Congressional Digest

Congressional Digest December 2011 No. 10 Vol. 90
North American-Made Energy Security Act

Keystone Pipeline

Weighing Energy Security Against Environmental Risk

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North American-Made Energy Security Act

H.R. 1938 Background and Rationale

A Canadian pipeline company, TransCanada, has long sought to increase the capacity of its Keystone pipeline system in order to bring more Canadian crude oil to American refineries. A permit application for its proposed expansion project, Keystone XL, was submitted to the State Department in September of 2008.

In the 33 months since — an unusually long period for such permits — the Nation has faced high gasoline prices as well as soaring unemployment rates. Approval of Keystone XL would help address both of these concerns, but the Obama Administration has yet to make a final decision about whether to allow the project to move ahead. Most recently, the Environmental Protection Agency raised several objections that may further delay a final decision.

Despite the economic downturn, the Nation’s demand for petroleum and motor fuels remains strong and is projected by the Energy Information Administration to grow in the years ahead. However, domestic oil production is limited by the Federal Government. Many promising domestic onshore and offshore areas are explicitly off-limits to energy leasing, and even those that are not may be subject to permitting delays or regulatory constraints that effectively make them so. Oil imports are needed to fill the gap between consumption and domestic production.