on it.
        Mr. Green. It sounds like what we are trying to do here.
        Mr. Mallino. Exactly.
        Mr. Green. So we are not breaking new ground by this
    particular legislation.
        Dr. Jaccard, I visited the oil sands last summer and I
    learned that in 2007 the province of Canada actually begin
    regulating large industrial sources of greenhouse gas emissions
    immediately requesting each unit to reduce their GHG output by
    12 percent. And per the March 2012 statistic, over 34 million
    tons of emissions have been avoided. They have also indicated
    that the province will revisit this in the near future to
    strengthen the standard and update the law.
        From your testimony, Canada as a nation hasn't made the
    decision but obviously the province of Alberta has. Has British
    Columbia taken that kind of stance on GHG?
        Mr. Jaccard. Yes. British Columbia--and I helped with the
    work on those policies--has a carbon tax across the board now
    of $30 per ton of CO2. And also we have a
    requirement that no electricity be generated that produces
    greenhouse gases even though we have very cheap coal and gas.
        Mr. Green. OK. Let me interrupt.
        Mr. Jaccard. Alberta----
        Mr. Green. I only have 5 minutes.
        Mr. Jaccard. Yes.
        Mr. Green. How much electricity is British Colombia
    produced by hydropower? What percentage?
        Mr. Jaccard. About 93 percent but----
        Mr. Green. Pardon? Pardon?
        Mr. Jaccard [continuing]. Ninety-three percent----
        Mr. Green. OK.
        Mr. Jaccard [continuing]. But we have the cheapest natural
    gas and coal in the country.
        Mr. Green. Oh, I understand. But if 93 percent of your
    electricity comes from hydropower and obviously in Texas we
    don't have that topography benefit that some places have. But I
    understand that----
        Mr. Jaccard. We won't allow any----
        Mr. Green [continuing]. It is easier to not use natural gas
    and export it because most of their electricity comes from
    hydro, just like British Columbia. But Alberta has made an
    effort to control the GHG in their province.
        Mr. Jaccard. The regulation as I have studied it carefully
    basically tracks what our normal efficiency gains that have
    happened. The actual cost on a per-ton-of-CO2 basis
    is about $1 or $2, effectively close to zero.
        Mr. Green. OK. Well, since you have studied this--and I
    know the refineries that are my area, typically, we import
    heavier crude from Venezuela, from all over the world. Do you
    know of any of our importing countries that we have that have
    done what Alberta has done? Let's take Venezuela as an example.
        Mr. Jaccard. If you mean a dollar per ton of CO2
    or $2, no. But it is inconsequential.
        Mr. Green. Well, obviously it is not. And so that is our
    decision and I appreciate your opinion. Again, the question----
        Mr. Jaccard. The number of $1 or $2 is from the Canadian
    Association of Petroleum Producers.
        Mr. Green. Well, another question for both you, Doctor, and
    Mr. Swift, I actually represent refineries where most of the
    oil sands product would go. And the fact that the refineries
    will continue to seek supplies and heavier crude whether
    Keystone XL is approved or not, the problem is that the failure
    to secure long-term energy supply from Canada will only cause
    these facilities to purchase oil from unstable foreign
    countries that do not have anywhere near the environmental
    regulations that Alberta does. Is that correct, Mr. Swift?
        Mr. Swift. The 2010 incident report actually suggested that
    Venezuela imports into the Gulf were going to decline either
    way.
        Mr. Green. Well, and I agree with you. Venezuela is losing
    production just like Mexico. But again, the question is, are
    those countries that we are going to import from have stronger
    standards or even equal standards of what Alberta has?
        Mr. Swift. Well, we are seeing those imports being replaced
    by domestic production. I mean, Eagle Ford shale, there have
    been plants that actually replace heavy production capacity
    with light production capacity. Our imports are declining
    independent of Keystone XL.
        Mr. Green. Well, but they would even decline more if we had
    TransCanada pipeline.
        Mr. Pourbaix, as a pipeline developer and operator working
    in western Canada, do you agree with Mr. Mallino and Mr.
    Swift's assessment that neither of the two eastern pipelines
    through British Columbia will be built?
        Mr. Pourbaix. No, as I said, I believe there is a very high
    likelihood that Canada's National Energy Board will find a need
    for those pipelines and will approve those pipelines.
        Mr. Green. Well, I have to admit coming from Houston,
    Texas, that we have a Houston company that has an interest in
    one of those pipelines so we either get the crude oil to our
    refineries or I guess we will send it to Asia through Kinder
    Morgan has that pipeline. So Mr. Chairman, thank you for your
    time.
        Mr. Whitfield. At this time I recognize the gentleman from
    Nebraska, Mr. Terry, for 5 minutes.
        Mr. Terry. Thank you. Mr. Pourbaix, I appreciate you being
    here again.
        Besides the need to obtain a presidential permit, which is
    the basis of H.R. 3, can you discuss some of the other
    outstanding permitting issues?
        Mr. Pourbaix. The obvious biggest issue is the presidential
    permit. We do require some other federal approvals, key among
    them would be some issues with respect to migratory birds and
    endangered species and water crossing, those type of issues.
        Mr. Terry. And what specific permits are required for
    those? Take crossing waterways----
        Mr. Pourbaix. We----
        Mr. Terry. Who do you have to get a permit from?
        Mr. Pourbaix. That is the Army Corps of Engineers. And we
    require a permit that will allow us to cross any major wetlands
    or water bodies.
        Mr. Terry. Then for which agency would permit any
    endangered species issues?
        Mr. Pourbaix. That is Fish and Wildlife.
        Mr. Terry. Yes. I appreciate that. And if TransCanada fails
    to receive any one of those permits, what impact would it have
    on the construction of the pipeline?
        Mr. Pourbaix. Well, we are not able to proceed with the
    construction of the pipeline until we are in receipt of all
    those required federal permits. So it would continue to remain
    on hold until we received those permits.
        Mr. Terry. So in that regard, what litigation has
    TransCanada already faced in federal courts over the
    construction of this pipeline?
        Mr. Pourbaix. I don't have the exact number of lawsuits but
    the opponents of this project have long come to the conclusion
    that ultimately delay means denial. So generally, their
    strategy has been at every possible stage in the process to put
    legal claims up against the project. To this point, we have won
    every one that has been brought against us, but there have been
    many, many legal suits filed.
        Mr. Terry. And you participate anymore?
        Mr. Pourbaix. I fully anticipate there will be many more.
        Mr. Terry. What is your basis of your feeling that there
    would be many more?
        Mr. Pourbaix. Just the fact that our opponents--they truly
    are focused on a strategy of delay with the view that
    eventually either the project proponents or the shippers will
    give up.
        Mr. Terry. Yes, the opponents have not been shy about
    saying that they have petitions sitting on their desk ready to
    file.
        Mr. Pourbaix. Yes, absolutely.
        Mr. Terry. Now, could these lawsuits and others that have
    yet to be filed if the presidential permit is approved,
    seriously delay or impact this pipeline?
        Mr. Pourbaix. You know, this is nothing new. Our opponents
    have brought these same suits in all major pipeline and energy
    infrastructure projects, and in all cases that we have been
    involved in, we have been able to succeed in all of those legal
    cases and we would expect we will succeed in these. So once we
    receive the presidential permit, we will commence construction
    and fight the lawsuits.
        Mr. Terry. All right. Since I represent Omaha, Nebraska,
    that has a history with rail, in fact, we grew into a corporate
    town because of the railroad----
        Mr. Pourbaix. Yes.
        Mr. Terry [continuing]. They have told me that even with
    the Keystone pipeline, and they as Union Pacific and BNSF, have
    said that even with the pipeline, they still expect to be
    hauling from both the Bakken and Alberta oil sands. Can you
    tell us your understanding of how, even with the pipeline, the
    rails and trucks would still be involved?
        Mr. Pourbaix. You know, there will always be a role for
    trucking and rail in moving oil around. They serve a legitimate
    purpose. The point that I have always taken is that as the
    distances get very long and the volumes to be moved get very
    large, the benefits of pipelines become very apparent with
    respect to their cost-benefit. It is much cheaper to move oil
    through pipelines. Their safety record is higher, there is less
    likelihood of spill, and there is significantly less greenhouse
    gas emissions when you move large volumes of oil a long
    distance. So there will still be real movements and truck
    movements to get oil to those main collection points where the
    pipelines can take it away from.
        Mr. Terry. All right. Thank you, and I yield back.
        Mr. Whitfield. The gentleman yields back.
        At this time I recognize the gentleman from Michigan, Mr.
    Dingell, for 5 minutes.
        Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
        My question is for Anthony Swift. Mr. Swift, most of these
    will be yes or no because of our limited amount of time. Is
    there currently an open comment period for draft Supplemental
    Environmental Impact Statement regarding the Keystone XL
    pipeline? Yes or no?
        Mr. Swift. Yes.
        Mr. Dingell. When does this period end?
        Mr. Swift. At the moment I believe it is April 21.
        Mr. Dingell. OK. Is the draft Supplemental Environmental
    Impact Statement currently open for public comment, the same as
    the one referenced in H.R. 3? Yes or no?
        Mr. Swift. Yes.
        Mr. Dingell. Now, this legislation deems approval of
    certain permits within the jurisdictions of the Department of
    State, Interior, and Defense and prohibits EPA from being
    involved in providing input for permits under the Clean Water
    Act. Is that so?
        Mr. Swift. Yes.
        Mr. Dingell. Are we certain that all the information has
    been gathered to justify issuing these permits? Yes or no?
        Mr. Swift. No.
        Mr. Dingell. All right. Mr. Chairman, never have the
    American people being comforted by the words I am from the
    government and I am here to help. President Bush established a
    process to issue these types of permits and I believe that
    allowing the public to know how this project will affect their
    communities is simple common sense.
        I would point out that they were going to go through in
    Nebraska over a very, very, very sensitive aquifer and they
    found out that it posed enormous risk. That information was not
    available to the public. And as a House author of NEPA, on
    which I labored long and hard, I can tell you that it was
    created to create transparency so that the people would know
    the impact of a project and what it would be on their
    communities.
        However, this bill will circumvent that transparency even
    as a public comment period is in progress and is only going to
    create more delays. Instead of allowing the process to properly
    play out, Congress is choosing to rush the Administration
    without allowing the established process to run its course.
    This has already caused us trouble on one occasion. And now, by
    rushing the Administration to make a decision at the beginning
    of last year, they were forced to start this process back again
    at square one further delaying a final decision.
        I repeatedly said that I support the building of this
    pipeline. I believe it is in the national interest. It is also
    in the national interest that we should comply with the law,
    should know the facts, and should see that the permits are
    properly issued and that they reflect the need for us to
    address the public interest. That is why we passed the Clean
    Water Act, why we passed Endangered Species, and why we passed
    the National Environmental Policy Act.
        Now, I would much rather see the manufacturing,
    construction, and other jobs that are going to be created in
    this construction to go down south through the United States
    rather going west to China where the oil will be processed and
    spent and burned in a very dirty way. However, the bill that we
    have passed already, this bill would do exactly the opposite.
    It circumvents the established process and potentially opens
    the process and the project to a plethora of lawsuits where the
    lawyers are going have a wonderful time delaying the process
    and the construction even further.
        Instead of legislating the permitting process where it is
    not needed, this committee should instead be focusing on
    comprehensive energy legislation and on supervising the
    processing of this to see that it goes forward properly. As I
    have observed, the Keystone pipeline, in my opinion, should be
    a useful part of our national energy strategy and not be given
    into litigation of this kind. It should be viewed as an
    opportunity to make technological advances, changes in the
    economy, to gather new information, and we should be giving
    consideration to this as a part of our national energy policy,
    including spurring a large number of things like nuclear,
    renewable, and fossil fuel.
        Let us stop helping where it is not needed. The bill is a
    solution to a problem that does not exist. I very much want to
    support the pipeline. I believe it is in the national interest.
    But you are compelling me and many other Americans to oppose
    this legislation and to oppose the construction of the pipeline
    because you do not choose to do it in a proper way in
    conformity with the law. These unnecessary changes that you are
    making to hasten the process are counterproductive in the
    extreme, and I beg the committee not to engage in this kind of
    silly activity.
        Mr. Whitfield. Thank you, Mr. Dingell.
        At this time I recognize the gentleman from Texas, Dr.
    Burgess, for 5 minutes.
        Mr. Burgess. I thank the Chairman for the recognition.
        Mr. Pourbaix, did I pronounce that correctly?
        Mr. Pourbaix. Yes, sir.
        Mr. Burgess. Let me just ask you, you heard Chairman
    Emeritus Dingell just speak about this. Do you feel rushed? Do
    you feel like we are rushing you? I feel like it is Groundhog
    Day. I mean every time I come into the subcommittee, Mr.
    Chairman, we are talking about the Keystone pipeline. It has
    been like that for 2-1/2 years.
        Mr. Pourbaix. I think it is without dispute that the
    environmental review process for this process has been
    certainly the most involved, the longest certainly in any
    experience I have ever had with energy infrastructure projects.
    We have had dozens of public hearings. We have had hundreds of
    thousands of pages of public comment in testimony. I don't
    think anyone could argue that every material issue related to
    this project has not been exhaustively analyzed.
        Mr. Burgess. Let me just tell you one of the things that
    troubles me. Texas is my home State. March 22 of last year,
    President Obama went to Cushing, Oklahoma, and said he wanted
    the pipeline built from here to the Gulf of Mexico, meaning
    Oklahoma to the Gulf of Mexico. So your company has been doing
    that work. It has not been without some anxiety at home, and I
    will admit that. There are people who have had their lands
    disrupted by the placement of the pipeline. But OK. It is in
    the national interest and the interest for our economy to get
    this going and Texans, we are understanding of energy issues
    and the necessity of getting energy to market.
        But here is the problem that I have. Why is it OK to build
    the pipeline from Oklahoma to the Gulf of Mexico, disrupt the
    lives of hard-working Texans, when the Administration
    apparently never had any intention of completing the other part
    of the pipeline that would actually make it economically
    relevant and economically beneficial to the Nation?
        Mr. Pourbaix. Yes.
        Mr. Burgess. We have asked Texans to give of their land for
    the pipeline and yet the Administration still seems immobile in
    its ability to make a decision for the betterment of the
    country. Am I missing something here?
        Mr. Pourbaix. No. And I think at the time the President
    denied the permit early last year, TransCanada took the
    initiative. We saw the opportunity to sever the southern
    portion from the larger Keystone XL application because there
    was an independent need in the industry to reconnect Cushing to
    the U.S. Gulf Coast. So we took that opportunity. That was not
    something that the Federal Government encouraged. It was an
    opportunity we saw to take that portion of the project that had
    independent utility and remove it from this presidential permit
    application process.
        One comment I would just say on your comment about the
    land, there is no company that takes those issues with right-
    of-way and landowners more serious than TransCanada. In Texas
    alone, more than 99 percent of our landowners we reached
    voluntary negotiated easements and did not have to go to any
    eminent domain procedure. We are down to literally a handful of
    landowners.
        Mr. Burgess. And I appreciate that. I appreciate the fact
    that this was a privately instigated and funded venture but
    still, the President want to Cushing, Oklahoma, and with 200
    invited guests, did a photo op in March of last year. It was an
    election year, you may recall. And I have always felt a little
    bit of unease by the willingness of the Administration to
    capitalize on, hey, I am here for creating jobs in America,
    building in America, and all the right things, and yet, really
    if America is going to capitalize on the promise of delivering
    this energy where it can be refined in Mr. Greene's district,
    the rest that pipeline has to be built.
        You know, I don't know that I am smart enough to do this.
    We will have the GDP figures coming out for the first quarter
    of this year. Last quarter of last year was pretty
    disappointing. I will just submit if you were to subtract the
    Texas component to the GDP for this quarter we just finished
    and the last quarter, I wouldn't be at all surprised if the
    country was not still in a recession with negative growth in
    two successive quarters, which is the definition. It is Texas'
    forward-leaning activities in the energy field that have really
    prevented the recession from being so much more desperate in
    the entire country.
        When people talk about the re-industrialization of America,
    they need to look at what is happening in the shale plays in
    north Texas and south Texas. It has been a game-changer. And if
    we really were serious about re-employing Americans, this is
    where we would concentrate our efforts.
        I thank you for your indulgence, Mr. Chairman. I will yield
    back the balance of my time.
        Mr. Whitfield. The gentleman yields back.
        At this time I recognize the gentlelady from California,
    Ms. Capps, for 5 minutes.
        Mrs. Capps. Thank you, Mr. Chairman.
        And thank you, each of you, for your testimony. After
    multiple hearings and markups on this committee in recent
    years, this is an issue that we are all very familiar with. And
    that is why I must say that I am disappointed that one of our
    first legislative hearings is again on this well-vetted issue
    when there are so many other important issues that we could be
    considering.
        I continue to have serious concerns about this legislation
    and the potentially devastating impacts of the Keystone
    pipeline on public health and the environment. Of course, one
    of the main issues in this discussion is jobs, and rightfully
    so. There is no denying that construction of the pipeline will
    create temporary jobs. And these jobs are still desperately
    needed, especially in the construction industry.
        But as policymakers, I believe we must also look at the big
    picture. When we are facing estimated job losses of 750,000 due
    to sequestration, creating a few thousand temporary jobs,
    though helpful, does not constitute the comprehensive jobs
    legislation our Nation needs right now. It is our
    responsibility to pursue policies that advance the long-term
    interests of our Nation as a whole. Doubling down on limited
    fossil fuels is a dead-end policy that pollutes our planet and
    only delays the inevitable, especially considering the serious
    impacts Keystone could have on public health and the
    environment.
        As our witnesses have testified, development of oil sands
    is even more carbon-intensive than traditional oil development.
    So this is a big step in the wrong direction. To me it makes
    far more sense to focus on promoting the development of clean
    renewable technologies we all know we are going to need down
    the road. These new technologies reduce our dependence on oil,
    but also create quality long-term jobs that cannot be shipped
    overseas.
        I see this all the time on my district in the central coast
    of California. Local companies like Infinity Wind, REC Solar
    are harnessing clean renewable energy sources to create jobs
    and strengthen economic growth. So Dr. Jaccard, or Jaccard. How
    do I say it?
        Mr. Jaccard. Jaccard.
        Mrs. Capps. Jaccard. In your testimony, you focus on the
    environmental and economic impacts of developing the Alberta
    oil sands and how the Keystone pipeline plays into that. And I
    have a second question to ask as well. Could you briefly
    discuss some of the economic and environmental benefits of
    developing clean and renewable energy resources compared to
    fossil fuels? Make a comparison for us if you will.
        Mr. Jaccard. Yes. Well, in California certainly I follow
    the numbers. I don't have numbers at the tip of my finger for
    California but I do for British Columbia because when we passed
    the rule of clean electricity, it meant that two coal plants
    and a natural gas plant that were going to be built in the 2007
    to 2011 period were not built. Instead, we develop run-of-the-
    river hydro, a small-scale hydro, wind, and wood waste power
    and they produced three times as many jobs.
        Mrs. Capps. Perfect. Thank you very much.
        I have a question for you, Anthony Swift. Jobs are
    obviously critical to economic growth, but we must remember
    that environmental and public health are also critical to a
    strong workforce and resilient economy. In 1969, my home
    district was a victim to one of the worst oil spills in the
    United States history offshore. So I know firsthand that local
    communities bear the brunt of industrial accidents for a long
    time after they occur.
        The proposed pipeline would cut straight through America's
    heartland, putting numerous communities at risk. These farmers
    and ranchers depend on clean soil and clean water to grow the
    crops and raise their livestock that are feeding our entire
    Nation. A spill here could have devastating effects on local
    wildlife, public health, the economy, and our Nation's food
    supply.
        Mr. Swift, would you elaborate on this, and what are some
    of the economic impacts a spill could have on the communities
    along the pipeline?
        Mr. Swift. Certainly. There are over 500,000 agricultural
    jobs along the pipeline and they depend on clean water, clean
    lands. And we have learned, unfortunately, through two major
    spills, one in Kalamazoo, Michigan, and another in Arkansas,
    that tar sands spills have significantly different and longer-
    term impacts. In Kalamazoo, Michigan, nearly 3 years after that
    spill of 800,000 gallons of tar sands and nearly $1 billion in
    cleanup activities, 38 miles of that river are still
    contaminated. And spill responders don't think that they are
    going to build up at the river back to the state it was before
    the spill. So tar sands pipelines and tar sands spills pose
    unique and pretty dramatic risks to sensitive waterways and the
    places they crossed it. Regulators have not got a handle over
    it.
        Mrs. Capps. And if I could ask you very briefly, with a few
    seconds left, to discuss some of the differences between the
    safe use of tar sands, if there is such a thing, that would
    flow through the Keystone pipeline, and the crude that we
    normally know. Would you go into the difference on that?
        Mr. Swift. Yes. Tar sands is being moved as something
    called diluted bitumen. And bitumen is basically solid at room
    temperature. It has to be mixed with light petrochemicals and
    is moved as a thick substance through the pipeline. You know,
    the State Department estimated that frictional heating on
    Keystone XL will send the temperature to between 130 and 150
    degrees in some places. We have learned in California that
    high-temperature pipelines are much more likely to spill. And
    when a spill occurs, the light stuff gases off, and if the
    heavy stuff, the heavy bitumen tar, hits a water body, it sinks
    below the water body. And at that point spill responders have a
    very difficult time either containing it or cleaning it.
        Mrs. Capps. So tar sands and conventional crude are very
    different----
        Mr. Swift. Dramatically different, yes.
        Mr. Whitfield. At this time I recognize the gentleman from
    Texas, Mr. Olson, for 5 minutes.
        Mr. Olson. I thank the chair, and good afternoon and
    welcome, witnesses. I represent a suburban Houston district, so
    as you can imagine, the Keystone XL pipeline coming into the
    Port of Houston and the Port of Port Arthur is very important
    to my State. And we are all entitled to have our own opinions,
    but none of us are entitled to have our own facts. So before I
    start my questions, I just want to reiterate a few facts that
    seem to be forgotten in this debate.
        Fact number one, Canadian oil from Alberta is already
    coming to the United States. The Keystone pipeline, Mr.
    Pourbaix, I think, called it the base Keystone pipeline. That
    pipeline is bringing over 500 million barrels a day for our
    country right now. The Alberta clipper is bringing about
    450,000 barrels a day to Superior, Wisconsin.
        Fact number two, there are 25,000 miles of pipeline over
    the Ogallala Aquifer right now, 25,000, 2,000 over Nebraska.
        Fact number three, this Canadian oil will be brought to
    market. Either it comes to the United States or it goes to
    China or India or some other country. White House Press
    Secretary Jay Carney echoed my reasons to support Keystone XL
    when he said last year, ``moving oil from the Midwest to the
    world-class, state-of-the-art refineries on the Texas Gulf
    Coast will modernize our infrastructure, create jobs, and
    encourage Americans' energy production. We look forward to
    working with TransCanada.'' I inserted Texas there, just a
    literary preference. But those are the facts.
        Mr. Pourbaix, TransCanada now is almost halfway done with
    the southern leg of the pipeline through East Texas. Can you
    please describe the steps that you are taking to ensure the
    safety of his pipeline?
        Mr. Pourbaix. Sure. I mean right off the bat I think it is
    very important to understand that the Keystone pipeline system
    is truly a state-of-the-art pipeline system. It uses modern
    high-strength steel, fusion bond epoxy coating, multiple
    redundant leak detection technologies.
        You heard me say this in my prepared statements, but in
    addition to following federal code, we have voluntary agreed to
    follow 57 additional special conditions. Those are things like
    reduced spacing of isolation valves, burying the pipe deeper,
    doing more inspections. All major river crossings where it is
    feasible to do so, we are in fact doing horizontal directional
    drill. So we are 20 to 40 feet below the bottom of the river in
    bedrock, so we don't ever have to worry about the kind of
    problems that occurred at Kalamazoo or the Yellowstone problem
    that Exxon had. I mean these modern pipelines have incredible
    records with respect to spill and safety, and we are building
    the most modern pipeline ever built in the U.S.
        Mr. Olson. So again, in your opinion, the Keystone XL
    pipeline is designed to be the safest pipeline in the history
    of the world?
        Mr. Pourbaix. Yes, and you don't have to take my word for
    it. That is actually the finding of the Department of State in
    the Environmental Impact Statements.
        Mr. Olson. And a question for you, Mr. Mallino, in your
    opening statement you said the Keystone XL is not a pipeline,
    it is a lifeline. And you mentioned that opponents say that
    many of these jobs being created are going to be temporary. Can
    you explain how a lifeline is not a temporary job?
        Mr. Mallino. In our industry, our members work job-to-job.
    The job starts, the job ends. Sometimes you go on to the job,
    off the job, and go do something else and come back to that
    job. Not just your pay but the way your benefits package is
    structured, the way you earn your health insurance, the way you
    earn your pension credits are determined by the number of hours
    you work in a given quarter. So without a project that creates
    hours, whether it is a highway project, a bridge project, an
    infrastructure project for energy, water, without projects, our
    members don't work, and if our members don't work, they don't
    earn a living and they don't earn benefits. And in that sense
    it is a lifeline. A temporary job has been used to dismiss
    these jobs and that is unfortunate because it truly doesn't
    take into account how the construction industry works. It is
    done in a very derogatory way by people who want to dismiss the
    importance of these jobs.
        Mr. Olson. One final question for you, sir. What is the
    salary range of these lifeline jobs and the educational level
    necessary to have these jobs? Because I made $75,000 max as a
    pilot in the United States Navy. That is over all my training
    and all these things--I suspect that those salaries are in that
    range. Can you comment----
        Mr. Mallino. It varies by craft so depending upon what your
    skill set is and which union craft you work for, it would vary.
    In some parts of the country our pipeline workers make about 20
    bucks an hour plus a benefits package. In other parts of the
    country that is much, much higher. If you are with the
    operating engineers who may still be back in the back of the
    room somewhere, their benefits package is structured and salary
    are structured entirely different. Their salary and benefits
    are going to be much higher. So it depends upon what you are
    doing on the project. But they are good jobs and they are some
    of the best jobs in the construction industry.
        Mr. Olson. And I am out of time. So just to sum up, 800,000
    barrels a day, 20,000 good-paying jobs, energy security,
    national security. I yield back.
        Mr. Whitfield. At this time I recognize the gentlelady from
    the Virgin Islands, Ms. Christensen, for 5 minutes.
        Mrs. Christensen. Thank you, Mr. Chairman.
        There is a lot that really bothers me about the bill we are
    considering today but one is that I am concerned that the
    committee is proposing to give one project a regulatory
    earmark. And I don't see why one particular project owned by a
    foreign corporation should get special treatment. My
    constituents in the U.S. Virgin Islands are American citizens.
    We are experiencing extremely high energy price spikes in a
    community with limited resources. My constituents are
    suffering.
        While help is being offered, there is no special
    legislation for the Americans in the U.S. Virgin Islands or
    support for my bill, H.R. 92. But the subcommittee is proposing
    to move yet a third bill in 2 years granting special treatment
    to TransCanada's Keystone XL pipeline and has held four
    hearings on this project in the same period.
        As a physician, I am also concerned about how the Keystone
    XL tar sands pipeline would affect public health. Of course,
    crude oil pipelines can directly harm public health when there
    is an accident. We are reminded of the pictures of oil flowing
    down the streets of Mayflower, Arkansas, and Mr. Swift, I
    believe, talked about Kalamazoo, Michigan. So despite Mr.
    Pourbaix's----
        Mr. Pourbaix. Pourbaix.
        Dr. Christensen [continuing]. Pourbaix's testimony,
    TransCanada's safety record doesn't provide a tremendous amount
    of reassurance that Keystone XL would operate without
    accidents.
        The Keystone XL tar sands pipeline threatens human health
    in other ways as well. I understand that low-income and
    minority communities near the refineries in Houston and Port
    Arthur, Texas, already have a 50 percent higher chance of
    contracting leukemia and other diseases linked to pollution.
    These communities are worried that refining more tar sands
    crude will add to the pollution that is already harming their
    health.
        So Mr. Swift, let me ask you. Are these communities right
    to be concerned and does the State Department's analysis
    adequately address the impacts on those communities, minority
    and poor communities?
        Mr. Swift. To the first question I would answer yes. Tar
    sands bitumen has some of the dirtiest crude in the world both
    in carbon emissions but it also has higher sulfur content, much
    higher heavy metal content. The sort of emissions that you
    expect from refining these complicated, heavy, high sulfur
    bitumen would be at the top of the scale. And the State
    Department did not adequately address the impact of these
    increased emissions on communities in the refinery areas. They
    basically assumed that these refineries would be processing oil
    either way and so they didn't really evaluate how much more
    pollution would be generated by these refineries if Keystone XL
    goes through.
        Mrs. Christensen. And we were refining up to about a year-
    and-a-half ago Venezuela heavy crude and our toxic emissions
    inventory was out of the roof in the Virgin Islands. So I
    suspect it will be the same.
        And Dr. Jaccard, we know that Keystone XL pipeline will
    exacerbate climate change, as you stated, and that also has
    devastating health impacts. So could you also please speak to
    this? And also if granting special treatment to TransCanada
    will benefit our constituents and do those benefits really
    outweigh the harm?
        Mr. Jaccard. Right. The point I was trying to make is that
    it is very difficult to deal with climate change so you have to
    have political courage to say we start here and we have to push
    for things to happen in Canada, things to happen in China.
    There is no other way to solve it. When you do that, what you
    are trying to do is prevent acidification of oceans, dramatic
    changes in extreme weather events, and all sorts of problems
    with ecosystems as well, which all come back to human health
    types of issues. And the science is very clear on this.
        Mrs. Christensen. I agree. And coming from a place that is
    prone to natural weather disasters and also where we rely on
    our reefs for food, and for recreation, the acidification of
    the oceans is very devastating to communities like mine. So
    thank you for your answers and I yield back the balance of my
    time.
        Mr. Whitfield. Thank you, Dr. Christensen. At this time I
    recognize the gentleman from West Virginia, Mr. McKinley, for 5
    minutes.
        Mr. McKinley. Thank you, Mr. Chairman.
        I have heard several comments today here, Mr. Chairman,
    about these temporary jobs. And quite frankly, I come from the
    construction industry, 47 years. I started in construction in
    '65. I never thought of my job back then as being a temporary
    job. That was my way of life and the people I worked with. So I
    find it almost a demeaning, demoralizing comment when people
    make that statement that these are just temporary jobs. I
    disagree with that.
        So having vented a little bit on that, I want you to know I
    am just one of two engineers in Congress and I concur that
    there is global warming and there is climate change. The issue,
    however, I think, still has to be debated, is it manmade or is
    it natural cyclical? I am not convinced that I am going to join
    the chorus of those that are trying to build a consensus around
    manmade.
        And because of that, I am troubled by the fact that we are
    holding back because the Administration believes it is manmade.
    He is holding back 20,000 jobs in this market. A thousand more
    jobs likely would occur afterwards doing maintenance and taking
    care of the line. I can remember the testimony over the last 2
    plus years of how many things we have talked about, how many
    more jobs all because we are focused on an ideology.
        So I am asking Mr. Swift and Dr. Jaccard, when I have
    talked with climatologists, they often will refer to, in trying
    to address this issue, they say go back to the Bering Strait.
    And I would like to hear from your perspective. The Bering
    Strait 25,000 years ago, the ocean levels dropped 150 feet, 50
    some meters. We weren't using the Keystone pipeline, we weren't
    driving too many SUVs, and we weren't creating electricity with
    coal, but there was a natural cyclical change in the globe that
    caused the temperatures to be at such a level that the water
    levels dropped all in the oceans all across the waters. Can you
    enlighten me or tell me where the paleoclimatologists are wrong
    on that? That the----
        Mr. Jaccard. Yes.
        Mr. McKinley [continuing]. Waters dropped so that the
    landmass became exposed and people from Asia came over and
    populated North America?
        Mr. Jaccard. Yes. I am sorry.
        Mr. McKinley. Go ahead, please.
        Mr. Jaccard. I feel that I would be arrogant to pick and
    choose among the science that I wanted to believe that was
    convenient for me and that was inconvenient for me. So when I
    take the body of climate science, which I read very carefully,
    it will tell you that climate has changed over long time
    periods in the past and sometimes accelerated. And the climate
    science also says we are making something happen very quickly,
    that we are causing it. And we are acidifying the oceans as
    well, so I don't know what you pick or choose from what the
    climate scientists are telling you. I have read the reports. I
    interact with leading scholars in the world who are very honest
    people, who don't have any particular agenda, and they are
    saying, climate, we are causing the change. We can do something
    about it.
        Mr. McKinley. I would concede that there are people that
    agree with you. But there is a document floating around right
    now, 32,000 scientists that disagree with you on that. So I am
    still torn over it because, here, we are still arguing over
    this. Science has not been determined. The conclusion is not
    determined yet. But yet, we are holding up 20,000 jobs in
    America where people want to go to work. That is their
    livelihood and we are holding it up because we have got an
    ideological base, a disagreement. I am troubled with that. I
    really am.
        Yes, I can talk about the Bering Strait. We can talk about
    the Medieval warming period. What caused that? Again, I don't
    think there were too many SUVs, I don't think we were burning
    much coal there, or gas or oil to create electricity, but yet
    we had the globe heated up, Earth heated up. I am somewhat more
    in that field. I am leaning that way more--is this a natural,
    cyclical issue? And could man be contributing? Of course we
    could be. I agree with you, we could be. But are we the one
    causing it? And what are the ramifications of it? There are too
    many disagreements on that. I am hoping sometime in the balance
    of this year that will have some opportunities to discuss
    global warming more. But in the meantime, why are we costing
    20,000 jobs to people that could be working?
        Mr. Jaccard. So we create jobs as we reduce carbon
    pollution, just as we did as we reduced acid pollution and
    urban smog and so on. So I am sorry. I have seen so much
    evidence I can buy that we can't create jobs while reducing
    carbon pollution and maybe even use more fossil fuels while
    doing it. But the----
        Mr. McKinley. Are you with this pool of Lisa Jackson that
    said that we create, what is it, one job for every million
    dollars in EPA standards, making it the more rigid the standard
    is that we are going to create a job and that and so
    therefore--or one-and-a-half jobs for every million dollars
    spent on enforcement? Is that----
        Mr. Jaccard. Is this talking about the historical analysis?
        Mr. McKinley. Are you a disciple of that school?
        Mr. Jaccard. I haven't read that. I am talking about
    historical analysis that I have been involved in.
        Mr. McKinley. OK. I am sorry, my time is up.
        Mr. Whitfield. The gentleman's time has expired.
        At this time, I recognize the gentleman from New York, Mr.
    Engel, for 5 minutes.
        Mr. Engel. Well, thank you. Thank you very much, Mr.
    Chairman.
        Gentlemen, I am an anomaly here because I see both sides of
    the coin, and to tell you the truth, I am torn. I have a lot of
    environmental concerns but I also have concerns about energy
    independence. I am the ranking member on the Foreign Affairs
    Committee, I was the founder of the Oil and National Security
    Caucus, and I think it would be important if we could safely
    develop this, that North America become energy independent. So
    I kind of see both sides. I have some questions as to why we
    want to circumvent the process here. There is a process. And
    jump the gun and say that this project should be done.
        But I think the larger issue is how do we guarantee or try
    to guarantee that America is energy independent and at the same
    time try to guarantee that our environment is not despoiled. It
    is kind of hard to me to see everybody there, but let me ask
    Mr. Pourbaix. Why cannot we guarantee that the oil that is
    refined in Texas stay in the United States? I mean you have
    heard here today, and we always hear colleagues express
    concerns----
        Mr. Pourbaix. Yes.
        Mr. Engel [continuing]. That if we are going to take the
    chance of the oil pipeline--and it is always a chance. I mean I
    know there are safeguards and this is new technology and
    everything else. I am willing to kind of go with it but I would
    like to know that if we are taking the risk we get the benefit
    and that the oil isn't simply going to come down the pipeline,
    be refined in Texas, and get exported to China.
        Mr. Pourbaix. Yes.
        Mr. Engel. So why can we get a guarantee, maybe 100 percent
    of it can't stay but maybe we can get some kind of percentage
    that gives Americans a guarantee that we are taking the chance
    but it is a worthwhile chance to take?
        Mr. Pourbaix. Yes. Well, I guess I would have a couple of
    comments on that. The first is that the draft supplemental EIS
    went into great detail in examining this issue and came to the
    conclusion that it was highly unlikely that Keystone XL would
    be an export pipeline. And so I think you have that side of it.
        I think, when you think about exports, it is very important
    to understand that the U.S. Gulf Coast is the largest refining
    center. It has about half of the refining capability in the
    U.S., but the U.S. itself typically needs more gasoline and
    less diesel. When you refine a barrel of oil you get a certain
    component of oil and of diesel, certain of gasoline. The U.S.
    needs more gasoline. So to get enough gasoline, it tends to
    produce an excess of diesel which it then tends to import to
    Europe because Europe needs respectively more diesel than it
    gets gasoline. So I think you have to be careful about
    unintended consequences of putting in place any kind of hard
    and fast rules.
        Mr. Engel. Well, let me just say--I am sorry to interrupt
    but----
        Mr. Pourbaix. Yes. Yes.
        Mr. Engel [continuing]. Five minutes is not a lot of time.
    You know, if my constituents knew, for instance, that by having
    this pipeline they would get a reduction a year down the line
    or 2 years down the line, of a dollar a gallon in their
    gasoline----
        Mr. Pourbaix. Yes.
        Mr. Engel [continuing]. People would see something
    tangible.
        Mr. Pourbaix. Yes.
        Mr. Engel [continuing]. But people are very skeptical and
    so am I to a degree, as to if we are looking at--if we are
    talking about making North America energy independent, which is
    obviously something we would all like to see----
        Mr. Pourbaix. Yes.
        Mr. Engel [continuing]. Then what would be the benefit to
    the taxpayers who are taking this kind of risk if in fact, we
    are getting more oil but we are then exporting more oil as
    well? So it is the same equation. Technically, we could be
    energy independent but we are exporting oil as well.
        Mr. Pourbaix. I understand the issue. I think the important
    point, though, is once the pipeline system is set up where this
    oil is going to the Gulf Coast refineries, it is entirely open
    to the U.S. Congress should they choose at some point in the
    future--for example, if there was a war and there was a
    requirement to keep that oil or those refined products in the
    country, the only place that oil can go is where it is being
    pipelined to. So just by having that infrastructure, the U.S.
    has the comfort that they have that energy independence and
    that energy security.
        Mr. Engel. Can somebody also--and perhaps you are the one,
    Mr. Pourbaix, or anybody else, the pipeline we are told by
    people who oppose it--they are saying it has to come through
    the United States because Canada doesn't want to allow it to
    come west and go out to the Pacific Ocean on the West Coast.
    Can anybody answer? Has it been answered? I didn't know.
        Mr. Pourbaix. I mean, I would be happy to just--the
    practical reality is the U.S. Gulf Coast is the largest
    refining center on the planet and the refiners are largely
    configured to run heavy crude that the oil sand production out
    of Canada is overwhelmingly heavy crude. So it was natural to
    connect the large supply with the large demand. And that is why
    it goes the direction it goes. And I think that is the most
    rational and economic place for it to go. But if it can't go to
    the U.S., then it will go to China, it will go to India.
        But I mean I think from the Canadian Government's
    perspective, from the Alberta government's perspective, the
    view is the right place for it to go is the Gulf Coast.
        Mr. Engel. Mr. Swift, I see you shaking your head no.
        Mr. Swift. Yes. We know it is not going to China in large
    volumes because a) China doesn't have the heavy crude
    processing potential to process Canadian tar sands; and b)
    there is a small pipeline going West through British Columbia.
    It is about 300,000 barrels a day. And we know that 99 percent
    of the crude on that pipeline is going to the U.S. So if there
    was an interest by China to receive this crude, it would be
    buying it from the pipeline they already have going to the West
    Coast and they are not.
        So this argument that it is either the U.S. or China is a
    false one. And you look at the pipeline going through, Keystone
    XL through the U.S. to the Gulf Coast, the fact of the matter
    is, I believe, the number is 600,000 barrels of gasoline was
    exported from Gulf Coast refineries and the State Department
    indicated that over half of the refined products from the
    refineries getting oil from Keystone XL would likely be
    exported internationally. So it is not an issue. This is not
    energy that is going to benefit primarily the American
    consumer.
        Mr. Whitfield. The gentleman's time has expired.
        I might also add that the Department of Energy did a study
    as well that was significantly lower on what they estimate the
    exports would be.
        But, Mr. Griffith, I will recognize you, the gentleman from
    Virginia, for 5 minutes.
        Mr. Griffith. Thank you, Mr. Chairman. I appreciate the
    opportunity. I appreciate the witnesses being here today.
        I do have a lot to get through so I apologize if I seem
    short at times. I would say in response to the answer to Mr.
    McKinley's question by Dr. Jaccard, in your written testimony
    you indicated that China might not have grown at 10 percent per
    year but energy economic models predict this growth would still
    have been well above 5 percent while avoiding the dramatic
    increase in carbon pollution. So you do acknowledge that using
    a lot of fuel does in fact create jobs. Would that not be
    correct? Yes or no, please.
        Mr. Jaccard. It would have created more jobs in that same
    scenario.
        Mr. Griffith. Well you----
        Mr. Jaccard. It would have been more labor-intensive.
        Mr. Griffith. Well, your testimony was that there economic
    growth is 5 percent----
        Mr. Jaccard. About economic growth.
        Mr. Griffith. Right.
        Mr. Jaccard. But it would be more labor-intensive, more
    jobs.
        Mr. Griffith. Right. That being said, I think that at
    times, particularly in regard to Keystone XL pipeline, we are
    straining out the gnat while swallowing the camel. I would
    compliment you, Dr. Jaccard, that you at least pay attention to
    the camel. And I point to your work with the China Council on
    International Cooperation on Environment and Development, of
    which you were the co-chair of the 2009 task force for
    sustainable use of coal.
        Mr. Jaccard. Yes.
        Mr. Griffith. And while today we are talking about the XL
    pipeline, I support the pipeline. I also support the use of
    coal. There is some really interesting data in there. And I
    would point to the data out of that report, 2009, which I have
    a copy of it and read through while listening to the testimony
    that China has increased its production of coal 43 times since
    1949, that it passed the U.S. as being the world's number one
    coal producer in 1996, that Chinese coal profits are now over
    100 billion yuan a year, that 2002 saw them having an 11-fold
    increase in those profits.
        And then I am going to take a couple of quotes out of here
    because I think it is instructive long-term to what we are
    dealing with. Nevertheless, the energy efficiency and pollution
    control of the coal power industry in China is still behind the
    most advanced level in the world. For example, the fraction of
    power capacity within unit scales smaller than 100 megawatts is
    24.8 percent in 2007 while it is only 7 percent in the USA in
    2007. The average coal consumption per unit, coal-powered
    electric supply in China 2008 is 11 percent higher than that of
    Japan in 2005, and the emissions of sulfur dioxide and oxygen
    dioxide per unit of electric supply of coal power in China in
    2007 is 30 percent and 150 percent higher than the U.S.
    respectively. I go on in later quote on the same page--I am on
    page 13 of 47--``normally, thermal efficiency designed for
    boilers is between 72 and 80 percent, which is close to the
    design level of developed countries. But in reality, most of
    the actual thermal efficiencies are between 60 to 65, 10 to 15
    percent lower than identified thermal efficiency of boilers.
    Some boilers only have efficiency of 30 to 40 percent actual
    application, which is 30 to 50 percent lower than that of
    developed countries.''
        3.5 billion tons of coal are mined China, just under a
    billion in the U.S. And so I think it is instructive because I
    don't believe that the Chinese are going to--while you paid
    attention in the report and suggested some reforms, I don't
    believe that the Chinese are going to take away jobs in order
    to make everything better and more efficient. And I would also
    submit to you that in that same report on page 19, beginning at
    the bottom of that page--and I am going to edit this a little
    bit. There are five recommendations or five problems. One, the
    existing laws, regulations, and policies are insufficient,
    mostly stating principles without practical value; four, the
    existing regulations and policies are issued by different
    government offices resulting in ineffective supervision on
    environmental protection work. Five, the existing regulations
    and policies have no means of encouraging the widespread use of
    key techniques for sustainable development of the coal
    industry.
        I have a solution for China's problem and that is that we
    use our energy in this country and our energy in North America,
    and we bring those jobs to the United States because we do it
    much more efficiently, and the bottom line is we can do it with
    less pollution in this country. There is a NASA study that says
    that the pollution from China takes about 10 days to get from
    the Gobi desert, where actually camels, I think, still exist in
    an indigenous state, all the way to the eastern shore of
    Virginia.
        Folks, we have got to bring those jobs back. Keystone XL
    pipeline is one way to do it. We reduced the world's carbon
    footprint by doing so because the Chinese are using a whole lot
    more by being less efficient. They are using a whole lot more
    energy to produce the same goods that we could produce if we
    were allowed to use our resources in this country. Wouldn't you
    agree with me, Mr. Stelter?
        Mr. Stelter. Yes, I would.
        Mr. Griffith. Thank you very much. I yield back.
        Mr. Whitfield. Thank you very much.
        At this time I recognize the gentleman from New York, Mr.
    Tonko, for 5 minutes.
        Mr. Tonko. Thank you, Mr. Chair, and thank you to the
    witnesses for inspiring interesting discussion here this
    morning.
        When we consider actions that drive climate change, I
    believe that we can't just focus on short-term emissions. We
    also have to consider how major infrastructure investments
    impact a sustained, long-term, carbon emissions agenda.
    Investment in a pipeline of this size would only be worthwhile
    if oil were going to move through it for decades, perhaps 30 to
    50 years. Dr. Jaccard, could you please talk about the Keystone
    XL pipeline in that context?
        Mr. Jaccard. In the context of infrastructure?
        Mr. Tonko. Of infrastructure and long-term carbon
    emissions.
        Mr. Jaccard. Oh, absolutely. So one thing is when you put
    that infrastructure in place, you are committing yourself to
    pollution for a long time to come into the future. And Mr.
    Pourbaix might agree with me that pipeline economics change--I
    used to regulate pipelines--once you have already built them.
    In other words, even if the economics change, people don't need
    nearly as much return to keep a pipeline operating as opposed
    to initially building it.
        Mr. Tonko. So that being said, with the Keystone XL line,
    are we committing ourselves to many years of high emissions and
    creating a major incentive for further tar sands production?
        Mr. Jaccard. Absolutely. That is exactly what you are
    doing.
        Mr. Tonko. Then how would a comprehensive climate policy
    help avoid that?
        Mr. Jaccard. A comprehensive planet policy would make sure
    that just as the Chinese told me that they wouldn't act unless
    the U.S. was acting. How else would they act? So you have to
    have a situation where what they said very clearly, we will act
    if the U.S. acts and starts to pressure--encourage us to act.
    And in fact, when there were times when it looked like the U.S.
    would act, that is when I helped the Chinese develop a
    renewable portfolio standard, eliminate coal subsidies, and
    several other policies. And so simply, you have to have a
    situation where the most powerful country in the world takes a
    first step, creating jobs as well, but takes a first step and
    then starts to push other countries to go in the same
    direction. It doesn't happen any other way.
        Mr. Tonko. Thank you. Our highest priority undeniably is
    bringing about more jobs, needing more jobs and requiring many
    more jobs. Is the Keystone XL tar sands pipeline addressing
    that jobs policy?
        Mr. Jaccard. I might leave this to Mr. Swift because of the
    specifics, but I have already given testimony that moving away
    from a carbon pollution future, which doesn't necessarily
    meaning stop using fossil fuels, is a job-intensive future. It
    is a false idea that you trade one off against the other.
        Mr. Tonko. So thank you. And Mr. Swift, how many permanent
    jobs do you quantify that Keystone XL would create according to
    the State Department?
        Mr. Swift. The State Department found that Keystone XL
    would create 35 permanent jobs.
        Mr. Tonko. And I understand there would also be several
    thousand construction jobs over 1 to 2 years?
        Mr. Swift. That is right. The State Department found that
    there would be 3,900 construction jobs. On the national level,
    one of the ways to think about this is it is the chance of
    getting a Keystone XL construction job is similar to the chance
    of being struck by lightning when considering the labor force.
        Mr. Tonko. Well, I understand any of those jobs to be
    important but I sense that it is not the best path to follow if
    we rely on Keystone XL as the job creator. Let me put it into
    this context, CBO estimates that the sequester will cost
    750,000 jobs this year alone. If this were really about jobs,
    we would not have gone forward with sequester. We could have
    passed our President's jobs bill in the last Congress. I
    believe we would be taking the advice of many economists and
    making infrastructure investments and energy investments that
    we need to support a modern economy as the best way to create
    jobs and advance a safe climate.
        This project is not about jobs; it is about committing us
    to an oil-based economy for another 50 years or more. It is
    about committing us to serious disruption of our climate
    system, our agriculture, our fisheries, our coastlines, our
    water supplies. I believe that we don't have to choose. We can
    have it both ways. We can have safe climate and good jobs.
        And I believe I am almost up but I would ask, Dr. Jaccard,
    with the right policies can we shift to low carbon energy and
    grow jobs at the same time?
        Mr. Jaccard. Absolutely. When you look at independent
    analysis at MIT, University of Maryland, Stanford University,
    these are independent studies. We involve oil fossil fuel
    companies in the projects and in the work. We continuously show
    if you start now, a transition over many decades--doesn't mean
    shutting down production or coal mines or oil sands today--it
    means not expanding and transitioning towards cleaner energy,
    that that is a jobs future and it is a climate future as well.
        Mr. Tonko. Thank you very much. Thank you Mr. Chairman.
        Mr. Whitfield. The gentleman's time has expired. Well, that
    concludes today's hearing. Mr. Rush?
        Mr. Rush. Mr. Chairman, if I might with your indulgence.
    Mr. Chairman, I want to just kind of clarify a comment that you
    made earlier in the hearing where you referenced an article in
    the Economist and the reason that we don't need to worry about
    climate change.
        Mr. Whitfield. I didn't say we didn't need to worry about
    climate change. I did reference the article in the Economist.
        Mr. Rush. I would like to clarify the article just a little
    bit more, Mr. Chairman. I think you are referencing a March 30
    article which describes the correlation between mean global
    temperatures and greenhouse gas emissions. Mr. Chairman, I
    think you should read the entire article which explains that we
    are currently heading towards a temperature increase that would
    ``be extremely damaging'' with more areas affected by drought
    with up to 30 percent of species at greater risk of extinction,
    which will likely increase of intense hurricanes like super
    storm Sandy and with much higher sea levels.
        You might also want to read the editorial in the Economist
    from the same date which advocates for our government policies
    to cut carbon pollution.
        Finally, Mr. Chairman, if you want to look at an article in
    a scientific journal, nature climate change that came out just
    this week, the article explains this scientific issue and is
    about anything but comforting.
        And I think, Mr. Chairman, this highlights the need to have
    a series of hearings, not just one hearing 2 years ago, but a
    series of hearings on climate change science so that this
    committee can better understand all the issues and better
    understand what is at stake. Thank you, Mr. Chairman, for your
    indulgence.
        Mr. Whitfield. Well, you know I am delighted that you
    raised that issue and I really appreciate your referring
    everybody to this article. I think everyone should read this
    article. And all of us could pick out specific parts of this
    article to buttress the argument that we want to make, and
    there is no question about that. And that is why I think--for
    example, let me just read this: this is from the article.
    ``Lastly, there is evidence that the natural non-manmade
    variability of temperatures may be somewhat greater than the
    international Panel on Climate Change has thought. A recent
    paper by a group of Chinese in the proceedings of the National
    Academy of Sciences links temperature changes from 1750 to
    natural changes such as sea temperatures in the Atlantic Ocean
    and suggests that the anthropogenic global warming trends might
    have been overestimated by a factor of two.''
        Now, we here today can't answer this question. And so I
    know that you all have asked--I mean we have had a lot of
    hearings on climate change, and it may make you feel good to
    know that this morning I talked to our staff and said, maybe we
    should have another hearing about it because the temperatures
    have been flat for 10 years according this article. And maybe
    we need to address the issue. And so I, for one, am perfectly
    happy to bring in scientists because this is an ongoing issue.
    Things are changing every day, every year, and I don't think
    any of us have all the answers. So I appreciate your raising
    the issue. And you have any other comments?
        Mr. Rush. No, Mr. Chairman, I would just like to know when
    will the hearing be scheduled? And I look forward to the
    hearing that would bring some scientists in so that we would
    stop getting opinions from industry officials and those who
    have a self-interest in it. Let us bring some scientists who
    can offer independent conclusions about climate change.
        Mr. Griffith. Mr. Chairman?
        Mr. Whitfield. Yes.
        Mr. Griffith. Mr. Chairman, I just want to point out that
    while he may not call himself a scientist per se, Dr. Jaccard
    actually was a part of that team that received the Nobel Prize
    working on climate change----
        Mr. Whitfield. Right.
        Mr. Griffith [continuing]. So he is no stranger to the
    issue.
        Mr. Whitfield. Right.
        Mr. Griffith. So I do feel it is a mischaracterization to
    say that we only have industry folks coming in when we have a
    couple of scientists here today who take counter view----
        Mr. Whitfield. Right.
        Mr. Griffith [continuing]. But also one who shared in a
    Nobel Prize.
        Mr. Whitfield. And we have had a multitude of hearings on
    climate change over the last 5 years.
        Mr. Rush. Mr. Chairman, I really respect Dr. Jaccard and I
    respect his accomplishments but that doesn't nullify our
    request that we have a hearing specifically with scientists to
    discuss climate change, not Keystone but climate change itself
    and----
        Mr. Whitfield. Well, they don't have to be mutually----
        Mr. Rush. If you want to invite Dr. Jaccard to come in to
    be a part of that panel, I have no objections to that. But the
    focus of it would be climate change and not Keystone.
        Mr. Whitfield. Well, we are all----
        Mr. Rush [continuing]. Of which we are really deliberating
    not Keystone itself but whether or not this Congress is going
    to or wanting to jeopardize the international relationships
    between Canada and the U.S., whether or not we want to just
    hijack the process. And this committee will begin to just write
    international policy without the input of the Administration or
    the Secretary of State. That is what this hearing is about.
        Mr. Whitfield. Well, we asked for agencies to send
    representatives to this hearing and they refused.
        Mr. Rush. But, Mr. Chairman, the nature and the subject of
    this hearing I want to be real clear is not climate change; it
    is Keystone.
        Mr. Whitfield. Well, Keystone is very important. Isn't that
    right, Mr. Mallino?
        Mr. Mallino. Yes, sir.
        Mr. Rush. I am not in opposition that Keystone is very
    important. All right. But I don't want to see the process
    short-circuited by the actions of this committee in favor of
    this bill that is before us.
        Mr. Whitfield. Well, I really appreciate you raising the
    issue, Mr. Rush.
        Mr. Rush. Well----
        Mr. Whitfield. And you know we are very sensitive to your
    concerns. And I know that you and Mr. Waxman have written a
    number of letters, and we have a lot of issues to visit
    together, so thank you.
        And once again I want to thank the members of the panel for
    being with us today. We appreciate all of your testimony and
    you responding to our questions. And we will keep the record
    open for 10 days in the event that some additional material
    that someone may want to offer.
        And with that, we will conclude today's hearing and thank
    you once again. Today's hearing is concluded.
        [Whereupon, at 12:43 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]