American Oil and Gas Reporter - February 2015 - 42

Federal Legislation

Keystone XL Becomes Senate Priority
WASHINGTON-Senate Republicans
opened the 114th Congress with their eyes
on energy, devoting S 1, the first bill introduced in 2015, to the Keystone XL Pipeline.
However, the measure failed to clear an early legislative hurdle as Democrats blocked
a vote to end debate (Editor's Note: The
Senate subsequently passed S 1 on a 62-36
vote Jan. 29).
Legislators also started the new session
with proposals to ease pipeline permitting,
increase liquefied natural gas exports,
and grant tribes more authority on Indian
country energy projects.
Introduced by Senator John Hoeven, RN.D., S 1 would authorize TransCanada
Keystone Pipeline LP to construct and operate the pipeline, which would run from Alberta to Steele City, Ne. According to congressional documents, the bill also deems
the final supplemental environment impact
statement issued by the secretary of state in
January 2014 to fully satisfy National Environmental Policy Act requirements.
On Jan. 26, Senate Majority Leader
Mitch McConnell, R-Ky., sought to end
debate on S 1, but failed to end a Democratic filibuster on a 53-59 vote. Senator
Chuck Schumer, D-N.Y., was quoted in
news accounts as saying the Democrats
were seeking more discussion on the
measure.
Before the filibuster vote, Senator Lisa
Murkowski, R-Ak., said the bill approved
the long-delayed border permit while
also protecting private property rights,
adding that it would allow Nebraska to determine the best possible pipeline route.
Murkowski, chairwoman of the Senate
Energy and Natural Resources Committee, says her committee approved the
Keystone bill soon after the House of Representatives approved its version, HR 3.
"Literarily everything that has happened
during the Obama administration-legislation, regulations and extracurricular activities-happened while Keystone XL's permit application was pending," she states.
"At more than 2,300 days and counting,
it is abundantly clear the president is not
going to make a decision and that Congress
needs to make it instead."
S 1 Amendments
House and Senate legislators have introduced more than 140 amendments to S
1. Among the proposed changes, Senator
David Vitter, R-La., wants the federal government to change its allocation schedule
for offshore revenue sharing, and to include
more areas off the East and West coasts in
42 THE AMERICAN OIL & GAS REPORTER

the 2017-22 Outer Continental Shelf fiveyear leasing program.
According to Vitter's office, under his
amendment, the cap on funds that Gulf
states receive from offshore revenues
would increase from $500 million to $699
million from 2017 to 2055. Virginia, North
Carolina and South Caroline would join the
distribution program, each receiving $100
million annually from 2016 to 2025, and
$200 million a year from 2026 to 2065.
"States such as Louisiana, that produce
energy off our shores, receive only a
small portion of the revenues generated
from the production," Vitter says. "The rest
goes to the federal treasury. I have always
said they are our coasts, our risks and our
workers, so we should get more of that revenue to stay in Louisiana. We want other
states, such as Virginia, to be able to access the resources off their shores and participate in revenue sharing, too."
Vitter's amendment calls for the United States to open nearly all the OCS to
lease sales; current restrictions keep 85 percent of offshore areas closed. Virginia's
two Democratic senators, Mark Warner
and Tim Kaine, support opening Virginia's coast to drilling, Vitter's office
points out.
Senator Ted Cruz, R-Tx., advanced
three amendments to the Keystone XL
pipeline bill. According to his office, the
proposals:
* Expedite LNG exports by requiring
that members of the World Trade Organization that do not have free trade agreements with the United States receive the
same expedited export approvals that
countries with FTAs receive;
* Repeal the ban on U.S. crude oil exports, including the president's authority
to restrict oil exports enacted in the 1970s,
and allow exports of crude oil produced on
the OCS; and
* Implement the North American Energy Infrastructure Act, which removes
barriers to cross-border energy development.
The Senate tabled two Democratic
amendments to the Keystone bill. Senator
Edward Markey, D-Ma., offered an amendment to prohibit refined gasoline, diesel
and other fuels produced from the Keystone tar sands from being exported,
Markey's office says. The American Petroleum Institute and other industry groups
opposed the measure, saying it went
against their long-standing drive to allow
exports of U.S. oil.
Senator Al Franken, D-Mn., wanted to

require the pipeline be built exclusively
from U.S.-made steel, iron and manufactured goods, media sources indicate.
Franken's amendment wouldn't apply if using domestic goods increased project cost
by more than 25 percent, reports indicate.
Pipeline Permitting
Federal government bureaucracy is
blocking the energy industry's ability to
deliver natural gas from the wellhead to
consumers, contends Representative Mike
Pompeo, R-Ks., who announced he was
sponsoring legislation to make federal
agencies accountable for completing all
pipeline application reviews in a timely
fashion.
Despite improvements in gas pipeline
infrastructure over the past decade and attempts to strengthen the permitting process
in the Energy Policy Act of 2005, challenges continue for permitting interstate
pipelines, Pompeo says. Under his bill, the
Federal Energy Regulatory Commission
would conduct NEPA reviews and have the
authority to enforce deadlines for other
agencies involved in the permitting process
under laws such as the Clean Air Act, Clean
Water Act or Endangered Species Act.
FERC regulations state that federal and
state permitting agencies participating in
a NEPA analysis are required to complete
their reviews within 90 days after FERC's
environmental review is complete.
Despite the increased authority given
to FERC under EPAct, numerous instances of delays have been reported,
Pompeo says. One 2012 study found delays of more than 90 days had risen 28 percent since EPAct's permitting reforms,
while delays of 180 days or more had increased 20 percent. Pompeo says a chief
cause of these delays is that there are no
enforcement mechanisms or consequences
if agencies don't comply within that 90day window.
HR 161, the Natural Gas Pipeline Permitting Reform Act, is bipartisan legislation that seeks to modernize the review
process by establishing firm timelines for
permit applications, Pompeo says. Its
provisions would:
* Require FERC approve or deny a
pipeline certificate no later than 12 months
after receiving a complete application
for projects going through its prefiling
process;
* Codify FERC's requirements that all
relevant agencies make permit application
decisions within 90 days after FERC's notice of completion of the environmental re-

American Oil and Gas Reporter - February 2015

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