Special Briefing
Kerri-Ann Jones
Assistant Secretary, Bureau of Oceans and International Environmental and Scientific Affairs
Via Teleconference
Washington, DC
August 26, 2011


MR. TRAN: Good afternoon. We are pleased today to have Assistant Secretary Dr. Kerri-Ann Jones of the Bureau of Oceans and International Environmental and Scientific Affairs here to discuss the proposed Keystone XL project Final Environmental Impact Statement and details on the upcoming public meetings.

Just a couple of quick logistical items: a reminder that this call is on-the-record. Assistant Secretary Jones will make some opening remarks, followed by your questions. If you could please keep any follow-up questions to a minimum after your initial questions, we want to get in as many questions as possible.

And with that, I’d like to turn it over to Assistant Secretary Jones for some opening remarks.

ASSISTANT SECRETARY JONES: Thank you. Hello everyone. Thank you for joining this call. Today, we are releasing the Final Environmental Impact Statement for the Keystone XL project. We have produced a final environmental impact statement that thoroughly examines and assesses the potential environmental impacts of this proposed project.

I have been looking at the press, and I have noticed that some are touting that this statement is a victory and some are touting that it’s a loss. And I would like to clarify at the beginning that these characterizations are wrong because we have – this is not a decision document. This is a document that presents the analytical and the data information that we have regarding the environmental impacts. The process that was used to produce this impact statement looked to technical expertise across the U.S. Government and to engineering and technical experts outside of the U.S. Government, as well as extensive public feedback. We have listened to the comments received during this process and we have addressed the key issues raised in the final statement that we put out today.

The Final Environmental Impact Statement responds to the comments we received, and it provides additional information and analysis on key topics. These topics include shallow aquifer systems, composition of crude oil, and potential for this pipeline to affect the development of the Canadian oil sands. The Final EIS also describes additional actions that the applicant will take to address environmental and safety concerns. The FEIS is not a decision. It is not the decision regarding the permit. The FEIS is one piece of the information that will be considered. Much information will be needed to inform the decision regarding this required permit.

Today, we begin the next step of the process, which I’m sure as many of you know about, is called the national interest determination. This is a 90-day period when we will consult with other U.S. Government agencies to define the national interest regarding this project. We have also decided that during the first few days of this 90-day period, we will have sessions for more additional public comments. These are not required, but we feel that because this is such an important project, we need to have more interaction with the public and we want to get as much feedback as possible and have this be as transparent as possible.

You will have received a notice of more meetings across the states where the proposed pipeline would be crossing, and we will also have the opportunity for folks to comment via our website and also through mail. The open comment period will be ending the – around the beginning of October, which will be when we have our last public meeting. And the reason for that is we will need some time to process all of these comments to have them be part of the record.

So with that, let me stop and take your questions. Thank you.

MR. TRAN: Operator, we’re ready for questions.

OPERATOR: We’ll now begin our formal question and answer session. Once again, to ask your question, please press *1 on your touchtone phone. The first question is coming from Dan Berman, Politico. Your line is open.

QUESTION: Hi. So you said several times that this is not the final decision, and I know you guys have emphasized that for a while. But since the EIS over the several reports you guys have done has been fairly consistent, what exactly is going into the final decision? What exactly will Secretary Clinton take into account? And will that take into account the various political implications with the 2012 election?

ASSISTANT SECRETARY JONES: Thanks for that question. The considerations that will be looked at during the national interest determination include the environmental impacts that are discussed in the FEIS. It will also look at other topics, including economic impacts, energy security questions, and foreign policy concerns. So we will look to the eight agencies that are named in the executive order that define how we are carrying out this process to consult with us. And we’ll also look at all of the comments that are coming in from the public. Those are the issues that will be going into the decision that Secretary Clinton or her designee will be making.

MR. TRAN: Okay, Operator, we’re ready for the next question.

OPERATOR: Our next question is coming from Arthur Hovey, Lincoln, Nebraska Star Journal. Your line is open.

QUESTION: Thanks for taking my call. There’s been a lot of discussion in Nebraska, of course, about this project, including suggestions that the 57 special conditions in many cases were things that TransCanada was going to do anyway. Can you elaborate on that, please?

ASSISTANT SECRETARY JONES: Yes, I certainly can. Those additional special conditions that were discussed between the Department of State, and since the Pipeline and Hazardous Materials Safety agency were added on in order to bring the level of safety up several steps above the code. And in particular, the things that have been augmented in those conditions include such items as pressure testing the pipeline to a higher level of pressure than is called for in the code, having more mainline valves on the pipeline placed closer together, also the fact that the pipeline will need to be inspected and cleaned more frequently than is called for in the code, and also there is going to be a more rigorous standard for corrosion and when it must be replaced on the pipeline. And one final one is that the pipeline must be buried deeper than is called for in the code.

So while there have been comments that these are not augmentations, they are – they do call for actions that take the safety issues above what is currently in the code. And those are just some examples.

MR. TRAN: Okay. Great. Operator, next question please.

OPERATOR: The next question in coming from Joseph Morton, Omaha World-Herald. Your line is open.

QUESTION: Hi. Yes. Thanks for taking the question. Part of the summary of this report talks about how individual states have the authority to approve pipeline construction and the specific route. Could you talk a little bit about where things stand on that? I mean, at this point in the – could the state of Nebraska make a determination that the route needs to change or that the pipeline can’t go through the state, or has that window passed?

ASSISTANT SECRETARY JONES: Thanks a lot for that question. There are roles for the states in a lot of these different questions, but right now I’m really unable to comment on the specifics for what each of the states’ actions may or may not do. I mean, the states – that’s in the states’ court to decide about that. And their future actions, I really can’t comment on that.

OPERATOR: The next question is coming from Tim Gardner of Reuters. Your line is open.

QUESTION: Thank you. The Final EIS implies that the oil sands, oil crude is – well, technologies are beginning to make it less carbon dioxide intensive, and so that over time it would basically be more equal to other crude oils. But how does the State Department feel that the companies producing it would make sure that the technology keeps improving? I mean, if they – if the companies – if the producers go have some tough financial times they – how can we make sure – how can the U.S. make sure that those techniques would be used and reduce the emissions?

ASSISTANT SECRETARY JONES: Thank you for that question. I think what you’re getting at is the actual extraction procedures from the oil sands, and that’s regulated by Canada, and we are working closely with them. And in the FEIS, we have put some information regarding what Alberta is doing and more broadly what Canada is doing, so that’s what we are – that’s what we are relying on. We closely follow what’s going on in terms of international regulations in this area.

OPERATOR: The next question is coming from Tennille Tracey of Dow Jones. Your line is open.

QUESTION: Hi. Thank you for holding the phone call. You said in this Final EIS that there could be significant adverse effects to certain cultural resources. Can you tell us a little bit more about what cultural resources we’re referring to there? And then, I think, there’s also mention of some mitigation measures that will be taken, and can you tell us what those are as well?

ASSISTANT SECRETARY JONES: Yes. Thank you. In terms of where the areas that the pipeline crosses, we have had many meetings during this process and also had many, sort of, chances to look at what kind of areas were being crossed through. And in the course of that, we did many outreach meetings with different tribes in the states and looked at many of the cultural resources and possible archeological finds that may be there. And what is typically done is we have developed – within the FEIS there is a program – there is reference to a program agreement that has been negotiated between the tribes, the applicant, and the relevant cooperating U.S. Government agencies to deal with this, and that is described in detail in the FEIS.

OPERATOR: The next question is coming Juliet Eilperin of The Washington Post. Your line is open.

QUESTION: Hi, there, Assistant Secretary. I was wondering if you could just in plain English describe how you would characterize, as a result of this FEIS, what the potential environmental impact would be of this pipeline. At the end of the day, obviously, it identifies the preferred alternative for the agency being the proposed project with some modifications. But if you had to say how extensive or not extensive you think you think the environmental impact of the construction and operation of this pipeline would be, it would be helpful to just get your characterization of that.

ASSISTANT SECRETARY JONES: Well, thank you for that question. The FEIS does have a summary of findings, and what that summary states is that there would be no significant impacts to most resources along the proposed pipeline corridor. However, with that statement there are a lot of follow-on descriptions as to steps that the applicant is required to take and has agreed to take in terms of complying with all applicable laws and regulations, following some of the special conditions that I’ve already alluded to, and also following up on many of the other mitigation actions that they have agreed to.

There are some areas of impact that have been identified. These include one that we touched on in the previous question regarding cultural resources, and I said, there’s been a program agreement put in place to address some of that. There’s also an adverse effect that is identified regarding the American burying beetle, as it is an endangered species, and there are – there’s a detailed biological assessment in the FEIS on that. And the applicant has agreed to take the necessary mitigation steps. And currently, the Fish and Wildlife Service is developing the biological opinion on that. There are also some impacts related to trees and shrubs in areas where the actual pipeline goes, and so many of these things are called out in the FEIS. And how they will be addressed going forward is also called out.

Also, I must add that, as I said in the beginning, we’re moving into the national interest determination, and all things – all these things in the FEIS, as well as the other topics I already mentioned, will be considered during that process.

MR. TRAN: Operator, next question please.

OPERATOR: The next question is coming from Neela Banerjee, LA Times. Your line is open.

QUESTION: Hello, Assistant Secretary. Thank you for taking my call. I wanted to find out a little bit about this aspect of the purpose or need for the pipeline, which is stated in the FEIS, having to do with the imports that we get, the pipeline capacity we have now. But the refining industry in the U.S. has said repeatedly, including those refiners in the Gulf Coast, that they’re doing very well, they’re making a lot of money exporting refined products overseas. And so I was wondering what assurances do we have that this – that this oil would be refined for products sold in the United States, and have you assessed how much of the tar sands crude would be used in the United States and how much of it might be exported?

ASSISTANT SECRETARY JONES: Thank you for that question. What we have looked at is that certainly the refineries that would be receiving this oil do have the capacity and the demand to get this type of oil. We have also – DOE has also done a study – a paper and a study that is in part of the FEIS that looks at the overall supply of crude oil and the market issues that you’re raising and speaks to it.

In addition, I want to just add that the issue that you’re really touching on, I think, is the broader kind of commercial energy security issue, and that’s very much going to be dealt with in the national interest determination. So while there’s some information in the FEIS regarding this, as I said, the papers by DOE, it will be further examined in the national interest determination.

OPERATOR: The next question is coming from Dina O’Meara of Calgary Herald. Your line is open.

QUESTION: Thank you for taking my question. Do the public consultations, the public hearings, and this following three months of looking over what this latest environmental impact assessment has said, does that leave the possibility open for another review, or is this the final EIA?

ASSISTANT SECRETARY JONES: Thanks for that question. Let me clarify a bit. This is the Final Environmental Impact Statement. And so it’s the completion of the environmental impact process, which is done in accordance with our National Environmental Protection Act, NEPA. So this is the completion of that. However, the second phase that I mentioned, the national interest determination, is a different process. That’s a process defined by the executive order, where when this authority was delegated, the authority to grant the permit was given based on whether or not the permit was in the national interest, which is more broadly defined than simply the environmental pieces that come from the FEIS.

The Final Environmental Impact Statement is a very important piece of the national interest determination, but it is not the only one. Energy security, economic considerations, and foreign policy considerations are also taken into account at that time. And the 90-day period is a period that is called for by the executive order. So we are following what is prescribed in the executive order to – towards this decision.

OPERATOR: The next question is coming from Ed Crooks of Financial Times. Your line is open.

QUESTION: Yeah. Hello. Thanks for taking the call. I just wanted to get clear exactly what you’re saying about potential greenhouse gas and CO2 emissions increases as a result of the project going ahead. I wondered if you could point me towards the discussion of that and the assessment, and also just very quickly to check the timetable. You’re still talking about a decision by the end of the year.

ASSISTANT SECRETARY JONES: Okay. Thanks for that question. Regarding the greenhouse gas emissions, I think there’s a couple of different perspectives on that. One is the overall greenhouse gas emissions, sort of, life cycle from this type of crude oil. And the FEIS does say that this type of crude has a higher lifetime production of greenhouse gases relative to some others, but that really depends on what you’re comparing it to.

The other question is – I think you may be getting at is just in terms of whether or not this pipeline was built if the oil sands in Canada would be developed or not and how that may contribute to greenhouse gases. And we have – in the FEIS, there is a study that was commissioned by the Department of Energy to look at that issue, and the summary – that was the EnSys report, and the summary of that basically states that regardless of whether or not this pipeline would be built, there would be continued development of the oil sands, and there would be other methods for transporting that crude oil to refineries, and those would include such things as barges or tankers or rail. And so I would refer you to the FEIS, which has quite a bit of analysis on this question.

OPERATOR: The next question is coming from Matthew Daly of Associated Press. Your line is open.

QUESTION: Great. Thank you very much for having this call. On the project, I mean, you’re saying that there’s not a decisional document, but you also are not identifying any more significant problems. So a lot of the people who are opposing this project are saying that this is kind of the rubberstamp. I wanted you to kind of address that issue.

ASSISTANT SECRETARY JONES: Thank you. Let me say very clearly this is not the rubberstamp for this project. The permit that is required for this process has not been approved or rejected at all. It will not happen until the rest of the project is completed. In the FEIS, there are several things called out, as I mentioned in the summary. And going forward, we will continue to have more discussion and analysis on the topics that I talked – mentioned already – the energy security piece, the economics piece, as well as the foreign policy piece. So it’s not a rubberstamp. No decision has been made, and this is only one part of what goes into the information to building toward a decision here. It’s only one part.

It’s much broader than just this FEIS. There’s a lot of other pieces, and it’s a whole-of-government approach in that there are eight other agencies identified, including the Department of Energy, the Department of Homeland Security, the Environmental Protection Agency, and the Department of Transportation. It should not be seen as a lean in any direction, either for or against this pipeline. It is a – we are at a point of neutrality in that we wanted to do the absolute best we could on doing an Environmental Impact Statement that was comprehensive and thorough and responded to the comments that we received from technical agencies and from public across the country, and we feel our document is stronger for the process that has been completed.

MR. TRAN: Next question, Operator.

OPERATOR: The next question is coming from Jim Efstathiou from Bloomberg News. Your line is open.

QUESTION: Oh, hi. Thank you. I’m just looking at the executive summary, and you do discuss some of the potential impacts in there, sometimes qualifying them as being limited or sort of contained. I’m looking for – and I think some opponents and environmental groups are going to look at your bottom-line sort of assessment of no significant impacts on most resources and compare it to sort of the list or the problems that could happen that you identify in the executive summary and see kind of a disconnect there, maybe that the bottom-line assessment doesn’t really take into account some of their concerns. Can you talk about that a little?

ASSISTANT SECRETARY JONES: Yes. Thank you for that question. I think you’re pointing out sort of the part of the process that we have really tried to pay attention to. The point is that we looked at these issues, the key issues, I think that you’re probably reading through in the executive summary, and we brought to bear as much analysis and information as we could in terms of identifying both the potential risks as well as the mitigation actions and also comparing to other systems and other alternatives – not just alternative routes, but alternative systems as well. I think what we have done in that process is to put forward in the conclusion, both in the conclusion, the summary of the FEIS, as well as the conclusions for each particular topic, what is a sort of thorough analysis of where we think that particular issue is. There is really no bottom-line, absolute answer here, and what we have put forward is the best analysis regarding each of these complex topics and the fact that many of these systems are interrelated.

MR. TRAN: Operator, next question.

OPERATOR: The next question is coming from Luiza Savage of MacLean’s Magazine. Your line is open.

QUESTION: Yes. Thank you very much. Two points: One is, just to go back to the greenhouse gas issue, is your assumption then that if this project does not go forward you expect other projects to go forward that would take this oil overseas, such as the West Coast Pipeline that’s being considered? That seemed to be implicit in the analysis, that if this doesn’t go to the U.S. it will go to markets abroad, such as China. And secondly, has there been a decision maker appointed or delegated yet on who will actually write the final decision on the permit?

ASSISTANT SECRETARY JONES: Thank you. The assumption that you raise about the pipelines going to the West Coast, other pipelines are one system that’s considered, but where there’s – there’s no assumption about any other specific projects, pipeline projects, that we are making. What we looked at or what was presented to us from the DOE report is that even with no other project, no other pipeline projects, it appeared that there were other ways to move this oil around. There were other means of transportation, as I said, rail, barge, and tanker, and that the analysis – the conclusion there seemed to be that they could – that the development of the oil sands would continue whether or not this pipeline or any other pipelines were put forward, and that’s sort of what’s out there in the FEIS for everyone to sort of look through and comment on. And we also will, as I said, in our national interest determination look at the issue of energy security much more broadly and in depth.

And the other point of your question about identifying a decision maker, at this point it is the Secretary or her designee, and no other information is on that. We want to get into this piece where we have opinions from our partner agencies and have this be more of a whole-of-government approach, and we can then – we’ll then be moving forward more on the details of that.

MR. TRAN: Operator, we have time for a couple more questions.

OPERATOR: The next question is coming from Natalia Melia of Energy Now. Your line is open.

QUESTION: Hi. Thanks for taking this call. I just have a question about going back to that no action alternative and this FEIS being seen as the final stamp. How can the Department say that it has not come out in favor of this project when it says that the no action alternative is not preferable to the proposed project? And also, looking at the Western Alternative, the FEIS says that was eliminated since it was financially impractical. Does that take out all chances of the pipeline being rerouted out of the aquifer?

ASSISTANT SECRETARY JONES: I think – thank you for that question. I think you have a couple of different questions in there. First of all, again, this is not a final decision. This is not the final stamp. This is not a lean in any way toward one particular decision or another. This is one point in this process that we have defined by the executive order, which is, I think, number 13337. So I’d refer you to that for the details of this process, because the FEIS is not the decision document.

The – your other question about the expansion and different pipelines, I think you’re talking about both the greenhouse gases as well as the alternative routes question. We analyzed a number of major alternative routes, I think about 14. Five of those in particular were looked at in order to avoid the Ogallalla Aquifer because we understand – we’ve had many comments about that. We are – recognize the importance of that. And we did analysis on those alternatives based on both the environmental conditions as well as some of the technical and economic considerations. And we’ve had a lot of feedback on that, and we feel that the proposed route of the applicant is the preferred route at this point, because there’s – the environmental alternative seemed to all be rather worse or similar.

MR. TRAN: Operator, we can take one last question.

OPERATOR: The last question is coming from Renee Schoof of McClatchy. Your line is open.

QUESTION: Hi. Thanks. I’m wondering if I could just ask you a final question about the greenhouse gases. I’m just wondering how – what the State Department bases the assumption that the trends may go down, that Canada will improve technology when the drilling for the oil is a higher intensity, uses more energy, and moving the diluted bitumen also requires a lot of refining and that’s the trend? How do you see it going down?

ASSISTANT SECRETARY JONES: Well, I thank you for the question. I mentioned that in the FEIS it talks about this crude as being somewhat higher in terms of greenhouse gases relative to some other crudes, and that depends on what comparison it is. And in addition, the FEIS also talks to some of the actions that this – Alberta is doing and more nationally at the government level in Canada. But I think that the sense is we have that this oil sands is going to be developed and therefore, there’s not going to be any dramatic change in greenhouse gas from this pipeline, or if the pipeline was to go forward or without the pipeline, because the oil sands will continue to be developed and there are alternatives to pipelines to moving that fuel or potential crude around.

MR. TRAN: All right, I’d like to thank Dr. Jones for coming in to today and all of you for participating. Operator, this concludes the call.



PRN: 2011/1374