Congressional Record, Volume 161 Issue 8 (Friday, January 16, 2015)

[Congressional Record Volume 161, Number 8 (Friday, January 16, 2015)]
[Senate]
[Pages S221-S235]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

KEYSTONE XL PIPELINE ACT

The PRESIDENT pro tempore. Under the previous order, the Senate will
resume consideration of S. 1, which the clerk will report.
The assistant legislative clerk read as follows:

A bill (S. 1) to approve the Keystone XL Pipeline.

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Pending:

Murkowski amendment No. 2, in the nature of a substitute.
Markey/Baldwin amendment No. 13 (to amendment No. 2), to
ensure that oil transported through the Keystone XL Pipeline
into the United States is used to reduce U.S. dependence on
Middle Eastern oil.
Portman/Shaheen amendment No. 3 (to amendment No. 2), to
promote energy efficiency.
Cantwell (for Franken) amendment No. 17 (to amendment No.
2), to require the use of iron, steel, and manufactured goods
produced in the United States in the construction of the
Keystone XL Pipeline and facilities.

The PRESIDENT pro tempore. The Senator from Hawaii.
Ms. HIRONO. Mr. President, I rise today to speak in opposition to an
amendment offered by Senator McCain pertaining to the Merchant Marine
Act of 1920, popularly referred to as the Jones Act.
I will, of course, start by saying that the chairman of the Armed
Services Committee, Senator McCain, has a distinguished record of
support for our men and women in the military and cares deeply about
our national security, but on this amendment I respectfully disagree
with our chairman.
I wish to take a few minutes this morning to remind my colleagues why
the Jones Act is an essential component of our national security policy
and shipbuilding is a foundational component of American manufacturing.
The Jones Act requires that our maritime vessels engaged in shipping
goods between U.S. ports must meet three requirements: They must be
built in the United States, at least 75-percent owned by U.S. citizens,
and operated by U.S. citizens. The Jones Act helps to shore up our
national security by providing reliable sealift in times of war. It
ensures our ongoing viability as an ocean power by protecting American
shipbuilders. As a result, the Jones Act provides solid, well-paying
jobs for nearly half a million Americans from Virginia to Hawaii.
In short, the Jones Act promotes national security and American job
creation. Therefore, I am unclear why some of my colleagues are opposed
to this commonsense law. I don't say this simply as a Member from an
island State where we depend on the reliability offered by American
shippers for fresh food, energy, and other everyday goods, but I say
this as a Senator who cares deeply about supporting our strong and
growing middle class and creating American jobs.
First, shipbuilding is a major job-creating industry. According to
the Maritime Administration, there were 107,000 people directly
employed by roughly 300 shipyards across 26 States in 2013.
Additionally, shipyards indirectly employed nearly 400,000 people
across the country. This amendment would specifically knock out the
Jones Act provision that requires that U.S.-flagged ships be built in
the United States, jeopardizing good-paying, middle-class jobs. To me,
that is reason enough to oppose this amendment.
Secondly, this is not the time to create the instability this
amendment would directly cause. After struggling through tough times,
America's shipbuilding industry is coming back. Both this Congress and
the administration have long stressed the need for creating and keeping
manufacturing jobs here at home in the United States. According to the
Navy League, there are 15 tanker ships being built here in the United
States right now and slated to join our U.S. flag fleet. These ships
don't create quick-turnaround jobs but hundreds of thousands of well-
paying, long-term manufacturing jobs. If these ships are not built here
in U.S. shipyards by U.S. workers, where will they be built? Where will
these jobs go? China? Other Asian countries? Europe? The shipbuilding
industry in our country is rebounding.
Repealing the Jones Act is a step in the wrong direction. Instead of
dismantling a policy that supports American jobs, Congress should be
focused on doing more to promote and grow American jobs and American
manufacturing.
Repealing the Jones Act's requirement to build ships here in the
United States will unquestionably cost U.S. jobs and weaken our
position as a manufacturing leader. Those are two strikes against the
amendment.
The third and final strike is the fact that the amendment would
undermine our national homeland security. The Jones Act's
requirements--along with American shipbuilding and the maritime
industries they underpin--provide American-built ships and crews for
use by the Department of Defense in times of need. It is easy to see
why the Navy and Coast Guard strongly oppose repeal of the Jones Act
and all of its components.
The Defense Department has concluded:

We believe that the ability of the nation to build and
maintain a U.S. flag fleet is in the national interest, and
we also believe it is in the interest of the DOD for U.S.
shipbuilders to maintain a construction capability for
commercial vessels.

Therefore, there are three strikes against this amendment.
If adopted, the amendment would dismantle the Jones Act, costing
American jobs, hurting American manufacturing, and undermining our
national security. I ask my colleagues to stand with me--and I
certainly ask the chair of the Armed Services Committee to change his
mind on this amendment--and nearly half a million middle-class
Americans and vote against this amendment if it is brought up for a
vote.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Ms. CANTWELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDENT pro tempore. Without objection, it is so ordered.
Ms. CANTWELL. Mr. President, I know my colleagues are coming to the
floor to talk about various amendments. It is likely that on Tuesday we
will start voting on at least the pending amendments we have discussed
so far. I come to the floor today to talk about the proposal by
TransCanada Corporation and about the fact that, obviously, there are
some here who want to give an expedited approval to that and usurp the
President, who needs to review this project in detail to make sure we
understand the interests of various people, property owners, and people
affected by the pipeline.
One particular issue in this debate is why Congress should be
hurrying to give a special interest permitting go-ahead while the
President still has issues to address and as do the local communities.
I know many of my colleagues are going to come to the floor to talk
about those special interest concerns, as well as the issues of energy
efficiency, property rights, climate change, and a whole host of
priorities. But I am here today to talk about an issue I think is
particularly important, which is the fact that tar sands has a loophole
and doesn't pay into the oilspill liability trust fund.
Both of my colleagues, Senator Markey and Senator Wyden, are going to
be putting forward amendments to close this loophole. As a country we
have made sure the taxpayers aren't stuck with the tab of cleaning up
oil spills. The principle behind that is to keep our waters safe and to
keep our communities from paying the cost of this pollution. It means
really to have commonsense laws on the books providing that polluters
pay for cleanup. So that is the principle that drives the oilspill
liability trust fund. It is something we have had in place for a while.
Basically, what the oilspill liability trust fund means is simply
that American taxpayers won't be left holding the bag for the
responsibility of spills that happen. We currently in law have a
loophole that means that companies that produce the tar sands don't
have to pay into the trust fund. That is because they are considered as
synthetic petroleum. So just by the definition, they basically have had
a loophole. It is important to me, as the United States considers
whether a pipeline should be built across our country that would
include these tar sands, which is very thick and heavy material and it
is often diluted with lighter oil so it can be easier to handle. But
when the spills happen, and it spills in water as we saw with the
Kalamazoo spill, it leaves a thicker oil behind that usually sinks to
the bottom of the water. That makes it hugely expensive to clean up and
really almost nearly impossible to clean up.
These concerns are driving us to make sure that as the United States
and Canada continue to look at tar sands production, we are getting the
technology in place to deal with this and to get the job done and to
make sure that those who are liable for those

[[Page S223]]

kinds of spills are actually paying into a fund that would help clean
up the mess.
That is why it is so important that the Senate take up action on one
of these amendments, so that we will be paying into the oilspill
liability trust fund for any pipeline that is carrying this crude
material.
I want to go back to why this trust fund was created and why it was
so important. The oilspill liability trust fund was created in 1986 as
part of the Comprehensive Environmental Response and Liability Act.
This bill was signed by President Reagan, but it took 4 more years and
a major disaster before the country actually funded the oilspill
liability trust fund, and that disaster was Exxon Valdez. My colleague
from Alaska will be on the floor later today, and I am sure she could
talk a lot about this issue as well. I had many conversations with the
late Senator Ted Stevens about this issue, and there were various times
when we increased payments into the oilspill liability trust fund. When
one comes from the State of Washington and Pacific waters and when one
comes from Alaska, how we clean up these oil spills is incredibly
important to our economies.
What happened in 1989 is that an oil tanker hit a reef and ended up
spilling 11 million gallons of crude oil. It didn't take long for those
pristine waters of Prince William Sound in Alaska to be impacted. So
the impacts of the Exxon Valdez disaster were devastating not just to
Prince William Sound but to the entire Pacific Northwest, and the total
cost of that cleanup was $2.5 billion.
Ten years ago, a Federal judge ordered Exxon to pay $6.7 billion to
thousands of Alaskans affected by that oil spill. Fishermen in the
Northwest lost more than $300 million as a result of that oil spill. At
the time, the livelihood of individuals was impacted and, obviously,
the wildlife was impacted. It killed sea otters, harbor seals, and
approximately 250,000 birds. The images of all this wildlife are seared
into our memories even 25 years after the spill.

When the gulf spill just recently happened, we revisited a lot of
those issues because we wanted to make sure we were getting things
right. It was very interesting to see the environmental effects years
later and some of the things that still had not recuperated from the
oil spill in Prince William Sound.
In 1990 Congress passed the Oil Spill Pollution Act, and it was
signed into law by President Bush. It added sweeping improvements to
the oil spill response and held parties responsible. It established the
mechanism actually to invest in the oilspill liability trust fund.
Specifically, the bill said: Let's have a per-barrel tax to raise the
revenue for the fund. So today that is an 8 cents per-barrel tax on oil
products.
As I mentioned, this was signed into law by President Bush, who
specifically praised the funding of the oilspill liability trust fund.
He said that ``the prevention, response, liability, and compensation
components fit together into a compatible and workable system that
strengthens the protection of our environment.''
The reason I am bringing that up is because if the oilspill liability
trust fund was good enough for oil products promoted by a Republican
President, then it ought to be good enough for us in Congress to add
tar sands. That literally was just not thought of under the current
definition because of the way the definition was written. Because it is
a synthetic fuel, they have a loophole. It is a question whether we are
going to close this loophole or whether we are going to let them pay
zero into the trust fund.
The fund is used to pay for immediate cleanup costs and spills in
navigable waters. This is a very important point. Some people would
say: Well, aren't people just liable for their own mess, and why don't
they just clean it up?
I can tell you that in trying to protect Puget Sound and trying to
clean up the waters off the coast of Washington, you might think it
would be easy to figure out where the oil came from. It is not. When
you have a busy waterway like Puget Sound, and all of a sudden somebody
sights an oil slick or oil product in the water, they don't know how
serious it is. It takes months and months, sometimes years, to figure
out where the pollution came from.
Yes, in the case of Exxon Valdez we had a ship that hit a reef and
caused a problem. But in many cases, sometimes you don't know where the
spill is coming from. A lot of people will say: Well, it wasn't us. Or
they start this process. An oil spill needs an immediate response, and
that is why we established the oilspill liability trust fund--to have
an immediate response so that we are not sitting around waiting for
weeks and months to figure out who did the oil spill, and so somebody
can start the process immediately and work with the Coast Guard to
actually clean it up.
You would think this doesn't happen that frequently, but it happens a
lot more frequently than people realize. That is why an immediate fund
is important, and that is why everybody who is producing oil should pay
into it. Yet there is a loophole in the law, so the per-barrel tax
doesn't apply to tar sands.
In 2011 the IRS issued a ruling stating that the tar sands imported
into the United States were not subject to the excise tax on petroleum.
The ruling was actually based on a 1980 House Ways and Means Committee
report that crude oil does not include tar sands. As I said earlier, it
is considered synthetic. Therefore, according to the IRS, it is not
subject to the tax.
We should simply clean this up and have those responsible for their
mess also be responsible for paying in to clean it up. When the
oilspill liability trust fund was established, it was intended to be a
mechanism for all oil spills--not the definition of oil as a product.
Congress should fix this next week when we vote on this legislation
and figure out exactly how to make sure the Commandant of the Coast
Guard would have the tools to deal with this.
I, too, have concerns about the fact that we don't really have the
tools yet to accurately clean up tar sands. When the Commandant of the
Coast Guard was before a commerce hearing just a year ago--because I
have a great deal of concern about the moving of this product on a
variety of transportation means--I asked him about tar sands because
the last thing we want to see is product out on our waterways. He said:
Our technology is not as sophisticated when you have tar sands. They
are heavier, they sink into the water, into the ocean bottom, so it is
a challenge for us. Once it settles on the sea floor, our technology is
lacking in that regard.
Basically, I am finding that some of the dirtiest oil out there does
not pay into the oilspill trust fund, and we don't even have the
mechanisms for cleaning up. Unfortunately, we learned that lesson very
hard in the 2010 Enbridge pipeline, which was owned by another Canadian
company, along the Kalamazoo River in Michigan. It ruptured, and it
spilled 1 million gallons of tar sands into the river.
This is a picture of that cleanup and the process, which was $1.2
billion that was spent. So for those of you who don't know Kalamazoo,
it was an incredible economic, environmental, and historic issue for
the people of Michigan. The river was closed for business for 18 months
after that spill. More than 35 miles of the river had to be off limits
because it was difficult to clean up.
Today, 4 years later, they are still impacted. As I said, the cost
was $1.2 billion because they had to dredge the bottom of the river. So
any oil spill of that magnitude is damaging. Yet, when we look at this
issue, the fact that these tar sands were sinking to the bottom made
that dredging even more serious.
It is the reason why we need to make sure these tar sands are taxed
just as any other oil that is produced in the United States and pays
into this trust fund. A Cornell University study found that ``this
spill affected the health of hundreds of residents, displaced
residents, hurt businesses, and caused a loss of jobs'' in Kalamazoo.
This study is located online at: https://www.ilr.cornell.edu/sites/
ilr.cornell.edu/files/GLI_Impact-of-Tar-Sands-Pipeline-Spills.pdf.
I think it is just the start of what the challenges will be for us
when we allow this kind of tar sands development to move through the
United States. Our spill responders are very skilled. First, they know
we need to do everything we

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can to prevent spills, to begin with. They are developing technologies
to respond to the case of an emergency. They are doing everything they
can to use this trust fund.
So we need to make sure we are having those who are producing this
product pay into the trust fund. We need to make sure we are closing
this loophole. So my colleagues--as I said, Senator Wyden and Markey--
have been working on this issue for some time. Senator Wyden, the
ranking member on the Finance Committee, I know he feels very strongly
they should be paying into the oil spill liability trust fund and
paying their fair share of revenue. I know Senator Markey has worked on
this issue in the House of Representatives before coming to the Senate.
So we need to make sure people understand that dredging is not good
enough, that our country needs a plan, that we need not just to rush
through this pipeline and basically to think that we have all of the
technology, all of the methods, all of the appropriate emergency funds
to clean this up. We need to make sure we are not sitting here arguing
with a company--a Canadian company--that just wants us to clean up the
mess and leave the U.S. taxpayer paying the bill.
In fact, there was some debate in the Kalamazoo spill whether the
Enbridge company had hit their liability cap and so the trust fund
should pay for it, even though they never paid into the trust fund.
So are we going to let the American taxpayers clean up a Canadian oil
mess at our expense--that we paid in--and everybody is affected by
that? I think we should slow down this process and make sure we are
getting things like the oil spill liability trust fund right and that
we are getting this added to this legislation before it moves out of
the Senate.
I know my colleagues will get a chance to look at this next week. As
I said, we will probably start voting early next week on some of these
amendments that are being offered. But I hope my colleagues will close
these loopholes and make sure that the U.S. citizen and taxpayer is not
left on the hook paying for oil spill responsibility that should be the
responsibility of these individual companies. I know we are expecting
some of our other colleagues to come to the floor shortly to speak on
their amendments.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER (Ms. Murkowski). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. MARKEY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MARKEY. Madam President, when the new Congress opens there is a
choice as to which issues we should start to work on. Would it be
infrastructure jobs, clean energy jobs, a minimum-wage increase for all
of America? No, no. That is not what the new majority decides to bring
up. No. Instead, it is a Canadian oil export pipeline.
Next week I am going to offer an amendment that the Senate will
consider to ask whether we will put Americans first or oil companies
first, whether we will keep this oil and gasoline here for Americans or
send it to foreign nations to help them instead.
If my amendment is defeated, it will make clear this is not an energy
plan that is ``all of the above,'' it is oil above all.
My amendment says that if we build the Keystone Pipeline, we keep
that oil here. We keep that gasoline here. We keep the diesel, the jet
fuel, the heating oil. We keep it all here, because if we send it
abroad, what are we doing? We are helping Canadian oil companies get a
higher price for their oil. We are acting as the middlemen between
dirty foreign oil and thirsty foreign markets.
Without my amendment, there is nothing in the bill or U.S. law that
would prevent this oil from being exported. Eighty percent of our
refined fuel exports go out of the gulf coast, exactly where Keystone
would end, and foreign crude oil--including crude oil from Canada--can
be freely reexported.
We know what TransCanada's plan is because I asked him at a
congressional hearing--a senior TransCanada official--whether he would
commit his company to keeping the oil and refined products from
Keystone in the United States of America, and he said no.
Why do the oil companies want to export this Canadian tar sands oil?
Because they can get a higher price and make more profit.
Tar sands crude in Canada trades for $13 less than the U.S. crude
benchmark. The international prices are $3 higher than our prices.
If we do all of this, if we build this pipeline and then we send this
oil to foreign countries, then we have turned Uncle Sam into ``Uncle
Sucker.'' Because, make no mistake, without my amendment this bill will
not do anything to help people at the pump. It will just serve to pump
up the profits for oil companies.
We shouldn't export in oil, even as we are forced to send young men
and women to defend oil interests in the most dangerous parts of the
world.
Let us have that debate. As we import--still--oil from the Middle
East, coming into the United States on tankers, this proposal we are
debating next week will actually export oil that is already in the
United States. We still import millions of barrels of oil every single
day.
What we hear from the Canadians, what we hear from the oil industry
is that this is all about energy independence. Energy independence
cannot, by definition, include the exportation of oil while the United
States of America is still importing millions of barrels of oil per
day. That is heading us away from, rather than toward, the goal of
energy independence.
That, ladies and gentlemen, is at the heart of the issue of what it
is that we must understand about this Keystone Pipeline debate. We want
lower prices for consumers, lower prices at the gasoline pump, lower
prices for home heating oil, lower prices for diesel, and lower prices
all across America. It is akin to a tax break that is going into the
pockets of every single American, giving them more spending money
because they are paying much less for oil in all of its forms in the
United States of America right now, and it is giving an incredible
incentive for economic growth in America.
What makes America great? What makes America strong? What makes us
strong is when we are strong at home. What makes us strong at home is
our economy, because the stronger our economy, the stronger the United
States is in projecting power across this planet.
That is why on this debate the exportation of oil is so central. It
goes right to the heart of what we must be discussing and debating in
our country. This is an incredible opportunity for our country.
Let's take it to the next step. The next step includes what is the
taxation on the Canadian oil. There is a loophole, believe it or not,
in the American Tax Code that allows tar sands oil from Canada--such as
that that would flow through the Keystone Pipeline--to not pay into the
Federal trust fund to respond to oilspills in the United States--
understand that?
Canadian oil, the dirtiest in the world, coming through the pipeline
that the Canadians want to build through the United States, in the
event of an oilspill, will not have paid into the oilspill liability
fund for oilspill accidents in the United States.
I wrote to the Treasury Department in 2012 urging them to close this
loophole through executive action, but their response indicated that
they do not believe they have the authority to close this loophole on
their own, and they need legislation to do so.
Yet there is nothing in this bill that would close this tax loophole
for Keystone tar sands oil. Tar sands oil can be more difficult to
clean up than regular crude but receives a ``get out of Canada tax-
free'' card. That makes absolutely no sense. We are already importing
more than 1.2 million barrels per day of tar sands oil into the United
States. But oil companies don't have to pay into our cleanup fund to
import that dirty oil.

There are roughly 30 oil companies importing tar sands crude into the
United States. If you are one of those 30 companies, you are getting a
great deal. But if you are one of the hundreds of other oil companies
out there that do pay into the oilspill trust fund, you should hate
this loophole, and the American people should hate that loophole as
well because the Canadians and

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their oil companies are not paying their fair share of the dues to be
able to participate in our great American society. They want to build a
pipeline like a straw right through the middle of the United States,
send the dirtiest oil right down that straw, and if that straw breaks,
if there is a spill, the Canadians have not contributed to the oilspill
liability trust fund. Does that make any sense? Does that make any
sense? Of course it doesn't.
That is why this debate is so important. The Congressional Budget
Office says this is going to cost the United States of America hundreds
of millions of dollars because the Canadians escape their
responsibility of paying for the accidents. That is why Senator Wyden
and I are working here to make sure we have an ability to close this
loophole, and we are working with Senator Cantwell, the ranking member
on the committee. Along with Senator Cantwell, we are going to make
sure we have this important debate on the Senate floor.
I know Senator Cantwell was out here earlier today raising this
issue, highlighting this issue, pointing out how unfair and unjust it
is that the Canadians escape their responsibility to pay and that it is
just another giveaway to the oil industry that ensures this is nothing
more than a giveaway to those Canadian companies.
I say this on a day when it is being reported there are now 140,000
people in America employed in the solar industry--140,000. There is
another 50,000 employed in the wind industry--nearly 200,000 people
employed in industries that, for the most part, didn't really even
exist in a meaningful way 7 years ago. That is how quickly our own
domestic wind and solar industries have been developed--creating jobs
here in the United States, creating growth here in the United States,
creating opportunity here in the United States.
So this, colleagues, is really what we should be debating. But once
again, when the Republicans are in control, we do not debate all of the
above. We don't debate wind and solar and biomass and energy efficiency
and oil and gas and nuclear. The Republicans always make it one
subject, and that is oil above all, not all of the above.
So I am looking forward to this debate. It goes right to the heart of
the security of our country, the economy of our country, and the
environment of our country. This is the dirtiest oil in the world. This
oil is going to contribute dangerously to the warming of the planet.
Last year--2014--was the single warmest year ever recorded in the
history of the planet--2014. You don't have to be Dick Tracy to figure
out this is a problem that we are passing on to the next generations
without the debate this issue must have if we are going to discharge
our responsibilities to those next generations.
The Keystone Pipeline is the central opportunity we are going to have
to raise this issue of global warming, of the national security of our
country, of making our economy stronger, and of ensuring we discharge
our responsibility to the next generation.
Madam President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. UDALL. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Sasse). Without objection, it is so
ordered.
Mr. UDALL. Mr. President, climate change is one of the greatest
challenges of this century. We have a profound choice before us. We can
deny that our climate is warming, we can fall behind our economic
competitors, we can ignore the danger to our planet and to our
security--that is one choice--or we can move forward with the
diversified energy portfolio that includes clean energy, with an energy
policy that makes sense, that creates jobs, that protects the
environment, and that will keep our Nation strong.
There is a lot of work to be done. We can work together, we can find
common ground, become energy independent, move us on a path to energy
independence, grow our economy, and fight climate change. But instead,
unfortunately, our focus today is on the Keystone XL Pipeline. The new
majority has not chosen to start with energy policy as a whole or
innovation or manufacturing policy or our response to climate change.
Instead, we are debating on the floor of the Senate just one pipeline
project, which primarily benefits another Nation.
There is really one basic question. Is the Keystone Pipeline in our
Nation's interest--not Canada's interest or Wall Street's interest but
our Nation's interest. I do not believe it is. I say this for two
reasons. First, we are being asked to do something I believe is
unprecedented--for Congress to step in and promote a bill for one
private-sector energy project, to wave ahead a private pipeline for a
private foreign company so that Canadian oil can be piped to Texas for
export to other nations. Again, how does this serve our Nation?
We are told it is about jobs. Keystone will create jobs, and, of
course, we are all for that. But how many jobs? About 3,900 temporary
construction jobs. But how many permanent jobs--jobs that American
families can count on for years to come? Maybe about 50. Yet with all
the challenges we face, at home and abroad, this is the priority. This
is priority No. 1 for the new Republican Congress. This is one choice.
It is the wrong choice and the wrong priority.
This brings me to my second point. We are at a crossroads in our
energy policy. We can still lead the world in clean energy production--
wind, solar, advanced biofuels--to reduce global warming pollution, to
become energy independent, and to create permanent American jobs. That
is our future. That should be our priority.
New Mexicans are already seeing the impact of global warming. The
Southwest is at the eye of the storm, with historic drought, with
severe flooding when it does rain, and with more and more wildfires. I
talk to farmers and ranchers in my State, and they are struggling.
According to a study at Los Alamos National Laboratory, by 2050--not
far away--we may not have any forests left in my State. It will be as
if New Mexico were dragged 300 miles to the south. Our climate will
resemble land that is now in the middle of the Chihuahuan Desert.

I am not a scientist; neither are my colleagues. But the experts at
Los Alamos National Laboratory and scientists all over the world are
clear: If we do nothing, it will only get worse. We are already seeing
the impact. Recently the Government Accountability Office issued a
warning: Climate change will continue to increase costs to taxpayers
for the Federal Flood and Crop Insurance Programs. FEMA is already $24
billion in debt due to extreme weather events such as Hurricane Sandy
and last year's floods in New Mexico. The cost of the Federal Crop
Insurance Program has increased 68 percent just since 2007. If left
unchecked, these costs will continue to skyrocket.
But this is more than numbers, disturbing as they are. This is the
burden of climate change on farmers, ranchers, and our communities. The
damage is real. The threat is here. But so are the solutions and the
opportunities, and there are many opportunities. With the right
priorities, we can encourage the production of clean energy. We can
create a clean energy economy that leads the world. We can create the
jobs of the future right here at home and revitalize rural America.
I have long said we need a ``do it all and do it right'' energy
policy. That includes traditional energy sources. Oil and gas play an
important role in my State. New Mexico is a leading producer of both
oil and gas. We have strong, independent companies. They employ over
12,000 New Mexicans. They help pay for our schools and our other public
services. They are an important part of the mix, and so are renewables
such as wind and solar. The United States has incredible wind energy
potential, enough to power the Nation 10 times over. New Mexico has
some of the best wind resources in the Nation, enough to meet more than
73 times the State's current electricity needs. Wind power emits almost
no carbon pollution. It uses virtually no water. It already saves folks
in my State 470 million gallons of water a year. The U.S. solar
industry employs more than 143,000 Americans--more than coal and
natural gas combined. Solar jobs grew 10 times faster than the national
average. The majority are in installation, sales, and distribution.
Those are well-paying local jobs. Those are permanent

[[Page S226]]

jobs, and they won't be shipped overseas.
Now is the time to build on the momentum and invest in a clean energy
economy. Now is the time to create energy at home and jobs at home.
Now. Not later. And we need to do it before we lose too much of the
market to our overseas competitors in Germany, China, and elsewhere.
They can see the future too, and they are going after it.
A national renewable electricity standard would help us get there.
The proposal I have introduced for many years would require utilities
to generate 25 percent of electricity from renewable sources by 2025.
New Mexico and over half the States already have one. The States are
moving in that direction. The Nation needs to move in that direction.
We need a national standard. Experts have said a national standard
could create 300,000 new jobs. I have pushed for this ever since I came
to Congress. The House of Representatives has passed it. The Senate has
passed a version of this three times. We have to get it right. We have
to do this. Let's get it done.
America can lead the world in a clean energy economy. We have the
technology, and we have the resources. We just need the commitment and
the cooperation.
This is a new Congress. Let's find common ground where we can move
forward. Just as we invested in the oil industry, we need to invest in
wind, solar, and biofuels. We should support tax credits for
renewables. We should encourage important cutting-edge energy research
at great institutions such as Sandia and Los Alamos National
Laboratories. What we don't need is Congress simply acting as a
permitting agency for a Canadian pipeline.
I understand the frustration that this project has been pending for
so long. I believe the President should make a decision now. The
necessary studies have been done. The recent litigation is over. We
have debated this project extensively in this Congress and in several
elections. If the President decides to approve it without some strong
conditions that mitigate its climate impact, I will be very
disappointed. If the President rejects it, the supporters can raise
this issue in the next election. But Congress should move on to real,
pressing policy debates.
Let's get our heads out of the tar sands and work together for our
economy, for our energy independence, and for our future.
Mr. President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Ms. MURKOWSKI. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. MURKOWSKI. Mr. President, it is good to be here on the Senate
floor talking about where we are in the process to hopefully finally
move toward approval of a permit to allow for construction of the
Keystone XL Pipeline.
It has been interesting--the past couple speakers this morning have
all mentioned that they don't understand why the first order of
business in this new Congress should be this measure, that there are a
lot of issues out there. And there certainly are. There will always be
issues in the Senate. This is what we do. These are all weighty issues.
But I would remind my colleagues that one of the reasons we are moving
early to the Keystone XL Pipeline legislation is because in many ways
this is a bit of unfinished business.
It was just 6 weeks or so ago that we had this measure before us on
the floor of the Senate. It was before this body for debate--a good
debate--led by our former colleague from Louisiana who was absolutely
passionate--absolutely passionate--in her defense of why this was
timely, important, critical that this measure be approved. We had that
debate, and unfortunately in the final vote we were shy one vote and so
we did not see passage. It was a measure that was in front of us
because it was timely and also because of the work this body had done
to advance it. The energy committee had hearings, process, and we had a
bill in front of us.
It is the first week of this session, and we have a lot of measures
that we will be taking up that are extremely important, but they are
perhaps not as primed, if you will, for action on the Senate floor
because that legislation hasn't been drafted. The committees have not
met to work through some of the legislation that will be before us.
So why not move to advance the Keystone XL Pipeline, a measure that
will provide for good-paying jobs in this country; a measure that will
work to enhance that relationship with our closest friend and ally to
the north, Canada; a measure that will help us from an energy security
perspective when we are able to displace oil coming in from places such
as Venezuela with oil coming in from Canada. That is a relationship
that this Senator would much rather enhance and further.
So for a host of different reasons we are on this measure in the
second week of this new Congress. I am pleased we are at this place
where when we reached unanimous consent earlier to proceed to
consideration of amendments on this bipartisan bill. It has been
interesting. As I have talked to not only colleagues but reporters out
in the hallways--just people having conversations--and there was a fair
amount of skepticism that if Republicans were to regain the majority,
would we return the Senate to what we know as regular order, where
there is a processing of amendments and a regular committee process,
but that is what we are doing, folks. Those who are observing what is
going on, beginning today, are seeing something that hasn't been seen
around here in a number of years. It was unfortunate that we hadn't had
that process, but it is never too late to do the right thing. It is
never too late to get back to a deliberative process that allows for
the open exchange and consideration of ideas on the floor.
When we talk about an open amendment process, clearly it is not just
open for amendments for those of us on this side of the aisle. It is an
open amendment process for the full Senate so Members on both sides can
offer their ideas and work to get votes on them. The majority leader
has said several times that this process is going to be open, but it is
not going to be open-ended. We are not going to be on this measure for
a full year or even a full month, but we will be taking the time to do
the deliberation that I think is important. I think you have already
got some people saying: Oh, we are spending enough time on it. It is a
mixed message with those saying it is not timely, we shouldn't be
taking it up, and then others complaining that we have been on it now
since last week. I think it is important for Members to know we are
expecting to see amendments filed. We are expecting to see Members come
to the floor to call up amendments. I would encourage Members not to
wait until the last minute because to use the majority leader's words,
this is not going to be open-ended. So let's get to our business and
let's get it done.
We have three amendments that are currently pending before the body.
Before I speak to each of those, I would like to very briefly address
my support for the underlying bill from the perspective of Alaska and
being one who is immersed in Alaska's energy process and politics.
I heard from more than a couple of folks back home who have seen the
debate and discussion playing out, whether it is on C-SPAN or in the
media, and I have been asked: We understand Keystone is in the national
interest. We get that. But is it truly in Alaska's best interest? Folks
back home are a little worried right now. We are seeing the price for
oil sink to lows we have not seen in years, sitting around $46 a barrel
today. It has certainly had an impact on our State's budget--
dramatically so. It is not just Alaska, I think we are seeing it in
other oil-producing States. It is good news to have lower oil prices,
but it is kind of a double-edged sword for some.
The questions that are being asked at home are legitimate, fair, and
very important questions such as: OK. How does this fit in with the
Alaska piece?
We certainly have large-scale infrastructure projects, particularly
energy projects of a serious magnitude.
We have a world-class oilfield in Prudhoe Bay and the connector that
the Trans-Alaska Pipeline provides from Prudhoe Bay down to tidewater
in Valdez, an 800-mile silver ribbon that bisects our State, is truly a
modern

[[Page S227]]

marvel. A State can have the resource, but if they don't have the
infrastructure to move the resource it doesn't do them much good. It
doesn't help their economy and it doesn't help fund education if they
cannot move it to market.
As I mentioned, Alaskans are a little nervous right now. A New York
Times article recently described what is happening in Alaska. The
journalist described it as economic anxiety hanging over the State
because of the drop in the price per barrel of oil. When a State relies
on oil for about 90 percent of its revenues to fund its budget and the
price drops dramatically, they notice it.
One way to deal with the variations and variables in price is to have
sufficient production. Alaska is suffering from this economic anxiety
because our oil production, which was over 2 million barrels a day, has
dropped precipitously over the past couple decades. We are now talking
about an oil pipeline that is less than half full. What does that mean
to a State such as Alaska when the artery for the State's revenues is
not pumping at an optimum level? We are in that place right now. As a
State we are looking at what can we do to make a difference when it
comes to production because there will be price variables. As long as
OPEC is in play there will be price variables we are not able to affect
as much as we would like.
We have the resource. We have an estimated 40 billion barrels of oil
in our Federal areas, offshore in the Chukchi and Beaufort, on our
coastal plain within the NPRA. We are not looking at a situation in
Alaska where we are running out of oil or about to run out of oil. Our
problem straight up is our limited ability to be able to access it. The
holdback we get, the pushback we get from our own Federal Government,
the policies that keep us from being able to access that resource has
been our challenge.
Now back to the Keystone XL Pipeline. The Keystone Pipeline is not
going to be carrying any Alaskan crude. Don't get a mixed message. We
have a pipeline. We have already built it. It is waiting to be filled
back up. The need isn't infrastructure in Alaska but permission--
consent from the Federal Government to access our lands, access our
waters to achieve that energy potential.
When I am talking to Alaskans about the imperative for Keystone and
how it intersects with Alaska, there are a couple of messages. The
first one is simple. There is plenty of demand within just the United
States for all the oil Canada and Alaska can produce at the same time.
The demand is there, even with the surge we have seen coming out of the
Bakken and the amount of increased production we have seen domestically
in this country. We are continuing to import that oil. Again, it is
better for us to rely more on ourselves. The world view that supports
the construction of Keystone XL is the same one that leads to new
production in my State of Alaska; that is, the recognition that
affordable energy is good. This is my mantra. I keep advertising it. I
have a bumper sticker that says ``energy is good.'' Affordable energy
is good. The understanding is that low prices result when world markets
are well supplied along with the desire to achieve North American
energy independence. This is something I feel very strongly about.
Approving the Keystone XL Pipeline is not going to eat into the
markets for Alaska's oil. This is an important message for Alaskans to
understand. In fact, it is going to help us preserve the markets we
have because right now our North Slope crude is shipped predominantly
to the west coast--makes sense, it is in closer proximity--where it is
refined into gasoline and other petroleum products for use in the lower
48.
We take it down our 800-mile pipeline, put it to tidewater, and it is
refined on the west coast. We enjoy the benefit of it here. But this
ANS crude--Alaskan North Slope crude--as we call it, is now finding
itself in competition from the shale plays out of the Bakken. So what
we are seeing is, without a Keystone XL Pipeline oil, the oil that is
being produced out of the Bakken is finding a home somewhere. It is not
just sitting there. It is being moved.
Where is it being moved to? It is being moved to refineries that have
capacity. It is going west. It is going west to those west coast
refineries that are used to getting Alaska crude. Keep in mind that as
it moves west, if we don't have the pipeline, how is it moving there?
How are we moving it? We are moving it by rail, predominantly.
Again, we will have that discussion about the environmental impacts
of rail or truck versus a pipeline and the safety and emissions issues.
If you want a cleaner way to transport oil, it will be in a pipeline.
If you want a safer way to transport oil, it will be in a pipeline. We
have had this discussion in the past--and again, so Alaskans
understand--and the Keystone XL Pipeline will benefit us in terms of
being able to continue to send our crude to those west coast
refineries.
We have heard--I believe repeatedly and incorrectly--that the
Keystone XL Pipeline is a foreign project that is going to carry
Canadian oil to the gulf coast. We know where the name TransCanada
derives from. We know that much of the oil to be transported will be
from Alberta, but I think it is important to acknowledge that we have
about 100,000 barrels of Bakken crude that will come from North Dakota
and Montana and down through the midcontinent. If we have the Keystone
XL Pipeline constructed, it will avoid the west coast.
The last point I will make for the folks back home, for whom I work
and who are following this issue, is that I really think the Keystone
XL Pipeline is a test for us. It is a test of whether we as a nation
can still review, license, permit, and build a large-scale energy
infrastructure project. We are looking at that in Alaska. We need to
know that can continue to be done in this country, because if we cannot
do it even here in the lower 48, where the costs are lower and there is
an existing infrastructure that you tie into, which the Keystone XL
will--you have the southern leg already completed--if we can't
demonstrate that we can get beyond the process of permitting a leg of
this pipeline over the Canadian border and into the United States, what
confidence do we have that we are going to be able to do other big
energy infrastructure projects? That worries me a great deal.
When people say that we are rushing this too quickly or that it is
premature or that we need to let everything play out, I think we need
to remind ourselves that 6 years is a pretty long time to play
something out. Most companies don't have the wherewithal to wait
something out over the course of 6 years because the cost of
constructing this pipeline has not gone down during this intervening
time period. If anything, the costs are going up. We know the costs are
going up. We are working on the Keystone XL Pipeline right now, but it
is just the first step of many I believe we need to take and to do in
order to improve our energy policies.
I will be continuing my conversation with Members to explain how my
State has an awful lot to offer our country--whether it is increasing
the flow of oil in our Trans-Alaska Pipeline or getting production up
so we are not half full and instead are full, so we can share that
resource with people throughout the country. As we look to move our
natural gas--our amazing quantities of natural gas--that massive
infrastructure project is a way in which we can work to advance that
resource.
Alaska has so much to offer the country, but we need to have the
chance and the opportunity to do so. Our pipeline up north is already
built. It was completed just after I got out of high school. In fact, I
was privileged to have the opportunity to work up in Prudhoe Bay at
that time and saw what actually happened out there in the oil fields.
It has operated successfully, safely, and efficiently for decades. It
has far surpassed what we believed we would be able to ship through
that line, but it remains surrounded by billions and billions of
untapped oil that can be brought to market, which would then bring in
jobs, generate revenue, and keep prices as low as possible, and
increase our security. We all want that.
This is a conversation that will continue until the conditions of
Alaska's Statehood--those promises that were made to us back in 1959
when we became a State--are fulfilled and we are allowed to produce our
resources as a State.

[[Page S228]]

So watching what is going on with Keystone is something that is of
great interest to the folks back home. We will continue to watch it and
hopefully be encouraged that we do the right thing from a jobs
perspective, from a revenue perspective, from an economic perspective,
and an energy-security perspective.
We have three amendments which are pending. I was privileged to be
sitting in the Chair a little while ago when the junior Senator from
Massachusetts spoke about his amendment. His amendment relates to
exports from the Keystone XL Pipeline. My colleague from Massachusetts
is not from a big oil-producing State, as I am.
I believe it is fair to say that his State cares a lot about the cost
of energy. They have cold winters, infrastructure challenges, and other
issues as it relates to energy, and I appreciate that. But it is
important to understand what my colleague's amendment would do. It
would specifically prohibit the export of oil that is brought into the
United States through the Keystone XL Pipeline, as well as the export
of the finished products made from that oil. It is not just the raw
crude that is put into the line. It is what goes down to the refineries
in the gulf coast and is then refined into products--whether it is
diesel or some other product. It is saying that the export of that
should be prohibited.
Basically, his amendment is a full-on, flat-out statement saying that
you can't have any aspect of it--any drop of that--leave this country.
It essentially says that all of this--every ounce of this new Canadian
resource--will be brought into this United States and will stay here.
My colleague has raised the concern that the United States should not
be that passthrough entity. He used the terminology that it is similar
to a straw from Canada down to the gulf, and then it goes out the back
end from there. The President, in a comment, used the term conveyor
belt and that the United States should not be that conveyor belt. The
argument is that we should not just be a passthrough where Americans
get none of the benefits. Well, if we didn't get any of the benefits, I
think we should be talking about that.
It is important to know this is not the first time we have had this
discussion or this idea in front of us. Back in early 2012, it was part
of an amendment that came before the floor. It was defeated 33 to 65.
We had many of our Democratic colleagues join with all of the
Republicans to reject a statutory ban on exports.
I am hopeful this amendment that has been offered and is pending will
see the same fate and ultimately be defeated by at least the same
margin. I say that because I think it continues to be unnecessary, and
I strongly believe it takes our export policies in the wrong direction.
This is not just Lisa Murkowski saying this takes us the wrong way.
The Department of Energy has looked critically at the issue of the
Keystone XL oil being exported and whether or not that makes sense. In
their analysis--and they state it pretty succinctly--they say: Without
a surplus of heavy oil in PADD 3--that is the gulf coast area--there
would be no economic incentive to ship Canadian oil sands to Asia via
Port Arthur, which is where it is coming out of.
The Department of Energy's conclusion--they had a pretty broad
discussion about it. But their conclusion was then reinforced by the
State Department in its final supplemental EIS for Keystone, which is a
document that everybody should read--granted that it is 1,000 pages
long, or thereabouts, but there is a summary that helps to condense so
much of it. In the State Department's final EIS, they say that ``such
an option''--that being export--``such an option appears unlikely to be
economically justified for any significant durable trade given
transport costs and market conditions.'' Think about that. I believe
these conclusions make some pretty good sense here.
The purpose of the Keystone XL Pipeline is to bring Canadian and
American oil--let's not forget the 100,000 barrels coming out of
Montana and North Dakota--to the gulf coast. It does not make any sense
to bring oil all the way--850 miles--to refineries that can refine it--
remember, these refineries in the gulf coast are set up to deal with
exactly this type of oil. So we have the line that brings it from the
north to the south where you have refineries that are able to handle
this. So tell me why it would make sense to just use this pipeline as a
passthrough--as a conveyor belt or straw--and then ship it to
refineries around the world that will add that transport cost to it. As
the State Department EIS said, it would not be economically justified.
It is important to understand, again, what is going on down there in
the refineries in gulf coast, and the State Department looked at that.
What they found was that the traditional sources of heavy oil used on
the gulf coast are declining. Why are they declining? What we
traditionally see coming in as imports there--coming in from Venezuela
and Mexico--has been drawn down or lessened, if you will, for a host of
different reasons, but not the least of which is because we are
producing more here in the lower 48 States in the Bakken.
We have talked a lot about the misalignment that is going on within
our refineries and what is being produced and what we are capable of
refining. But again, what we are seeing in the gulf coast is an ability
to take on more capacity for this heavy oil. The opportunity to refine
the product that is coming out of Canada there in the gulf coast
refineries is real. It is there.
Now, I think it is important to be honest here. I don't want to be
written up in somebody's fact checker. Believe me, we looked at that.
There are small amounts of oil from Keystone XL that could be
reexported as a matter of economic efficiency, but that should not give
anyone a reason to panic or get everybody all excited. It may come as a
surprise to some, but the reexport of Canadian oil that is not
commingled with the domestic crude is already completely legal. It is
already a routine matter where the Commerce Department just routinely
signs off on it. This is no big deal. There is no change in policy that
is dramatic.
The Obama administration has already approved dozens of licenses to
reexport crude oil all across the world.
I think it is important to recognize that this amendment offered by
my colleague from Massachusetts would not just block the export of the
crude, it would block the export of finished products. As he said, it
would be everything. It would be the crude, and it would be everything
that is then produced. Every bit we have he would have stay here. But
blocking the export of finished products would be a reversal of
existing law and current practices. And think about it--just from a
practical perspective, how do we enforce this? How would we
realistically enforce this measure of diesel that came from this
refinery, from this pipeline here in the lower 48--that we can go ahead
and export--and this is what we do. It is not any great state secret.
We move our refined products, and we do so in a significant way to the
benefit of our Nation. So how do we fence off everything that comes out
of Keystone XL and say: The refined product from this particular
pipeline can't move outside this country. It creates potential havoc,
and maybe that is the point.
I think the Senate should recognize that this amendment is not going
to improve this bill. I don't think it will change anybody's mind. I
don't think it is going to bring new support. I think it is meant to
kind of poison the well and perhaps ensure that this pipeline will
never be built and that it can't operate.
I encourage my colleagues to look at a couple different documents. I
mentioned the final supplemental environmental impact statement the
State Department did. It is an important read for the critical analysis
that went into it. I have cited those areas where they speak
specifically to the impact of the export. There are others who have
reviewed not only that but other documents, other outside facts.
I mentioned that President Obama had made reference to the conveyor
belt theory or tagging Keystone XL as being a conveyor belt for the
oil. He made that statement when he was in Burma in November. His
specific words were that it would provide ``the ability of Canada to
pump their oil, send it through our land, down to the Gulf, where it
will be sold everywhere else.''
So the fact checkers got on President Obama for that and did a pretty
good analysis. I felt it was a pretty good

[[Page S229]]

analysis. They laid it out in clear English and ultimately decided that
the President was going to be awarded three Pinocchios for that
statement. For those who aren't familiar, if a person makes a
significant factual error or obvious contradiction, they get three
Pinocchios.
But it wasn't just the Washington Post and Glen Kessler who did this
assessment. We also had another fact check come out of PolitiFact, and
they also rated that statement mostly false on their Truth-O-Meter.
I ask unanimous consent that both of these fact checks be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Washington Post, Nov. 20, 2014]

Obama's Claim That Keystone XL Crude Would Go `Everywhere Else' But the
United States

(By Glenn Kessler)

``I won't hide my opinion about this, which is that one
major determinant of whether we should approve a pipeline
shipping Canadian oil to world markets, not to the United
States, is does it contribute to the greenhouse gases that
are causing climate change?''--President Obama, news
conference at G20 summit, Brisbane, Australia, Nov. 16, 2014.
``Understand what this project is. It is providing the
ability of Canada to pump their oil, send it through our
land, down to the Gulf, where it will be sold everywhere
else.''--Obama, news conference, Rangoon, Burma, Nov. 14.
Twice during his recent overseas trip, President Obama
asserted that the proposed Keystone XL pipeline was designed
to take Canadian crude oil to the world markets. The
implication of the president's words is that the United
States would be simply a conveyor belt for the oil.
The pipeline would allow the Canadians ``to pump their oil,
send it through our land, down to the Gulf, where it will be
sold everywhere else,'' the president said in Burma. The
question he faced, he said in Australia, is whether ``we
should approve a pipeline shipping Canadian oil to world
markets, not to the United States.''
The White House did not provide an on-the-record comment.
Update: The Natural Resources Defense Council, in a
response to this column, said we were relying on ``outdated''
information. It noted that in recent months there has been a
jump in unrefined crude oil exports from the Gulf Coast,
contradicting the conclusions of the State Department. ``Data
from the Gulf Coast today show that some of the tar sands
from Keystone XL will be exported internationally before it
sees a U.S. refinery,'' the NRDC said. ``some'' at the moment
amounts to about 200,000 barrels a day; for reference, a
supertanker carries 2 million barrels. We did adjust some of
the language concerning exports in response to the NRDC
critique.

the pinocchio test

The president seriously overstates the percentage of
Canadian crude that might be exported if the Keystone XL
pipeline is built. He suggests all of it would be exported,
without mentioning that it first would almost certainly stop
on the Gulf Coast to be refined into products. On top of
that, current trends suggest that about half of that refined
product would be exported. That is not insubstantial, but it
is certainly much smaller than 100 percent.
All of this is laid out in the extensive report issued by
the State of Department earlier this year. The president
might want to study it before he addresses the Keystone
question again. In the meantime, he earns Three Pinocchios.
We nearly made it Four Pinocchios, but it is correct that at
least some of the product would be exported, based on current
market conditions.

three pinocchios

Is this really the case?

the facts

First of all, the president leaves out a very important
step. The crude oil would travel to the Gulf Coast, where it
would be refined into products such as motor gasoline and
diesel fuel (known as a distillate fuel in the trade). As our
colleague Steven Mufson reported more than two years ago, the
refineries on the Gulf Coast are ``eagerly waiting'' for the
Canadian crude, since there isn't enough oil in the area
anymore to feed the refineries.
``The modernized Valero refinery [in Port Arthur, Tex.] can
turn 310,000 barrels a day of some of the world's worst
quality crude oil--such as the bitumen-laden mixture from
Canadian oil sands--into gasoline and diesel fuel for cars
and trucks,'' Mufson wrote. ``Valero, the largest U.S. oil
refining company, would be one of the biggest customers of
oil from the Keystone XL pipeline, buying about 150,000
barrels a day.''
Indeed, the State Department's final environmental impact
statement on the Keystone XL project specifically disputed
claims that the oil ``would pass through the United States
and be loaded onto vessels for ultimate sale in markets such
as Asia,'' saying it was not economically justified. The
State Department noted that the traditional sources of crude
for the Gulf Coast, such as Mexico and Venezuela, are
declining, and so refineries would have ``significant
incentive to obtain heavy crude from the oil sands.''
So then the question turns on what happens to that oil
after it leaves the refinery. Oil is a global commodity, of
course, and where it travels often depends on market
conditions. In Obama's telling, however, the refined Canadian
oil goes ``everywhere else'' and ``not to the United
States.''
But that's not right either, according to the State
Department report. U.S. exports are not affected by various
pipeline scenarios but instead by market conditions, such as
``domestic demand versus domestic refining capacity, the cost
of natural gas, and refining capacity abroad, including in
foreign markets currently importing U.S. refined products
such as Mexico, Brazil, Chile, and Europe,'' the report said.
The demand for exports, in other words, is completely
unrelated to building the Keystone XL pipeline.
For the sake of argument, let's look at the percentage of
exports currently from the Gulf Coast area, using data for
refining output and product exports from the Energy
Information Administration. Depending on how you crunch the
numbers, the percentage of exports for finished products
ranges between 35 percent and 50 percent. The State
Department pegged the rate of exports at just over 50
percent, noting that ``this increased volume of refined
products is being exported by refiners as they respond to
lower domestic gasoline demand and continued higher demand
and prices in overseas markets.''
In other words, at least half of the oil that is refined on
the Gulf Coast stays in the United States. Market conditions
could change, of course, but there is little basis to claim
that virtually all of the product would be exported. (The
Fact Checker has previously noted that, contrary to the
claims of advocates of the project, Keystone XL is unlikely
to have much impact on gasoline prices.)
Opponents of the Keystone project have seized on slides,
such as the one below from one of Valero's presentations to
investors, to suggest the plan ultimately is to export the
production from Canadian oil sands.
But Bill Day, a spokesman for Valero, says ``it's a mistake
to interpret this to mean that Gulf Coast products would ONLY
go to export markets.'' The slide is simply showing the flow
of trade, from various refineries; diesel currently is more
popular in Europe while gasoline is king in the United
States, though demand for diesel is growing in both markets.
Day noted that currently the vast majority of the company's
products stay in the United States for domestic consumption.
____

[From PolitiFact, Nov. 20, 2014]

Obama Says Keystone XL is for Exporting Oil Outside the U.S., Experts
Disagree

(By Lauren Carroll)

President Barack Obama and many other Democrats think
there's little to be gained by building the Keystone XL
pipeline.
On Nov. 18, Senate Democrats voted down a proposal to build
the oil pipeline--which would stretch from Canada to Steele
City, Neb., where it would connect with an existing pipeline
that goes to Texas' coast. But the issue isn't going
anywhere. When the new Republican-led Senate takes over in
January, it will likely be at the top of their priorities
list.
Obama and other Keystone critics have argued that the
pipeline would have a negative environmental impact, while
having little benefit for the United States. For example,
constructing the pipeline would result in few permanent
American jobs.
``Understand what this project is,'' Obama said at a Nov.
14 press conference in Burma. ``It is providing the ability
of Canada to pump their oil, send it through our land, down
to the Gulf, where it will be sold everywhere else. That
doesn't have an impact on U.S. gas prices.''
Two days later, in Brisbane, Australia, Obama described
Keystone XL as ``a pipeline shipping Canadian oil to world
markets, not to the United States.''
Predicting the effect of the pipeline on gas prices is a
little tricky. Experts tend to agree that it could impact gas
prices, but the effect would be indirect and minimal. But in
this fact check, we're going to focus on the export
question--whether or not, as Obama said, Keystone XL's
primary destination is beyond the United States.
We found that Obama's off the mark.

Crude oil

In recent years, the United States has become a net-
exporter of refined oil products, like gasoline, jet fuel and
asphalt (meaning it exports more products than it imports),
according to the U.S. Energy Information Administration.
However, it is a net-importer of the crude oil it uses to
make those products.
Keystone XL would transport crude oil from Canada's tar
sands through the Midwestern United States down to the Gulf
Coast, and there are refineries all along the proposed route.
America gets more crude oil from Canada than any other
country. Nearly all of Canada's exports go to the United
States, and this accounts for about a third of America's
total crude oil imports. Much of its oil already makes it to
the United States by rail and existing pipelines.
We asked several energy economics experts, and they believe
that quite a bit--if not most--of the Keystone XL crude oil
will be bought and used by American refineries.

[[Page S230]]

``It's difficult to say with any certainty, but it is most
likely that most would be refined in the U.S.,'' said Kenneth
Medlock, an expert in energy economics at Rice University in
Texas.
A recent State Department report argues that it would not
be ``economically justified'' for Canada to primarily export
its Keystone XL oil to countries other than the United
States, when there are plenty of American refineries to
consume it.
Some independent refineries--particularly those in the
upper Midwest, but also in Texas--are in desperate need of
crude oil, said Charles Ebinger, a senior fellow in energy
security at the Brookings Institution. Currently, the
refineries have to import crude from places like Venezuela
and Mexico--though it would be cheaper and better for overall
energy security to buy from a North American source, rather
than pay high transport costs.
On Nov. 17, TransCanada told Reuters, it ``makes no
business sense for our customers to transport oil down to the
U.S. Gulf Coast, pay to export it overseas but then pay to
transport millions of barrels of higher-priced oil back to
the U.S. refineries to create the products we rely on.''
Ebinger added that many American refineries are geared to
use heavy crude, which is what Keystone would transport from
Canada's tar sands.
There would, though, likely be oil coming through the
Keystone XL pipeline in excess of what the American
refineries would be able to use, noted Eric Smith, an energy
economist at Tulane University. This excess oil could go to
other countries capable of refining it. Still, most Keystone
oil would stay in North America.

Refined products

Some Keystone XL critics have focused on the fact that
American refineries could export some of the products they
make with the Canadian crude oil, such as gasoline, diesel
fuel or asphalt. They argue that because products made in the
United States, using Keystone XL oil, will leave the country,
the pipeline wouldn't improve domestic energy security or
independence.
Anti-Keystone XL environmental group Tar Sands Action (part
of the larger 350.org) said in a Keystone XL fact sheet, that
American refineries will process the oil but, ``much of the
fuel refined from the pipeline's heavy crude oil will never
reach U.S. drivers' tanks.''
However, American oil refineries' product exports are ``not
sensitive'' to the addition of a new pipeline, the State
Department study says. Export trends are more dependent on
demand--both domestically and abroad--as well as the cost of
natural gas and foreign refining capacity. American oil
refineries are already increasing their exports, and that
trend could continue independent of Keystone XL.
``Refined product export levels have already increased and
some of the crude used is from foreign sources,'' the report
says. ``As this may already be occurring, it may continue
with or without (Keystone XL).''
Further, the report says, ``The economic viability of
exports does increase the demand for crudes in the United
States,'' but, ``this demand does not depend on the proposed
project.''
Even if exports are increasing, the majority of oil
products refined in the United States stay in the United
States. For example, in 2013, Gulf Coast area refineries
produced about 946,000 barrels of finished motor gasoline per
day. They exported about one-third of that--323,000 barrels
per day.
In January, Our friends at the Washington Post's Fact
Checker looked at an ad by liberal PAC NextGen Climate that
said, ``(China is) counting on the U.S. to approve
TransCanada's pipeline to ship oil through America's
heartland and out to foreign countries like theirs.'' A
spokesman for NextGen told Fact Checker that they were
referring to refined product exports, rather than crude oil.
Fact Checker gave the ad its lowest rating of Four
Pinocchios.
Even if Keystone XL isn't built, experts said Canada will
find other ways to transport their oil to the United States.
Canada already sends crude from the oil sands into the United
States by rail and other pipelines.
``I have no doubt that Canada will develop alternate means
of monetizing its crude oil, whether that be via expanded
rail shipments or by building pipelines to one or both of its
coasts,'' Smith said.
The longer that politicians debate Keystone XL, the more
time Canada has to figure out these alternate means.
``Keystone XL is rapidly becoming irrelevant,'' said
Michelle Foss, energy economist at the University of Texas'
Bureau of Economic Geology.

Our ruling

Obama said, Keystone XL allows ``Canada to pump their oil,
send it through our land, down to the Gulf, where it will be
sold everywhere else.''
The general consensus among experts, as well as the State
Department, is that American refineries would be the primary
buyers of crude oil transported through the Keystone XL
pipeline, by a vast margin. Some Keystone XL critics have a
point that American refineries would likely export some of
the products that they make with crude oil transported by the
pipeline. The State Department says, however, that product
exports are already increasing, and that trend would likely
continue independent of a new pipeline. Additionally,
American refineries tend to keep more products in the country
than they export.
We rate Obama's claim Mostly False.

Ms. MURKOWSKI. Again, I think it is important to have a full
understanding of what we are talking about when we talk about the
export of Keystone XL and the imperative that in order for something to
work, as the Senator from Massachusetts has suggested that we are just
going to have this passthrough, it has to make sense for those who are
moving this product. There has to be economic justification at the
other end. And what makes sense is to move that product to the gulf
coast, where our refineries have the capacity to handle that heavy
crude, turn it into product there, and continue to create jobs within
that region.
I am not going to support the amendment of the Senator from
Massachusetts, which I think is obvious from my statement, but I
believe it is important to give some of the background. I would commend
to colleagues some of these articles I have referenced.
There are two other amendments that are pending before us, and I will
speak very quickly to the amendment that has been offered by the
Senators from Ohio and New Hampshire. They have once again teamed up to
offer this bipartisan amendment on energy efficiency. They have worked
very closely on these issues over the years. We are to the point where
we can't think about energy efficiency without thinking Portman or
Shaheen, so I commend my colleagues for their diligence. I have been
happy to support them in their efforts, and I am happy, quite honestly,
that we will have an opportunity to vote on an amendment that does
relate to energy efficiency. It is not the full-on energy efficiency
bill my colleagues introduced previously, but it is an amendment with
text that is identical to the measure that came out of the House, the
Energy Efficiency Improvement Act. This is a bill that moved through
the House 375 to 36 during the last Congress, toward the end. We tried
to move it through in the Senate, and we came close to advancing it by
unanimous consent, but there were still a few outstanding concerns we
couldn't get around, so it is back before us once again. But really
nothing has changed since then, and in my view this is a good reason
why this proposal is really regarded as important and noncontroversial.
It is cost-neutral. It contains four provisions, one of which is
extremely time-sensitive.
Sometimes people don't want to get down into the weeds of certain
aspects of what we are dealing with. The time-sensitive provision we
are dealing with is these energy efficiency standards related to water
heaters where we have a consent decree from back in 2010 that our water
heater manufacturers have until April 16 of this year--so actually 3
months from today--to meet these revised minimum efficiency standards
from DOE.
The problem we have is that DOE's standards effectively ban
production of these grid-enabled water heaters that many of our rural
co-ops use for electrical thermal storage or demand response programs.
So instead of saving energy, these revised standards now threaten to
actually work against these goals. So we have a bizarre, unintended
consequence in this situation.
We have been working for a couple of years now to address this and to
fix it, and now it is urgent. Now we have to deal with it because,
again, we are at 3 short months. The manufacturers are worried about
what the Congress is going to do. Is it going to be resolved? Should I
be building any of these? Thanks to the cooperation of the Senators
from Ohio and New Hampshire, we have an opportunity to have this
measure in front of us once again.
There are three other provisions in this amendment that are equally
noncontroversial. They all relate to voluntary efficiency programs. One
focuses on the efficiency of commercial office buildings. Another
provides greater information about energy usage in those buildings. The
third looks at energy-efficient government technology and practices.
This is one that I hope we will be able to advance without further
delay. This is really a commonsense effort to fix a real problem for
our rural co-ops.
More importantly, let's embrace energy efficiency around here. We are
now involved in the discussion about

[[Page S231]]

increased production, which is very real. I started off my comments by
talking about Alaska's desired contribution to the national energy
economy, but I view energy from a three-legged stool perspective: We
have increased production. We have all the technologies that are going
to allow us to achieve our potential with our clean and renewable
resources, which is hugely important, but we also have the efficiency
and the conservation piece. We don't talk about that enough around
here. We need to do more. Shaheen-Portman is one way to get us there,
albeit in a very small way.
The last amendment we have pending is an amendment offered by my
colleague from Minnesota on the other side of the aisle, who also
serves on the energy committee. He has introduced an amendment that
would require that all of the iron, the steel--that all the
manufactured goods that are used to construct Keystone XL be produced
right here in the United States.
I think all of us want to do all we can, certainly, to encourage more
jobs and job creation here in this country and to put in place policies
that would allow us to do so. I do appreciate that the Franken
amendment inserts language in the amendment that allows--or I guess it
avoids a conflict with our international trade agreements because we
know that could have really threatened the bill. It would actually have
given the President real reason to threaten to veto this bipartisan
bill. But they have addressed that within the amendment. I also
appreciate that the amendment allows the President to waive the
requirements for American materials based on findings he makes. So that
is language which is included in it.
But I have to tell my colleagues, we are sitting here at 2,310 days
since the initial cross-border application was submitted for this
project. I was reminded that when the initial application was first
presented, the President was then Senator Obama. That much time has
elapsed. So I see this language, and I think it is included in this
amendment in good faith, but I just can't be convinced that the
President would actually exercise this type of a waiver in a timely
manner. He certainly hasn't demonstrated it at any point throughout
this whole, long, drawn-out process we have been on with Keystone XL
after 6 years.
So I am going to be opposing this amendment for the same reasons I
opposed it when we had it in front of us in 2012. It was included as
part of a broader amendment at that time, but it did fall on a pretty
strong bipartisan basis.
These are important issues to be thinking about and considering, and
I did take good time to review this. Again, I think all of us want to
do more to encourage job production, job creation. I buy American and I
buy local wherever and whenever I can. I strongly support the use of
American materials in American projects, whether it is in my State or
around the country. I know the Presiding Officer probably does as well,
as does the Senator from Minnesota. But in considering whether we here
in Congress should mandate specific materials for the Keystone XL
Pipeline, I have come down on the side that we should not mandate that.
I think we need to look at several things. First off is the
commitment that has been made to buy American without any sort of
mandate, without any requirement coming out of Congress. Fully 75
percent of the pipe from this project is going to come from North
America. That is the commitment that has been made, and I understand
that more than half of that--about 332,000 tons--is going to come from
Arkansas alone.
Again, this is a commitment that has been made to ensure that America
does derive benefit, that we do see those--direct and indirect--induced
jobs. When you make a commitment, you say that we will pledge a full 75
percent of the pipe for the project that is going to come from North
America. I think that is important. It was important enough that
TransCanada announced this 3 years ago. So this is not just something
they have decided in order to help facilitate this--that we are going
to say 75 percent. They made this commitment a while ago.
Here in Congress we passed the Buy American Act, and that act
specifically is applied to projects that are Federally funded. But keep
in mind here that when we are talking about Keystone XL, this is a
private project. Keystone XL gets no subsidies. It will receive no
taxpayer dollars. It will be built to the government's specifications.
We have seen that when you look to that final SEIS, where the
additional mitigation measures are required once the permit is
approved. It will be built to government specifications, but I don't
think the government should decide what it is actually built with. We
are going to define the parameters in terms of mitigation, but, again,
this is a private project. This receives no Federal funds, and it would
be somewhat precedent setting. So I asked the Congressional Research
Service to see if they can identify for me any other projects where the
Congress has sought to force or direct private parties or a private
company to purchase domestic goods and materials--so all of the
materials that go into it and not just the steel but everything else in
there. They have been looking. They have some pretty sharp folks over
there at CRS. So far, they have not been able to come up with an
example in our laws. I am concerned about this, quite honestly. As much
as I support ``Buy American'' and making sure that we receive the
benefit of these jobs from creating these products, I am concerned
about the Congress' setting a precedent here. I think it potentially
puts us on a pretty slippery slope.
If we are going to set the precedent here for Keystone XL and say,
well, you have to do it for pipelines, why wouldn't we do it for other
energy sources? Is that going to be a requirement we are going to place
on wind turbines?
I know some of my colleagues are in some States where they are
manufacturing good made-in-America wind turbines. I am all for that,
but is that a policy we are going to take on--where we are going to
say, no, it is an important industry, it is an important sector, and so
we are going to require that it all be made in America? If that is the
case, why not on our vehicles? Why not everything?
I worry about that. I worry about the precedent. I worry about where
we go beyond Keystone XL if that is the requirement. I think it is also
important to listen to the industry's perspective on this position. The
American Iron and Steel Institute have been a huge supporter of
Keystone XL for years now. They have 19 different member companies,
major producers such as U.S. Steel. They have 125 associate members.
On January 8--actually, right after we came into session--before this
amendment was even filed, the American Iron and Steel Institute sent
every one of us a Steelgram reiterating their support for Keystone XL,
and their letter is pretty definite. They are not nuanced about it.
They say:

It is essential that Congress act to ensure the approval of
the Keystone XL Pipeline without further delay.

I think we should listen to those words. Those words aren't coming
from a TransCanada. They are not coming from an oil company. They are
coming from associations and workers around the country who believe
earnestly and honestly that construction of this pipeline will be good
for this country and it will be good for these families. So let's
listen to them. Let's agree that 2,310 days and counting is more than
enough time to make a decision.
We saw the Nebraska Supreme Court come out with their determination
that the decision that came out of Nebraska was not unconstitutional.
So it clears away that excuse, if you will, or that reason to say we
can't move forward.
There is really nothing holding up a decision at this point in time
other than the President's unwillingness to move on this issue. I think
if we want to move forward and provide good jobs--and we have had the
debate about how many jobs are really created. Is it the 42,100 that
the final SEIS states in terms of direct and indirect jobs?

If you want just to focus on the permanent jobs, that is definitely a
much lower number--35 to 50 permanent jobs. But you know what. When you
build something, there is the opportunity for good, honest work for
well-paying jobs for welders, for truck drivers, for operators. People
are looking for an opportunity such as this. They want to be

[[Page S232]]

part of building something. I can tell you that in Alaska, when we are
debating how we are going to move our natural gas to market and how we
are going to build this natural gas pipeline that will move this,
nobody is saying that we can't build this because it is only going to
provide temporary construction jobs. That is not what we are talking
about. They know that there is benefit there. They are hoping they are
going to be part of that benefit.
When we talk about where we are with some of these amendments coming
forward, I think it is good to have this debate. I think it is good to
have this discussion, whether it is talking about exports, because that
is a legitimate part of the discussion, talking about requirements that
may be placed on construction. But I think we have to remember we are
not the zoning board here in the Senate or in the Congress. This bill
doesn't have anything to do with siting. We are not determining the
route. That is what the States do and rightly so. What this 2-page,
400-word bill does is approve the issuance of that permit to allow for
construction, but we are not the ones determining that this is the way
the line goes.
I would urge colleagues to look critically at the language and see
exactly what it does. Understand that when we are talking about the
benefits and burdens of a pipeline, it is true that pipelines are not
100 percent fail-safe. Not much that we build is 100 percent fail-safe,
but what we try to do at every turn and at every opportunity is to make
it as close as possible. But when you look from a safety perspective,
from an environmental perspective, the safest and most environmentally
sound way to move this oil is in a pipeline. It is not putting it in
rail to other parts of the country. It is not putting it on the roads
as we are seeing. Those are the options right now. Whether people in
this body or across the Chamber here object, Canada is accessing their
resource. They are accessing their resource, and they will move their
resource. Right now the way they are moving it is in a way, quite
honestly, that adds to emissions, has greater potential for a spill and
for an environmental incident. So I am looking at it from the
perspective that Canada is going to move that. They have made that very
clear.
In fact, there was an article just a couple of days now, in the Wall
Street Journal--and it is talking about the impact of lower oil prices
and the impact on what is happening in Canada as an oil producer. Are
they slowing down their production in response to lower oil prices?
Absolutely not. What we are seeing is almost--I don't want to describe
it as a doubling down because that is an inaccurate phrase--but what we
are seeing is continued effort within Canada to access their oil
resources. Some of the statements that are made by some of the Canadian
oil companies are really quite telling. They say that Canadian Natural
is a company that will ``ensure the oil sands will continue adding to
the global oil glut for a long time to come, regardless of the price of
crude.'' They go on to say: ``It's not well understood just how robust
the oil sands are. If you stopped expansion of the oil sands tomorrow,
you would have no decline in the production base for decades . . . But
few of the largest producers in Canada envision scaling back production
at their oil sands operations.''
So what we are seeing is there was big investment up front with the
oil sands in Canada and accessing a resource that is plentiful, but if
you are to believe some of the statements from these Canadian
companies, they are going to continue to produce their resource, even
in the face of what we are seeing--declining world oil prices.
If Canada is going to continue to produce, how is that product going
to be moved? I would rather it be moved safely through a pipeline, with
fewer emissions through a pipeline, and to a part of the country where
we are set up to accommodate that resource in our refineries so that we
can refine that product to our benefit.
To me, that makes sense. So we will have good and--excuse the pun--
energetic debate about amendments in these coming days. I think you can
see from my comments we are going to have some amendments that I like
and some that I am not supporting. But what I am looking forward to is
the fact that we are at a point that we are describing as regular
orders. We are going to be voting on amendments, perhaps quite a few,
as we move toward the final passage of this bipartisan bill. I look
forward to the exchange that we will have.
I thank you for your attention, and I yield the floor.
The PRESIDING OFFICER (Mr. Tillis). The Senator from North Dakota.
Mr. HOEVEN. I am very pleased to join my colleague this morning, the
chairman of our energy committee. The Senator from Alaska is doing a
fantastic job leading our energy committee. I so appreciate her
leadership on the committee, her knowledge of energy. Her words this
morning--very well spoken--I think really go to the heart of what we
are trying to do with this legislation: not only pass important energy
legislation for the country but have this open process, open dialogue,
have a real energy debate, and not just a debate but give people the
opportunity to vote.
Republican and Democrat alike, we are saying, come on down here,
bring your amendments, and let's have a serious discussion about energy
and about building the energy future of this country. Offer your
amendments, make your case, and then let's vote. If you can get 60
people to support your amendment, if you can get 60 votes, that gets
attached to the legislation. That is the way it is supposed to work
around here.
So we are encouraging our colleagues to join with us and get the work
done that the American people want done. So I thank our energy chairman
for setting that in motion. That is the right way to do business. That
is what we are elected to do. We are going to get something done for
the American people, who sent us here for that very reason.
When you look at what is going on in energy today, you have to feel
pretty good about it. If not, drive over to the gas station to fill
your car. Gas prices at the pump are about a dollar lower than they
were this time a year ago. If you equated that savings our consumers
are receiving at the pump to a tax cut, it would be more than a $100
billion tax cut for hard-working Americans. That is pretty exciting.
That did not just happen. It certainly did not happen because OPEC or
anyone else--Venezuela or Russia or anybody--decided they wanted to cut
us a break, cut hard-working Americans, hard-working taxpayers,
consumers, small businesses across this country a break. It happened
because we are producing more energy in this country and we are working
with our closest friend and ally in the world--Canada--to produce more
energy.
On a daily basis we consume about 18 million barrels of oil a day--
oil and oil equivalents--and produce about 11 million of those barrels
here domestically. We are up to about 3 million, so of the 7 million we
import, about 3 million comes from Canada. So we are down to only
importing about 4 million barrels a day from other sources. If we stay
on this track, if we build the necessary energy infrastructure--such as
the Keystone XL Pipeline--and we continue to build good business
climates and get our companies to invest, to create jobs, and produce
more energy, we can get to a point where we truly have North American
energy security, meaning we produce more energy here at home and with
Canada than we consume. Boy, then we will be in the driver's seat--not
OPEC; America will be in the driver's seat. If we don't do it, if we
block projects like we are debating right now, then we will put OPEC
back in the driver's seat. So when they hear our President say he is
going to continue to block this project, to veto this legislation if we
are able to pass it with a strong bipartisan majority, that is music to
OPEC's ears because that puts them right back in the saddle. That is
what they want.
But we work for America. That is why we need to continue to move
forward and build this exciting energy future for our country that we
are building. It is energy. It is jobs. It is economic growth. This
project will create hundreds of millions of dollars of revenue--State,
local, and Federal revenue to help reduce the debt and deficit. That is
a huge and important impact of the project. Of course it is about
national security with energy security. So I want to emphasize that

[[Page S233]]

again because that is doing the work the American people sent us here
to do.
For the opponents--there are a couple of things that I heard this
morning and that I hear on an ongoing basis. One is that, oh, gee, we
should be doing renewable energy instead of fossil fuels.
Why not do all of it? Why are they mutually exclusive? How does doing
this project in any way prevent us from doing any renewable project we
ought to do? Let's do those renewable projects.
In my home State we use steam from coal plants to produce biofuels,
power biofuels plants. We use the wastewater from some of our
communities in those biofuels plants. We have wind energy. We have
geothermal, ethanol, biodiesel. We are now the second largest oil-
producing State in the country. We produce 1.2 million barrels a day--
second only to Texas.
They are not mutually exclusive. Let's do it all. How does holding up
one enable us to do the other? It does not. So when I hear the argument
that ``Well, we ought to do all of those other things,'' good--let's do
them. But doing this project helps us. It provides more energy. Heck,
let's do the others too. So arguing that we should do renewables is not
an argument against this project. Fine. Let's do it. Let's do them
both.
The other argument that I heard this morning and that I hear, of
course, a lot from the critics is the environmental argument. Again, I
say look at the facts. Go back to the science. The report itself says
``no significant environmental impact.'' That is the report done by the
Obama administration, the environmental impact statement that was
designed to look specifically at the environmental impacts. That has
been done over the course of 6 years; not one, not two, not three, but
five reports--three draft reports, two final reports. The results are
right in the report: The Keystone XL Pipeline will have no significant
environmental impact.
In fact, we will have higher greenhouse emissions without the
pipeline than we will with it because it would take 1,400 railcars a
day to move all of that crude into our country, which is what will
happen. If somehow the critics manage to block that, then it would go
to China. We would have pipelines built to the west coast of Canada.
The oil would go to China in tanker ships and be refined in refineries
that have higher emissions. So however you slice it, without the
pipeline, we would have higher greenhouse gas emissions.

But here is what I want to touch on for just a few minutes today. I
will talk about it more next week. Canada is working aggressively to
get investment in the oil sands to reduce the greenhouse gas emissions.
Exxon has a major project up there. Shell has a major project up there.
The Exxon project is the Kearl project. The Shell project is the Quest
project. In both cases they are bringing down the greenhouse gas
emissions of the oil sands buy investing in new technologies, in
cogeneration, and in carbon capture and storage. Hundreds of millions--
billions of dollars are being invested along with the Canadian
Government in carbon reduction technologies. Not only does that reduce
the carbon footprint of the oil sands, but think about it--as that
technology is developed, what happens? It is adopted in other places.
It is adopted here in this country. It might be adopted in China and
other places around the world. So the advances they make in technology
in reducing greenhouse gas emissions, in reducing the footprint of this
oil production and finding better ways, more cost-effective, more
efficient ways, more environmentally friendly ways to produce that
energy, that technology then is adopted around the world.
In other words, they are finding solutions to some of the concerns
that are being raised on the environmental front by the very critics of
this project. So instead of stopping that investment and that
advancement, why don't we find ways to continue to develop that, which
is not only a benefit in the oil sands in Alberta, but it is a benefit
that we can utilize to produce energy in this country and other places
around the world. That is true for oil. That is true for gas. That is
true for all fossil fuel energy.
See, that is how America has always worked. We create that business
climate. We encourage the investment. We get American ingenuity. We get
American companies to use their entrepreneurial genius to make those
investments to not only create good jobs but to produce more energy,
giving us energy security, and deploy the very technologies that give
us the better environmental stewardship that we want. But when we block
these projects, when we prevent the investment, when we will not let
them build the infrastructure, we bring all of that to a grinding stop.
Why would we do that? It does not make sense.
There is not one penny of U.S. taxpayer money going into this $8
billion project. It is private investment. Why would we not want the
private investment that helps build the infrastructure and develop and
deploy the technology that gives us better environmental stewardship?
Isn't that what it is all about? Isn't that why our powerplants and our
energy production in this country are light-years ahead of what they
are doing in countries around the world, where in many cases they are
still using third world-type energy approaches? Let's lead the way
forward in technology. Let's empower that to happen.
Because I note that the time is wrapping up here, I will come back to
the floor next week. But I am going to talk about the hundreds of
millions that are being invested in the Kearl project--Exxon is doing
that project--and also in the Quest project, and Shell is doing that
project. They are working with the provincial government in Alberta to
develop carbon capture and storage. That is something we talk all the
time about wanting to do. Here we have private companies working to put
hundreds of millions into developing that very technology.
Since 1990 the greenhouse gas emissions for the production of oil in
the oil sands has come down 28 percent--been reduced almost by one-
third. They are continuing to find ways to improve the environmental
stewardship and reduce the greenhouse gas emissions. Isn't that what we
want versus continuing, for example, to import oil from Venezuela that
has as high or a higher footprint, and you do not have that kind of
investment in new technologies, that kind of investment in better
environmental stewardship.
So as we talk about this issue, let's talk about it in a way where we
advance the ball and we do it the right way; where we get the energy,
the jobs, the economic growth; where we build our relationship with
Canada rather than saying: No, we are not going to work with you guys.
At the same time, we will get better environmental stewardship. We can
do it. Let's do it.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. HATCH. Mr. President I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Cyber Security

Mr. HATCH. Mr. President, I rise to discuss the critical need for
cyber security legislation.
Computers control nearly everything we use in our daily lives. They
control our cars, our phones, our water supply, our power grid, our
financial services, our retail networks, our food production and in
many respects our military capabilities.
Fortunately, our adversaries have not yet succeeded in inflicting
major physical damage on our Nation's interdependent critical
infrastructure.
That is not to say however they are not vulnerable to persistent
threats in cyber space. Look no further than in the ``2014 U.S. State
of Cybercrime Survey.'' That is a study prepared by
PricewaterhouseCoopers, the U.S. Secret Service, Carnegie Mellon
University, and CSO magazine.
Of the more than 500 U.S. executives and security experts surveyed,
77 percent of businesses detected an attempted security breach in the
previous 12 months, and 34 percent of these businesses said the number
of security incidents detected increased over the previous year, with
an average number of 135 incidents per organization.
The report makes many key observations, but let me emphasize a key
finding that resonated with me. One thing

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is very clear: Most organizations' cyber security programs do not rival
the persistence, tactical skills, and technological prowess of today's
cyber adversaries.
Cyber thieves proved their determination just last week when Russian
hackers amassed over 1 billion Internet user names and passwords, the
largest known collection of Internet credentials.
In the years following the September 11, 2001, attacks, the U.S.
Director of National Intelligence consistently ranked terrorism as our
No. 1 threat, but that started to change a few years ago. In 2012 then-
FBI Director Robert Mueller predicted that ``in the not too distant
future, we anticipate that the cyber threat will pose the number one
threat to our country.''
He was right.
In 2013 and 2014 the intelligence community's Worldwide Threat
Assessment lists cyber as the top threat to our Nation. Terrorism,
nuclear proliferation, and unauthorized leaks of classified information
remain grave threats to our country, but cyber is now our No. 1 threat.
Yet it is hard to believe no major cyber security legislation has
been enacted since 2002, when Congress passed the Federal Information
Security Management Act--or FISMA--and the Cybersecurity Research and
Development Act. Of course, there have been provisions relevant to
cyber security enacted in subsequent laws but nothing as significant or
comprehensive as the laws passed 12 years ago.
As we begin a new Congress, let me articulate a few guiding
principles that should be included in any cyber security legislation.
First, we must acknowledge the need for the government and the
private sector to cooperate in order to fend off cyber attacks, but
today businesses are reluctant to share critical information out of
fear of legal repercussions. Congress must provide proper incentives,
such as liability protection, to encourage the private sector to share
cyber threat information with our government.
Next, any cyber security legislation must strike the right balance
between protecting our Nation's computer infrastructure and protecting
individual privacy rights.
Thus, information sharing between businesses and the government must
be tailored to the recipient's actual security responsibilities.
Moreover, any legislation should avoid overly broad language that could
clash with privacy protections.
Furthermore, a voluntary, nonregulatory approach is most likely to
yield consensus legislation. The role of DHS and other government
agencies should be to provide advice and resources to improve our
Nation's cyber security posture, not to pile on additional burdensome
regulations.
Finally, and perhaps most important, we must build a strong cyber
security workforce in the public and the private sectors. Enacting
cyber security legislation will mean very little if there are no
trained professionals prepared to tackle our Nation's cyber security
challenges.
In order to build the enduring capabilities capable of protecting our
cyber infrastructure, we must encourage young people to pursue high-
tech careers and attract highly skilled workers from around the world.
Beyond the civilian realm, the cyber threats we face present critical
new challenges to our national security. Arguably, we have not yet
faced a similarly novel catalyst for policy formulation and change
since the development of our nuclear deterrence strategy more than 60
years ago.
As we face this new world of cyber threats, the fundamental question
remains the same: What is the most efficient and effective means to
defend our country, the United States, while remaining true to the
Constitution at the same time. Answering that question should be the
cornerstone of the President's cyber security strategy.
I was encouraged to hear the President say during his visit to the
National Cybersecurity Communications Integration Center earlier this
week that ``cyber threats are an urgent and growing danger.'' I
certainly share that assessment of the dire nature of this very real
threat to our national security.
While I applaud the White House for its plans to host a conference on
cyber security and consumer protection next month, the nature of the
cyber security threat demands a comprehensive strategy to protect our
Nation.
Much work remains to be done on this front, especially from the
standpoint of the Department of Defense and the Department of Homeland
Security. The urgency of this task was amplified when the Congressional
Research Service concluded just this month that ``the overarching
defense strategy for securing cyberspace is vague and evolving.''
As we face these threats, we must act decisively to ensure that
bureaucratic barriers do not hinder the development of an effective
strategy to counter threats from cyber space. As it stands, there is
not a single agency primarily responsible for cyber defense.
The Department of Homeland Security is charged with protecting
civilian networks and working with the private sector. The FBI and
Secret Service are responsible for investigating cyber crime, and the
Department of Defense is responsible for defending its own systems and
partnering to protect the defense industrial base.

Critically, the Defense Department is only tasked with supporting DHS
when the cyber attack is directed at our homeland. Yet these
differences of responsibility can operate as artificial barriers to the
efficient and effective cyber defense system.
Indeed, the lack of a single organization with direct responsibility
runs counter to the basic leadership principle of unity of command. It
bears remembering that these boundaries only exist for our agencies,
not the hackers which seek to exploit the limitless terrain of cyber
space. In a world in which the lines between cyber crime and cyber
warfare are increasingly blurred, we need to ensure that all of our
defensive cyber capabilities are brought to bear against the wide
variety of threats facing our infrastructure, private and public,
civilian and military.
Nevertheless, the need for a primary agency of responsibility does
not necessarily mean the Department of Defense should be that agency,
even despite its remarkable capabilities. Such a course would raise
both legal and practical concerns.
Beginning with the legal issue, as the Supreme Court has stated,
there is a ``traditional and strong resistance of Americans to any
military intrusion into civilian affairs.''
The use of the military to enforce the law, with respect to domestic
hackers or to virtually patrol on private networks is problematic
because of the provisions of 18 U.S.C. section 1835.
In addition, the Defense Department's organization to defend against
cyber attacks might not be the most efficient. Currently, U.S. Cyber
Command, which is responsible for the training and equipping of our
cyber warriors, is also entrusted with the Department's operational
activities in cyber space. Such a construct makes sense. Yet unlike a
unified combatant command, Cyber Command is a subunified command under
U.S. Strategic Command. Though this configuration has been considered
and agreed to by the Senate Armed Services Committee, I am still not
convinced of its value. Therefore, I also hope the President addresses
how our military forces can best be aligned to facilitate the most
efficient and effective cyber defense possible.
But returning to the larger question, if concentrating our efforts
entirely in the hands of the Defense Department is not advisable, what
are we to do?
One possible solution has been presented by Richard Clarke, the noted
former member of the National Security Council, in his book, ``Cyber
War.''
To be clear, I am not endorsing Mr. Clarke's proposal. We surely do
not need another government bureaucracy, but I do believe it is an
important concept to be discussed during future debates on cyber
security. Specifically, Mr. Clarke argues for a civilian cyber defense
administration which would be responsible for protecting ``the dot-gov
domain and critical infrastructure during an attack.'' As well as
assigning those Federal law enforcement agencies personnel responsible
for cyber crime to this centralized cyber defense administration, it
would only be logical to ask if such an agency could provide other
cyber defense functions.
Accordingly, addressing proposals such as this as part of answering
the

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question as to what is the most effective organization we can employ
for cyber security should be a focal point of the President's address.
But we should not just place these questions at the President's door.
The Senate itself must consider modifying the way it considers cyber
security legislation and issues.
Currently, there are at least five separate Senate committees which
are responsible for various aspects of cyber security. Therefore, we,
too, have a unity-of-effort issue, and the Senate should consider means
to concentrate this body's expertise on this critical matter.
In conclusion, there are a myriad of questions which our government
must address before we are able to state we have the most effective,
efficient, and constitutional cyber security defense possible.
I hope the President fully utilizes the opportunity presented to him
in his State of the Union Address to answer these important questions--
and if he doesn't, we have to. So we better solve these problems. I
presume the President will speak intelligently on these issues and
hopefully in a way that will unify the country, unify the Congress, and
get us all working in the same way.
We can't afford to let this drag any longer. This is one of the most
important sets of issues we have in our country. It may be one of the
most important issues or sets of issues in the world at large.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

____________________