The State Department recently released the Final Environmental Impact Statement (FEIS) for the Keystone XL Pipeline. As a final installment to the project’s review under the National Environmental Policy Act (NEPA), the FEIS assesses the potential impacts associated with the proposed pipeline and its alternatives. The State Department concludes that the Keystone pipeline is unlikely to significantly impact oil sands production and, in turn, unlikely to alter global greenhouse emissions (i.e., finding no new objection to the project). Notably, the FEIS is unusually careful not to identify a preferred alternative or express a strong opinion on any one topic. As such, the fate of the project remains largely political. The ultimate decision on the whether to issue a Presidential Permit to Keystone is left to Secretary of State John Kerry and the President to determine whether the project serves the national interest, with no firm deadline for doing so.
The Keystone XL Presidential Permit application and associated environmental review illustrates just how ill-suited the Presidential Permit process is to decision-making, particularly when it becomes intertwined with NEPA. The primary purpose of a Presidential Permit is to determine whether a transborder project is in the national interest. Presidential Permits are purely a creation of the executive branch, with no statute authorizing their creation or use and few regulations governing their review or issuance. See NLJ article. When the State Department combines its Presidential Permit natural interest deliberation with NEPA review under certain circumstances, the resulting process inextricability entangles the national interest determination with the project’s environmental review—resulting in delay and uncertainty for major transborder energy infrastructure projects.
While judicial precedent is limited, courts have found that Presidential Permits by themselves are not subject to judicial review. See NLJ article. When Presidential Permit deliberations are combined with NEPA review, however, judicial review may be available under the Administrative Procedure Act, at least for the NEPA aspects of the final decision. For those reasons, when the federal government decides to combine ‘national interest’ decision-making with environmental review, projects like Keystone may become vulnerable to piecemeal litigation and political deliberations that are bounced back and forth between the judicial and executive branches, with no immediate or predictable outcome.
In the past few years the President and Congress have articulated an intent to streamline and expedite energy infrastructure projects in the U.S. In order to create a more efficient and transparent Presidential Permitting process, Congress or the Executive Branch should better define that decision-making process, including whether and how those decisions should be subject to judicial review. Further, Congress or the Executive Branch should address the scope of the Presidential Permit review and whether it should be limited to the border crossing itself or include the larger associated project. Limiting Presidential Permit review just to the border crossing itself is most consistent with the history of the Executive Branch’s permitting authority and intent (first used for telegraph cables in a review made by President U.S. Grant). Until Congress or the Executive Branch take action to better define the process, however, it will continue to be vulnerable to political influence and transborder energy projects may remain uncertain.