House Passes Keystone XL Pipeline Bill Georgetown International Environmental Law Review

Greg Warren - House Passes Keystone XL

House Passes Keystone XL Pipeline Bill

 By Greg Warren, Staff Contributor

On February 11, 2015, the House of Representatives passed a bill approving construction of the Keystone XL Pipeline; President Obama is likely to veto the highly debated legislation.

Keystone XL is a proposed pipeline for the transport of tar sands oil from Alberta, Canada to the U.S. Gulf Coast. It is designed to run through unpopulated areas and important natural resources, such as rivers and the Ogallala Aquifer, all of which could be at risk in the event of a pipeline burst.

The Oil Spill Liability Trust Fund, which is maintained by an excise tax of eight cents per barrel of crude oil imported into the United States, would provide an immediate source of funding for responses to oil spills occurring during the construction and operation of the pipeline. Due to the IRS’ interpretation of a 1980 piece of legislation, tar sands-derived oil importers are exempt from paying into the fund. Accordingly, TransCanada, the corporation spearheading the Keystone XL Pipeline project, would not be obligated to fund any cleanup efforts.

“TransCanada, the corporation spearheading the Keystone XL Pipeline, would not be obligated to fund any cleanup efforts.”

Supporters of Keystone XL believe it will bring much needed economic development through tax revenue, job creation, and lower gas prices within the United States. Additionally, it would alleviate U.S. dependence on the import of crude oil.

However, critics argue that the pipeline may in fact only create 35 “permanent jobs,” as indicated by State Department estimates. Furthermore, President Obama is concerned that the EPA has not completely investigated all possible hazards and that the benefits of the project will primarily accrue to the Canadian oil industry.

“President Obama is concerned that the EPA has not completely investigated all possible hazards and that the benefits of the project will primarily accrue to the Canadian oil industry.”

The initial legislation originated in the House of Representatives, where an amendment that would have required TransCanada to pay the 8-cent-per-barrell fee to the Oil Spill Liability Trust Fund, as other transporters of crude oil into the United States are required to do, was rejected before the bill was sent to the Senate.

On January 29, 2015 the Senate passed a revised version of the bill that included a “Sense of the Senate” Amendment indicating that ALL types of oil companies, including those that transport oil derived from tar sands, should be required to pay a per-barrel tax to the fund. However, the amendment does not actually require tar sands companies to contribute a per-barrel excise tax to the fund.

Before the bill was re-approved by the House, Republican Congressman Lois Capps of California made one final attempt to amend the bill to require TransCanada to pay the same per-barrel fee towards the fund, but the motion failed. The failure to pass such an amendment certainly creates an inequitable result by allowing TransCanada to continue to circumvent a necessary tax due to an outdated loophole in previous legislation.

As Congressman Lois Capps stated, “[W]e have the Oil Spill Liability Trust Fund . . . to ensure that the oil companies that create these messes also pay to clean them up. My commonsense amendment would have required TransCanada to certify that it will pay the same per-barrel fee for its tar sands oil as it does for regular crude, and I am disappointed it was not adopted.”

“My commonsense amendment would have required TransCanada to certify that it will pay the same per-barrel fee for its tar sands oil as it does for regular crude, and I am disappointed it was not adopted.”

Though Capps’ proposed amendment was not incorporated into the final version of the bill, an amendment declaring Congress’s belief that climate change is real and not a hoax, in addition to the Sense of the Senate amendment, was successfully attached to the approved legislation.

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