A yard in Gascoyne, ND., which has hundreds of kilometres of pipes stacked inside it that are supposed to go into the Keystone XL pipeline, is shown on Wednesday April 22, 2015.Alex Panetta/The Canadian Press
Republicans in Congress are moving forward with legislation to streamline the approval of cross-border pipelines and transmission projects, and remove the President's role in issuing permits.
The presidential permitting process – established under executive order in 1968 – became mired in controversy in the battle over TransCanada Corp.'s Keystone XL pipeline that was turned down by then-president Barack Obama in 2015, seven years after the company first applied for permit. President Donald Trump approved Keystone XL in March after an expedited review process, though TransCanada has not yet confirmed construction.
The Republican-dominated House of Representatives approved a bill late Wednesday that would regulate the cross-border permitting of energy infrastructure; the bill must now go to the Senate where the Republicans hold a slim majority. If passed in the Senate and signed by President Trump, the legislation would further the integration of the North American energy market and reduce the opportunity for opponents to block controversial cross-border projects.
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The legislation would take the review of oil pipelines out of the hands of the State Department and put it with the industry-friendly Federal Energy Regulatory Commission (FERC).
FERC – and the Department of Energy in the case of transmission lines – would have strict time limits on the review process and would have to approve a project unless it is shown not to be in the public interest, reversing the current onus on proponents to demonstrate their projects are in the national interest in the United States. The reviews would focus narrowly on construction at the border, thereby avoiding any assessment of the impacts of the energy production itself – whether emissions of greenhouse gases from the oil sands, or massive flooding at Canadian hydroelectric sites.
"The construction of these border-crossing facilities should be done effectively and efficiently without getting caught up in our nation's politics," the bill's sponsor, Oklahoma Congressman Markwayne Mullin, told the House of Representatives on Wednesday. "These facilities are used for importing and exporting oil, natural gas and electricity that enhance the trade of our energy products that benefit our economy."
Environmentalists worry the legislation – and a companion bill streamlining the review of domestic natural gas pipelines – would short-change environmental considerations and lead regulators to rubber-stamp project approvals.
"From an environmental perspective, we believe the federal review process needs to reside with State, especially giving regard to the national interest test," Melinda Pierce, legislative director with the Sierra Club in Washington, said in an interview Thursday. She said the limited scope of the review would prevent the federal agencies from conducting credible public-interest screening, particularly with regard to climate-change impact of energy developments.
Canadian energy exporters have complained about lengthy reviews, uncertain outcomes and politicization under the presidential permitting process. After Mr. Obama rejected Keystone XL, TransCanada claimed discrimination and launched a $15-billion suit under the North American free-trade agreement, which it dropped after Mr. Trump approved the project.
With presidential permits now in hand for KXL and Enbridge Inc.'s proposed expansion of its Line3 pipeline into the Midwest, Canadian crude exporters do not have any cross-border projects under application. However, there are several transmission projects that are awaiting decisions.
The Canadian Electricity Association has long advocated for reform of the approvals process in the United States as part of the ongoing effort to forge a North American energy strategy, CEA president Sergio Marchi said Thursday.
"Inconsistencies and undue delays in these processes inject uncertainty and risk into development plans, and deprive consumers of such benefits as enhanced reliability, affordability, and diversity of supply," Mr. Marchi said.
"As we now enter NAFTA re-negotiations, we should be thinking of how to construct a modern continental energy strategy, which among a set of strategic issues, will include a more practical and streamlined regulatory regime."