[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

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                    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:]

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    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:]

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    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:]

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    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:]

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    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:]

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