Midwest THe MIDwesTeRN OffICe Of THe COuNCIL Of sTATe GOVeRNMeNTs
Vo l. 2 0 , No. 1 2 • D e ce mbe r 2 0 1 1
CSG Midwest Issue Briefs 2
Decisions on oil pipeline
run through Midwest
• States strengthening review of increases
in health care premiums
• State export-promotion programs
getting a boost
• Change in federal law could lead to horse
processing facilities opening again
• State, provincial lawmakers raise concerns Nebraska special session shows role for states in
about impact of “Buy American” proposal
project that aims to boost U.S. use of Canadian oil
Around the Region 4
Fiscal data show states being squeezed;
by Ilene Grossman (email@example.com)
policies on health care for retired legislators
ransCanada has faced many hurdles
Question of the Month 5 in its multi-year effort to get a new The Keystone XL pipeline project: A time line of the
What are the similarities and differences in
states’ graduated driver’s license laws?
1,700-mile oil pipeline built. application and approval process
But this fall, the energy infrastructure September 2008 — TransCanada application to build pipeline received by u.s. state
Feature Story 6 company ran up against perhaps its stiffest Department, which publishes a notice of intent to prepare environmental impact statement, meets with
Federal legislation would strip Great Lakes opposition yet — from concerned residents communities/tribes along the route and consults with other federal agencies.
states of authority on ballast water permitting and lawmakers in the state of Nebraska.
April 2010 — Draft environmental impact statement issued, followed by public meetings and
“Every Nebraskan has an opinion about comment period.
Profile 8 two things right now,” state Sen. Ken Haar
Kansas Rep. Paul Davis said in advance of a special legislative session April 2011 — supplemental draft environmental impact statement issued, followed by
called by the governor in November, “Big
FirstPerson 9 August 2011 — final environmental impact statement concludes that the Keystone XL
Red football and the Keystone pipeline.”
Kansas Sen. Tim Owens on his state’s pipeline would not cause any significant impact to resources along the pipeline route.
new law to prevent drunk driving Public outcry over the Keystone XL
pipeline being routed through the Sandhills, September 2011 — Review period begins with public meetings in states and consultations
CSG News & Events 10 an ecologically sensitive area of the state that with at least eight federal agencies.
• CSG policy academies foster collaboration, also contains areas of shallow groundwater, November 2011 — Nebraska unicameral Legislature holds special session due to concerns
learning among state legislators had been building for months. about pipeline being routed through sandhills and Ogallala Aquifer.
• Donna Brazile, Rich Galen and P.J. O’Rourke to be That outcry ultimately resulted in a
featured speakers at 2012 MLC Annual Meeting November 2011 — TransCanada agrees to work with the state of Nebraska on developing an
special legislative session in November, new
alternative route for the pipeline.
Capitol Clips 12 laws that will beef up Nebraska’s oversight
of future oil-pipeline projects, and an agree- November 2011 — Citing the need to explore alternative routes for the pipeline, the u.s.
• Caught on tape: Illinois legislature OKs use state Department announces that a final decision will be delayed until at least the first quarter of
of speed cameras near parks and schools ment to reroute the proposed pipeline away
2013. Previously, an announcement on whether to grant a presidential permit for Keystone XL had
• Fracking legislation: Differing proposals from the Ogallala Aquifer, a critical resource been expected by the end of 2011.
emerge on use of oil and recovery process for irrigation and drinking water.
• Leaving No Child Left Behind: States seeking The events in Nebraska were also cited any new proposal from TransCanada or already had on the books.
waivers for new direction in education policy by the Obama administration when it an- other pipeline projects. In Montana, for example, the state’s
• Paperless legislatures: Indiana latest state trying nounced that a decision on whether to grant Prior to those measures being passed, Major Oil Pipeline Siting Act requires
to cut down on use of paper during session
the necessary presidential permit for the Haar says, Nebraska had lacked the kind that major projects apply for certification
project would be delayed until 2013. of pipeline-siting laws that some states from the Department of Environmental
Stateline Midwest is published 12 times a year A final decision was originally ex-
PLeASe TuRN TO PAGe 6
by the Midwestern Office of pected by the end of 2011. As a result, the
The Council of State Governments. controversy over constructing a pipeline Alberta oil sands
Annual subscription rate: $60. that would bring oil from Alberta’s oil development, mining
To order, call 630.925.1922. sands to U.S. refineries and consumers and exploration
will continue over the next year. continues, as does
the controversy over
plans to build a
More state oversight of pipelines pipeline that would
During Nebraska’s special session, allow much more of
CSG Midwestern Office Staff TransCanada — the energy infrastructure this oil to be shipped
Michael H. McCabe, Director company that developed plans for and will to and used in the
Tim Anderson, Publications Manager own the pipeline — agreed to work with U.S. The pipeline
Cindy Calo Andrews, Assistant Director the state of Nebraska on a new route. expansion would go
Ilene K. Grossman, Assistant Director through the Midwest.
Lisa R. Janairo, Senior Policy Analyst The Legislature, meanwhile, passed
(photo: David Webb/
Laura Kliewer, Senior Policy Analyst two bills to improve state oversight over
Gail Meyer, Office Manager
Laura A. Tomaka, Senior Program Manager
Kathryn Tormey, Policy Analyst/Assistant Editor
Kathy Treland, Administrative Coordinator and Meeting Planner
CONTINueD FROM PAGe 1
Concerns about pipeline lead to new siting laws in Nebraska and rerouting of project
Quality. as additional jobs for communities along
In Minnesota, North Dakota and South Dakota, Keystone oil pipeline in the Midwest the pipeline route.
the states’ public utilities commissions have the From oil sands
authority to approve or deny applications to construct in Alberta Pipeline through 6 Midwest states
crude oil pipelines. (South Dakota granted a permit
The first presidential permit allowed the
for Keystone XL in 2010, contingent on TransCanada
construction of an oil pipeline from Alberta
meeting 50 different conditions; the pipeline route
to refineries in the Illinois towns of Wood
did not run through Minnesota and North Dakota.)
River and Patoka.
Nebraska, though, had no such processes in place
That pipeline, which runs through six
— until November.
Midwestern states — North Dakota, South
The new laws approved during the special session
Dakota, Nebraska, Missouri and Illinois —
will establish a siting permit process for the state
became operational in 2010. A second phase
while also authorizing and funding an environmental
of the project was up and running in 2011; it
impact study of TransCanada’s proposed pipeline.
extends the pipeline to storage and distribu-
“From the beginning, I sought a process similar to
tion facilities in Oklahoma.
what neighboring states have to determine the route of
To re neries in The goal of an additional pipeline expan-
oil pipelines,” says Nebraska Sen. Annette Dubas, who
Oklahoma and Texas sion — the Keystone XL project — is to create
helped push for the special session and served as the
a new route carrying oil from Alberta’s oil
sponsor of the Major Oil Pipeline Siting Act, LB 1. Existing Keystone pipeline sands to Port Arthur, Texas. It would dramati-
Under this new law, the Nebraska Public Service
cally increase the amount of oil that could be
Commission has the authority to evaluate and approve Proposed Keystone XL expansion* shipped to and used in the U.S.
applications to site major oil pipelines in the state. The
* TransCanada has agreed to work with the state of Nebraska on an The new pipeline would also transport
applicant will have to pay any costs associated with
alternative route that addresses concerns about the proximity of the oil produced in Montana, North Dakota and
public hearings and state investigations. proposed Keystone XL project to the Sandhills region and the Ogallala South Dakota; according to TransCanada
LB 1 also sets time lines for the commission to Aquifer.
spokesman Shawn Howard, about 25 percent
make a decision — seven months upon receipt of the Source: CSG Midwest map (using information from TransCanada)
of the oil carried in the pipeline would come
application, though the commission could extend that
from those states.
time period by another five months for “just cause” TransCanada officials say they have been surprised In all, the pipeline could transport up to 830,000
— and requires a company to have an approved ap- at the level of opposition to the project. barrels of oil a day.
plication before it is given eminent domain rights. “Four years ago, we thought it would be embraced Regardless of whether Keystone XL is built,
This new state law, though, will not apply to any with great enthusiasm,” Scott Farris, director of
Canadians will not sit on such a valuable energy
new rerouting plan for TransCanada’s Keystone XL government relations for TransCanada, said dur-
resource. Some Canadian officials, including federal
project. The Legislature instead crafted a second bill ing a policy session in October at The Council of
finance minister Jim Flaherty, have said that Canada
to deal with that project. State Governments’ National Conference & North
could also look toward other pipeline options and
Under LB 4, the state Department of Environmental American Summit.
Quality will conduct a $2 million environmental export markets for the oil sands.
The first two phases of the
impact study (paid for by the state) and prepare Flaherty told Bloomberg News
pipeline project had already Crude oil production
recommendations to the governor, who will then that one possibility would be
been completed without resis- in Midwest vs. amount
notify the federal government whether the state to build a pipeline to British
tance, he said, and the proposed imported into u.s. from
approves or disapproves of the new route. Canada (2010)* Columbia for export to Asia.
Keystone XL expansion would
As pipeline proponents
bring additional jobs and reduce Thousand
Long route for pipeline approval U.S. dependence on oil from State barrels per
have noted, too, Canada is a
more-hostile parts of the world. day friend, neighbor and stable
he special session in Nebraska put the state democracy — qualities that
at the center of an international controversy The first part of the pipeline Illinois 25 14
project received a permit in less Indiana aren’t necessarily true of some
over the pipeline and the use of oil from the 5 22
than two years. (That permit was other countries from which the
province of Alberta’s oil sands. Kansas 111 9 U.S. gets its oil.
Haar says his constituents have not necessarily approved by President Bush in
2008.) In contrast, TransCanada Michigan 18 16 “When a nation [like the
been against tapping into the oil sands or even build-
submitted its application for Nebraska 6 21 United States] imports three
ing a new pipeline through Nebraska. (An existing
Keystone XL in September 2008 North Dakota times more energy than it pro-
Keystone pipeline, in fact, already runs through the 310 4
and will now have to wait until Ohio duces, it makes sense to go
state). What they didn’t like was the proposed route. 13 18
at least 2013 for a final decision next door to borrow a cup of
But outside of Nebraska, opponents of the south Dakota 4 25
on the presidential permit. sugar or borrow a million barrels
project have been asking another question: Should
The Obama administration Midwest total 492 — of oil a day,” Murray Smith, a
a pipeline transporting oil
cited recent developments in Crude oil imported into former member of the Alberta
from Alberta’s oil sands to 1,929 —
Nebraska as the reason for the U.S. from Canada legislature who now works in
this country be built at all?
* The U.S. Energy Information Administration reports that the
delay, but the decision was also Midwest was home to eight of the 31 oil-producing states in the private energy sector, told
That question will be
expected to be politically diffi- the United States in 2010. The state data and rankings do not legislators at the CSG summit.
debated for at least an-
other year even if a new
include offshore production. Canada is the leading supplier
cult, in part because the decision of crude oil imports to the United States, accounting for 21 Canada, in fact, already is
route addresses Nebraska’s split union and environmental percent of the total. the leading supplier of U.S. oil
specific concerns about groups.
Source: U.S. Energy Information Administration imports (21 percent of the total),
potential contamination of The Nat iona l Wi ld life with the oil sands accounting for
the Ogallala Aquifer. Federation, for example, says the proposed expansion 170 billion barrels of Canada’s
Opponents say the is a “game-changer” that would “lock the U.S. into a 176 billion barrels of proven reserves. Another 315
Sen. Annette Dubas
pipeline will take the U.S. dependence on this dirty fuel and drive a massive billion barrels could potentially be captured with
on the wrong energy path: expansion of the tar sands operations in Alberta.” advances in technology and the recovery process.
a greater use of fossil fuels (the oil sands, in Key unions, meanwhile, have hailed the proj- Whether the U.S. decides to use more of that
particular, have been criticized because of the ect’s “game-changing economic benefits”: more oil remains to be seen. But as the recent special
amount of greenhouse gases emitted during the jobs and state and local tax revenue. TransCanada session in Nebraska shows, any pipeline project
recovery process) and an abandonment of efforts has said the expansion would create 20,000 U.S. will likely need the backing of all states along the
to reduce the country’s carbon footprint. jobs in construction and manufacturing, as well proposed route.
6 STATELINE MIDWEST December 2011