Presidential Permit Review for Cross-Border Pipelines and Electric Transmission

Summary

Executive permission in the form of a Presidential Permit has long been required for the construction, connection, operation, and maintenance of certain facilities that cross the United States borders with Canada and Mexico. The constitutional basis for the President’s cross-border permitting authority is well established, but questions remain about the manner in which this authority is exercised among the agencies to which it has been delegated. In particular, some Members of Congress and affected stakeholders seek greater clarity about how Presidential Permit applications are reviewed for various kinds of cross-border energy projects. Particular attention is paid to the scope of review and perceived differences in the approaches taken by the State Department, the Department of Energy, and the Federal Energy Regulatory Commission. These agencies have jurisdiction over cross-border oil pipelines, electric transmission lines, and natural gas pipelines, respectively.

In the past, with few exceptions, the Presidential Permits issued for cross-border pipelines or electric transmission lines involved projects extending a relatively short distance into a U.S. border state before connecting to some existing facility. However, over the last decade, much longer cross-border projects have been approved, including the Keystone and Alberta Clipper pipelines. These projects are hundreds of miles long and cross multiple states. The larger scope of these approved projects, and subsequent permit applications for other large projects—especially the Keystone XL pipeline—have increased national attention to the Presidential Permit process.

Analysis of historical Presidential Permit reviews among the three permitting agencies shows that, notwithstanding differences in their permit authorities under the various executive orders, their reviews are driven largely by the National Environmental Policy Act (NEPA)—and the same NEPA requirements apply to all three. Faced with Presidential Permit applications for energy projects of similar physical scope, the agencies appear to perform NEPA reviews of similar proportion. Very short, smaller projects are generally reviewed more narrowly and quickly, whereas multi-state projects of large capacity are subject to more expansive environmental review and tend to face much greater public scrutiny and comment—regardless of which agency has jurisdiction.

In response to concerns about delays in the review of the Keystone XL permit application, several legislative proposals in the 114th Congress have sought to change some aspect of the Presidential Permit process. Most notable was the Keystone XL Pipeline Approval Act (S. 1), which was passed in Congress but vetoed by President Obama. Subsequent legislative proposals remain active, including the American Energy Renaissance Act of 2015 (S. 791 and H.R. 1487) and the North American Energy Infrastructure Act (S. 1228).

As long as agencies apply NEPA to Presidential Permitting decisions, changes to the delineation of, or jurisdiction over, the border-crossing portion of large projects for permitting purposes may not change the scope of project environmental review. The imposition of decision deadlines on the permitting agencies after NEPA review is complete, either for national interest or public interest determination, could provide greater process certainty to stakeholders. However, the overall project review would still be contingent on the completion of NEPA review. Thus, the effects of legislative proposals to change cross-border infrastructure permitting on the review or approval of future border crossing energy infrastructure projects are open to debate.