Legal Issues Associated with the Proposed Keystone XL Pipeline

Adam Vann
Legislative Attorney

Kristina Alexander
Legislative Attorney

Kenneth R. Thomas
Legislative Attorney

In 2008, TransCanada Corp. applied for a Presidential Permit from the State Department to construct and operate an oil pipeline across the U.S.-Canada border in a project known as Keystone XL. The Keystone XL pipeline would transport oil produced from oil sands in Alberta, Canada, to Gulf Coast refineries.

Environmental organizations and federal and state legislators are scrutinizing the State Department’s review of the Keystone XL project. Environmentalists question the adequacy of the review under the National Environmental Policy Act (NEPA), the routing of the pipeline near key aquifers, and the emissions caused by the oil production. Additionally, as states have begun to contemplate taking action with respect to the pipeline siting, some have questioned whether state siting of a pipeline is preempted by federal law. Others argue that states dictating the route of the pipeline violates the dormant Commerce Clause of the Constitution prohibiting one state from acting to protect its own interests to the detriment of other states. This report reviews those legal issues, finding generally that state oversight of pipeline siting decisions does not appear to violate federal law or the Constitution. The report also finds that the State Department’s implementation of its authority to issue Presidential Permits appears to allow for judicial review of its NEPA determinations. A companion report from CRS focusing on policy issues associated with the proposal, CRS Report R41668, Keystone XL Pipeline Project: Key Issues, by Paul W. Parfomak et al., is also available.

A final NEPA document for the Keystone XL pipeline was issued in August 2011, but the next step in the permitting process, a national interest determination, has not been completed. This determination often considers the results of the NEPA process but is a distinct decision to be made by the State Department, and in this instance the State Department has not yet issued the permit. Some have claimed the delay is costing American jobs (for the construction of the pipeline and refinery operations), while others argue the delay allows a hard look at the pipeline’s potential impacts on the environment. Congress is considering legislation that would direct issuance of the pipeline permit, in some cases limiting further environmental review. S. 1932, H.R. 3537, and H.R. 3630 each would require the Secretary of State to issue a permit for the project within 60 days of enactment, unless the President determines the project to be not in the national interest. H.R. 3548 would transfer the permitting authority over the Keystone XL pipeline project to the Federal Energy Regulatory Commission, and would require the commission to issue a permit within 30 days of enactment.


Date of Report: December 16, 2011
Number of Pages: 25
Order Number: R42124
Price: $29.95

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