American businesses, workers and families need oil pipelines now more than ever to connect them to crude oil and refined petroleum products.  In the Northeast and Mid-Atlantic, refinery closures mean gasoline, heating oil, and diesel fuel must be provided from new sources to avoid higher prices from tight supplies.  The people in the upper Great Plains need more pipelines to fully realize the job and economic development benefits of their growing crude oil production.  In the Ohio Valley and the Gulf Coast, petrochemical workers will see billions of dollars invested in their communities on new industrial plants that will use natural gas liquids and provide good-paying jobs.

Oil pipeline operators are responding.  New pipe is being laid, existing lines are being reengineered and reversed, and storage terminals are being given new lives.  This “midstream makeover” is removing bottlenecks, solving challenges consumers face, and supporting the American quality of life.

A new paper by the Department of Energy’s Energy Information Administration (EIA) highlights this amazing dynamism in today’s U.S. oil transportation business.  Additional pipeline capacity is needed to address an “upstream revolution” and “downstream shifts in demand patterns and refinery economics,” says EIA.  The “Midstream Makeover,” described in the latest version of This Week in Petroleum, is truly a “new chapter in supply logistics.” 

The House Energy and Commerce Committee will soon consider legislation regarding the Keystone XL pipeline project. AOPL recommends committee members defeat amendments that would threaten U.S. manufacturing jobs and hurt consumers. AOPL opposes H.R. 3900, introduced by Congressman Ed Markey.

• The Markey legislation limiting U.S. exports of refined petroleum products like gasoline and diesel fuel threatens U.S. manufacturing jobs. While the U.S. exports only about 10%-15% of the refined petroleum products it manufactures, these exports are key to keeping U.S. manufacturing workers on the job during slow times. The current U.S. recession is depressing demand for fuel in the United States. Without the ability of U.S. workers to send their surplus products overseas, their refining plants might need to idle or shut down altogether, threatening their jobs and livelihoods.
• Crude oil exports are already restricted by law, and do not need protection from the Markey legislation. Any potential U.S. exporter of crude oil today needs a Department of Commerce license in order to legally export. The Administration has the right to stop any exporting of crude oil that is not in the national interest. There is no need for a new restriction on crude oil exports.
• The Markey legislation would increase future pain at the pump for US consumers. Limiting the ability of U.S. fuels manufacturers to sell their product could force the closure of refineries no longer needed and discourage investment in new energy infrastructure like pipelines. When the U.S. economy does return to full strength, American families and employers needing more fuel would face tighter supplies and resulting higher prices.
• Applying an export prohibition to a pipeline is impractical, too. Pipeline operators know whose product they are shipping, but not where it will be sent after it leaves the pipeline. Crude oil delivered by a pipeline is commingled with other crude oils. One cannot track molecules of crude oil or refined petroleum products, even if Congress tries to require it.

The Association of Oil Pipe Lines (AOPL) welcomes the continued Congressional interest in the Keystone XL pipeline project and the opportunity to bring new jobs and affordable energy to the American people as soon as possible through the safest available mode of transportation -- pipelines.

Congress is debating ways to move the Keystone XL pipeline project forward after the President’s recent decision rejecting the project. Multiple proposals to produce a final decision are under discussion in the House and the Senate. AOPL applauds those in Congress who have heralded the benefits of oil pipelines and brought ideas to the table. They recognize Keystone XL and other pipelines planned across the country are vital for America to gain the full jobs and economic benefits of the energy boom currently under way. Debates about fair decisions for pipeline projects should not get sidetracked by other issues. 

Pipelines are a major source of the good-paying jobs the American people need right now. The energy boom across America needs pipelines to deliver that energy, and American workers are ready to go to work. Pipeline construction will help create tens of thousands of good-paying jobs that support middle-income families so important to America. Pipelines also deliver the raw materials needed at major American manufacturing plants producing everything from plastics, chemicals and paints to pharmaceuticals, fertilizer and automobiles. Without pipelines, manufacturers across America cannot get the fuel and raw materials they need to keep Americans on the job right here at home.

Pipelines also ensure affordable energy for American families and consumers. Americans drive their cars and heat their homes with the fuel pipelines deliver. The more of it, the cheaper the prices for American consumers. Pipelines are also the safest way to deliver energy across America, much safer than other modes used when pipelines are full or unavailable.

Liquid petroleum pipeline operators take seriously their responsibility to work with the emergency response community before any accidents occur. Pipeline accidents are very rare, but can require assistance from first responders.

Today, the pipeline industry came together with first responders and safety regulators at Pipeline Emergency Response Forum. The Pipeline and Hazardous Materials Safety Administration (PHMSA), the National Association of Pipeline Safety Representatives (NAPSR), and the U.S. Fire Administration sponsored the event. PHMSA Deputy Associate Administrator Tim Butters, a former fire chief and leader in emergency response, talked poignantly about the importance of working together. 

TransCanada Keystone Pipeline’s Niki Affleck represented AOPL and the American Petroleum Institute (API). Ms. Affleck and other speakers discussed the importance of regular liaisons between pipeline operators and local emergency response officials. She reiterated our industry’s intent to provide these personnel with the information they need. She highlighted the challenge pipeline operators can face in gaining the attention of first responders, who are often busy and spread thin, before any incident occurs. Later in the day, attendees at the Forum broke into small groups to discuss perspectives and identify solutions. 

I congratulate PHMSA, NAPSR, and the U.S. Fire Administration on a successful emergency response forum. 

Additional information about the Forum can be found at here.

AOPL supports swift passage of responsible pipeline safety reauthorization legislation. Each of the major bills approved by Congressional committees (H.R. 2845, H.R. 2937, and S. 275) has provisions we support.

Each of the three bills should help reduce pipeline accidents caused by third-party damage, the leading cause of pipeline accidents that kill or hurt people. They require States to prohibit One-Call exemptions for local governments, state agencies, and their contractors, or risk federal enforcement for One-Call violations. Two of the three bills (H.R. 2845 and H.R. 2937) require a federal study on the threat of third-party excavation damage due to existing One-Call exemptions. AOPL would support strengthening these provisions to remove most or all exemptions from the use of One-Call systems before starting mechanized excavation.

AOPL believes legislation should not mandate new regulations unless it has been demonstrated that current regulatory requirements have failed. We do not oppose requirements for federal studies of: 1) gathering line regulations; 2) cover over buried pipelines; 3) leak detection; 4) incident notification procedures; and 5) other issues. However, we ask that Congress not pre-judge the outcome of these studies by requiring the Pipeline and Hazardous Materials Safety Administration (PHMSA) to conduct a rulemaking before the studies are even completed. If Congress requires PHMSA to conduct rulemakings, it should also require PHMSA to conduct those studies using the same risk assessments and cost-benefit analyses that govern most other Federal pipeline safety rulemakings.

H.R. 2937, the bill approved in the House Committee on Transportation and Infrastructure, adheres more closely than the other bills to the principle of ensuring the necessary analysis is done before assuming new regulations are necessary. However, we can support each of these bills with modest changes.

Turning to the debate over the Keystone XL Pipeline, AOPL and API filed comments to the State Department regarding the pending National Interest Determination. We supported the State Department’s finding that pipelines are the safest and preferred mode of transporting crude oil to the U.S. from the Canadian oil sands. We also responded to “misplaced claims” about the corrosivity of pipeline-transported crude oil derived from the Canadian oil sands. We explained that moving diluted bitumen by pipeline is as safe as moving any crude oil by pipeline, and that corrosion experts concur. We said “in essence, oil sands crude oil is simply that – oil.”

The decision about the Keystone XL should be made on the merits, and not influenced by myths.