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



 
              THE NORTH AMERICAN ENERGY INFRASTRUCTURE 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

                               __________

                            OCTOBER 29, 2013

                               __________

                           Serial No. 113-88


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

                                 7_____

                    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        JOHN A. YARMUTH, Kentucky
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 (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)    HENRY A. WAXMAN, California (ex 
                                         officio)

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     2
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................     3
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     6
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     7
    Prepared statement...........................................     7
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     8

                               Witnesses

Jeff C. Wright, Director, Office of Energy Projects, Federal 
  Energy Regulatory Commission...................................     9
    Prepared statement...........................................    12
Mark P. Mills, Senior Fellow, Manhattan Institute for Policy 
  Research.......................................................    38
    Prepared statement...........................................    41
David K. Mears, Commissioner, Department of Environmental 
  Conservation, State of Vermont.................................    45
    Prepared statement...........................................    47
Paul C. Blackburn, Attorney and Environmental Consultant, 
  Blackcreek Environmental Consulting............................    54
    Prepared statement...........................................    57
Jim Burpee, President and Chief Executive Officer, Canadian 
  Electricity Association........................................    75
    Prepared statement...........................................    77
    Answers to submitted questions...............................   181
Mary J. Hutzler, Distinguished Senior Fellow, Institute for 
  Energy Research................................................    95
    Prepared statement...........................................    97
    Answers to submitted questions...............................   186
John H. Kyles, Senior Attorney, Plains All American Pipeline, 
  L.P............................................................   119
    Prepared statement...........................................   121
    Answers to submitted questions...............................   190
Michael Knotek, Deputy Under Secretary for Science and Energy, 
  Department of Energy \1\
    Prepared statement...........................................   173
Kevin J. Wolf, Assistant Secretary for Export Administration, 
  Bureau of Industry and Security, Department of Commerce \1\
    Prepared statement...........................................   178

----------
\1\ Mr. Knotek and Mr. Wolf did not attend the hearing but submitted 
statements for the record.

                           Submitted Material

Letter of October 29, 2013, from Charles T. Drevna, President, 
  American Fuel & Petrochemical Manufacturers, to Mr. Upton and 
  Mr. Green, submitted by Mr. Gardner............................   142
Letter of October 29, 2013, from Kyle B. Isakower, Vice 
  President, Regulatory and Economic Policy, American Petroleum 
  Institute, to Mr. Upton and Mr. Green, submitted by Mr. Gardner   143
Letter of October 28, 2013, from Thomas Finco, Vice President, 
  External Affairs, American Transmission Company, to Mr. Upton 
  and Mr. Green, submitted by Mr. Gardner........................   144
Letter of October 28, 2013, from R. Bruce Josten, Executive Vice 
  President, Government Affairs, Chamber of Commerce of the 
  United States of America, to Mr. Upton and Mr. Green, submitted 
  by Mr. Gardner.................................................   145
Letter of October 29, 2013, from George C. Landrith, President, 
  Frontiers of Freedom, to Mr. Upton and Mr. Green, submitted by 
  Mr. Gardner....................................................   147
Letter of October 28, 2013, from Donald F. Santa, President and 
  Chief Executive Officer, Interstate Natural Gas Association of 
  America, to Mr. Whitfield and Mr. Rush, submitted by Mr. 
  Gardner........................................................   149
Letter of September 30, 2013, from Raymond J. Poupore, Executive 
  Vice President, National Construction Alliance II, to Mr. 
  Green, submitted by Mr. Gardner................................   152
Letter of October 23, 2013, from Nan Swift, Federal Affairs 
  Manager, National Taxpayers Union, to Mr. Upton and Mr. Green, 
  submitted by Mr. Gardner.......................................   153
Letter of October 28, 2013, from Alaska Wilderness League, et 
  al., to Representatives in Congress, submitted by Mr. McNerney.   155
Letter of October 23, 2013, from Jennifer Diggins, Chair, 
  America's Energy Advantage, to Mr. Whitfield and Mr. Rush, 
  submitted by Mr. McNerney......................................   158
Letter of October 28, 2013, from Paul N. Cicio, President, 
  Industrial Energy Consumers of America, to Mr. Whitfield and 
  Mr. Rush, submitted by Mr. McNerney............................   160
H.R. 3301, the North American Energy Infrastructure Act, 
  submitted by Mr. Whitfield.....................................   165


              THE NORTH AMERICAN ENERGY INFRASTRUCTURE ACT

                              ----------                              


                       TUESDAY, OCTOBER 29, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:03 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Scalise, 
Shimkus, Pitts, Terry, Burgess, Latta, Cassidy, Olson, Gardner, 
Pompeo, Kinzinger, Griffith, Barton, Upton (ex officio), 
McNerney, Tonko, Yarmuth, Green, Barrow, Matsui, Christensen, 
Castor, Dingell (ex officio), and Waxman (ex officio).
    Staff present: Nick Abraham, Legislative Clerk; Gary 
Andres, Staff Director; Charlotte Baker, Press Secretary; Mike 
Bloomquist, General Counsel; Sean Bonyun, Communications 
Director; Matt Bravo, Professional Staff Member; Allison 
Busbee, Policy Coordinator, Energy and Power; Patrick Currier, 
Counsel, Energy and Power; Tom Hassenboehler, Chief Counsel, 
Energy and Power; Jason Knox, Counsel, Energy and Power; 
Brandon Mooney, Professional Staff Member; Chris Sarley, Policy 
Coordinator, Environment and Economy; Jeff Baran, Democratic 
Senior Counsel; Phil Barnett, Democratic Staff Director; Greg 
Dotson, Democratic Staff Director, Energy and Environment; 
Caitlin Haberman, Democratic Policy Analyst; Elizabeth Letter, 
Democratic Press Secretary; and Alexandra Teitz, Democratic 
Senior Counsel, Environment and Energy.

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

    Mr. Whitfield. I would like to call this hearing to order 
this morning.
    And today we are having a hearing on H.R. 3301, the North 
American Energy Infrastructure Act, which was introduced by the 
chairman of the full committee, Fred Upton, and Mr. Green of 
Texas.
    Anyone that has read any newspaper recently or any 
international articles is certainly very much aware of the fact 
that there has been an energy transformation taking place in 
America. I read an article recently about the World Economic 
Forum in Davos, Switzerland, and it was talking about how 
business leaders throughout Europe, Asia, and South America 
were all very much concerned about this energy transformation 
taking place in America and what it means for global 
competitiveness.
    And many of you may have read recently where one of the 
Energy Information Agencies, not only the one in the U.S., but 
the international agency also indicated that the United States 
would be the world's top producer of petroleum and natural gas 
in 2013, surpassing both Russia and Saudi Arabia. And of course 
we continue to be one of the world's leading producers and 
exporters of coal. As a matter of fact, the coal export market 
last year out of the United States, 45 percent of that market 
went to Europe.
    So the energy boom is having a dramatic economic impact, 
creating thousands of new jobs and paving a path toward a 
brighter energy and fiscal future, but energy supply alone is 
not sufficient to achieve North American energy independence. 
We must also have in place the energy infrastructure necessary 
to deliver affordable and reliable energy across our northern 
and southern borders. This means being able to site and 
construct oil and gas pipelines and electric transmission lines 
to carry energy and electrons across the borders of the U.S., 
Canada, and Mexico.
    Now, as many of you know, the Constitution very clearly 
states that the Congress has the authority to regulate 
commerce, and that up until this time Congress has really not 
taken action, and so the regulation of obtaining permits and 
building transmission lines, oil and natural gas pipelines, 
have fallen upon the Executive Orders of the President of the 
United States. So this legislation before us today will 
modernize and reform the approval process for energy 
infrastructure projects across the borders of the United 
States.
    And, well, I had been asked to yield some time to Mr. 
Barton, but I see he is not here. Did Mr. Burgess want some 
time?
    Mr. Upton. You know, I can go now, and if he comes back--is 
that all right?
    Mr. Whitfield. Well, I tell you what, I will just finish my 
statement, Mr. Upton, and then I will go to McNerney and then 
give you your entire 5 minutes.
    But I do want to thank Chairman Upton and Congressman Green 
for their work on this legislation. It is very important. I am 
proud to be an original cosponsor, and I think that we have 
broad bipartisan support to provide more transparency, a more 
efficient mechanism to permit transmission lines and gas 
pipelines between the U.S., Canada, and Mexico.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    Today's hearing is on H.R. 3301, the ``North American 
Energy Infrastructure Act,'' a bipartisan bill authored by 
Chairman Fred Upton and Representative Gene Green.
    Over the last several months, this committee has received 
compelling testimony detailing how the United States has 
entered a new era of energy abundance. New technologies and 
American innovation are unlocking vast amounts of previously 
untapped domestic energy resources, meaning greater access to 
affordable and reliable energy for all Americans. In fact, the 
Energy Information Administration recently reported that the 
U.S. will be the world's top producer of petroleum and natural 
gas in 2013, surpassing both Russia and Saudi Arabia. And we 
continue to be one of the world's leading producers and 
exporters of coal.
    This energy boom is having a dramatic economic impact, 
creating thousands of new jobs and paving a path toward a 
brighter energy and fiscal future. A recent study from global 
consulting firm IHS concluded that domestic energy production 
now supports 1.2 million jobs directly or indirectly, and that 
the number is expected to grow to 3.3 million by 2020. The 
study also found that domestic oil and gas production added 
``more than $1,200 last year to the discretionary income of the 
average U.S. family'' and ``new energy's contribution to U.S. 
families' disposable incomes will hit $2,000 per household per 
year by 2015.'' During this time of stagnating household 
incomes, this should give us all hope.
    The energy revolution bodes well not only for U.S. economic 
and security interests, but it also offers significant 
advantages for our North American allies: Canada and Mexico. 
Based on current projections, many analysts believe that the 
U.S., Canada, and Mexico could finally achieve North American 
energy independence by the end of the decade.
    But energy supply alone is not sufficient to achieve North 
American energy independence. We must also have in place the 
energy infrastructure necessary to deliver affordable and 
reliable energy across our northern and southern borders. This 
means being able to site and construct oil and gas pipelines 
and electric transmission lines to carry energy and electrons 
across the borders of the U.S., Canada and Mexico. Additional 
infrastructure will create a more efficient North American 
energy market. For example, the reason natural gas is currently 
being flared is simply because there is insufficient 
infrastructure to move it; nor is there enough of a domestic 
demand. H.R. 3301 is part of the solution to that problem.
    The legislation before us today will modernize and reform 
the approval process for energy infrastructure projects that 
cross the borders of the United States. As we have witnessed in 
previous contexts, trying to get approval for energy projects 
that cross our national borders has become an increasingly 
lengthy, confusing and politically-influenced process. H.R. 
3301 will bring much-needed certainty and fairness to the 
process for constructing cross-border projects for all types of 
energy infrastructure-whether it be oil or gas from the Bakken, 
or new hydro or solar generation from Canada or Mexico. Its 
passage will help to encourage investment in new job-creating 
energy infrastructure needed to transport North America's 
growing energy supplies.
    I want to thank Chairman Upton and Congressman Green for 
their work on H.R. 3301. I am proud to be an original co-
sponsor of this legislation, and I am pleased to see that it 
already has broad bipartisan support. Moving forward, it is my 
hope that all Energy and Commerce Committee members will be 
able to support this important legislation.

    Mr. Whitfield. At this time I would recognize the gentleman 
from California, Mr. McNerney, for 5 minutes.

  OPENING STATEMENT OF HON. JAY MCNERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McNerney. Thank you, Mr. Chairman. I appreciate you 
holding this hearing today and I appreciate the witnesses for 
their time and energy on this issue.
    Our Nation is producing more oil and gas than it has in 
years, and I believe that the natural gas can have some real 
benefits in terms of our national security, our manufacturing, 
and our employment in general. But we must ensure that this 
production does not worsen global warming, result in 
groundwater contamination, or negatively impact public health. 
These projects must be done safely using the best technology 
possible because the well-being of the public and the 
environment must remain a priority. I believe that this can be 
accomplished with an efficient permitting process.
    We often hear about business certainty, whether it is 
streamlining environmental reviews or the regulatory process. I 
have had to deal with these issues myself while working in the 
wind energy sector and know firsthand how a lack of clear 
direction can negatively affect businesses. H.R. 3301, the 
North American Energy Infrastructure Act, aims to revise the 
current approval process for cross-border oil pipelines, 
natural gas pipelines, and electric transmission lines. I think 
there is an argument that Congress should act to set the rules 
of the road for these projects rather than have the processes 
determined primarily by Executive Orders.
    But if we are going to have a discussion about revising 
permitting processes, we need to understand what the problems 
are and what we are going to do to save the public interest. 
Like my colleagues who have introduced 3301, I share a belief 
that a change in project ownership shouldn't necessarily be a 
major roadblock during the permit process. I also believe that 
projects should be reviewed in a timely yet thorough manner and 
that more consistent guidelines could be beneficial.
    But I do have significant concerns about the bill. I don't 
think the case has been made for why projects that are not in 
the public interest should be approved. We should make sure 
that cross-border energy projects are in the broad public 
interest, receive a thorough environmental review, and provide 
adequate opportunities for public comment and participation. We 
shouldn't have a rushed process that isn't going to provide 
meaningful review.
    I hope today's hearing will give us a chance to examine 
some of these issues. We need to get to the facts and 
understand the consequences of the changes proposed in this 
legislation. I look forward to hearing from the witnesses on 
these issues, and I would now like to yield to my colleague 
from Texas, Mr. Green, one of the bill's co-authors.

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

    Mr. Green. Thank you. And I would like to thank my 
California colleague and ranking member for allowing me to 
speak.
    I appreciate the opportunity because after reading some of 
the testimony, there seems to be some confusion about the 
intent of this bill and what the bill actually does. H.R. 3301 
would only impact the act of reviewing and granting a cross-
border presidential permit. So what does that mean? The bill 
only addresses the permit that a company needs to import or 
export the commodity. It does not affect all the permitting 
required to site or construct the project. In fact, Section 
3(f) specifically keeps in force without change all Federal 
lands, environment, and wildlife statutes and requirements for 
projects in the U.S. such as the Clean Water Act, the Clean Air 
Act, the Endangered Species Act, the Mineral Leasing Act, the 
Rivers and Harbors Act, the Fish and Wildlife Coordination for 
Fish and Wildlife Service Consultation, the National Wildlife 
Refuge System Act, Administration Act, the Wilderness Act, the 
Federal Land Policy Act and Management Act, the National 
Environmental Policy Act for projects triggering a need for 
review based on actions under the above statutes. All 
permitting requirements under these statutes remain in addition 
to any State laws that govern these projects as well.
    H.R. 3301 simply excludes the act of issuing a cross-border 
permit from triggering a NEPA review. Any of the environmental 
laws left in place could still trigger a NEPA review under the 
current criteria. I also think it is important to recognize 
that the current ad hoc Executive Order process that governs 
the presidential permitting process could change at any time.
    So my colleagues that may have issues with the text, let's 
talk about it, but I personally would always rather have 
Congress develop a statute that reflects our diverse 
constituencies than have the President regulate by Executive 
Order. This bill would implement a fair and standardized 
approval process that everyone understands, and I look forward 
to testimony this morning and again thank the chairman for 
allowing me to be here and work on the bill. Thank you.
    Mr. Whitfield. The gentleman yields back.
    At this time I recognize the chairman of the full committee 
and one of the authors of the bill, Mr. Upton of Michigan, for 
5 minutes.

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

    Mr. Upton. Well, thank you, Mr. Chairman, and I hope your 
voice gets better. I am not sure who it is over there that is 
talking, but today, we are going to examine a critical 
component in the effort to construct the architecture of 
abundance to realize our Nation's newfound energy potential. 
This bipartisan North American Energy Infrastructure Act is a 
bill that fills in the gaps created by Executive Orders and 
attempts to add much-needed regulatory certainty to energy 
infrastructure projects that cross the Canadian or Mexican 
border.
    And I would like to thank my friend and colleague Mr. Green 
for cosponsoring this bill and look forward to working across 
the aisle on this important measure.
    The most significant energy storyline in recent years has 
been the unexpected increase in North American oil and natural 
gas production. Long-held assumptions of permanent declines in 
North American energy output have been turned upside down by 
impressive production increases dating back to 2007. The Energy 
Information Administration and others expect the growth in oil 
and gas output to continue rising in the years ahead.
    However, the Federal regulatory regime has failed to keep 
up with this dynamic advancement. Many new infrastructure 
projects, including oil and gas pipelines and electric 
transmission lines, will certainly be needed to transport this 
growing energy abundance, including projects that cross our 
north and south borders.
     But these projects and the jobs and economic growth that 
they will generate can get delayed for years on end. The time 
has come for Congress to provide certainty and rightfully 
assert its role in deciding how these projects should be 
allowed to cross our Nation's borders.
    We have all heard about the Keystone XL pipeline expansion 
project to bring more Canadian oil to the American market. We 
have also heard about this project's nearly 5-year regulatory 
delay, but Keystone is not--it is not--the issue today. There 
are many other upcoming cross-border projects, large and small, 
that may be subject to similar delays. We also have projects 
that have been in existence for decades that are being left in 
regulatory limbo over minor issues such as change in ownership. 
This is only dissuading industry and investors, both here and 
abroad, from entering our market.
    For those concerned about the environmental and safety 
standards applicable to these projects, the good news is that 
none of these standards are changed by the bill. This bill 
simply brings uniformity to current administration policy--that 
a cross-border decision does not in and of itself trigger a 
NEPA determination.
    Under this bill, a 500-mile pipeline or a transmission line 
carrying new hydro from Canada or solar from Arizona that 
extends across the Canadian or Mexican border would be subject 
to the same regulatory scrutiny as a similar project that 
remained within the boundaries of the U.S., but it would no 
longer be subject to unlimited additional delays because of the 
border crossing.
    Our energy policies should seek to safely and responsibly 
maximize our energy abundance and minimize pain to the people's 
pocketbooks when it comes to energy prices, and this bipartisan 
legislation is an important step forward as we work to develop 
the architecture of abundance to achieve North America's energy 
future.
    I yield the balance of my time to my friend Mr. Barton.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Today, we examine a critical component in the effort to 
construct the architecture of abundance to realize our Nation's 
newfound energy potential. The bipartisan ``North American 
Energy Infrastructure Act'' is a bill that fills in the gaps 
created by executive orders and attempts to add much-needed 
regulatory certainty to energy infrastructure projects that 
cross the Canadian or Mexican border. I would like to thank my 
friend and colleague Gene Green for co-sponsoring this bill, 
and look forward to working across the aisle on this important 
measure.
    The most significant energy storyline in recent years has 
been the unexpected increase in North American oil and natural 
gas production. Long-held assumptions of permanent declines in 
North American energy output have been turned upside down by 
impressive production increases dating back to 2007. The Energy 
Information Administration and others expect the growth in oil 
and gas output to continue rising in the years ahead.
    However, the Federal regulatory regime has failed to keep 
up with this dynamic advancement. Many new infrastructure 
projects, including oil and gas pipelines and electric 
transmission lines, will be needed to transport this growing 
energy abundance, including projects that cross our Northern or 
Southern borders. But these projects, and the jobs and economic 
growth they will help generate, can get delayed for years on 
end. The time has come for Congress to provide certainty and 
rightfully assert its role in deciding how these projects 
should be allowed to cross our Nation's borders.
    We have all heard about the Keystone XL pipeline expansion 
project to bring more Canadian oil to the American market. We 
have also heard about this project's nearly 5-year regulatory 
delay. But Keystone is not the issue today. There are many 
other upcoming cross border projects, both large and small, 
that may be subject to similar delays. We also have projects 
that have been in existence for decades that are being left in 
regulatory limbo over minor issues such as change in ownership. 
This is only dissuading industry and investors, both here and 
abroad, from entering the U.S. market.
    For those concerned about the environmental and safety 
standards applicable to these projects, the good news is that 
none of these standards are changed by the bill. This bill 
simply brings uniformity to current administration policy-that 
a cross-border decision does not in and of itself trigger a 
NEPA determination.
    Under this bill, a 500 mile pipeline or a transmission line 
carrying new hydro from Canada or solar from Arizona that 
extends across the Canadian or Mexican border would be subject 
to the same regulatory scrutiny as a similar project that 
remained within the boundaries of the U.S., but it would no 
longer be subject to unlimited additional delays because of the 
border crossing.
    Our energy policies should seek to safely and responsibly 
maximize our energy abundance and minimize pain to people's 
pocketbooks when it comes to energy prices. This bipartisan 
legislation is an important step forward as we work to develop 
the architecture of abundance to achieve North America's energy 
future.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Chairman Upton, and my condolences 
to Chairman Whitfield on his cold or laryngitis.
    We appreciate the hearing today on H.R. 3301, the North 
American Infrastructure Act. Everybody has already said 
basically what I was going to say. I think the important thing 
to realize is that this only deals with the permitting process 
across international borders. It does not change any existing 
permitting process on projects within the United States.
    I think it is also important to point out that this is a 
very bipartisan bill. There are a number of Democrat cosponsors 
on the bill. I am proud to be one of the Republican cosponsors. 
So I think this is a commonsense approach to an issue and 
interestingly, we are moving it at a time when we are looking 
more at exporting American energy as opposed to importing 
American energy, and I think that is a good thing.
    Mr. Barton. With that, Mr. Chairman----
    Mr. Shimkus. Mr. Barton?
    Mr. Barton. I yield to Mr. Terry.
    Mr. Shimkus. Oh, OK.
    Mr. Barton. I am sorry.

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

    Mr. Terry. Thank you. And I just want to say how pleased I 
am about this bill, and it will allow for a more streamlined 
process for oil and natural gas pipelines to cross our northern 
and southern borders, as well as electric transmission lines. 
And I am no stranger to this issue about cross-border 
pipelines, and this is at least similar in theory to one of the 
bills that we have passed to move the jurisdiction to those 
agencies that actually have expertise in this area. And so can 
I yield the last 11 seconds to Mr. Shimkus?
    [The prepared statement of Mr. Terry follows:]

                  Prepared statement of Hon. Lee Terry

    Thank you, Mr. Chairman.
    I am pleased to join Chairman Upton and Congressman Green 
in this bipartisan effort to continue to make North America 
Energy Independent.
    This bill--the North America Energy Infrastructure Act--
will allow for a more streamlined process for oil and natural 
gas pipelines to cross both our northern and southern border as 
well as electric transmission lines.
    I am no stranger to the issue of problems with cross-border 
pipelines. As the House lead on the Keystone XL, I am pleased 
that my colleagues have brought forward a comprehensive, 
forward-looking bill.
    We should never have another Keystone-type delay. Energy is 
the cornerstone of any vibrant economy. We must allow oil, 
natural gas and electricity to flow freely among our countries.
    New uses for natural gas will fuel our economy. If not, we 
have to ask ourselves, Who will leapfrog the U.S. as the most 
dynamic economy?
    This bill is a good step in the right direction to remain 
the leader of the pack.

    Mr. Shimkus. Thank you. And I am sorry to jump in, but I 
wanted to make an introduction: In the back row in the 
committee room is Arbenita Mjekiqi, Senior Officer for Internal 
Market at Ministry of European Integration working for the 
Department of Economic Criteria, and she is from Kosovo. So she 
is following me today. I would like for us to give her a warm 
welcome. Thank you.
    Mr. Whitfield. The gentleman yields back. The gentleman's 
time has expired, and we do welcome the lady from Kosovo. We 
appreciate your joining us today.
    At this time I would like to 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 very much, Mr. Chairman.
    Climate change is the biggest energy challenge we face. 
Before approving a multibillion-dollar energy infrastructure 
project that will last for decades, we need to evaluate its 
climate impacts. That is the standard the President rightly set 
in June. But this test is a significant obstacle for tar sands 
pipelines because they would carry the dirtiest fuel on the 
planet.
    Over the last few years, House Republicans have repeatedly 
tried to short-circuit the process and mandate approval of the 
Keystone XL tar sands pipeline. The bill we are considering 
today goes even further. It creates a new process to 
rubberstamp every pending and future tar sands pipeline.
    The premise of the Upton bill is that tar sands pipelines 
should be approved quickly with no Federal environmental 
review, no public comment, and no consideration of important 
factors like climate change or even safety. Under this 
approach, legitimate concerns cannot even be raised. Mr. 
Chairman, not only is your voice strained and hard to come 
forward, everybody's voices will be restrained. That is the 
wrong approach for making decisions about controversial 
projects.
    Keystone XL is a multibillion-dollar pipeline that will 
carry tar sands sludge. The oil industry financial analysts and 
Canadian Government officials say this pipeline is critical to 
realizing the oil industry's plan to triple tar sands 
production. Well, environmental groups say the pipeline will 
lead to a massive increase in carbon pollution. Over one 
million Americans filed comments. One million Americans had 
their voices heard, Mr. Chairman. In a democracy, we need a 
permitting process that allows for public input. This bill does 
exactly the opposite.
    The July 2010 Enbridge pipeline spill in Marshall, 
Michigan, taught us that tar sands spills are much harder to 
clean up than regular oil spills. Almost $1 billion has been 
spent and they are still cleaning up the Kalamazoo River over 3 
years later. Enbridge wants to expand another tar sands 
pipeline from Canada through North Dakota, Minnesota, and 
Wisconsin. But if this bill becomes law, the permitting agency 
couldn't even consider pipeline safety issues when deciding 
whether to approve that controversial pipeline.
    In the Northeast, another divisive pipeline project would 
carry tar sands oil from Canada through New Hampshire and 
Vermont to Portland, Maine, where it would be loaded onto 
tankers. The project wouldn't require any approval at all under 
this bill's new permitting process. This bill virtually 
guarantees that Keystone XL and the other controversial 
pipelines with pending applications are approved within 2 
years. It should really be called the Zombie Pipeline Act. 
Under this bill, even if the administration rejects KXL because 
it is not in the public interest, KXL could rise from the grave 
and reapply. It would then be rubberstamped under the new 
process.
    The Upton bill is not limited to oil pipelines. It also 
applies to cross-border natural gas pipelines and electric 
transmission lines. This bill would prevent permitting agencies 
from considering factors such as safety, electric reliability, 
engineering, and environmental impacts when deciding whether to 
approve these projects. Energy projects that are not in the 
public interest would be rubberstamped.
    And the bill would allow for unlimited exports of liquefied 
natural gas through Canada and Mexico with absolutely no 
controls or conditions. That is why domestic manufacturers like 
Dow, Alcoa, and Nucor have criticized the bill.
    Faced with the threat of dangerous climate change, we have 
a responsibility to think through the impacts of proposed 
energy infrastructure projects. That means thorough 
environmental reviews and meaningful public participation. But 
this bill prohibits consideration of climate change and other 
important impacts. Mr. Chairman, that is not a responsible 
approach.
    Mr. Whitfield. Thank you, Mr. Waxman.
    That concludes the opening statements, so we have with us 
on the first panel Mr. Jeff Wright, who is the director, Office 
of Energy Projects, over at the Federal Energy Regulatory 
Commission.
    And, Mr. Wright, thanks for joining us today, and you are 
recognized for 5 minutes for an opening statement.

    STATEMENT OF JEFF C. WRIGHT, DIRECTOR, OFFICE OF ENERGY 
         PROJECTS, FEDERAL ENERGY REGULATORY COMMISSION

    Mr. Wright. Chairman Whitfield, members of the 
subcommittee, again, my name is Jeff Wright, and I am the 
director of the Office of Energy Projects at the Federal Energy 
Commission. The Commission is responsible under the Natural Gas 
Act for authorizing the construction and operation of 
interstate natural gas pipeline and storage projects and for 
the construction and operation of facilities necessary to 
permit either the import or export of natural gas. The 
Commission conducts both a non-environmental and an 
environmental review of the proposed facilities. The 
environmental review, pursuant to the National Environmental 
Policy Act of 1969, or NEPA, is carried out with the 
cooperation of numerous Federal, State, and local agencies, and 
with the input of other interested parties.
    I will now turn to the proposed legislation. Section 
3(b)(1) of the bill states that the Commission shall approve a 
project within 120 days of receipt of a request to construct 
and operate border facilities unless the project is not in the 
national security interests of the United States, and that 
under proposed Section 3(b)(3), approval will not be a major 
Federal action under NEPA. This would differ substantially from 
the Natural Gas Act in that the proposed Act does not make any 
provision for procedures such as public notice, public comment, 
issuance of an order supporting a Commission decision, 
rehearing, or judicial review in conjunction with the 
Commission's consideration of an application. A 120-day 
deadline would not permit construction of an adequate record, 
enable important agency consultation, or allow for meaningful 
public interaction in arriving at a decision. The proposed 
language could be read as giving the Commission no discretion 
in the issuance of an authorization unless there are national 
security concerns.
    The Commission, by statute, is the lead agency in the 
approval of interstate pipeline facilities in the U.S. and at 
its borders. However, depending upon the location of the 
proposed facilities, there are other Federal statutes that are 
administered by Federal and State agencies that require 
authorizations prior to the Commission's approval. Even if the 
Commission issues conditional approval, construction cannot 
begin until the other Federal authorizations are issued.
    Further, border facilities, when considered on their own, 
do not usually constitute a major project. Nevertheless, a 
finding of no significant environmental impact still requires 
the Commission staff to conduct a NEPA analysis to be able to 
make such a conclusion. In addition, many border facilities 
require Commission-jurisdictional upstream pipeline facilities 
to be constructed.
    Typically, Greenfield pipeline construction requires an 
environmental impact statement since there will be significant 
environmental disturbance. Under NEPA, an agency is charged 
with reviewing the cumulative impacts of a project. The related 
upstream facilities cannot be considered apart from the related 
border facilities. Separate consideration would invite charges 
of project segmentation and could result in a court reversal of 
a Commission decision. Therefore, the proposed 120-day approval 
process would hinder the ability of the Commission to consider 
stakeholder concerns and prevent the Commission from conducting 
a thorough analysis of a project involving border facilities, 
resulting in a decision whose sustainability is questionable.
    Also, the Commission is not equipped to make decisions on 
the national security interests of the U.S. Currently, the 
presidential permit process solicits the opinions of the 
Secretaries of State and Defense regarding the import of gas 
from or export of gas to Canada or Mexico. If there were 
national security concerns, they would be expressed by State 
and Defense as part of the process. However, Section 3 of the 
proposed legislation would eliminate the need for a permit. 
Even with the elimination of the presidential permit, the 
Commission would still need to consult with State and Defense. 
In addition, agency consultation may be necessary with, for 
example, the Department of Homeland Security to further 
determine the national security interests of the U.S. regarding 
a proposal to construct border facilities.
    Section 5 of the proposed bill would repeal Section 202(e) 
of the Federal Power Act and make other conforming changes. 
Now, this is not within my area of expertise. However, I 
understand from discussions with others at the Commission that 
repeal could have a potentially adverse effect on the 
Commission's ability to ensure nondiscriminatory open access 
transmission service over the U.S. transmission grid.
    My prepared testimony suggests two remedies that if this 
bill were to become law should be considered to ensure that 
transmission service in foreign commerce continues to maintain 
its nondiscriminatory open access properties. I would suggest 
that inquiries on this topic could be adequately addressed by 
the submission of questions for the record.
    In conclusion, the current siting process for natural gas 
facilities, including those facilities at the U.S. border with 
Canada and Mexico, have resulted in a significant increase on 
the natural gas infrastructure in the U.S. meeting the needs 
and answering the concerns of all stakeholders with decisions 
that are fair, thorough, and legally sustainable. The proposed 
legislation raises questions as to conflicting Federal 
authorities and procedures that will be followed to authorize 
natural gas border facilities.
    This concludes my remarks. I would be pleased to answer any 
questions you may have.
    [The prepared statement of Mr. Wright follows:]

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    Mr. Whitfield. Thank you very much, Mr. Wright. And I would 
like to just remind the Members, although all of you are always 
so responsive anyway, that each of us will be given 5 minutes 
for everybody. And the reason I want to ask you to just watch 
the clock today is that there is another hearing scheduled in 
this hearing room today at one o'clock. So we want to give 
everybody the opportunity to ask questions and so I would just 
ask you to keep that in mind.
    And with that, I would like to recognize myself for 5 
minutes for questions.
    Now, Mr. Wright, how long has FERC had the authority to 
make these decisions about natural gas pipelines?
    Mr. Wright. All natural gas pipelines or just border 
facilities?
    Mr. Whitfield. The border facilities.
    Mr. Wright. I believe since the inception of the Natural 
Gas Act in 1938. Siting authority came about in 1945.
    Mr. Whitfield. OK. 1938. And of course FERC has no 
jurisdiction over transmission lines or oil pipelines, is that 
correct?
    Mr. Wright. Only for ratemaking purposes.
    Mr. Whitfield. Only ratemaking. Now, in your testimony and 
also in the--you know, one of the things I do like about this 
legislation, though, is that the Constitution does grant 
Congress the authority to regulate foreign commerce. And I 
think many of us are concerned that, over time, the executive 
branch has become more and more and more powerful. So one of 
the exercises that I do appreciate with this legislation is it 
gives us the opportunity to visit that issue and the role of 
Congress in regulating foreign commerce.
    But in the legislation it says approval is not a major 
Federal action, and you touched on that in your testimony. 
Would you elaborate just a little bit on the concern that you 
have over that segment of the legislation?
    Mr. Wright. Well, under the Natural Gas Act under Section 3 
and Section 7, and also enhanced by the Energy Policy Act of 
2005, FERC acts as the lead agency for the environmental review 
under NEPA. As such, my concern is, especially on those border 
facilities that involve upstream facilities that would be 
subject to Section 7, normally, we are looking at an 
environmental impact statement. So a finding of not a major 
action leaves a question in my mind whether the NEPA 
requirements have been totally fulfilled.
    Mr. Whitfield. And you think this legislation would affect 
that?
    Mr. Wright. Well, it seems conclusory and the fact that it 
says the border facilities would not constitute a major Federal 
action.
    Mr. Whitfield. Yes. Now, I know you expressed concern about 
that 120-day period to approve. Is there another period of time 
that you would feel more comfortable with?
    Mr. Wright. Well, I believe the Commission--and I only 
speak with regard to natural gas pipelines--has been fairly 
responsive with regard to facilities, whether they are within 
the country or at the border. There are some 31 border 
crossings with Canada, 18 with Mexico. We have 2 more pending 
with Mexico, a major increase in export volumes there. And I 
think we act fairly expeditiously but there are also concerns 
whether it is landowner concerns, other Federal agency 
concerns, especially on the borders. So I would believe 92, 93 
percent of our cases are issued within a year of filing and 
those are fairly well-reasoned decisions that we come out with.
    Mr. Whitfield. 92 percent within a year? OK. Now, you 
indicate in your testimony that the current natural gas 
pipeline permitting process is working, and yet it has been 
brought to our attention massive price disparities in the U.S. 
despite the fact we have an abundance of natural gas. For 
example, in January of this year in New Hampshire, residential 
natural gas prices were 30 percent above the national average. 
Massachusetts was 43 percent and Maine was 67 percent above the 
national average. So do you feel like that because of those 
disparities that we should take action to deal with that or is 
that just a natural course of supply and demand?
    Mr. Wright. I believe the way FERC approaches that, we 
don't plan infrastructure. We are very much a reactionary 
agency and that someone proposes and we dispose as quickly as 
we can. Disparity in the Northeast may be owing to the fact 
that pipeline companies are not proposing to build facilities, 
you know, for whatever market-based reasons they see. 
Currently, we only have one pipeline major project that is in 
our pre-filing process that would serve New England. It is a 
Spectra company corporation project. But, as such, we don't 
dictate where the infrastructure is built. That is a market-
based decision.
    Mr. Whitfield. OK. My time is about expired so, Mr. 
McNerney, I will recognize you for 5 minutes.
    Mr. McNerney. Well, thank you, Mr. Chairman.
    H.R. 3301 would replace the existing permitting process for 
cross-border oil pipelines, natural gas pipelines, and electric 
transmission lines with a totally new and untested process. 
And, Mr. Wright, according to your testimony, that means 
massive changes to the current process. Now, my understanding 
is that FERC has responsibility only for the natural gas 
permitting process and have there been major or long delays 
with the permitting of cross-border natural gas pipeline 
projects under the current process?
    Mr. Wright. In my opinion, there have been no major delays. 
Always, sponsors of pipeline projects desire their projects to 
be approved as soon as possible. Sometimes there are other 
stakeholders that have questions, that ask us questions that 
become part of our NEPA analysis, and we have to answer all 
stakeholders.
    Mr. McNerney. Thank you. Well, the NEPA language in the 
bill is a little unclear. The Department of Energy says that 
the language appears to exempt new approvals from the NEPA 
review. FERC lawyers have also looked into the NEPA provisions 
in the bill. Did they think that this is an ambiguous language?
    Mr. Wright. Well, it appears that you could construe the 
language in the filing dates, that you could actually delay 
projects, wait for the legislation to come into effect, and 
then operate under the new 120-day regime.
    Mr. McNerney. So there is a significant degree of ambiguity 
according to FERC?
    Mr. Wright. I don't know if it is ambiguity. It is the way 
the legislation reads. I mean there are time frames of when 
things would take effect and what certain projects would be 
subject to to this new act.
    Mr. McNerney. OK. Well, the bill would require a pipeline 
application to be approved within 120 days. Is that anywhere 
near long enough for FERC to prepare environmental impact 
statements?
    Mr. Wright. No, I do not believe so.
    Mr. McNerney. Is that long enough to ensure time to prepare 
less detailed environmental assessments?
    Mr. Wright. No, I think we would need more time even to do 
the lesser environmental assessment.
    Mr. McNerney. Well, given the bill's what I am calling 
ambiguous language and deadline for approval, do you believe 
that these cross-border pipeline projects would receive 
adequate environmental review under the process established by 
the bill?
    Mr. Wright. Given that my charge is under NEPA, I don't see 
it as adequate time to acquit myself of the NEPA 
responsibilities assigned to the Commission.
    Mr. McNerney. Well, a full environmental analysis is just 
one of the steps taken before a project is approved under the 
current process. Would 120 days be enough time for adequate 
public comment or consultation with other agencies?
    Mr. Wright. I do not believe so.
    Mr. McNerney. One of the big changes in the bill in my 
opinion is the language from national interests to national 
security interests. How do you think that would affect the 
permitting process, that one change?
    Mr. Wright. Well, it seems to remove the public interest 
determination that is charged not only to FERC in terms of 
evaluating facilities but also possibly to the Department of 
Energy, but I don't want to address the Department of Energy. 
Those are their issues. So really the only interest or decision 
to be made is concerning national security with regard to the 
import or export facilities.
    Mr. McNerney. Well, has FERC had the responsibility to look 
at national security interests prior in the current process?
    Mr. Wright. No, we do not have that responsibility.
    Mr. McNerney. So how would FERC go about determining 
national security interests if it has this obligation?
    Mr. Wright. Well, as I said in my testimony, during the 
presidential permit process, we issued a letter to the 
Secretaries of State and Defense for their concurrence. If they 
had national security issues, they would display those concerns 
in their reply to us. Also, there are other agencies such as 
the Department of Homeland Security. In fact, we have a current 
case before us on the Arizona/Mexico border that involves 
concerns by the customs and the border patrol----
    Mr. McNerney. So this one simple change going from national 
interest to national security interest approaches this process 
exactly the way that the bill's authors intended not to do by 
shoving it back into the administration's discretion as to 
whether something is national security or not?
    Mr. Wright. Yes, I----
    Mr. McNerney. In other words, it removes it from the 
legislative language and gives it back to the administration, 
this one word?
    Mr. Wright. Yes.
    Mr. McNerney. Thank you. I yield back.
    Mr. Whitfield. The gentleman yields back.
    At this time I recognize the gentleman from Texas, Mr. 
Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    I want to make sure that I understand the administration's 
position. Are you testifying on behalf of the Obama 
administration?
    Mr. Wright. No, I am not.
    Mr. Barton. Are you testifying on behalf of the Federal 
Energy Regulatory Commission's official position?
    Mr. Wright. No, I am not. I am a representative of the 
Federal Energy Regulatory Commission, but my views don't 
represent any----
    Mr. Barton. But your views basically represent your views 
as an individual citizen? Is that correct?
    Mr. Wright. As a citizen and as an official at the FERC.
    Mr. Barton. Well, now, you can't have it both ways. You can 
testify as a citizen like anybody in the audience behind you or 
you can testify on behalf of the FERC. Which is it?
    Mr. Wright. Well, if you put it that way, I guess I am 
testifying as a citizen who happens to work at the FERC. But I 
wouldn't have been invited here to speak in this position if I 
were not at the FERC.
    Mr. Barton. Well, but I don't really speak for the 
administration. I can accept that, I guess, but you have to--
well, you don't have to, but if you are here because you work 
at FERC and you are a senior official at FERC, one would assume 
that you testify on behalf of FERC, and whatever you say is 
their position. I mean, isn't that logical?
    Mr. Wright. That is a fair statement.
    Mr. Barton. Well, my primary question is do you oppose this 
legislation because of its content or do you oppose the 
legislation because you feel it is better to do this by 
Executive Order as compared to congressional legislation? Do 
you understand?
    Mr. Wright. I understand. I am looking at the legislation 
from the viewpoint of my 34 years of experience at FERC and in 
processing these types of applications and with the charges 
that have been given to us over the years, the various laws, 
and especially the NEPA responsibilities. That is a Federal 
mandate under the Energy Policy Act of 2005.
    Mr. Barton. Do you agree that the Congress has the right to 
legislate in this area?
    Mr. Wright. Yes, I do.
    Mr. Barton. OK. So your opposition is based on the content 
of the legislation?
    Mr. Wright. Yes, it is based on how I processed 
applications in the past, the acts, the laws, statutes that we 
operate under, and looking at it in that vein and looking at 
the new legislation. Obviously, if Congress wishes to change 
the regime, that is their prerogative.
    Mr. Barton. Well, we appreciate you agreeing that it is our 
right to do it. You know, it is an esoteric issue but I think 
that there is value given the fact that we are about to engage 
in what could be an export boom to codify in legislation the 
way these permits are handled.
    There is nothing intrinsically wrong with presidential 
Executive Orders, but the primary Executive Order was passed 
back in the 1950s under President Eisenhower. It has been 
amended several times, and of course, in natural gas there is 
growing interest interestingly in exporting natural gas from 
the Southwest into Mexico, and the dynamics of that are very 
positive for both countries. So if we could codify it in a 
bipartisan way both in a bicameral way in the House and the 
Senate, I think we would have a better system. We certainly 
would have a more open system and I would hope, as you 
pontificate in your office on your personal views, you might 
shed some light with your other friends at FERC what you would 
want to do to improve the legislation so that it could be 
officially supported by the FERC and officially supported by 
the Obama administration. I think this is a serious intent, a 
serious effort to try to get ahead of the curve for a change in 
the Congress and hopefully it will bear fruit.
    And with that, Mr. Chairman, I yield back.
    Mr. Whitfield. The gentleman yields back. At this time I 
recognize the gentleman from Texas, Mr. Green, who is one of 
the authors of the legislation.
    Mr. Green. Thank you, Mr. Chairman.
    And, Director Wright, welcome. In your testimony you state 
that ``a 120-day approval deadline would not permit 
construction of an adequate record, enable the important agency 
consultation, or allow for meaningful public interaction in 
arriving at the decision.'' And that is a direct quote. The 
purpose of the 120-day deadline is only regarding the decision 
on whether the commodity in question--in the case of FERC, 
natural gas--is allowed to enter the country. Do you agree with 
that? I think it is important we establish that.
    Mr. Wright. My reading is it would apply to the permitting 
process. That is the permitting process for facilities. If that 
is a misreading of it, then probably I shouldn't even be here.
    Mr. Green. Well, you might want to read it again. Director 
Wright, setting aside the presidential permit issue, because my 
intent and our intent is it is only the 120 days on the 
presidential permit. And considering it only covers two 
countries, Mexico and Canada, because we have free trade 
agreements, and I can put a 100-car train coming from Alberta, 
Canada, without getting permission to cross because of the free 
trade agreement, but to get a presidential permit for a 
pipeline and yet we can bring all the train cars and trucks we 
want, long-haul trucks.
    But let me get to my question. Setting aside the 
presidential permit issue, do permits issued under Section 3 
and Section 7 of the Natural Gas Act trigger NEPA reviews?
    Mr. Wright. Yes. And I would like to clarify there are 
applications under Section 3 and Section 7 to construct 
facilities and there is also a presidential permit requirement.
    Mr. Green. OK. The construction of the facilities would 
still be under NEPA review under the Natural Gas Act under this 
legislation?
    Mr. Wright. Is the question--
    Mr. Green. OK.
    Mr. Wright. I think you are asking me that--
    Mr. Green. I think your answer should be yes because if I 
have to go to the bill, I will show it to you. Your answer is 
yes, though? We don't touch the Natural Gas Act on triggering 
NEPA reviews.
    Mr. Wright. OK. It was not clear to me from the text of the 
bill that NEPA was--
    Mr. Green. OK. Well, we will work on that but we will try 
and make it clear to FERC what it says.
    Does H.R. 3301 waive compliance of the natural gas 
pipelines to comply with Section 3 or 7 of the Natural Gas 
Acts? Does anything in this bill waive compliance for natural 
gas pipelines to comply with Section 3 or Section 7 of the 
Natural Gas Act?
    Mr. Wright. Only in the sense of not being able to conduct 
the proper NEPA review--
    Mr. Green. OK.
    Mr. Wright. --that we have--
    Mr. Green. OK. Your proper NEPA review would still be under 
Section 3 and 7 though.
    Mr. Wright. OK.
    Mr. Green. Because the Natural Gas Act triggers a NEPA 
review. And you are right. You say the only thing NEPA wouldn't 
involve is to bring that commodity across the border. There is 
no NEPA review right now on me to bring that 100 train cars 
full of Canadian crude to one of our refineries in Texas. We 
don't need any permits. We just bring them across the border. 
So that is the intent of the bill. Why would we need a NEPA 
review when there is not one for any other mode of 
transportation?
    Mr. Wright. Well, it is a major Federal action under the--
    Mr. Green. OK. Well, let me get going. Does H.R. 3301 waive 
compliance with any other Federal, State, or local law beyond 
the limit that question of whether or not a project should be 
approved across the border of the United States? Is there any 
other waiver in this H.R. 3301 that waives any State or local 
law?
    Mr. Wright. It does not waive. However, the 120-day period 
could compromise the other agencies--
    Mr. Green. OK. One hundred and twenty days again going back 
only affects the presidential permit issue. It doesn't affect 
State law, and frankly, I listed--and I am sure we will hear it 
again in a few minutes the number of Federal acts it doesn't 
touch. There are NEPA acts under the Natural Gas Act. There are 
NEPA acts under many other Federal laws that don't cover it.
    Does FERC have the authority under the Natural Gas Act to 
include language to rescind the permits it issues or put in 
requirements for reporting?
    Mr. Wright. Yes, it does.
    Mr. Green. OK. You also state the proposed act does not 
make explicit provision for public notice, public comment, et 
cetera, but when it comes to the actual siting and 
construction, wouldn't FERC have the ability to consider 
stakeholder concerns, conduct analysis, and solicit opinions 
during the pre-filing process and that which follows?
    Mr. Wright. If the correct reading is this act only deals 
with the presidential permit, then under Section 3 and Section 
7 of the NGA, we would still have the ability to do those 
public outreach, public contact--
    Mr. Green. OK. Mr. Chairman, I am almost out of time but I 
want to make sure we are only talking about the presidential 
permit to waive the NEPA reviews because I wouldn't support it 
if it changed all the others under Federal law, including 
particularly the Natural Gas Act because right now we have--I 
don't know how many pipelines go from Texas to Mexico 
delivering natural gas, and I am hoping we are going to build 
some more because we would like to sell it to them.
    And I yield back my time.
    Mr. Whitfield. Certainly, that is an area we can work to 
clarify.
    And at this time I recognize the gentleman from Louisiana, 
Mr. Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having the hearing on this important bill. I support the 
legislation by the chairman and by the gentleman from Texas. It 
is a good bipartisan bill that actually allows us to have more 
cooperation between our neighbors, both Canada and Mexico, and 
doing something we already do. And, Mr. Wright, I think one of 
the concerns you were expressing is what role FERC would play. 
It is my understanding that under this bill the Department of 
Commerce could still contract out with you or you would still 
have a role that you would be able to play under this bill. Is 
that correct?
    Mr. Wright. I don't understand the reference to Commerce. 
We don't interact with the Department of Commerce.
    Mr. Scalise. Well, the Department of Energy, I apologize, 
that there was nothing in this though that impedes the 
Department of Energy from delegating certain responsibilities 
to FERC. Is that----
    Mr. Wright. No, they have delegation authority.
    Mr. Scalise. Yes, so you could still play a role.
    Mr. Wright. In terms of siting facilities.
    Mr. Scalise. Yes. Now, you were talking about also citing 
concerns with landowners. What in this bill would impede that 
because, you know, what we are talking about here is the actual 
permit to cross the border, not the full route of the pipeline. 
I mean ultimately you still would have to have the normal State 
involvement, so States would still have a say, in fact, in 
essence a veto authority over whether or not they would permit 
it within any State, not only where it crossed the border, but 
any other part of the route that pipeline will go, isn't that 
correct?
    Mr. Wright. As is my new understanding of the bill, it only 
deals with the presidential permit, which I would point out has 
never been a problem at FERC or never been the----
    Mr. Scalise. Right, but do you see anything that impedes 
that State role that currently exists and even with this bill 
would still exist?
    Mr. Wright. No, it does not change the State's role in 
terms of----
    Mr. Scalise. Right. So what would your----
    Mr. Wright [continuing]. Section 7.
    Mr. Scalise. Right. You were citing landowner concerns, so 
what would those landowner concerns be that still there would 
be many opportunities to address both at the State and at the 
Federal level even if this bill were to become law.
    Mr. Wright. Well, given the understanding that this is 
dealing solely with the presidential permit, the rights of 
citizens under Section 3 and Section 7 of the Natural Gas Act 
to intervene, to file comments would be preserved.
    Mr. Scalise. Right. In fact, there is a whole list of 
Federal laws that would still apply, you know, and again 
depending on the route, you know, this is just to say whether 
you cross the border. Ultimately, you still would have to get 
permission, both Federal and State, to determine the route, and 
then all those other Federal laws would still apply.
    You know, I think my colleague from Texas was talking about 
the number of crossings we already have. He was asking about 
natural gas. We have 21 crossings with Mexico just on natural 
gas pipelines, 29 with Canada, currently 19 crossings both with 
Canada and Mexico on oil, and as it relates to electricity 
transmission, there are 40 already happening. This isn't some 
new process. It is just talking about expediting a process that 
right now is not real structured and frankly has become bogged 
down in bureaucracy.
    And you look in the Northeast, I mean, they pay very high 
prices. I think 7 of the top 10 cities for electricity prices, 
if you exclude Hawaii and Alaska, are in the New England area. 
And, you know, what would be wrong with having an expedited 
process if there is an ability to generate more commerce with 
our friends in Canada, help lower electricity rates into the 
New England area? Why would that be something that FERC would 
have concerns with?
    Mr. Wright. I only have concerns with the facilities that 
need to be constructed and making them environmentally--or 
mitigate any environmental damage or harm that may be. We do 
process----
    Mr. Scalise. But environmental issues, I mean there is 
nothing here that gets rid of the NEPA process. Do you see 
anything in H.R. 3301 that waives NEPA compliance for an 
application across the border under Section 3 or 7?
    Mr. Wright. Well, it wasn't only my interpretations. It was 
the interpretation of other senior staff at FERC that this 
would abrogate our responsibilities under Section 3 and Section 
7.
    Mr. Scalise. Yes, well, there are still--and I think my 
colleague from Texas pointed this out, as others have--there 
still is a role in NEPA and many other Federal laws that don't 
just go away and there is still that State role, which is a 
very important role that would not be trumped by this 
legislation either. So, you know, maybe your folks need to go 
back and take a look or, you know, our folks can talk to you 
about the differences in interpretation you are having, but we 
sure don't see those concerns here.
    And with that, I yield back the balance of my time.
    Mr. Whitfield. The gentleman's time is expired.
    And I would like to take just a moment of personal 
privilege to welcome John Yarmuth of Kentucky to the 
subcommittee. We now have three Kentuckians on the Energy and 
Commerce Committee, and I think this is your first meeting with 
Energy and Power, so I look forward to working with you, John, 
and thank you for joining the Energy and Commerce Committee.
    Mr. Yarmuth. I appreciate it. Thank you, Mr. Chairman.
    Mr. Whitfield. At this time, I would like to recognize the 
gentlelady from the Virgin Islands, Dr. Christensen, for 5 
minutes.
    You have no questions? OK.
    Mr. Tonko of New York for 5 minutes.
    Mr. Tonko. Thank you. Thank you.
    The Upton bill would replace the existing presidential 
permit process for cross-border natural gas pipelines with a 
completely new rubberstamp approval process. Currently, a 
project cannot get a presidential permit unless the applicant 
can show the project is in the broad public interest. But under 
this bill, FERC would be required to approve a project within 
120 days unless it finds that the project is not in the 
national security interest of the United States. This is a much 
narrower standard.
    Mr. Wright, under this new national security standard, 
would FERC be allowed to consider environmental impacts, 
pipeline safety, engineering issues, or economic effects when 
deciding whether to approve a pipeline?
    Mr. Wright. Well, this leads to my confusion on the bill. 
If the presidential permit per se is not a siting procedure, 
then I am not quite sure then what the 120-day limit applies 
to. The assumption at FERC was it applied to authorizations 
under Section 3 for border facilities.
    Mr. Tonko. Um-hum. And under the current presidential 
permit process, the Defense Department and the State Department 
need to sign off on a pipeline, but that requirement disappears 
under this bill. Does FERC have much experience with national 
security determinations with respect to natural gas pipelines?
    Mr. Wright. No, it does not.
    Mr. Tonko. I would like to focus on the current permitting 
process for a minute. My understanding is that a company that 
wants to build a natural gas pipeline across the border with 
Canada or Mexico needs both a presidential permit and an 
approval under Section 3 of the Natural Gas Act. But an 
applicant submits one application package to FERC for both 
approvals, is that correct?
    Mr. Wright. Correct.
    Mr. Tonko. The Natural Gas Act permitting process requires 
an environmental review, which takes some time, but the 
presidential permit process is happening simultaneously. Does 
the presidential permit process slow things down or does the 
Natural Gas Act review basically determine how long the 
permitting process takes?
    Mr. Wright. It is usually within the Natural Gas Act, the 
NEPA review is the critical time path. The presidential permit, 
in fact the last two or the two current cases we had have taken 
less than 2 months to get concurrence from State and Defense.
    Mr. Tonko. Thank you. And so the Natural Gas Act review 
really determines how long it takes to get a cross-border 
pipeline approved. FERC's lawyers have examined this instant 
bill. Does this bill have the many the requirements for a 
project to get an approval under Section 3 of the Natural Gas 
Act?
    Mr. Wright. It doesn't appear to eliminate Section 3 or 
Section 7, but our interpretation is it gave us 120 days to 
complete the studies we needed to do.
    Mr. Tonko. And, Mr. Wright, you are a career manager at 
FERC and you deal with natural gas pipeline applications every 
day. Do you think that this measure, this bill will speed up 
permitting for cross-border natural gas pipelines?
    Mr. Wright. For gas pipelines, given the understanding that 
it only eliminates presidential permits, it would not speed up 
the process.
    Mr. Tonko. Thank you, Mr. Wright. This bill eliminates 
important environmental and safety reviews without even 
speeding up the permitting process for natural gas pipelines. 
It is really the worst possible outcome we could imagine. I 
think this bill is going in the wrong direction.
    And with that, Mr. Chair, I yield back.
    Mr. Whitfield. The gentleman yields back.
    At this time I recognize the gentleman from Illinois, Mr. 
Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I love my friend from New York but it is absolutely the 
opposite. This deals with the presidential permit. Mr. Wright, 
you said this numerous times and I just want to give you--this 
keeps in force for the review of the entire project the Clean 
Water Act, doesn't it?
    Mr. Wright. Yes.
    Mr. Shimkus. It keeps in force the Clean Air Act, correct?
    Mr. Wright. Correct.
    Mr. Shimkus. The Endangered Species Act?
    Mr. Wright. Correct.
    Mr. Shimkus. The Mineral Leasing Act?
    Mr. Wright. Yes.
    Mr. Shimkus. The Rivers and Harbors Act?
    Mr. Wright. Yes.
    Mr. Shimkus. The Fish and Wildlife Coordination for Fish 
and Wildlife Services' consultation?
    Mr. Wright. Yes.
    Mr. Shimkus. The National Wildlife Refuge System and 
Administration Act?
    Mr. Wright. Yes.
    Mr. Shimkus. The Wilderness Act?
    Mr. Wright. Yes.
    Mr. Shimkus. The Federal Land Policy and Management Act?
    Mr. Wright. Yes.
    Mr. Shimkus. The National Environment Policy Act?
    Mr. Shimkus. Yes.
    Mr. Wright. I would hope so.
    Mr. Shimkus. I would say that, yes. So I mean this is just 
for the presidential permit; it is not for the construction. 
So, you know, my colleagues can say this is disrupting the 
entire world, but it is not. And to keep it short, I want to go 
to this debate on national security interests. Having served in 
the military and we are all concerned about national security, 
I think you have a different definition of what is generally 
accepted for national security interests because national 
security interests is a well-understood term in the foreign 
affairs and national security arena. And this is an 
international affairs issue. It is not just solely a national 
concern.
    According to the U.S. Army Combined Arms Center, national 
security interests includes ``preserving U.S. political 
identity, framework, and institutions, fostering economic well 
being and bolstering international order supporting the vital 
interest of the United States and its allies.'' It is a term 
found multiple times in Federal law. During the 111th Congress, 
for example, there were eight bills signed into law by 
President Obama that contained the phrase ``national security 
interest.'' The term national security interest is a more 
appropriate and better-understood threshold for determining 
whether or not a project should cross the border of the U.S. 
than the current ``national interest,'' a determination which 
has broad and ill-defined interpretations that can change over 
time and is susceptible to political interference.
    Now, my question, do you believe that national security 
interest is a more appropriate threshold for approving projects 
crossing the border of the United States than the current ill-
defined national interest standard that is in place through 
Executive Order?
    Mr. Wright. We are charged under the Natural Gas Act with 
determining what is in the public interest. It is not in the 
Executive Order.
    Mr. Shimkus. And that is why we have this law change 
because many things that deal internationally deal with the 
term ``national security interest.''
    Mr. Wright. Um-hum.
    Mr. Shimkus. And to weave a tale that this isn't all-
encompassing in the national interest of both countries and our 
allies and our economy and our political systems is just wrong. 
So with that, I thank you for your time and I yield back.
    Mr. Whitfield. The gentleman yields back.
    At this time I recognize the gentlelady from Florida, Ms. 
Castor, for 5 minutes.
    Ms. Castor. Well, thank you, Mr. Chairman. And welcome and 
thank you for your testimony.
    I think we need to rename this bill the North American 
Environmental Trial Lawyer Full Employment Act because I think 
what will happen in the end is it will create greater 
litigation due to uncertainty. The benefit of having a 
collaborative process where you have the public involved and 
you have this overriding review is that you work out the issues 
in advance. You work out the alternatives, the mitigation 
alternatives and conditions. And your testimony was that 92 
percent plus of pipelines make it through the process, is that 
correct?
    Mr. Wright. In one year.
    Ms. Castor. You have said that you find the legislation 
problematic and it does not provide you with adequate time to 
carry out your duties and responsibilities. And what this will 
do is lead to greater conflict over time, and I think it will 
make it much more difficult to have these important pipelines 
across national borders approved.
    I also see a greater risk of litigation based on the 
exchange you had with Representative Green where you already 
have different interpretations of what the language means. I 
think this in the end would be again ripe for litigation that 
would end up delaying these very important pipeline projects.
    Tell me this based on your expertise. Right now, if a 
pipeline is simply within a State, that doesn't trigger your 
review, is that correct?
    Mr. Wright. If it is a border facility and it is crossing 
the border, it always triggers our review under Section 3 of 
the Natural Gas Act.
    Ms. Castor. Right. So if it is just an interstate pipeline, 
the presidential permit is not at issue, correct?
    Mr. Wright. No, it is an issue under Section 3.
    Ms. Castor. So for the presidential permit it has cross 
into Canada or into Mexico, is that correct?
    Mr. Wright. Correct.
    Ms. Castor. So if this legislation is passed and it removes 
the requirement for the presidential permit, what review 
process would be in place then for environmental considerations 
going forward?
    Mr. Wright. Well, as I have been told today, Section 3 and 
Section 7 of the Natural Gas Act are not being affected. What I 
don't understand and I would say my colleagues at FERC don't 
understand is what does the 120-day review period apply to? It 
doesn't apply to presidential permits--
    Ms. Castor. Um-hum.
    Mr. Wright. --if they are removed. There is a 120-day 
permit period that truthfully I don't understand what that 
applies to.
    Ms. Castor. So it very well could lead to a gaping hole in 
oversight of what are sometimes very complex pipeline projects 
that cross international borders?
    Mr. Wright. Correct.
    Ms. Castor. OK. Again, colleagues, I think this needs to go 
back for much greater work, and I think just some friendly 
advice. You need to rethink the overriding goal here. If the 
overriding goal is to expedite some of these complex projects, 
the last thing you want to do is create greater uncertainty and 
expand the litigation risk moving forward. These complex 
projects that cross international borders most often benefit 
from having the collaborative process where you get input from 
everyone, you consider the alternatives, and the ways to 
mitigate these projects.
    So thank you and I yield back.
    Mr. Whitfield. The gentlelady yields back.
    At this time I recognize the gentleman from Texas, Dr. 
Burgess, for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    And thank you, Mr. Wright, for being here. Going back to 
Mr. Shimkus' line of questioning from just a moment ago, if I 
understood right, at the conclusion of his list that he posed 
in the form of question, the bill under consideration today 
would or would not waive the NEPA compliance for an application 
and a cross-border pipeline?
    Mr. Wright. I do not see it as waving it. I see it as 
possibly compromising the NEPA review.
    Mr. Burgess. Well, look, you know the problem that we have. 
A 120-day timeline may seem brief bureaucratically but I don't 
know how many 120-day intervals there have been since the State 
Department approved this. I believe it was in June or July of 
2011 when they gave the first approval for the leg of the 
pipeline for TransCanada.
    Now, during the campaign in 2012 the President came to 
Cushing, Oklahoma, and said the pipeline to the Gulf of Mexico 
should be built, so the southern half of the pipeline should be 
built. That is within the United States. That is within the 
purview of the company, property acquisition, maintaining 
consideration of property rights all can happen, did not need a 
presidential directive in order to happen.
    But those people in the State of Texas and other States, 
Arkansas, that gave up of their property so that the easement 
for the pipeline could be accomplished down to the Gulf of 
Mexico, I mean that was tendered with the understanding that 
this would improve the overall economy of Texas because there 
would be so much more product that would be refined in those 
refineries down in the southern part of Texas. And yet the 
northern half of the pipeline has yet to be built, so the 
product that was to come through the pipeline has not 
materialized. So it is almost as if these people had their 
property taken from them under false pretenses.
    Here is a pipeline that is going to span the length or the 
breadth of the United States from Canada to the Gulf of Mexico, 
it is going to benefit the economy of Texas, it is going to 
benefit the consumer with lower costs, and none of that has 
come to pass. And it appears to me that the reason it hasn't 
come to pass is because the administration has been immobilized 
by political concerns. It doesn't want to irritate the unions 
on one side, doesn't want to irritate the environmental left on 
the other side, and as a consequence, simply cannot make a 
decision.
    And Chairman Upton is correct. There are other 
considerations. A lot of people talk about the Eagle Ford Shale 
in southern Texas and what a benefit that has been to the local 
economy. I am not a geologist but I don't think the Eagle Ford 
Shale stops at the Rio Grande River. It likely continues on 
down into Mexico. At some point their State-run oil interest is 
likely to have an interest in developing that resource, and in 
all likelihood, they may need to come to a market that is in 
the United States. It seems logical that there should be a 
mechanism by which that could work not just from north to south 
but from south to north if that be in everyone's economic 
interest.
    So it is just astounding to me as I have sat through 
hearing after hearing after hearing in this committee and the 
bottleneck is the administration. The bottleneck is actually 
the President of the United States who refuses to grant the 
permit for that last little bit of pipeline to be laid between 
Canada and the United States. And as a consequence, we keep 
having to revisit and relitigate and introduce bills to try to 
overcome that administration in transition that has essentially 
blocked a program that many people in my State thought that 
they were, you know, I don't like giving up my land but if it 
is to the greater glory and good of the United States, I will 
do it. But that has been blocked. And this is the same pipeline 
that the President came to Cushing, Oklahoma, and said I want 
this built. And yet they never have delivered on the promise 
that the additional product that would be brought down from 
Canada--it really wasn't posed in the form of question, but if 
you have observations, I will be happy to hear them.
    Mr. Wright. Well, first and foremost, I appreciate your 
view. The State Department's process regarding the presidential 
permit is seemingly different than FERC's process. The State 
Department does answer to the executive branch. FERC is an 
independent agency.
    Mr. Burgess. And just for historical reference, the State 
Department approval, do you know when that occurred?
    Mr. Wright. No, I----
    Mr. Burgess. August 26 of 2011, over 2 years ago.
    Mr. Wright. Pipelines aren't under FERC's purview other 
than making rates for them, so we don't site them, we don't 
keep up, we don't process presidential permits. That is the 
State Department's----
    Mr. Burgess. But all of this legislative activity is 
necessary to try to overcome, again, the intransigence of the 
administration, and that really is the shame here. It is 
holding back the economic recovery that we all know we want in 
this country and I for one just simply don't understand why we 
haven't built it yet.
    Thank you, Mr. Chairman, for your indulgence. I will yield 
back.
    Mr. Whitfield. The gentleman yields back.
    At this time I recognize the gentleman from Texas, Mr. 
Olson, for 5 minutes.
    Mr. Olson. I thank the Chair.
    And good morning, Mr. Wright.
    Mr. Wright. Good morning.
    Mr. Olson. What a difference a few years make for the 
American energy economy. Imports are falling, exports are 
rising, and affordable fossil fuels are helping turn around our 
manufacturers and our petrochemical industry. It is not a 
surprise that Houston, Texas, my hometown, has become the 
largest port for exports from the United States of America. 
However, this North American energy renaissance will be cut 
short if we can't move those resources. We can build miles of 
pipe or transmission America, but somehow crossing the border 
becomes an invisible wall.
    And that is why I support this bill before us today. It 
gives us a chance to move our economy forward, creating 
thousands of American jobs from the wellhead to the pipeline to 
the refineries to the docks with their ships. And it will maybe 
give us a foreign trade surplus. That would be great.
    I have one question, sir. Having said all that about 
pipelines and gas, exports of gas are one of my highest 
priorities. Today's bill very importantly touched on a few gas 
export issues. However, FERC really has work to do on a much 
broader set of gas export applications. My first question is 
what should I view as a reasonable length of time for FERC to 
view a current gas export application?
    Mr. Wright. For LNG or for a pipeline?
    Mr. Olson. For pipeline, just gas in general.
    Mr. Wright. Pipelines I would consider--it is really 
dependent upon the upstream facilities that need to be built to 
get to the border, but reasonably speaking, probably a year.
    Mr. Olson. OK. One final question. Does the FERC staff give 
any consideration to the strategic importance of these projects 
as it works on these applications?
    Mr. Wright. We can give consideration to all the 
stakeholders, the project proponent who is backing the export 
if you will of the gas down to the landowner, who is impacted 
by the siting of pipelines or facilities necessary to affect 
that export.
    Mr. Olson. Well, thank you, Mr. Wright.
    I yield back the balance of my time, Mr. Chairman.
    Mr. Whitfield. The gentleman yields back.
    At this time I recognize the gentleman from Kansas, Mr. 
Pompeo, for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    Mr. Wright, I want to talk to you, you have a lot of 
skepticism about statutory deadlines, that is, you do 
personally, but I want to make sure and distinguish that from 
FERC. This is a follow-up really on both Mr. Whitfield and Mr. 
Barton's questions from earlier. So you are not testifying 
about what the FERC commissioner said. In your written 
testimony you confirm that, correct?
    Mr. Wright. I am sorry. I didn't understand your question.
    Mr. Pompeo. So you are not testifying on behalf of any of 
the FERC commissioners or on behalf of the institution of the 
Federal Energy Regulatory Commission?
    Mr. Wright. I was requested in my role as a director of----
    Mr. Pompeo. And it is a yes-or-no question. I mean it is 
pretty straightforward. Are you testifying on behalf of any of 
the FERC commissioners?
    Mr. Wright. No.
    Mr. Pompeo. All right. We will leave it at that.
    Mr. Whitfield asked you about 120-day deadline. He asked 
you if there was any deadline that you would find acceptable, 
and you went into a long rambling discourse. Is there any 
deadline--how many days would you find acceptable as a period 
of time in which your work needed to be completed?
    Mr. Wright. If we have a complete application before us, 12 
months is probably a reasonable time as in H.R. 1900.
    Mr. Pompeo. Great. And that is what I was going to get to 
because this is a similar issue that you were involved in in 
H.R. 1900 when we were working on a pipeline permitting bill 
that is my legislation that had a 12-month period of time. You 
didn't like that deadline either, but Commissioner Moeller came 
in to testify. You were here for that hearing. He testified he 
had some changes. We made all of those changes. And then you 
went out last week and called that legislation draconian. Do 
you think this legislation is draconian as well?
    Mr. Wright. Well, with regard to H.R. 1900, I did not 
characterize the portion that applies to FERC as draconian.
    Mr. Pompeo. I will read it so everybody has got it. You 
were referring to the 90-day deadline for other agencies and 
you said it is still difficult. You said ``that is a rather 
draconian way to go about it.'' Do you think this legislation 
is draconian in setting a deadline for you to complete the task 
that sits before you?
    Mr. Wright. As I said earlier, I am not quite sure what the 
120-day deadline applies to anymore. It doesn't apply to 
presidential permits because they are being taken out of the 
equation. My assumption was that it applies to Section 3 and 
Section 7. If that is the assumption, I don't think that is 
long enough.
    Mr. Pompeo. They are not, but one year would be? Twelve 
months would be so----
    Mr. Wright. Twelve months from when we determined that all 
the information is there that we need.
    Mr. Pompeo. Great. So with respect to H.R. 1900, you have 
taken a different position than Commissioner Moeller, is that 
correct, on the deadline statute or now you are telling me you 
have the same position with respect to each of the statutory 
deadlines?
    Mr. Wright. No. Commissioner Moeller at his testimony this 
past summer mentioned the same thing, that there needs to be 
some oversight because the idea of giving 90 days and then 
deeming those agency permits approved could give those agencies 
the opportunity to either dismiss their applications or put 
conditions on them that are so onerous the infrastructure 
wouldn't get built.
    Mr. Pompeo. Right. That is not exactly what he said. He 
said he thought the legislation, H.R. 1900, made good sense so 
long as we created the right starting point for the period of 
the clock beginning to run. That was his actual testimony.
    Mr. Wright. Well, I read a portion that he said about the 
90-day limit, that was an oversight to watch out for these 
agencies because this is something they might do.
    Mr. Pompeo. Fair enough. You know, it is important. It is 
confusing, Mr. Wright, when you come here as a staff member to 
come testify. Politico this morning had a headline with respect 
to your testimony. It says ``FERC slams bill'' referring to 
H.R. 3301. You didn't write that headline, but I just think it 
is important that everybody understands that FERC hasn't 
slammed this bill, you did. It was your testimony that was 
characterized----
    Mr. Wright. Well, I am trying----
    Mr. Pompeo [continuing]. By Politico.
    Mr. Wright [continuing]. To understand the bill.
    Mr. Pompeo. I understand. I will yield back.
    Mr. Whitfield. The gentleman yields back and that concludes 
the questions for Mr. Wright. Mr. Wright, we appreciate you 
being here and giving us your views on this legislation. And so 
you are dismissed at this time.
    And I would like to call up the second panel. On the second 
panel today we have Mr. Mark Mills, who is a senior fellow with 
the Manhattan Institute. We have Mr. Paul Blackburn, who is an 
attorney, regulatory consultant to Blackcreek Environmental 
Consulting. We have Ms. Mary Hutzler, who is the distinguished 
senior fellow at the Institute for Energy Research. We have Mr. 
David Mears, who is a Commissioner with the Department of 
Environmental Conservation, the State of Vermont. We have Mr. 
Jim Burpee, who is president and CEO with Canadian Electricity 
Association.
    And I would like to recognize Mr. Green for the purpose of 
an introduction.
    Mr. Green. Thank you, Mr. Chairman. One of our witnesses 
today is a personal friend and a former elected official. He 
was a district judge in Houston/Harris County, and John Kyles, 
senior attorney with Plains All American Pipeline. And John and 
his wife and our families go back for a few decades, and I just 
want to welcome him here. Like I said, he was State district 
judge, and at one time I think we even recommended him to be 
U.S. Attorney, but he had twins and decided he couldn't come to 
Federal employment. He needed to stay in private practice.
    But I want to welcome Judge Kyles. Thank you, John, for a 
lot of service to our community as a judge and I sure 
appreciate your friendship.
    Thank you, Mr. Chairman.
    Mr. Scalise [presiding]. Thank you for the introduction and 
we will now go to our witnesses, starting with Mr. Mills. You 
each have 5 minutes for opening testimony.

STATEMENTS OF MARK P. MILLS, SENIOR FELLOW, MANHATTAN INSTITUTE 
 FOR POLICY RESEARCH; DAVID K. MEARS, COMMISSIONER, DEPARTMENT 
   OF ENVIRONMENTAL CONSERVATION, STATE OF VERMONT; PAUL C. 
 BLACKBURN, ATTORNEY AND ENVIRONMENTAL CONSULTANT, BLACKCREEK 
   ENVIRONMENTAL CONSULTING; JIM BURPEE, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, CANADIAN ELECTRICITY ASSOCIATION; MARY J. 
  HUTZLER, DISTINGUISHED SENIOR FELLOW, INSTITUTE FOR ENERGY 
   RESEARCH; AND JOHN H. KYLES, SENIOR ATTORNEY, PLAINS ALL 
                    AMERICAN PIPELINE, L.P.

                   STATEMENT OF MARK P. MILLS

    Mr. Mills. Good morning, Mr. Chairman. Thank you to the 
committee for the invitation to provide some remarks on this 
important legislation. I will take my 5 minutes to context for 
my work over the years in the energy field the importance of 
this particular Act, and specifically in the context of what I 
think is currently and still one of the most important things 
in the national interest, which is revitalizing the U.S. 
economy and ensuring that there is robust growth in the jobs 
sector with high-paying jobs.
    Let me just present first a thought experiment. Imagine 
what would have happened over the last 5 or 6 or 7 years but 
for the extraordinary expansion in the oil and gas sector that 
the many witnesses in past hearings and many members of this 
committee have pointed out. And just think in terms of what 
would have happened but for this extraordinary expansion. I 
think the United States would have faced not a recession but a 
depression in fact. If you consider the numbers just as, again, 
a context that the increased domestic production of 
hydrocarbons has contributed over $400 billion a year to the 
U.S. economy. It has attracted something like 200 billion plus 
and growing in foreign direct investment in the United States. 
It has driven down imports of oil by 45 percent, which has 
radically decreased the GDP-robbing trade deficit. We are, as 
others have noted, now a net exporter of hydrocarbon products 
for the first time since 1949 and on track, God willing and 
permit willing, to becoming a net exporter of significant 
amounts of natural gas, in our own EIA forecasts, about $2 
trillion of additional private investment over the next decade 
in this sector.
    And this is such a stunning reversal in the structure of 
the global and U.S. energy markets that it is inconceivable 
that the framework of regulation and legislation that has been 
put in place over the last 50 years still makes fundamental 
sense in the context of these reversals. In fact, the reversals 
are physical reversals, as many folks know. Pipelines had 
physically reversed their flows literally flowing from 
heartland to the coasts. We have had reversals in refinery 
construction, retirements. We have had reversals in shipyard 
fortunes. We have had reversals in the manufacturing sector.
    In fact, let me turn briefly to the manufacturing sector 
because I think that is at the center of what the opportunity 
is for this kind of legislation to lead to a revival in the 
broad manufacturing sector of the U.S. economy. It is already 
well recognized that the manufacturing sector directly related 
to oil/gas exploration, production, transport, and refinement 
has seen a growth and also has been recognized that the energy-
intensive sector of the U.S. manufacturing economy is under a 
massive revival. In fact the American Chemical Council has 
pointed out that there is about $70 billion in investments 
underway now and about 100 projects in the United States that 
will come online in just the next few years that will yield 
about a million jobs and add about $300 billion to the GDP. 
These are astounding changes but they are frankly only part of 
the story and not enough.
    The revitalization of that ecosystem will spill over into 
the rest of the manufacturing ecosystem because of the 
proximity of high-quality, low-cost, high-reliability supplies 
and suppliers, because of the proximity of a revitalized labor 
source and also, frankly, the proximity of reinvestment in the 
American educational entrepreneurship and venture community 
that arises from this wealth that occurs.
    So the real question, I think, on the table is not what has 
been posed by a lot of analysts and pundits as to whether or 
not the United States could become energy independent. It is 
obviously clear the United States could become economically 
energy independent and will be doing so very quickly. What is 
more interesting is the question of whether North America, the 
United States in combination with its two allies, could be, and 
will become the single-largest supplier of hydrocarbons to the 
world. This is a profound change in geopolitics, but more 
importantly, from a domestic perspective it is a profound 
change in the fortunes of U.S. companies across the entire 
industrial ecosystem and for high-paid permanent jobs in the 
middle markets and middle class.
    This won't come about easily because there are so many 
forms of legislation and regulations that are locked into a 
historical way of thinking, the paradigm of shortages, the 
paradigms of disappearing resources that we all know has now 
evaporated and no longer is the ruling paradigm. And it is in 
fact a permanent secular shift in the structure of the U.S. 
energy economy and the world energy economy. We can now become 
suppliers to the world in combination with our allies, not 
consumers of the world's resources.
    The central issue for me in looking at this legislation and 
legislation like this is it seems to me it is the first step 
towards what would be the equivalent of the North American Free 
Trade Act, a NAFTA-like legislation, which would allow free 
flow of capital, infrastructure development, and resources 
between Canada and the United States and Mexico. The Federal 
Government is not capable, no matter how well intentioned at 
any levels of bureaucracy or in Congress, of micromanaging this 
massive, multitrillion-dollar infrastructure. It could only be 
done fundamentally from the marketplace and there is no reason 
why it could not be done effectively between Canada, the United 
States, and Mexico. This is really an important first step 
towards unleashing that potential.
    Thank you.
    [The prepared statement of Mr. Mills follows:]

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    Mr. Scalise. Thanks for your testimony.
    Next, Mr. Mears.

                  STATEMENT OF DAVID K. MEARS

    Mr. Mears. Thank you, Mr. Chairman. Members of the 
committee, I appreciate the chance to testify before you today 
on behalf of my department.
    Mr. Scalise. Is your microphone on? Can you check?
    Mr. Mears. Sorry. My apologies. Thank you, Mr. Chairman. I 
appreciate the opportunity to testify before you today.
    Our State supports the underlying goals of this legislation 
as I understand it. Vermont is a State that has particularly 
benefited from transmission projects that cross boundaries from 
Quebec into Vermont. We have experienced lowered electricity 
prices and have a strong relationship with our counterparts in 
Quebec and with Hydro-Quebec and the associated owners of the 
infrastructure.
    We do have concerns, however, about this legislation which 
takes a piece of the approval process for international 
transboundary projects and breaks it out of the traditional 
process that we have had and removes the environmental review 
under the National Environmental Policy Act. Our concerns are 
specific to this specific project that is under consideration 
in Vermont but also more broadly with the concept in general.
    The specific project in Vermont that we are concerned about 
is a pipeline that currently runs from Portland, Maine, to 
Montreal transporting light sweet crude for the most part. And 
the proposal that is actively under consideration is if it ends 
up being that Montreal becomes the Locust point for the 
transmission of tar sands oil, that that oil will in turn be 
transmitted through the pipeline, the pipeline would be 
reversed and transmitted from Montreal through Vermont to 
Portland. The pipeline is decades old. It has not experienced 
this type of crude oil in the past, which presents greater 
risks to the environment. The pipeline flows through an area of 
pristine and natural beauty in the area. It flows past drinking 
water supplies, over water supplies, wetlands, State parks, et 
cetera. Vermont is a State that is critically dependent upon 
its tourism, recreation-based economy for its economic 
livelihood. And so our concerns are that if this project is 
exempted from review, that those kinds of considerations, 
whether or not the pipeline needs to be upgraded or additional 
considerations around how to ensure safety will not be given 
proper consideration.
    Also, our concern relates to the exemption of this project 
from the NEPA environmental impact statement requirements, 
which provide for the opportunity for public involvement and 
participate in. That is a critical aspect for Vermonters. We 
have a strong tradition of participatory democracy. It is 
critical to us that our citizens and communities have the 
chance to fully understand what the risks and impacts are both 
to their communities in terms of the direct impacts of the 
pipeline but also the broader impacts of an international 
transboundary pipeline such as this one that has implications 
in terms of climate change and the broader energy markets.
    So our concern is not that this pipeline reverse will not 
happen but that the process of approving it be given full 
consideration of all the environmental issues and that we have 
the chance to participate in the discussion.
    We acknowledge and I agree with many of the concerns raised 
today with the existing process for transmission projects 
particularly in the oil pipeline context, but simply exempting 
them from the environmental review and placing a time 
constraint on to the Federal agencies that are involved in 
limiting the scope of their review will not achieve the 
purposes of achieving, as Mr. Mills has suggested we all would 
like to see, a more robust, efficient North American energy 
system. I think we all share that goal. I think we can do it in 
our current system of environmental laws without exempting 
transboundary projects such as this one, the pipeline reversal 
that I was referring earlier, from an environment to review.
    Thank you for your time.
    [The prepared statement of Mr. Mears follows:]

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    Mr. Scalise. All right. Thank you.
    Mr. Blackburn.

                 STATEMENT OF PAUL C. BLACKBURN

    Mr. Blackburn. Mr. Chairman, Ranking Member, and members of 
the subcommittee, thank you very much for this hearing on H.R. 
3301. My name is Paul Blackburn and I have represented 
landowners threatened with condemnation by TransCanada and 
citizens concerned about oil spills and climate change 
resulting from proposed Keystone XL pipeline. I also plan to 
represent citizens of Minnesota on the Alberta Clipper pipeline 
expansion, which would probably be directly affected by this 
legislation. Various citizens of Minnesota might think about 
this.
    I would say that the citizens have a stake here and their 
rights and freedoms must be respected. One hundred and twenty 
days is simply not long enough, simply not long enough to allow 
citizens to be involved in these particular decisions, and this 
needs to be looked at in a broader context.
    The government offers pipelines a really sweet deal. First 
off, they get to condemn thousands of parcels of private 
property and property owners like the farmers and ranchers that 
I represent in South Dakota take this very personally. Also, 
once the pipeline is built, FERC guarantees the pipeline 
company profits forever as long as that pipeline operates, 
regardless of how much or how little it is used. And I will 
talk about that in a second.
    In contrast, landowners and citizens get a raw deal because 
they receive little benefit and shoulder many adverse financial 
and economic impacts. Environmental review here isn't really a 
problem and so the underlying problem is the crude oil pipeline 
regulatory process underlying. The one that underlies the NEPA 
process is deeply flawed. To protect the landowners, the 
subcommittee should consider reform not just of this particular 
presidential permit process but of a broader set of issues that 
are really important.
    As I noted, the Alberta Clipper pipeline is currently 
pending and it is critically important to recognize that the 
crude oil pipeline regulation process is radically different 
from the process for natural gas pipelines and for electric 
transmission lines. You know, applying this law to all three of 
them the same way doesn't make a lot of sense. FERC does an 
extensive amount of review in natural gas pipelines, as the 
prior witness talked about, and the Department of Energy does a 
great deal, as well as all the regional transmission system 
coordinators do a lot of work for the transmission line 
planning. In contrast, the crude oil pipeline regulatory 
process is kind of the Wild West.
    I am going to talk about economics here for little bit. And 
the reason that is important is because these issues--it is not 
just national security but it is also the whole entire national 
interest, and part of that is the economic issue. I am going to 
talk about some economic things because those kinds of issues 
should be discussed as part of that process and 120 days is not 
enough time to consider these kinds of economic issues.
    First, Congress should not allow crude oil pipelines to be 
built until a need for those pipelines is proven. Most 
regulative utilities have to do this before they get their 
tariffs guaranteed. This is a real problem, as shown by 2010 
FERC petition filed by Suncor, one of the largest tar sands 
producers. Suncor argued that Enbridge should not have started 
construction of the Alberta Clipper pipeline because it was not 
needed and may never be needed, something that the public 
doesn't know. Suncor stated--and I will cut to the quote--by 
the time the Alberta Clipper is finished, Suncor argued 
``shippers will have paid Enbridge hundreds of millions of 
dollars before they reach the point, if ever, where the 
operational benefits the Alberta Clipper justify their cost.''
    The FERC data in Chart 1--and I would ask Nick to bring up 
some of my data here--the dark area down there is the imports 
on the Alberta Clipper pipeline system from Canada. This is 
FERC data, nothing sophisticated, no statistical analysis. The 
thinner line above is the pipe capacity. Enbridge built their 
pipeline in 2010. That is where the line jumps up. Since 2010, 
they haven't really had any increased imports on that pipeline.
    So at the same time Figures 2 and 3--we will move to 
Figures 2 and 3--show that Enbridge's FERC-approved tariffs 
have approximately doubled and their revenues have skyrocketed, 
so that is the tariffs going up and this is--Figure 3, please. 
That is the revenues going up. The reason the Alberta Clipper 
pipeline was built prematurely was only partially due to the 
economic recession. Another reason is the fact that the Alberta 
Clipper pipeline and the first Keystone pipeline were brought 
online at almost exactly the same time resulting in too much 
capacity relative to market needs.
    As shown by Figures 4 and 5, new supply development in 
Canada is steady. That is the black line. It is a pretty 
straight line, little black line. The rest of those are all the 
CAPP forecasts, the Canadian Associated Petroleum Producers, 
forecasts show they tend to overestimate what they need. And 
then Figure 5, the light blue area of the top there is the 
imports on the first Keystone pipeline. So the dark blue is 
Enbridge and all the new oil that came out of Canada went on 
TransCanada's first pipeline. So that is why there isn't any 
more new oil flowing on Enbridge's system.
    Now, if the proposed Keystone XL pipeline is brought online 
in 2012, the likely result would be that even greater losses 
for Enbridge's shippers and ultimately consumers. Looking at 
the future, if Keystone XL comes online at about the same time 
that Enbridge completes its similarly sized expansions to the 
Gulf Coast, together totaling 1.7 million barrels per day of 
new capacity, then it is likely that consumers will 
unnecessarily pay billions of dollars at the pump.
    The media frames this as a conflict over Keystone XL as 
relating only to Administration delay to appease 
environmentalists, but this delay also----
    Mr. Scalise. If you could start wrapping up.
    Mr. Blackburn [continuing]. Provides great benefit to 
TransCanada's chief competitor Enbridge.
    I would just say that these kinds of economic issues are 
the kinds of things that the Federal Government should look at, 
and yet in 120 days it is something not possible to look at 
this economic analysis. The kind of analysis done in Canada by 
the National Energy Board and the kind of analysis done at 
States for need is critically important to determine if 
citizens are really protected. One hundred and twenty days is 
not enough. I would say that the Congress should really try to 
amend this entire system and make it rational for citizens so 
that we aren't just simply building pipelines without a clear 
understanding of why and whether they are really in the 
citizens' economic interests.
    Thank you.
    [The statement of Mr. Blackburn follows:]

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    Mr. Scalise. All right. Thank you.
    Mr. Burpee, you are up next.

                    STATEMENT OF JIM BURPEE

    Mr. Burpee. Mr. Chairman, ranking member, and members of 
the subcommittee, thank you for the privilege of being here 
today.
    The Canadian Electricity Association is the authoritative 
voice of the Canadian electricity sector representing 
generators, transmitters, distributors, and marketers of many 
ownership classes. With one limited exception, CEA members do 
not hold presidential permits issued by DOE for U.S. segments 
of international power lines, but they are impacted by 
considerations related to the issuance of these permits. Also, 
many of our marketing members are authorized by DOE to export 
electricity to Canada.
    The draft bill offers the opportunity for a dialogue on how 
well the permitting processes in Canada and the U.S. are 
working and on the prospects for greater synergies. In that 
spirit, my remarks will focus on the following: the strength 
and benefits of electric integration, the value of new 
international power lines, recent modernization of Canadian 
legislation governing infrastructure development and the 
robustness of environmental reviews thereunder, and aligning 
the respective regulatory processes to enhance infrastructure 
development and cross-border trade.
    The integration of the North American electric grid offers 
numerous advantages to consumers in both countries, including 
operational efficiencies and greater access to low-carbon 
resources. Such access is critical to many U.S. States along 
and beyond the border as electricity exports from Canada have 
historically played a key role in their supply nexus, thereby 
assuring adequate supplies of electricity.
    Physical and market linkages between Canada and the U.S. 
are further enhanced by common operational and commercial rules 
such as the mandatory reliability standards developed by the 
North American Electric Reliability Corporation that assure 
both a reliable and secure supply of power across the North 
American grid.
    New cross-border linkages will further enhance our trading 
relationship by supporting growth in low-carbon resources 
assuring reliability and offering benefits tailored to the 
economic needs and public interests of local jurisdictions 
involved. More broadly, these benefits are just some of the 
factors driving a need for hundreds of millions of dollars of 
investment in new electricity infrastructure in North America 
over the next 20 years.
    Understanding the importance of enhanced infrastructure in 
Canada and at the same time recognizing the need to modernize 
regulatory requirements to facilitate such development, the 
Government of Canada recently updated permitting and review 
processes for major infrastructure projects with a focus on 
establishing clear timelines, reducing duplication and 
regulatory burdens, strengthening environmental protections, 
and enhancing consultation with aboriginal peoples.
    I would stress these reforms have not come at the expense 
of Canada's robust environmental review process. Under the 
modernized regime, there will be continuity in the performance 
of the same high-quality reviews but with more flexibility and 
efficiency built in. Moreover, these updates have included the 
adoption of more stringent enforcement measures. CEA believes 
that greater efficiencies in review processes can and must be 
compatible with support for comprehensive environmental 
protection and stakeholder consultation requirements.
    Turning to the draft bill, CEA views it as an opportunity 
for dialogue and whether the permitting processes in Canada and 
the U.S. stands to benefit from closer alignment. CEA 
understands that experience with the DOE's processes is one of 
general satisfaction. However, we respectfully suggest that 
there are benefits to be gained for modernizing these 
processes. For example, DOE states that it requires 6 to 18 
months to issue a presidential permit. However, the record 
reveals a trend of lengthy delays. Likewise, DOE export 
authorization requirements would also benefit from 
modernization. Indeed, it is unclear if there was anything 
governed under current DOE export authorizations that is not 
addressed through separate market or regulatory mechanisms.
    Accordingly, modernizing these processes would not only 
present benefits in terms of enabling DOE to better meet its 
own time commitments but would also align more closely with the 
recent establishment of fixed deadline for completion of 
corresponding reviews in Canada. To their credit, both DOE and 
its counterpart in Canada, the National Energy Board, have 
recognized the need for reform and are beginning to take 
action. In view of this, CEA recently recommended to the 
Canada/U.S. Regulatory Cooperation Council that DOE and the 
National Energy Board cooperate on modernizing the respective 
processes under the auspices of a formal bilateral initiative 
to align our two countries' regulatory systems.
    Based on all of these themes, CEA wishes to acknowledge and 
applaud the specific principles underlying the draft bill which 
proposes the following: establishment of fixed timelines for 
permitting processes, modernization of procedures to avoid 
duplication of existing market and regulatory measures, and 
greater efficiencies in project reviews.
    To conclude, CEA supports efforts to address the cross-
border piece of the larger energy infrastructure and trade 
puzzle in North America and to ensure development of a 21st-
century grid that is facilitated by 21st-century regulatory 
regime. CEA looks forward to continuing engagement with the 
subcommittee on this important topic.
    Thank you again for this opportunity and I would be happy 
to answer any questions.
    [The prepared statement of Mr. Burpee follows:]

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    Mr. Scalise. All right. Thank you.
    Ms. Hutzler.

                  STATEMENT OF MARY J. HUTZLER

    Ms. Hutzler. Mr. Chairman, ranking member, and members of 
the subcommittee, thank you for the opportunity to testify 
today.
    Forty years ago, the United States faced the 1973 Arab oil 
embargo setting off a series of policy initiatives in 
Washington designed to reduce our dependence on foreign oil. 
Despite them, domestic production of oil had declined and oil 
imports had increased until recently. Thanks to American 
innovation, new drilling technologies have allowed us to tap 
our vast shale resources and make the United States the largest 
liquid fuels and natural gas producer in the world. And with 
Canada's vast proven oil reserves, the prospect of North 
American energy independence is no longer political rhetoric 
but a promising reality.
    The Institute for Energy Research has monitored closely the 
energy boom that is occurring primarily on private and State 
lands. Today, we welcome the committee's review of new ideas to 
strengthen our Nation's energy infrastructure and facilitate 
access to North America's vast stable supply of oil and natural 
gas.
    According to the government's own numbers, North America 
has enough resources to provide reliable and affordable energy 
for centuries to come, which IER highlighted in a recent 
inventory of North America's energy resources. To fully benefit 
from this energy renaissance, however, we need the 
infrastructure to get the energy where it is needed and the 
energy security that this infrastructure would provide.
    Pipelines have been used for 3/4 of a century providing the 
safest, most-efficient, and least-cost transport of oil and 
natural gas, but due to existing pipelines reaching near full 
capacity, oil transport by rail has increased dramatically. 
Last year, oil carried on trains from Canada to the United 
States increased 46 percent. EIA estimates that 1.37 million 
barrels of oil and petroleum products per day were moved by 
train during the first 6 months of 2013, up 40 percent in just 
one year.
    Total Canadian oil imports to the United States have also 
been rising steadily. Between 1993 and 2012, imports of oil 
from Canada increased by 150 percent. Most of the oil comes be 
a pipeline. The failure to construct the Keystone XL pipeline 
has precipitated greater use of trains for oil transport both 
from Canada and within the United States from the Bakken field 
to North Dakota.
    The United States imported almost 3 trillion cubic feet of 
natural gas from Canada in 2012, 12 percent of our consumption 
that year. The United States gets 94 percent of its natural gas 
imports from Canada. The rest comes from Mexico and from 
overseas as liquefied natural gas. Canadian natural gas imports 
to the Northeast and Midwest, areas that also benefit from 
increased domestic production of the Marcellus Shale, are 
slightly declining, while Canadian natural gas imports into the 
Northwest are increasing. Four U.S. States, Minnesota, Montana, 
Idaho, and North Dakota, account for 75 percent of all the 
natural gas brought into the United States via pipeline. The 
border States serve as critical links for gas-dependent States 
like California where over 55 percent of electric generation 
comes from natural gas.
    On the East Coast, Vermont, the first State to ban 
hydraulic fracturing, is entirely dependent on natural gas from 
Canada. On our southern border, the United States is a net 
exporter of natural gas to Mexico where exports have been on an 
upward trend since 2000 and have more than doubled since 2007. 
Mexico is also our third-largest supplier of oil and petroleum 
products supplying almost 400 million barrels in 2012, though 
this is down from its peak in 2006.
    By maintaining a well-working energy infrastructure between 
the United States and our closest allies in North America, we 
can reduce our reliance on overseas oil. The other oil imports 
are now just 35 percent of oil consumption, but because Canada 
and Mexico are supplying over 60 percent of our oil imports, 
our net energy dependence on North American oil is just 14 
percent. This number will drop due to increased production here 
and in Canada but we must ensure that North American energy 
commerce is free from impediments and permitting delays.
    More pipelines will mean greater energy security, safer 
transport, and the ability to move resources to where they are 
needed most. The recent politicization of pipelines in the U.S. 
will not accomplish any goal of those who oppose them. Rather, 
oil and natural gas producers will simply use more costly modes 
of transport that pose greater risks to the environment. They 
will export North American energy investments and jobs to 
countries with far fewer commitments to environmental 
protection. Affordable energy is essential to economic growth. 
Efficient and low-cost transport of energy provides the 
arteries of commerce that nourish an economic recovery.
    Thank you and I look forward to your questions.
    [The prepared statement of Ms. Hutzler follows:]

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    Mr. Scalise. All right. And thank you.
    And Mr. Kyles.

                   STATEMENT OF JOHN H. KYLES

    Mr. Kyles. Thank you, Mr. Chairman, and distinguished 
members of the committee. Thank you for inviting me here to 
testify today on the need for reform of the presidential permit 
program for cross-border energy infrastructure.
    I am John Kyles, senior attorney for Plains All American. 
We are based in Houston but have pipeline infrastructure across 
the country, including several pipelines across the U.S.-
Canadian border.
    Today, I will testify on the need for reform of the State 
Department presidential permit process for liquid pipeline 
projects. Despite widespread public attention to Keystone XL, 
there are many other presidential permit applications stuck at 
the State Department also facing multiyear delays. Many of 
these projects are simple changes of ownership filings with no 
impact on the pipeline's operations or border-crossing status. 
And yet they face lengthy delays at the State Department. We 
support the goals of Chairman Upton and Congressman Green to 
streamline the permit process and exempt these projects with 
minimal policy or practical impact on society.
    Every day, Plains All American handles over 3.5 million 
barrels of crude oil and natural gas liquids such as butane, 
propane, and ethane. We have approximately 16,500 miles of 
active crude oil and natural gas liquid pipelines and gathering 
systems.
    The pipelines I will highlight first today run from Canada 
to Michigan crossing the U.S.-Canadian border under the Detroit 
River near Detroit, Michigan, and under the St. Clair River at 
Port Huron, Michigan. These pipelines deliver liquefied 
petroleum gases such as propane and butane for industrial uses 
in manufacturing, chemicals, plastics, and similar products, as 
well as gasoline refining.
    Simply put, these pipelines deliver the raw materials that 
support good-paying manufacturing jobs in Michigan and beyond. 
These are blue-collar jobs with pay and benefits to support a 
family, provide healthcare, or send a child to college. So it 
is doubly frustrating when something as important as this is 
caught up in years of bureaucratic delay under the current 
presidential permit in process.
    Plains All American currently has two presidential permit 
applications pending for seven pipelines crossing the U.S.-
Canadian border into Michigan. Our need to apply for a 
presidential permit was triggered when Plains bought these 
pipelines in 2012. Under current State Department guidelines, a 
change in ownership of the pipeline triggers the need to apply 
for a new presidential permit.
    These pipelines already had pending name change permit 
applications from their previous change of ownership in 2007. 
So for as long as 5 years the State Department has been 
considering whether to issue a presidential permit for 
something almost as simple as a name change at the top of the 
permit. There have been no operational changes of the 
pipelines, no change in materials or physical or environmental 
impacts, just many years of review but still no decision.
    We are allowed to continue operating the pipeline 
consistent with the terms of the existing presidential permit, 
but we face the uncertainty of not knowing when or if we will 
ever get the presidential permit we are supposed to have for 
these pipelines or under what terms.
    Another area of uncertainty is our Poplar-Wascana pipeline 
crossing the U S.-Canadian border near Raymond, Montana; and 
Saskatchewan. This, too, involves an even more benign change of 
ownership presidential permit at the State Department. The 
Poplar-Wascana pipeline change is only required pursuant to an 
internal corporate reorganization that affects two wholly owned 
Plains subsidiaries. However, the application has been delayed 
by State considering whether to review the interconnection of a 
new Bakken North pipeline into Poplar-Wascana for movement of 
crude into Canada. This interconnection will have no impact on 
the border crossing or the environment.
    Now, we imagine that the State Department officials working 
on these applications are dedicated public servants. Part of 
the problem, though, is there appears to be little guidance to 
these folks or to us about the appropriate process for 
processing presidential permit applications.
    As this committee knows, there is no authorizing statute. 
Congress has the right to provide requirements for this 
program. There are no laws about what criterion is required for 
calculating presidential permit compliance, what to examine, or 
any timelines for completion of the Department's review. The 
unfortunate result of the lack of guidance is uncertainty and 
delay.
    Mr. Scalise. If you could begin to wrap it up.
    Mr. Kyles. Our 5-year delay for simple paperwork is an 
example of why this program needs reform and your bill would be 
welcome.
    That concludes my testimony. I would be happy to answer any 
questions. Thank you.
    [The prepared statement of Mr. Kyles follows:]

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    Mr. Scalise. I want to thank all of the panelists for their 
testimony and we will now go to member questions. I will start 
with myself.
    I want to ask Mr. Mills, in your testimony, you talk about 
some of the things that a lot of us on this committee have 
advocated for a long time, and that is North American energy 
independence. Of course we advocate an all-of-the-above energy 
strategy and of course we have seen a revolution, especially as 
it relates to natural gas, oil, other technologies that have 
allowed us to access so much more natural resource here in 
America that allows us to be energy independent. We also talked 
about the amount of investment that is sitting on the 
sidelines. I think you referenced over a trillion dollars and 
the abilities that we would have if we have a more streamlined 
process as this bill envisioned. Can you expand a little bit on 
what you have seen in terms of the investment that can come in 
the job creation here in America that would also come with a 
more streamlined process for permitting to access that energy?
    Mr. Mills. Well, thank you, Mr. Vice Chairman. The issues 
that we have done, it is utterly fascinating because I am 
basically a tech guy and I spent most of my life in 
microprocessors and in fact missile systems, as well as energy 
side, and I am very bullish about what the tech community will 
do and is going to do for America's economy.
    The fascinating thing is that the oil and gas sector 
dominantly--and to some extent the coal sector but mostly oil 
and gas--has done more for the U.S. economy in the last 5, 6 
years in terms of GDP generation, job creation, and the general 
expense to the economy than any other single sector of the 
economy. It is stunning what oil and gas has done. The reversal 
of foreign direct investment is what is utterly fascinating. 
Instead of dollars leaving America to invest in Africa, which 
is productive and a good thing, but from the viewpoint of the 
United States, the monies are from Africa and from the Middle 
East and from Russia included and from China and from India and 
Malaysia are flowing to the United States to invest in 
manufacturing operations, which I would include. But the 
numbers are in the hundreds of billions of dollars 
collectively.
    This has extraordinary ripple effect through the economy in 
terms of job creation because these are sticky jobs as the 
economist at U Cal Berkeley calls them. You can't really easily 
outsource the jobs that this creates. And it is not just jobs 
in the oil field. For every job in oil and gas, coal fields, 
there are 5 or 6 collateral jobs that are geographically 
located not just in California or Texas, God bless them both, 
but in dozens of States, which is magnificent.
    Mr. Scalise. And we see that in Louisiana with the spinoff 
jobs that are tied to energy production and what can come to 
that and also the value of the more we do, the more we 
displace, as you talk about, the oil that we are getting from 
some of the countries that don't like us. And clearly we have 
got a friend in Canada and in Mexico, and the more we can trade 
with those friends, it is less that we have to get from some of 
these countries that don't like us and take that money in 
essence and use it against our own national interests. And I 
know you talked about that.
    Mr. Kyles, I wanted to ask you, you talked about the 
experiences in Michigan specifically with the delays that you 
are experiencing and even of something as basic as a change of 
ownership. And obviously this legislation addresses that 
problem and streamlines the process as well. Can you talk about 
the job impact that a bill like this would have if you don't 
have to go through bureaucratic red tape, nothing to do with 
environmental laws. Those have already been done. If you are 
making changes as basic as ownership where you have already 
cleared so many of the other hurdles and then in essence you 
have to start all over again with another red tape process, how 
does it hurt jobs and in essence how would this bill help 
streamline that process?
    Mr. Kyles. Well, fortunately, under the current structure, 
a pipeline operator is able to continue the operations of an 
existing pipeline as long as the pipeline is operated in the 
same manner it has before. The problem, however, is the 
chilling effect there is on investment because you don't know 
what the change of ownership process will entail.
    Mr. Scalise. Any kind of example of job impact it is having 
into the two Michigan examples you used?
    Mr. Kyles. Well, at this point there has been no negative 
impact with respect to the jobs. However, there possibly could 
be in the future in another circumstance where there may not be 
a willingness to invest in a pipeline because there is a 
question about the delays and completion of the ownership 
change.
    Mr. Scalise. Yes. And obviously that can hurt not only 
investment----
    Mr. Kyles. Absolutely.
    Mr. Scalise [continuing]. But also job opportunities.
    Mr. Kyles. Absolutely.
    Mr. Scalise. I want to ask you, Mr. Burpee, you talked 
about the experiences in Canada and they have gone through a 
process similar to this. They have streamlined their process. 
Can we learn from some of the things that they did that are 
smart reforms they made that we can then implement here as 
well?
    Mr. Burpee. Yes, there are few and they did require 
legislative change. The fundamental issue was one of a variety 
of pieces of legislation. Regulations were put in piecemeal and 
didn't work together to foster an economic environmental 
review. Right now, that is being streamlined as well as working 
with the provinces to harmonize the opportunity for 
equivalency. Probably the most enlightening part that happened 
is about 5 years ago they created a major project management 
office recognizing how many different departments in the 
Federal Government different projects had to go through. And 
just by coordinating that review, they got review time down 
from an average of 4 years to 22 months. They realized that you 
couldn't get past 22 months without looking at legislatively 
get the acts and bring them up into the 21st century, which is 
the key part. A lot of things, especially electricity, have 
changed, mandatory reliability standards that are North 
American-wide, that there are a lot of elements there that were 
just outdated and not protecting the environment.
    Mr. Scalise. All right. Thank you very much.
    Mr. McNerney.
    Mr. McNerney. Thank you. Our cross-border tar sands 
pipelines such as the Keystone XL and Alberta Clipper are 
significant projects and they take billions of dollars and last 
decades and decades. They cross many States and take land from 
hundreds of landowners. These projects have environmental 
impacts, economic impacts, and impacts on communities and 
natural resources. I would like to start my question with Mr. 
Mills. I couldn't help but get caught up in your enthusiasm and 
your optimism, but I would like to know if the Institute has a 
position on global warming and its impact on our national 
infrastructure?
    Mr. Mills. The Institute does not take an institutional 
position, the Manhattan Institute, on issues like global 
warming or any other issue. The Institute is structured as a 
quasi-academic research organization, so individual fellows, 
senior fellows may have positions, absolutely.
    Mr. McNerney. Well, it is certainly a significant part of 
our energy question and our energy challenge.
    Commissioner Mears, what is your view of the Federal review 
process required by NEPA and does the NEPA process drive better 
projects with less environmental harm than projects would under 
the proposed legislation?
    Mr. Mears. Absolutely. NEPA is one of those keystone 
environmental laws in the United States. On one----
    Mr. McNerney. Well, keystone is an unfortunate use of 
terms.
    Mr. Mears. Sorry. It is a foundational law and 
environmental law in the United States and it is an integrating 
law. And, for instance, the way that it was described earlier, 
the way that FERC can, in its role, review natural gas projects 
where it will look at a whole host of economic and 
environmental issues and will also serve as a convener of the 
other State and Federal agencies that participate in the 
process. When they do the environmental impact statement 
review, that in turn feeds the determinations made under the 
Clean Water Act or Clean Air Act or under State land use laws. 
All of those laws and the implementation of those by other 
agencies, whether Federal or State, benefit from having a 
comprehensive environmental impact statement analysis, as well 
as an evaluation of alternatives, alternative project paths or 
locations that might have less environmental impact.
    Mr. McNerney. Thank you. Mr. Blackburn, tell us why you 
believe that the NEPA actually produces better outcomes for 
citizens, communities, and even for industry?
    Mr. Blackburn. Thank you, Representative McNerney.
    Well, having worked with a lot of landowners in South 
Dakota and Nebraska, it is clear that without the NEPA process 
there, without the National Environmental Policy review process 
in those States, the citizens really would have had no 
information and no opportunity to learn about how the impacts 
of the Keystone XL pipeline could be limited on them. Without 
that kind of review, citizens would have had even more problems 
and been more opposed to the pipeline there. You know, having a 
clear, understandable, robust review process means that 
citizens can be involved. When citizens aren't involved 
effectively in these decisions, they tend to get their backs 
up. They tend to become resistant to them, and then their 
actions become unpredictable.
    With the Keystone XL pipeline, the most unpredictable part 
of that was the legislative action in Nebraska. If there had 
been an existing permitting process in Nebraska, then probably 
there wouldn't have been a legislative effort and then the 
process there would have moved ahead more predictably. But at 
least NEPA gave those citizens, those ranchers and farmers and 
other folks that are concerned about the pipeline, an 
opportunity to participate, to learn about the pipeline, and to 
learn how to protect their interests.
    Mr. McNerney. Well, certainly, if the citizen input is a 
part of the process, there is going to be a better chance of 
acceptance by the local communities and less chance of lengthy, 
costly legal battles.
    Mr. Blackburn. Absolutely. You know, with Americans, if 
they have a fair fight, most people will go through the process 
of a regulatory review and they will be OK with the outcome one 
way or the other. If they are frozen out of the process, 
Americans will fight to protect their interests, and that can 
become very unpredictable what happens.
    Mr. McNerney. I think a current example is the Yucca 
Mountain nuclear repository in Nevada.
    Commissioner Mears, how did the citizens of Vermont feel 
about this project, and how many local government jurisdictions 
have weighed in?
    Mr. Mears. Well, the only jurisdiction that I recall 
weighing in formally, although there may have been several, but 
the one I know weighed in was Irasburg because their drinking 
water is affected, but I know that there was some consideration 
at a town meeting day last year by a number of communities, but 
I don't recall exactly how many formally weighed in. But I can 
say that regardless of how Vermonters may feel about the 
ultimate pipeline reversal in this instance, I can speak with 
assurance that almost all of them would feel strongly about 
wanting to have a voice in a decision like this one.
    Mr. McNerney. Thank you. I yield back.
    Mr. Scalise. All right, thank you.
    The gentleman from Illinois, Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. I just want to remind 
everybody that we do have the Keystone pipeline. We talk a lot 
about Keystone XL, and I guess I am just wondering why we 
didn't have a 5-to-10-year delay on Keystone and we have had a 
5-year plus delay on Keystone XL? I think the answer is pretty 
simple. We had a change in administration that doesn't want to 
move heavy crude via pipeline.
    And the Keystone pipeline produces crude oil directly to my 
district to my refinery and then it goes to Chicago and then it 
gets moved to Ohio and Indiana. It is very critical. The heavy 
crude from the oil sands equates to the Venezuelan crude or the 
Saudi heavy crude, and if anything it is displacing our 
reliance on heavy crude oil it is the oil sands. That is why I 
go back to my initial comments about national security 
interests. If you want to see anything that is a national 
security interest, it is the Keystone pipeline and it is the 
Keystone XL pipeline. And that is why the definition is so 
critical in what we are talking about.
    Pipelines are the safest, cheapest way to move heavy crude 
liquid products bar none. It is really not debatable. It is the 
safest, cheapest way to move bulk crude versus trains, as we 
have heard, versus barges, as we have heard, versus trucks. And 
for the individual consumer, you can't even calculate how much 
more beneficial it is to the individual citizen on the 
receiving of that product and then the refinement of that 
product.
    The question I have is I would have liked for the 
Department of Energy to have come. We invited them. They 
decided not to show. And I would have asked them about this 
whole free trade agreement provision on bulk commodity 
products. I am from southern Illinois. Corn and beans moves 
across the international border. Crude oil is a bulk commodity 
product so I would have asked them that terminology of ``shall 
be granted without modification or delay'' where it took DOE 4 
months. The law says ``shall be granted without modification or 
delay'' for natural gas. And that is an important aspect 
because natural gas is a commodity product.
    I want to ask Ms. Hutzler, Mr. Mills, and Mr. Kyles, why is 
it important to reduce obstacles to importing or exporting 
natural gas to or from Canada and Mexico? So, Ms. Hutzler? And 
if you can quickly because I have about 3 more other questions.
    Ms. Hutzler. Oh, OK. Well, mainly so that we have 
flexibility in where our supplies are coming from. Natural gas 
is going to be the fuel of choice. We are going to see it grow 
in the United States both in terms of houses switching from 
heating oil to natural gas, in terms of electric generation. It 
backs up renewable technologies that are intermittent 
technologies, and you need to be able to get that from 
different sources of supply.
    Mr. Shimkus. Mr. Mills?
    Mr. Mills. The central issue is a philosophical issue, 
which properly belongs to the purview of Congress is to your 
point, that these commodities are essential to the function of 
the North American economy. We already have established the 
bipartisan philosophical principle of NAFTA with respect to the 
free movement and free trade of goods and manufactured 
products. In my book the problem is definitional. We 
manufacture oil and gas in North America now. This is a 
manufactured product. You don't just dig it out of the ground. 
It looks like a manufacturing operation. There should be no 
constraints in North America politically, economically, or 
philosophically. It should be done within each country's 
purview of environmental regulation and that is it.
    Mr. Shimkus. Mr. Kyles?
    Mr. Kyles. I would agree with the previous comments. 
Primarily, however, Plains All American is involved in crude 
oil and liquid fluids, natural gas liquids transportation, so 
if you are talking about other forms of natural gas, then that 
is not within our operations.
    Mr. Shimkus. The same three, what would be the impact if 
Canada started restricting their exporting of natural gas based 
upon an argument that they wanted to keep natural gas cheap in 
Canada? Let's go Mr. Mills first.
    Mr. Mills. Well, I confess I am a Canadian and I have lived 
in Washington, DC, for 30 years. There was a debate along those 
lines. In fact in Canada for years, as my colleague here will 
attest, in that Canada came to the conclusion that the idea of 
being an isolationist in economic terms was counterproductive 
to driving down not just low cost for Canadians, which is 
symmetrically the same for Americans, but for boosting the 
economy.
    Mr. Shimkus. My time is expired. And, Chairman, I will just 
yield back. Thank you very much.
    Mr. Scalise. Thank you.
    The gentleman from California, ranking member of the full 
committee, Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Major fossil fuel energy projects have climate impacts that 
we can't just ignore. These projects also affect commodity 
prices, landowners, safety, jobs, natural resources, economic 
competitiveness, pollution, and many other legitimate concerns. 
The Federal Government is the only entity that can ensure that 
all of these concerns are taken into account. For cross-border 
pipelines, this is done by applying a public interest test 
before issuing the presidential permit. Do any of the witnesses 
here think that we should approve a cross-border pipeline that 
is not in the interest of the American public? If any of you 
believe that, just hold up your hand.
    No one seems to be holding up his or her hand.
    None of us should support approving projects that are 
contrary to the public interest. But that is precisely what 
this bill would allow. It eliminates Federal environmental 
review and consideration of the public interest, and then it 
requires approval of cross-border pipelines unless the pipeline 
would affirmatively harm national security. It is even more 
extreme than that. This bill could actually force approval of a 
pipeline that the State Department finds is contrary to the 
public interest. And I called this earlier in my opening 
statement the Keystone XL zombie clause. Perhaps it is 
appropriate we are considering this bill 2 days before 
Halloween.
    The bill preserves the existing permitting process for 
pending projects but only until the application is denied or 
until July 1, 2016, if there is no decision before then. So 
under this bill if the administration finds that the Keystone 
XL tar sands pipeline is contrary to the public interest, that 
is not the end of the matter. TransCanada could simply reapply 
when the new permitting provisions become effective on July 1, 
2015. And the Department of Commerce would then be required to 
rubberstamp the pipeline by October 29, 2015, absent harm to 
the national security.
    Well, let's be clear. The administration could determine 
that the Keystone XL pipeline is simply too dangerous to the 
climate. It is too risky to important aquifers of the Midwest. 
And overall, it just isn't in the interest of the American 
public. But none of this will matter. This bill virtually 
guarantees that Keystone XL pipeline would be approved within 2 
years. And some controversial cross-border projects such as the 
project that would bring tar sands crude from Montreal to 
Portland, Maine, would need no Federal approval or review under 
this new process.
    Commissioner Mears, does this make any sense? How would the 
citizens of your State view the idea that Congress would 
require approval of a pipeline that was contrary to the public 
interest?
    Mr. Mears. Thank you for the question. Clearly, in the 
State of Vermont the citizens would be frustrated with the 
process that they had no opportunity to have input into and in 
which the Federal Government wasn't playing its obligation to 
look at the international and national implications of a 
project that runs across a national border and multiple State 
boundaries. Our State doesn't have the resources or capacity to 
consider the full range of effects, and yet we suffer the 
implications of these kinds of decisions. Vermont is for 
instance particularly vulnerable to the effects of climate 
change as we experienced after Tropical Storm Irene and the 
dramatic flooding that happened there.
    Mr. Waxman. So you wouldn't like that?
    Mr. Mears. Would not like it.
    Mr. Waxman. OK. Mr. Blackburn, you have explained that the 
process is already heavily tilted toward the oil industry and 
that it provides minimal opportunity to address citizens' 
concerns. How do you think the Keystone XL zombie clause would 
be received by the landowners and others affected by that 
pipeline?
    Mr. Blackburn. I think the landowners and the citizens in 
Minnesota who would be affected by the Alberta Clipper pipeline 
expansions would be incredibly frustrated that there would be 
no meaningful national review of whether that was truly in the 
country's national interest. After all, it is not just the 
individual impacts on the ground. It is also the question about 
whether it is appropriate or not to import this very dirty 
fuel. And that itself is the question for the Federal 
Government and not necessarily for each individual State. At 
the same time, we are very clear that Minnesota does have 
limited authority, you know, over interstate pipelines, and 
that is really something the Federal Government should look at.
    Mr. Waxman. Thank you.
    This bill eliminates all comprehensive Federal 
environmental review and all opportunities for public 
participation. It makes sure that Keystone XL and other 
controversial pipeline projects are rubberstamped under this 
new process even if they are denied under the existing process, 
and I think, Mr. Chairman, that is not a defensible approach.
    I yield back my time.
    Mr. Scalise. The gentleman yields back.
    Now, the gentleman from Texas, Dr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman.
    I just would like to follow up a little bit on Mr. Shimkus' 
last questions and I think he had asked you, Mr. Mills, about 
was it in Canada's best interest to simply isolate themselves 
and not sell their products in the form of natural gas outside 
their borders. And, Mr. Burpee, I couldn't help but notice that 
you were having to contain yourself during that discussion. 
Could you share with the committee what was on your mind?
    Mr. Burpee. The debate that was referred to goes back to 
early '80s and the creation of a national energy program that 
looked to protect Canadian energy users, give them cheap 
relative to world prices. We have moved on from then. I think 
the perspective now where we live in a global market and 
getting back to electricity, it is a North American market that 
we fully participate in and North Americans have benefited from 
that. Enhanced transmission interconnection is just going to 
make it better for everyone in North America.
    Mr. Burgess. You know, in Texas we have been going through 
the Public Utilities Commission, which is a statewide effort, 
the competitive renewable energy zones and the siting of power 
lines. I know this because they have come west to east through 
the 26th Congressional District and had to deal with the people 
who were affected by the siting of those lines. But it is 
extremely important to be able to get the energy from where it 
is produced to where the people want it. And in Texas, people 
don't live in West Texas because it is so windy. It makes it a 
good place to produce wind energy, but the people actually live 
further to the east and the transmission lines were necessary 
to do that.
    Ms. Hutzler, did you have an opinion about the Canadian 
efforts to restrict their markets?
    Ms. Hutzler. Well, obviously, it would not help their 
economy to do that, but it would also be a problem to us. I 
mean, we have States that get 100 percent of the natural gas 
from Canada such as Vermont. Other Northeastern States also get 
quite a bit of natural gas.
    Mr. Burgess. Can you relay to the good people of Vermont 
that the people of Texas will be happy to sell their natural 
gas to the people of Vermont?
    Ms. Hutzler. Well----
    Mr. Burgess. We will sell it at a very good price, very 
competitive price.
    Ms. Hutzler. Well, I think some of the New England States 
would like to even capitalize on natural gas from Pennsylvania 
but they don't have the infrastructure to do so, so that is a 
problem. You would have to make sure you get the infrastructure 
there and they would probably be happy to buy it.
    Mr. Burgess. So the existing infrastructure from Canada to 
Vermont actually facilitates that sale?
    Ms. Hutzler. Exactly.
    Mr. Burgess. And therein would be the difficult with trying 
to shut it in to Canada, keep the price low for their 
consumers. In fact, it would be a commodity that was not 
delivered to the market and would have a negative impact on 
their overall economy?
    Ms. Hutzler. Right.
    Mr. Burgess. The two terms that I sat on the Joint Economic 
Committee and we would perceive the unemployment numbers every 
month, on the first Friday of every month, and the 
manufacturing sector was always one of the brief bright spots 
in an otherwise dreary report through 2009, 2010, 2011, 2012. 
And of course I couldn't help but note that my home State of 
Texas was a leader in those manufacturing jobs. And, Mr. Mills, 
as you point out, those manufacturing jobs in fact were in the 
energy sector, so much so that North Texas, which has the 
Barnett Shale, which is natural gas producing geologic 
formation, almost didn't even notice the recession for the 
first year because the economy was still so robust as a 
consequence of developing and marketing our existing energy 
resources.
    Mr. Kyles, let me ask you a question. It seems almost like 
there is a religious belief that if you somehow kill the 
Keystone XL pipeline, that will prevent any of the oil being 
sold out of the oil sands from Canada. But that is not really 
correct, is it?
    Mr. Kyles. No, it is not. The applications that Plains has 
pending, for example, are existing pipelines. And so at this 
point there is always the possibility that an asset, not to 
suggest that Plains' assets would be dedicated for that purpose 
because that is not our intention. But there is always the 
possibility that other assets owned by other operators could be 
bought and sold, cobbled together so that they could be 
utilized for the purpose of transporting tar sands. So of 
course there would be a regulatory process and review that 
would be associated with it, but it does not categorically 
prevent----
    Mr. Burgess. Well, and there are other methods of transport 
besides pipelines. There are rail cars and trucks----
    Mr. Kyles. Well, there are trucks and there is significant 
rail.
    Mr. Burgess. Yes, and then of course as we saw in Montreal 
there are some hazards from real transport of crude oil----
    Mr. Kyles. That is correct.
    Mr. Burgess [continuing]. When a train broke loose and hit 
the town.
    Thank you, Mr. Chairman. You are very indulgent. I will 
yield back my time.
    Mr. Scalise. The gentleman from Texas yields back.
    Now, we will go to the chairman emeritus of the full 
committee, the gentleman from Michigan, Mr. Dingell.
    Mr. Dingell. Thank you, Mr. Chairman. And I appreciate you 
holding this hearing. I also want to express my affection for 
the two authors, my dear friend Mr. Upton and Mr. Green. And I 
want to observe that I hope that we will be able to perfect 
this legislation which appears to have some modest problems.
    I want to make clear I am a supporter of the Keystone XL 
pipeline and I recognize that there have been extraordinarily 
long delays in the system we currently have. Meddling by the 
Congress, I would note, has also muddied the water. I believe 
that the reforms needed to be made can be made and I hope they 
can be done so in a bipartisan manner.
    However, I have concerns about the bill as written and I 
hope that the changes can be made to ensure proper diligence is 
given to protect the public interests and our tremendous 
natural resources and that we can do this by using the review 
processes that are now in the law wisely and not by eliminating 
the NEPA environmental review process from the cross-boundary 
permit or from other things which appear to be important 
because what may be necessary for the situation on the Keystone 
pipeline may be quite different in other matters and may lead 
to some very significant regrets if we go the wrong direction. 
So I would like to see that we preserve an intelligent and 
reasonably expeditious review process.
    Now, this question to Mr. Blackburn. And, Mr. Blackburn, I 
think it will be a yes or a no. In your testimony you said if 
this bill were in effect for the Keystone XL pipeline project 
that only the State of Montana has an environmental review 
process. Would the Montana environmental review have been 
required to examine the pipeline siting over aquifers, 
wetlands, rivers, and other sensitive areas in other States?
    Mr. Blackburn. No, Representative.
    Mr. Dingell. Thank you. I happen to have the privilege to 
live in the Great Lakes region, home for some 20 percent of the 
world's freshwater supply, as well as a tremendous resource for 
hunting, fishing, recreational use, for industrial and 
transportation. Now, not too long ago we had a serious problem 
with an oil pipeline leaking approximately a million gallons 
into the Kalamazoo River. My concern is what would have 
happened had this pipeline been crossing the Detroit River, the 
St. Clair River, or some of the waters in the Great Lakes? If a 
pipeline were to leak oil into one of these rivers, it would 
flow into St. Clair down the Detroit River, past my district 
into Lake Erie. All the way the spill would affect vast private 
areas and State and Federal lands of Michigan, possibly Ohio, 
Canada, and the rest of the Great Lakes basin.
    Now, Mr. Kyles, this question to you. Your company operates 
pipelines across the St. Clair and Detroit Rivers. If you were 
to build a new liquefied petroleum gas pipeline under either of 
these rivers and this bill were in effect, would a Federal NEPA 
review for that pipeline be required? Please answer yes or no.
    Mr. Kyles. Yes, it would be required but----
    Mr. Dingell. NEPA would be required if this bill were in 
effect?
    Mr. Kyles [continuing]. Not under this bill.
    Mr. Dingell. I am sorry?
    Mr. Kyles. Not according to this bill.
    Mr. Dingell. OK. If this bill----
    Mr. Kyles. And let me----
    Mr. Dingell. Please.
    Mr. Kyles. Sure.
    Mr. Dingell. I would be very grateful if you would respond 
to my questions. All right. The question is if this bill were 
in effect and you were to build a new pipeline under the St. 
Clair or the Detroit Rivers, would a NEPA review for that 
pipeline be required? The answer to that question----
    Mr. Kyles. Yes.
    Mr. Dingell [continuing]. Is no, is it not?
    Mr. Kyles. Yes, it would be required.
    Mr. Dingell. It would be?
    Mr. Kyles. Yes.
    Mr. Dingell. You seem to have an interesting reading 
process, because I read it quite differently. My point here is 
that we never know what is going to happen when an oil pipeline 
leaks or a natural gas pipeline explodes. We don't know what 
rivers, lakes, or aquifers it might affect. We tried letting 
each individual State deal with these issues before and it 
never worked. That is why I wrote the National Environmental 
Policy Act, which simply requires that people proposing these 
types of projects look before they leap. We want them to know 
where they are going to come down and where we are going to 
come down. And we want them to tell us what the project will do 
in an open, transparent process in which the people are brought 
into it. And I hope that my colleagues will take the time that 
is necessary to consider what this bill might do to sensitive 
areas like the Great Lakes.
    There is tremendous opposition to drilling in the Great 
Lakes but we are going to allow pipelines without any review or 
protection to move under them, and I find this to be a source 
of great concern and danger. And I am worried that we are 
ignoring important values in eliminating the review process. I 
am fully well prepared to support the pipeline. I am also fully 
well prepared to support modifications where necessary to make 
it possible to build the pipeline or to see to it that the 
review processes are adequate, but I am sure not going to throw 
the baby out with the bathwater and leave us in a situation 
where we have jeopardized the Great Lakes and the precious 
resources that they are to this country.
    Thank you, Mr. Chairman.
    Mr. Burgess [presiding]. The gentleman's time is expired.
    The Chair now recognizes the gentleman from Texas, Mr. 
Green, 5 minutes for your questions, please.
    Mr. Green. Thank you, Mr. Chairman.
    And following our chairman emeritus, I would hope if there 
was a pipeline under any river, that we are not waiving the 
Clean Water Act in this legislation and whether it is under the 
rivers in Michigan or the lakes. But let me get to my 
questions.
    Mr. Kyles, when it comes to actually siting and 
constructing a project, what impact would this legislation have 
on the environmental permitting at the State and Federal level?
    Mr. Kyles. It would have no impact with respect to the 
States or other existing Federal agencies that are involved in 
environmental review. The only issue that is the focus of our 
attention today is the cross-border aspect and it does not 
eliminate regulatory review for environmental purposes beyond 
that.
    Mr. Green. OK. I know, for example, and I am not familiar 
with the Northeast or Northwest, but I know we have Rio Grande 
River between Texas and Mexico and we have those same concerns 
about, you know, pipelines going across them. And they have 
environment reviews based on both Federal law, but I know we 
have the Texas Railroad Commission regulates our pipelines.
    Mr. Kyles. That is correct.
    Mr. Green. And that is a State agency that has regulation. 
It is not just Montana. In fact, I would hope that every State 
agency, including my State, would have regulation over pipeline 
permitting in their States, including Vermont.
    Mr. Burpee, FERC and the National Energy Board of Canada 
signed a memorandum of understanding for increased efficiency, 
expedition, and action on cross-border energy issues. In your 
opinion, how would this legislation build on that foundation?
    Mr. Burpee. I would say the direction here is to reduce 
redundancy, have a common view, and just move forward quickly. 
The Canadian process is a lot faster than all the U.S. 
processes right now and they are still robust.
    Mr. Green. OK. You mentioned that the expansion of 
international power lines would support the development of 
clean non-emitting energy sources, including projects located 
in the United States. Can you elaborate further on how U.S. 
renewable projects benefit from the construction of 
transmission connections with Canada and why is cross-border 
infrastructure essential in maximizing North American clean 
energy potential?
    Mr. Burpee. Within Canada, there is a large amount of large 
hydro storage. There is a lot of wind being developed in both 
Canada and the U.S. The marriage of large hydro for storage and 
wind is ideal. Anything that is non-dispatchable or 
intermittent needs some form of storage. The cheapest, most 
efficient form of storage is large storage hydro, so they fit. 
As the systems evolve and we move away from carbon, they work 
together very well. And you look at what Manitoba Hydro and 
Minnesota Power I believe it is are looking at now in terms of 
longer-term deals and how the systems work together, we also 
have great river energy and Minnesota announced seasonal 
diversity deal with Manitoba Hydro taking into account the 
different seasonal requirements of the grid and how they work 
together. So it promotes economic efficiency considerably.
    And on the Northeast side, the availability of more hydro 
development actually offers fuel diversity off of gas into the 
Northeast U.S.
    Mr. Green. OK. And I know in Texas we do things other than 
just natural gas and oil. We are probably the leading State for 
wind power. Now, all the wind power generation we are going to 
use obviously on our metropolitan areas, but somewhere along 
the way we may need to expand that and sell electricity in New 
Mexico, particularly northern New Mexico. So this would benefit 
the same situation was the Canadian border and the Mexican 
border.
    Mr. Kyles, how long has the State Department taken to 
approve your presidential permit to reflect the change in 
ownership of the pipeline?
    Mr. Kyles. We are still waiting for approvals--
    Mr. Green. How long has it been?
    Mr. Kyles [continuing]. With respect to the name change, 
but we have had applications under consideration for 2 years.
    Mr. Green. OK. If that was just a U.S. pipeline, I would 
assume you would just go to FERC for a change in ownership.
    Mr. Kyles. Yes, that is correct.
    Mr. Green. OK. What is the time limit for FERC?
    Mr. Kyles. Well, just a moment. These are crude oil 
pipelines so----
    Mr. Green. OK. OK. So it is not the FERC. OK. But if it was 
natural gas permitting, OK.
    Mr. Kyles. Right.
    Mr. Green. Is this type of delay for a project that has 
already been built unique only to the Plains All American 
Pipeline?
    Mr. Kyles. No, we have researched and there are other 
operators of pipelines who are in the same circumstance.
    Mr. Green. You previously stated that FERC is not equipped 
to make certain decisions. Do you believe those in the State 
Department are properly equipped to make timely decisions on 
issues related to this bill?
    Mr. Kyles. No. And that is because there is an unnecessary 
level of review and there is no transparency. There is no 
predictability. There are no timelines. There is a public 
notice that provides the opportunity to file an application for 
a name change permit for an existing pipeline that may already 
be operating, but nonetheless, no one knows exactly what 
completion of the name change is going to entail.
    Mr. Green. Thank you. Mr. Chairman, I know I am out of 
time. I appreciate your patience. I thank our witnesses, all 
our witnesses.
    Mr. Gardner [presiding]. The gentleman from Texas yields 
back. The Chair recognizes himself for 5 minutes.
    And I just wanted to talk about what is happening in my 
State as a result of the possibility that we have 
transnational, international pipeline activity construction 
taking place. It was a year ago when I toured a company my 
district that actually makes bird strike detectors. They make 
bird strike detectors. They detect wind shear, those kinds of 
things. In a conversation that we had, we were talking about 
who their number one customer was. And they asked if I could 
guess who their number one customer was. And I said, well, is 
it the Department of Defense? Is it the Denver International 
Airport? And they said, no, it is actually in Alberta with the 
oil sands because of the equipment that we make that they use 
in Canada. And they talked about the number of jobs that we 
have created in Colorado because of that one specific project. 
A report that we had from one of the universities talked about 
the thousands of jobs that could be created in Colorado because 
of pipelines that came in from Canada into the United States.
    And that kind of opportunity is something that we can't 
take lightly. In a time of high unemployment when people are 
looking to put food on their table, when people are looking to 
try to make ends meet, create good quality jobs, that is an 
incredible opportunity for this country. And so any process 
that takes too long, is too cumbersome to develop, to 
construct, to make these kinds of jobs, I think we have an 
obligation as Congress to figure out how to make it work 
better. And that is why I commend Chairman Upton and Chairman 
Whitfield for holding this hearing to talk about ways that we 
can move forward on job creation and job creation activities in 
this country.
    And so the legislation that we have today is again 
highlighting what we have done to break down barriers to job 
growth and to energy production. It is a bill that would 
clarify and modernize the approval process for construction, as 
you have talked about throughout the State.
    In late summer this year the independent U.S. Energy 
Information Administration released a statistic that for 
straight months our production in the United States has 
actually exceeded the production in Saudi Arabia. And we need 
more bills, more policies like this today to ensure that the 
United States continues down this path of economic growth. And 
so if we talk about agencies, entities, groups like the 
Environmental Appeals Board, they are infamous for sitting on 
several permit applications and creating problems within the 
administration leading to uncertainty, leading to permit 
uncertainty. And in your testimony, Mr. Burpee, you talk about 
the uncertainty for projects under the current process 
specifically with presidential permits. Could you again talk a 
little bit more about how we can streamline this process?
    Mr. Burpee. The observation I have is that what we are 
getting done with full environmental review, public stakeholder 
involvement on the Canadian side can be done in a year, 12 to 
15 months. We wait for presidential permit for an average of 2-
1/2 or more years. We have a similar example of basically an 
ownership change, which was a name change between two crown 
corporations in B.C. that took 2-1/2 years to get a new 
presidential permit for a 7-1/2 mile section of transmission 
line underwater that crosses U.S. territory waters going from 
south of Vancouver to Vancouver Island. And the Canadian 
equivalent was 7 months, 3 pages application on the Canadian 
side, 62 pages on the American side.
    Mr. Gardner. And perhaps you addressed this in prior 
comments but what markets would open up to the U.S. that we 
don't currently serve?
    Mr. Burpee. Well, from an electricity perspective there are 
right now proposals for increased interconnection, transmission 
interconnection in the U.S. Northeast into Quebec and 
eventually into the rest of the Maritimes as well, Midwest into 
the Ontario markets, basically all the existing markets 
including B.C. There are a number of proposals to increase--
there are significant low-carbon supplies of electricity within 
Canada and there is a lot more waiting to be built and operated 
and lower the carbon intensity of the entire North American 
economy actually.
    Mr. Gardner. I thank you. And I thank the witnesses for 
your testimony today. And with that the Chair recognizes the 
gentlelady from Florida, Ms. Castor, for 5 minutes.
    Ms. Castor. Thank you very much, and thank you to the panel 
for being here today.
    You all I believe were all in attendance during Jeff 
Wright's testimony. He is the director of energy projects for 
the Federal Energy Regulatory Commission. He was on the first 
panel. He provided important testimony regarding FERC's area of 
responsibility. For interstate natural gas pipelines the 
Natural Gas Act governs the permitting process. Under existing 
law there is a Federal environmental review and public comment 
for any interstate natural gas pipeline, even the ones that 
don't cross the border with Canada or Mexico. But this 
highlights what Mr. Blackburn opened his testimony with. We are 
dealing with different things. This bill is dealing with 
natural gas pipelines, oil pipelines, and electric transmission 
lines. And that is problematic.
    Mr. Blackburn, is there a comprehensive Federal permitting 
law for oil pipelines like there is for natural gas pipelines?
    Mr. Blackburn. No, there is not. And I would also add that 
Canada does have one and it is amazing what they do in terms of 
their statistical analysis and their----
    Ms. Castor. So that is one of the reasons this bill is 
problematic. So the presidential permit requirement is the only 
Federal requirement that guarantees an environmental review for 
cross-border oil pipelines, is that correct?
    Mr. Blackburn. That is correct. There are other laws but 
most of them actually may make no difference to a particular 
pipeline.
    Ms. Castor. And this bill eliminates the presidential 
permit requirement in the Federal environment review for the 
cross-border oil pipelines, is that correct?
    Mr. Blackburn. In many circumstances it would.
    Ms. Castor. So, Mr. Blackburn, then could you respond to 
the claim that other Federal environmental laws besides NEPA 
will ensure that environmental concerns are taken into 
consideration before the pipelines are approved and 
constructed?
    Mr. Blackburn. Sure. Thank you. For example, for the 
Alberta Clipper pipeline, it is an expansion of an existing 
pipeline which includes just pump station additions. The steel 
is already in the ground. Because of the limited actual 
footprint change for the pipeline itself, it is not clear what 
Federal laws--they are in existence but it is not clear that 
they will necessarily apply to this particular project. The 
only law that I am aware of, the only requirement that I am 
aware of that would absolutely require an environmental impact 
statement is the presidential permit process at this point.
    Ms. Castor. OK. And, Mr. Mears, you deal with these issues 
coming from Vermont. As a State regulator, as a practical 
matter, without the presidential permit for the cross-border 
oil pipelines, will States be able to evaluate all of the 
concerns that are currently considered as part of the public 
interest determination of a presidential permit?
    Mr. Mears. No, they absolutely would not be able to. And 
there is a particular challenge with long linear projects 
whether electricity generation or a long oil pipeline or 
natural gas pipeline. They may touch upon a variety of 
different jurisdictions and authorities, clean water, clean 
air, wetlands, and so forth, as Mr. Green from Texas pointed 
out, but none of those laws would get at the fundamental issue 
of whether that pipeline is necessary, whether there are less 
impactful alternatives. There is a whole variety of things that 
will not be assessed in the absence of the current system.
    Ms. Castor. And you are speaking as a State regulator for 
the information the State would need, and I imagine that is the 
same for citizens in the area or other businesses in the area, 
is that correct?
    Mr. Mears. That is correct.
    Ms. Castor. So, Mr. Blackburn, what is your view of the 
ability of States to substitute for the Federal review?
    Mr. Blackburn. States' power really is limited because for 
interstate pipelines, which most of these are, they, for 
example, in a new pipeline can't determine route to affect 
another State. They can't affect the route in another State 
even if it would be beneficial to theirs to have the border 
crossing with another State in a different location. And in 
general the States are not in a position to determine national 
interest much less national security interests, and because of 
that limitation that States have limited geographic 
jurisdictions, they simply are not in a position to fully 
assess the environmental impacts or the national interest 
impacts.
    Ms. Castor. So if this bill were to pass and the ability of 
the public to participate, the ability of States to understand 
all of the consequences, the lack of consideration of 
alternatives and mitigation, do you think there is a greater 
risk for litigation and could this lead to greater delays than 
we have under the current law?
    Mr. Blackburn. I believe that there is a greater risk of 
litigation, but I also believe there is a greater risk, for 
example, of citizen action of the legislature and other kinds 
of citizen actions that could delay the project. The clearer a 
process is and the fairer it is, the more citizens respect the 
outcome.
    Ms. Castor. Thank you very much.
    Mr. Gardner. The gentlelady's time is expired.
    At this point the Chair would enter into the record several 
letters for the record of support for the legislation.
    [The information follows:]

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    Mr. McNerney. Mr. Chairman, I would like to ask unanimous 
consent to introduce three letters into the record.
    Mr. Gardner. The gentleman's request is recognized and 
entered into the record.
    [The information follows:]

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    Mr. Gardner. The gentleman from Texas, Mr. Olson, is 
recognized for 5 minutes.
    Mr. Olson. I thank the Chair. And welcome to our second 
panel. And while I enjoyed all of your comments, your opening 
statements, I would like then a Texas amen to the competency of 
Mr. Mills, you, Ms. Hutzler, and you my fellow Texan, Mr. 
Kyles. We are at a unique time for North American oil 
production. Few would have guessed that North Dakota or Alberta 
would be at the heart of American energy policy, but the energy 
of the world is changing. Heck, 10 years ago in my home State 
of Texas if you had said Eagle Ford, most people of Texas would 
have thought that Ford has built a new F-150 pickup truck with 
some patriotic theme, the Eagle Ford. But as we all know, that 
is a big new shale play in America today. This is great news 
for America, great for Texas, but it means that we are in need 
of new transportation infrastructure across our continent.
    And my first question is for my fellow Texan, you, Mr. 
Kyles. When I watch approvals of energy imports and exports for 
the United States, I am frustrated. The timeline is slow and it 
seems that some groups always find a way to make it slower. I 
know no country has this perfect. However, I understand that 
Canada is updating their review process as we speak. That is 
welcome news but we need to act, too. And does lack of 
certainty for the energy industry make it harder to justify 
projects coming into the United States of America?
    Mr. Kyles. Absolutely because unfortunately under this 
current regulatory scheme, there are no clear procedures, 
checklists, timelines, and there is no transparency. An 
operator of a pipeline does not know what their timeline 
horizons will be in order to complete the application process 
or exactly what factors would be considered. And currently, 
there is a duplication of review also with respect to the 
States, the various Federal agencies, and then on top of it 
with respect to cross-border transportation pipelines, there is 
Secretary of State.
    Mr. Olson. Yes, sir. And this bill would fix most of those 
problems, is that correct?
    Mr. Kyles. That is correct.
    Mr. Olson. Without new pipelines, we are likely to rely 
heavily on rail, truck, and ships for transport of our 
petroleum products. What is the data on the safety of rail, 
trucks, and ships compared to pipelines moving crude oil? Any 
idea?
    Mr. Kyles. Pipeline safety is premier with respect to 
transportation of crude oil and liquids. It does not compare 
with respect to when compared to rail and trucks.
    Mr. Olson. In general is a fair to say that a modern well-
maintained pipeline is very unlikely to have a spill because it 
fails as opposed to some at the surface not doing the research 
and tapping the pipeline? Normally, it is human errors, is that 
correct?
    Mr. Kyles. That is correct.
    Mr. Olson. And I know back in Houston, Texas, the corrosion 
industry is working very hard to make these pipelines last for 
longer and longer and longer to prevent some of the corrosion 
problems we are seeing across this country.
    I have got a little bit of time here and my question is for 
you, Ms. Hutzler. At its core, this bill is about integrating 
North America. Our neighbors to the north and to the south are 
some of our best trading partners and our closest allies. Half 
of our southern border is on my home State of Texas. Our 
economies are heavily intertwined, perhaps now more than ever. 
With so much integration between us and with a new president in 
Mexico who seems very, very focused on getting Mexico in the 
21st century, how are we hurting ourselves by building 
roadblocks to international energy trade with Mexico and 
Canada?
    Ms. Hutzler. As you mentioned, they are allies and it is 
very important for us to be able to be able to trade freely 
between the countries and also to have the infrastructure to do 
so, meaning we rely on natural gas coming from Canada to a 
great extent and it is very important for us to have the trade 
and the infrastructure to do so.
    Mr. Olson. Thank you to the witnesses.
    Mr. Gardner. The gentleman yields back.
    The gentleman from New York is recognized for 5 minutes, 
Mr. Tonko.
    Mr. Tonko. Thank you, Mr. Chair.
    My first questions are to Mr. Mears and Mr. Blackburn. It 
has been pointed out that oil and gas can move across the 
border today by rail and by truck without any permits or 
decisions about whether oil and gas should go across the border 
and without a NEPA analysis. However, for new cross-border 
highway or rail line were proposed, would permits and NEPA 
review be required?
    Mr. Mears. Yes.
    Mr. Blackburn. Yes.
    Mr. Tonko. How about construction of a new port facility?
    Mr. Mears. In all likelihood, yes.
    Mr. Blackburn. Yes.
    Mr. Tonko. So do you view this legislation as addressing 
only the question of whether oil and gas can cross the border 
or is it about the construction of infrastructure to enable 
that transport?
    Mr. Blackburn. Could you repeat the question, please? I 
want to make sure I understand.
    Mr. Tonko. Sure. Do you view this legislation as addressing 
only the question of whether oil and gas can cross the border 
or is it about the construction of infrastructure to enable 
that transport?
    Mr. Blackburn. I believe it is about both. The permits 
themselves allow construction but the question of national 
interest is about whether it is appropriate to bring the oil 
into the country for other kind of reasons.
    Mr. Tonko. And Mr. Mears, is----
    Mr. Mears. I agree.
    Mr. Tonko. OK. Thank you.
    Environmental impact studies are viewed as primarily 
environmental reviews but they address a wide range of issues 
beyond potential impacts to natural resources. Do projects in 
communities benefit from the information gathered during the 
preparation of these documents or are we simply wasting time?
    Mr. Mears. It is certainly possible to waste time in an 
environmental review, but over time my sense is that the 
Federal agencies are getting much better in terms of how to do 
environmental impact statements, and I can tell you that in my 
department we rely very heavily on the environmental impact 
assessment work done by Federal agencies that informs our own 
decisions and help communities make their decisions as well.
    Mr. Tonko. Thank you.
    Mr. Blackburn. Yes, the environmental review process is 
critically important to landowners and other citizens 
throughout the pipeline routes. It, for example, allows them to 
understand something about economics for pipelines, which are 
critical to the national interest and allows them to understand 
the impacts to their own particular properties and the ways 
that those impacts can be limited. If we are going to ask 
landowners to take a bullet for the country, they should at 
least know that the pipeline is needed and what can be done to 
limit the harm.
    Mr. Tonko. Thank you very much.
    And, Mr. Burpee, a transmission project coming through New 
York State is currently under consideration to obtain a 
presidential permit. It is the Champlain Hudson Power Express 
bringing hydropower from Quebec to New York City. New York 
State conducted its own analysis and review of this project 
prior to its consideration by the Federal Government. The 
process isn't fast but seems to have avoided much of the rancor 
of other larger transmission projects. Do we need an overhaul 
of this system?
    Mr. Burpee. I am sorry. You tailed off at the end. I didn't 
hear the end of the question.
    Mr. Tonko. Do we need an overhaul of the system that guides 
the transmission project coming into States?
    Mr. Burpee. Yes, I think it is clear that there are 
opportunities to do things more quickly than they are currently 
happening and more efficiently at lower costs, so I think there 
is still a need for an overhaul, yes.
    Mr. Tonko. So the system is not working as reasonably well 
as it could?
    Mr. Burpee. We believe it could be working much better. We 
can't really comment specifically on this bill because I don't 
understand all the nuances of U.S. legislation. But just to 
give you the observation we have, we can do a proper review 
with public consultation involvement and get things done faster 
in the Canadian system.
    Mr. Tonko. Thank you. Thank you very much.
    And with that, Mr. Chair, I will yield back.
    Mr. Gardner. Thank you. The gentleman yields back.
    And with that, this concludes our hearing for today. I want 
to thank all of the witnesses for their time and then just 
remind people to clear the conversations from the room. We do 
have another committee meeting beginning in this room in just 
10 minutes. So thank you so much to the witnesses for being 
here.
    With that, the committee is adjourned.
    [Whereupon, at 12:51 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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