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House Passes Cross-Border Energy Infrastructure Bill

The U.S. House of Representatives on Tuesday passed a bill streamlining the approval process for oil and natural gas pipelines, and other energy infrastructure, that cross the borders with Canada and Mexico, and removing a requirement that the Department of Energy (DOE) approve oil and gas imports/exports to those countries.

HR 3301, the North American Energy Infrastructure Act, passed the House by a 238-173 vote. Although the vote was conducted mostly along party lines, 17 Democrats voted for the measure while one Republican was opposed. Twenty lawmakers, 10 in each party, did not cast a vote.

Rep. Fred Upton (R-MI), chairman of the House Energy and Commerce Committee and co-author of HR 3301, said the bill's passage represented a "new era for North American energy," (see Daily GPIOct. 28, 2013). Rep. Gene Green (D-TX) co-authored the legislation.

"With lessons learned from the Keystone XL pipeline debacle, we're creating a fair and transparent approval process for cross-border energy projects, putting them all on a level playing field for the benefit of North American energy security, lower energy prices, and jobs," Upton said Tuesday. "Outdated or unnecessary federal requirements are standing in the way of [our] potential...simply put, we cannot become an energy superpower without upgrading the energy infrastructure linking us with our neighbors."

The 1,700-mile Keystone XL pipeline, designed to carry Canadian oilsands to Gulf Coast markets, requires State Department approval because it would cross an international border; the Senate has taken up a separate bill to move the project forward (see Shale Daily, June 18).

HR 3301 now heads to the Democratic-controlled Senate for consideration.

Under the legislation, the Secretary of State would be required to issue a certificate of crossing for any oil pipeline that crosses the border with either Canada or Mexico within 120 days of a project's final review under the National Environmental Policy Act (NEPA), unless the secretary deems the project to be not in the public interest. The bill calls on the Secretary of Energy to do the same with electric transmission facilities.

HR 3301 would amend the Natural Gas Act by stipulating that "no order is required...to authorize the export or import of any natural gas to or from Canada or Mexico." It also removes the requirement for a Presidential permit for the construction, connection, operation or maintenance of an oil or gas pipeline that crosses the border.

The bill also would allow any cross-border projects being modified but already operating or permitted for construction, connection, operation or maintenance to no longer need a crossing certificate once it’s enacted. The amended rules would take effect July 1, 2015.

Upton said the Obama administration was threatening to veto the bill on the grounds it would "circumvent longstanding and proven processes."

"Keystone XL has yet to deliver any oil, but it has already delivered a message -- that our process for approving such projects is badly broken," Upton said. "While HR 3301 does not address Keystone XL's permit...this bill would ensure that important projects would not be stuck in limbo once being fully vetted. It would update and modernize the process for future cross-border energy infrastructure projects, eliminating the opportunities for delay and putting in place the same standards of review for oil pipelines, electric transmission facilities, and natural gas lines."

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