When the 114th U.S. Congress convenes this month, two key trade-related energy issues will be near the top of its agenda. First, the U.S. Senate is expected to vote on a bill that would authorize construction of the Keystone XL Pipeline. Second, the U.S. House of Representatives will consider a bill introduced by Representative Joe Barton (R-TX) that would repeal the U.S. ban on exports of crude oil.
As currently proposed, the Keystone XL Pipeline would connect crude oil reserves in Canada to existing pipelines in the United States by way of a 1,179-mile pipeline from Alberta to Nebraska. While proponents argue that the pipeline would create American jobs and reduce dependence on oil from outside North America, opponents are concerned with the environmental impact of both pipeline construction in the United States and oil extraction in Canada. The State Department's January 2014 determination that the project would have little effect on carbon emission and oil extraction rates has not resolved the environmental debate.
In November 2014, the Senate fell one vote short of passing a bill that would have authorized construction of the pipeline. Senate Republicans promised to vote on a similar bill as the first matter of business in the 114th Congress this month. The Obama Administration has said that it will not decide its stance on the pipeline until the Nebraska Supreme Court issues a decision on a pending lawsuit regarding the approval of the pipeline's route in Nebraska. Thus, decision-makers at the state and federal level will take important steps in early 2015 that may determine the fate of the Keystone XL Pipeline.
As previously discussed in King & Spalding's Trade and Manufacturing Alert and Energy Newsletter, the debate on ending the forty-year-old crude oil export ban has intensified along with the growth of U.S. oil production. In December 2014, Representative Barton introduced a bill that would repeal the export ban and prohibit U.S. Government officials from imposing or enforcing any restrictions on the export of crude oil. Senator Lisa Murkowski (R-AK), a leading opponent of the ban and the new Chair of the Senate Committee on Energy & Natural Resources, is pressuring the Obama Administration to loosen or lift the ban and also may introduce legislation to accomplish these objectives. Thus, the new Congress may consider significant changes in this longstanding U.S. policy on crude oil exports.
While it is unclear how, or if, these trade-related energy issues will be resolved in 2015, they certainly will be at the forefront of the political debate this year.