Transcript of State Dept. briefing on Keystone XL

 *

Via Teleconference

Washington, DC

July 22, 2011

MS. FULTON: Okay. Thank you. Thank you, everybody, for joining us today. As you know, the State Department is responsible for determining whether TransCanada’s permit application to build the Keystone XL pipeline across the U.S.-Canadian border is in the U.S. national interest. And although we expect to make a decision on whether to grant or deny this permit before the end of the year, we won’t make a decision until we’ve completed our thorough review process.

We thought it would be helpful to update you on where that process stands, and so today we’re very pleased to have with us Principal Deputy Assistant Secretary of State for the Bureau of Oceans and Environment – International Environmental and Scientific Affairs Daniel Clune, who can provide an update on the next steps in the Keystone XL permitting process. I’d like to take it over to PDAS Clune to give remarks, and then we’ll open it up for questions after that. As stated, this conversation is on the record, and the attribution will be to Dan Clune, Principal Deputy Assistant Secretary of State for the Bureau of Oceans and International Environmental and Scientific Affairs. Okay, I’d like to turn it over to Mr. Clune. Thank you.

MR. CLUNE: Thank you, Heide. I thought what I’d do before opening it up to questions is talk a little bit about where we are in the process and to announce two new developments. For those of you who aren’t familiar with the details of the pipeline, I think most of you know that it’s a proposed pipeline about 1,700 miles long that will run from the oil sands region of Alberta, Canada down to the Gulf Coast of the United States.

The application for a permit for the pipeline, which the State Department has to issue because it crosses an international border, was filed back at the end of 2008. We filed a draft Environmental Impact Statement in April of 2010. There was a 90-day comment period on that draft, which closed in July of 2010. We considered all those comments, issued a supplemental draft in April of this year. There was a 45-day comment period for that, which closed in June.

Every step along the way here we’ve made every effort to get info from the public. In addition to soliciting the written comments, we’ve held over 40 public meetings and met repeatedly with members of the public and with groups with varying views on the project.

So the first bit of news is that we expect to issue a final Environmental Impact Statement next month. That is in August, and we’ll be issuing a media note to that effect later today, which you’ll be able to use. And once we do that, the next step would be for interested federal agencies to provide their views within 90 days on whether issuance of the permit is in the national interest. And there’s an executive order, which governs this process, issued back in 2004, Executive Order 13337, which you can call up on the internet if you’re interested.

And then – in the national interest determination, which will be made by the Secretary of State or her designate, will take into account the environmental and safety issues that will be covered in the final Environmental Impact Statement as well as additional issues related to the national interest, such as energy security and economic considerations.

Now, the second bit of news is that in September, we’ll be holding some additional public meetings along the route of the proposed pipeline in the capital cities of each of the states traversed by the pipeline. That is Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas, and in addition to that we’ll hold a meeting near the Sand Hills region in Nebraska and along the Gulf Coast near Port Arthur, Texas. And there’ll be one other meeting here in Washington, D.C. And these meetings will give individuals the opportunity to comment on the issues related to the national interest; that is the economic and energy security issues in addition to the environmental and safety issues covered in the Environmental Impact Statement, and any other issues that they feel should be taken into consideration in determining whether granting a permit would be in the national interest.

And I think, as Heide indicated, that we still expect to make – to complete the process and make a decision on the permit before the end of the year. So that completes my initial comments, and would now welcome your questions.

MS. FULTON: Okay. Operator, we’re ready to move to questions, please.

OPERATOR: Thank you. We will begin the question-and-answer session. If you have a question, please press *1 on your touchtone phone. Please un-mute your phone and record your name and your media outlet. One moment please while we wait for the first question.

We have Zach Warmbrodt with Argus Media. Go ahead, sir. Your line is open.

QUESTION: Hi. Thank you for holding this call. I just wanted to make sure that I understood the timeline. After the final EIS, there’s a 90-day review period, and then the Secretary of State makes a decision, and then if the permit is going to be issued, other – the other agencies involved are notified. And during that period, the other agencies can’t object? And if they do, does it then go to the President to make a final decision?

MR. CLUNE: Yeah. That’s basically correct. I mean, there’s two periods described in the executive order. The first is the 90-day period that will begin to run, in this case, when we issue the final Environmental Impact Statement. And that’s a period in which we confer with the other agencies and seek their views on whether this would be in the national interest or not. And then once the Secretary of State makes a decision, the executive order gives other agencies the option of referring the matter to the President.

QUESTION: And how long do they have to refer it to the President?

MR. CLUNE: I believe it’s 15 days. But please look at the executive order yourself.

QUESTION: Okay. Thank you.

OPERATOR: Our next question comes from Tennille Tracy. Go ahead, ma’am, your line is open.

QUESTION: Hi. Thank you for holding the call. If I can be allowed to ask two questions. The first: Mr. Clune, you said that energy security is one of the factors that you’ll consider when looking at whether the pipeline is in the national interest. So how does your review change in light of the situation in Libya and some other – the other civil unrest in the Middle Eastern countries?

And then the second question is: I know there’s been some reports of TransCanada already starting the eminent domain process with some of the land owners along the pipeline route, and what is the Administration’s view of TransCanada’s actions given that no approval has been given yet?

MR. CLUNE: Yeah, thank you for that. With respect to the energy security, certainly energy security is going to be one of the factors that the Secretary or her designee consider in making this decision, and I think it’ll be an important part of the equation and it will include all the developments in the world related to energy and energy security, including what’s going on in Libya. But there are many other factors that go into the equation as well, including the environmental safety issues and economic considerations and foreign policy concerns. And this is – there’s no mathematical equation to – in which you plug in numbers for each of these factors and the equation spits out an answer. It’s for the decision maker to consider all the information that we’ve gathered during this long and thorough process and weigh it in her or his mind and balance – make the – balance all the competing factors and make a decision.

With respect to eminent domain, that’s an issue for state law and not for the State Department or the Federal Government.

OPERATOR: Our next question comes from Arthur Hovey of Lincoln, Nebraska, Journal Star. Go ahead, your line is open.

QUESTION: Yeah. Thanks for taking my call. I would like to understand a little bit better the extent to which you take into account what I think of as external events here. And I think, in particular, of the recent problem with the Yellowstone River and Exxon, I think it was. You have a lot to consider in the various testimony that’s come in to you, but what can you say about the extent to which you take into account these external events in making your decision?

MR. CLUNE: Well, let me first say that pipeline safety is something that has concerned us from the very start of the process, and I think rightly so – that this is a very important issue and something that we’ve spent a lot of time examining. It was treated both in the draft Environmental Impact Statement and in the supplemental draft, and we have conferred repeatedly with the Pipeline and Hazardous Material Safety Administration, the Department of Transportation, which has the responsibility for regulating and – the operation and maintenance of pipelines. And as a result of those consultations, contained in the supplemental draft is a list of 57 conditions for the operation and maintenance of the pipeline that the applicant has agreed to – voluntarily agreed to, which go beyond the requirements of the current law.

So this is something that we’ve looked at very closely from the very beginning. We’re continuing to look at it very closely and are very aware of the developments since the application’s been filed, including the incident in Yellowstone.

QUESTION: And if I may follow up, can you be more specific about where the meeting will be in relation to the Nebraska Sandhills?

MR. CLUNE: I would be delighted to be more specific, but I don’t know. (Laughter.) I think we are – I think what we need to do now is to look into what kind of suitable locations there are, what kind of meeting places there are in that region and pick the best one. And if you have any suggestions about a good place, we’d be – we would welcome the suggestion.

QUESTION: I’ll save that for another call.

MR. CLUNE: Okay.

MS. FULTON: Thank you, operator. Next question.

OPERATOR: Our next question comes from Matthew Daly, the Associated Press. Go ahead. Your line is open.

QUESTION: Okay. Thanks for having this call. I’m just trying to figure out exactly what – in terms of the EIS, what do you still need to know before you can release the report in mid-August? I mean, what kind of things are sort of still out there as unknowns?

MR. CLUNE: Well, we’re at a point in the process where we’re drafting the final EIS. And I don’t know if you’ve seen it, but it’s a document that’s more than a thousand pages long, and there’s a lot of work just putting it together and including all the latest information, which includes the comments that we received on the supplemental draft. There were some very thoughtful comments that were submitted, and –

QUESTION: Well, that’s what I was going to get at. What exactly is new from – because we did all see the supplemental draft a couple months ago.

MR. CLUNE: Meaning what exactly is going to be new in the final?

QUESTION: Yeah. I mean, what are you looking at that’s new?

MR. CLUNE: Well, it’s still in process, and we’ll get the final out in August, and I can’t really tell you what’s going to be new because it’s not finished yet.

QUESTION: And then just to follow up on the previous question about the Yellowstone, because I didn’t really hear an answer about that, is that going to be included in this and other spills that have happened?

MR. CLUNE: I can’t tell you what’s going to be in the final environmental impact statement because it’s not finished.

QUESTION: But are you going to include the Yellowstone River incident is what I think the question was – any external events?

MR. CLUNE: Well, I can’t answer that because I don’t know the answer to it, but I can guarantee you that it will include a very extensive discussion of pipeline safety.

OPERATOR: Our next question comes from Meghan Gordon of Platts. Go ahead. Your line is open.

QUESTION: Yeah, hi. You mentioned several times the Secretary’s designee will be making this decision. Is there – is that a specific person or a group of people that are tasked with that, for the final decision?

MR. CLUNE: No decision’s been made yet. The executive order specifies that the decision would be made by the Secretary of State. In previous cases, she’s delegated that responsibility to other senior officials. In the case of the last pipeline, the Keystone pipeline –

STAFF: (Inaudible).

MR. CLUNE: (Inaudible) –

STAFF: I think that was the last one.

MR. CLUNE: I guess the last one is actually the Alberta Clipper pipeline, she designated the authority to the then-Deputy Secretary of state Jim Steinberg, but she hasn’t done the same thing yet with respect to this pipeline.

QUESTION: And has he left, or is he still at the Department?

MR. CLUNE: Unfortunately, he has left.

QUESTION: Okay, so it’s not known who the designee would be?

MR. CLUNE: Correct.

QUESTION: Okay. Thanks.

OPERATOR: Our next question comes from Neela Banjeree of the Los Angeles Times. Go ahead. Your line is open.

QUESTION: I’ll just – I’ll refrain from asking questions, since it was about the pipeline in Yellowstone and that seems to have been covered fully. But thanks for holding the call.

OPERATOR: Our next question comes from Natalia Melia. Go – from Energy Now. Go ahead. Your line is open.

QUESTION: Hey. I had a question. The hearings in Nebraska, will there be, then, two, one in Lincoln and one in the Sandhills? And then also, the – Congressman Terry’s House bill, is that something at all that you are considering? And what would happen if that really got anywhere?

MR. CLUNE: With respect to the meetings in Nebraska – and I think it’s probably more accurate to refer to them as meetings than hearings; they’re not going to be that formal – yeah, our plan is to have two, one in Lincoln and one in the Sandhills region.

And with respect to the House bill, are you referring to the – I think it’s House Resolution 1938, which talks about a November 1^st deadline –

QUESTION: Right.

MR. CLUNE: I’m sorry –

QUESTION: Yes, that one.

MR. CLUNE: Did you say yes?

QUESTION: Yes.

MR. CLUNE: Got it. On that bill, the Administration hasn’t issued a formal statement of Administration position yet on that, so can’t give you a formal Administration opinion. From our perspective here at the State Department, we think it’s unnecessary, since we’ve already committed publicly to finishing his process by the end of the year, which is 60 days after November the 1^st.

QUESTION: Okay. Thank you.

OPERATOR: Our next question comes from Luiza Savage of Maclean’s. Go ahead. Your line is open.

QUESTION: Yes. Thank you for having this call. Yesterday, the Government in Canada announced a new monitoring plan for the oil sands, and I wondered to what extent that will be included in your EIS or any other measures that the Canadian Government has been taking in recent months, the Alberta government.

MR. CLUNE: We’ll certainly take a look at that. I should say that the Environmental Impact Statement is intended primarily to examine the impact of the proposed pipeline on the environment in the United States and not in Canada. In response to comments that we receive, we have made references to developments in Canada and we may refer to this report, but the focus of the Environmental Impact Statement is on impact in the United States.

MS. FULTON: Okay. Operator, next question, please.

OPERATOR: Our next question comes from Margaret Hobson of Congressional Quarterly. Go ahead. Your line is open.

QUESTION: Thank you. I guess I’m a little confused from the different questions. When is that Secretary Clinton or her designee would make the decision on this pipeline, either like an interim decision or a final decision? Could you just sort of walk through that a little bit again? I’m sorry to make you repeat this.

MR. CLUNE: No, no problem at all. It’s confusing. Let me, first of all, say that there will be no interim decision; there’ll just be a decision. And I can’t tell you exactly when it will be made, but I’ll go over the timeline again. So the next thing that we expect to happen is that we would issue the Final Environmental Impact Statement sometime in the month of August, and let’s say for the purposes of discussion, that it’s August the 15^th.

At that point, the other agencies would have 90 days to confer with us and to comment on whether issuance of a permit would be in the national interest, and that 90 days from August the 15^th is November the 15^th or thereabouts. Now during the first part of that period, we’re going to be also holding these public meetings in which we give the public the opportunity to comment on the same issues that the agencies will be commenting on, and their comments will be part of the administrative record that is – goes to the decision maker on the issue.

I mean, the fact that the order gives agencies 90 days to comment doesn’t mean necessarily that they will use all of 90 days but the order gives them that length of time, so it’s possible that that process could be finished before November the 15^th. But again, for the sake of discussion, let’s say it finishes on November the 15^th. And then, shortly thereafter, the issue would go to the Secretary or her designee for decision, and then she or he would consider the matter and – for a period that’s unknown to us, forever how long he or she needs, and then make the decision.

QUESTION: Okay. And at that point, then the agencies would have 15 days or however long to sort of appeal that to the President?

MR. CLUNE: Yes.

QUESTION: Okay. Thank you very much.

MR. CLUNE: You’re welcome.

OPERATOR: Our next question comes from Elana Schor of Great Greenwire. Go ahead, your line is open.

QUESTION: Thanks. I had two questions if possible. The first very simply, if the State Department decides not to grant this permit, would that be the first time ever such a decision has been made? Because some folks in town have been that they have looked at the records and seen this as the first case that could be a potential no. And the second question would be whether it’s possible to put any more conditions on this permit besides the 57 that you mentioned the company had agreed to?

MR. CLUNE: The – on the question of whether the State Department has denied a permit of this type before, I’m not aware of any, but that doesn’t mean that it hasn’t happened. We’ve been doing this at least since the Lyndon Johnson Administration, and we’d really have to dig through a lot of old files to figure out whether we’ve denied one of these in the past. I mean, the last two that came to us were the original Keystone Pipeline and the Alberta Clipper Pipeline and those were both granted.

With respect to conditions, I should clarify that the 57 conditions that the applicant voluntarily agreed to will not actually be part of the permit. The permit is kind of a yes/no thing – yes, you can cross the border and no, you can’t. But the 57 conditions are a matter of public record, and the applicant has committed publicly to comply with those.

QUESTION: So it’s essentially a yes or no; that’s what the rules state, then?

MR. CLUNE: Yeah. In the past, we have included some conditions in the permit. And I mean, we’ll need to face this issue when the time comes.

QUESTION: Okay. Thank you.

OPERATOR: Our next question comes from Kate Shepperd of Mother Jones magazine. Go ahead, your line is open.

QUESTION: Hi. Thanks for holding the call. You said that the environmental conditions that you are looking at are specifically within the U.S. Is there going to be inclusion of increased greenhouse gas output since it goes by the (inaudible) of this pipeline?

MR. CLUNE: Well, the answer is yes, and we’ve already done that. In – among the comments that we received on the original draft Environment Impact Statement was that we should look at the issue of greenhouse gas emissions and compare life-cycle emissions of fuels produced from the oil sands regions of Canada with fuels produced from other sources. And although we’re not required to examine that kind of issue, we thought that it would be useful to do so and to respond to the comments. So we commissioned a study that was done by a contractor, ICF, that is attached to the supplemental draft Environmental Impact Statement, which does exactly that. It reviews what is a very extensive literature comparing greenhouse gas emissions of fuels from the oil sands with other types of fuels and looks at the differences in the studies and tries to explain – tries to account for those differences. And it’s a fairly lengthy report, and I invite you to look at it.

OPERATOR: Our next question comes from Tom Doggett of Reuters news agency. Go ahead. Your line is open.

QUESTION: Hi. When you said you would consider energy security issues, does that also mean you will be looking at what would happen if this pipeline were not built, that Canada may export its oil – the tar sands oil to China?

MR. CLUNE: Yes. The – I mean, the draft Environmental Impact Statement and the supplemental draft both look at the issue of what happens if the pipeline is not built. And there is another study that’s attached to the supplemental draft Environmental Impact Statement, this one done by a contractor called NCES, which examines just that issue about what happens if the pipeline is built, what happens if the pipeline isn’t built, and what effect all these different scenarios would have on development of the oil sands region and on refinery emissions in the United States and so forth.

QUESTION: And since you issued the supplemental, the draft, and you’re now working on the final, have you increased or will you increase your review – study of the effects of corrosion that tar sands might have – oil sands might have on a pipeline, particularly in light of what has happened in Yellowstone and concerns about this pipeline crossing rivers?

MR. CLUNE: Well, again, I can’t really say what’s going to be in the final Environmental Impact Statement or not because it’s a work in progress. People are still laboring on it quite hard. But we are looking at that issue.

MS. FULTON: Okay. Operator, I think we have time for just two more questions.

OPERATOR: Okay. Our next question comes from Paul Hammel of Omaha World Herald. Go ahead. Your line is open.

QUESTION: Yes. Thank you very much. I have just a couple questions here. One is on these – this additional meeting, you call it, in the Sandhills. Why did the State Department decide to do that? And if you could be clear on what the differences are between a meeting and a hearing. I mean, I think you said hearing was too technical of a term, so what’s that mean? Will their comments be as valid as they would at a hearing as they will be at a meeting?

MR. CLUNE: The – on why we’re doing the meeting in the Sandhills, basically, the answer is because we were asked to.

QUESTION: By Senator Johanns or –

MR. CLUNE: By – including by members of Congress, and I don’t want to talk about particular letters, but we did receive the request and we’re trying to be responsive, and so we’re going to hold a meeting there. And I’ve also met personally with citizens of Nebraska who live in the Sandhills region and they expressed a desire that we go out there and meet with them.

On the question of meeting versus hearing, I mean, I don’t want to be overly technical. The word “hearing,” in my mind, conjures up the vision of a congressional hearing with somebody sitting up on a high podium with four or five witnesses sitting in front of microphones in front of them and grilling the witnesses. What these meetings are, and we’ve done them – a number of them already, as I mentioned – is opportunities for people to express their opinion.

So what’s happened is – I mean, the one I attended was in an auditorium-type setting here in the State Department, and there’s a speakers list and people are given a limited amount of time, four or five minutes, to speak and they come up to the front and they make their statement and there’s a court reporter there who records it. And then the next person comes up and reads their statement and we do that for – as time – as allows.

QUESTION: Given that these meetings will be held after your EIS is submitted, will they have any bearing on the EIS? Can they, since it’s – already would have been issued by then?

MR. CLUNE: Well, what’s important is that they will have a bearing on the final decision. I mean, the EIS is a description of the impact that the pipeline would have on the environment, and so it is information for the decision-maker to take into account along with lots of other information. So the important decision here is the ultimate one, whether or not to issue the permit and whether or not issuing the permit is in the national interest. And that’s what the good people of Nebraska will have the opportunity to comment on, and to – just to answer your question about the validity of comments, yes, I mean, their comments would be just as valid in this meeting as they would be at a hearing.

QUESTION: Okay. And just so I’m clear, I mean, the – one of the bigger issues in Nebraska is relocating the path of this pipeline. But given the State Department’s comments in the supplemental EIS, is that issue closed? Or is relocating the route of this – relocating this, is that still a possibility?

MR. CLUNE: The final Environmental Impact Statement will have a discussion of alternative routes for the pipeline, including some of the routes that had been proposed by various people in Nebraska. And that part of the final EIS is still in the drafting process.

QUESTION: Okay.

OPERATOR: Our next question comes from Tim Gardner of Reuters. Go ahead, your line is open.

QUESTION: Hi. Thanks for having this. There’s been a growing call in some of the bills moving through Congress and from Senator Barbara Boxer and others to do more assessments on whether the oil sands petroleum is more corrosive on pipelines. It sounds like, given the timeline of this, that that’s not going to – there’s not going to be an independent study commissioned by State Department on this?

MR. CLUNE: Well, that – I think, as I indicated before, this is an issue that we’re looking at. And although I can’t say exactly what will be included in the final Environmental Impact Statement, there will be an opportunity to discuss that issue further.

MS. FULTON: Okay. Operator, I’m afraid we’re going to have to conclude here. I would like to note for all of our participants that the State Department Press Office has already issued a media note that captures some of the milestones and some of the elements of our discussion today that folks, I hope, have already received. We do anticipate releasing a fact sheet about the process overall before the end of today, so hopefully you will see that shortly.

For those who are interested in reliving this call, we have – we will make available a dial-in audio transcript, and I’d like to provide the information for people. Individuals will be able to, for the next 30 days, to dial in to toll-free U.S. 888-562-6475, or international, they may dial 203-369-3494. The passcode to access the audio file is 72211. And again, that audio file will be available for approximately 30 days. We will, in addition, be releasing a transcript of this conversation from the State Department Press Office at some point later today.

I’d like to thank everybody for joining us today, and thank you for your interest and your comments. And we look forward to continuing the discussion.