House Bill Reducing President's Role in Cross-Border Energy Projects Heads to Senate

Researched by Industrial Info Resources (Sugar Land, Texas)--Earlier this month, the U.S. House of Representatives passed a bill that would curtail a U.S. president's substantial authority over cross-border energy projects. Although the bill would limit U.S. President Donald Trump's power to authorize or cancel pipelines and power transmission lines running between the U.S. and neighbors Canada and Mexico, the bill was largely split along party lines, with Republicans voting in favor of it while only a handful of Democrats gave their support.

As the law now stands, energy projects spanning U.S. borders both north and south must be personally approved by the president, who also can revoke the permits for such projects via executive order.

The bill, HR-3062, also known as the "Promoting Cross-border Energy Infrastructure Act," was introduced by North Dakota's sole House representative, Julie Fedorchak (R), who made no bones about what prompted its creation: former President Joe Biden's cancellation of the Keystone XL pipeline, which would have carried up to 830,000 barrels per day of crude oil from Hardisty, Alberta, to Steele City, Nebraska. From there, the line would have joined the existing Keystone system for transport to the Gulf Coast. After years of delays and a couple of rejections under the Obama administration, Trump in his first term attempted to revive the project, but the process was in legal limbo when he left office. Biden cancelled the entire permit on his first day in office, and developer TC Energy (Calgary, Alberta) officially abandoned its plans for the project soon afterward.

The pipeline was to have entered the U.S. in North Dakota, which apparently still has not let go of Biden's swift dismantling of the multibillion-dollar project. In a speech applauding the bill's September 18 passage, North Dakota's Fedorchak said, "The Keystone XL pipeline should have never been cancelled. Yet on his first day in office, President Biden used the stroke of a pen to shut it down. By passing my legislation, the House has taken a critical step to end years of regulatory uncertainty and partisan games that have delayed energy infrastructure projects, crushed good-paying jobs, and undermined America's energy security."

A revival of Keystone XL at this point probably would be an uphill battle. First, the project's original developer, TC Energy (Calgary, Alberta) (then TransCanada), spun off its liquids pipeline business in 2024, creating the oil-focused South Bow Corporation (Calgary), which has expressed little interest in reviving the project. South Bow's Chief Executive Officer Bevin Wirzba last summer told Bloomberg, "We've moved on from Keystone XL." After Trump in February posted on Truth Social, "The company building the Keystone XL Pipeline that was viciously jettisoned by the incompetent Biden Administration should come back to America, and get it built -- NOW!," offering "easy approvals, almost immediate start! If not them, perhaps another Pipeline Company. We want the Keystone XL Pipeline built!," a spokesperson from South Bow reiterated to Bloomberg that the company has moved on from the project.

But it's not just the developers that would prove a challenge to a revival of Keystone XL; Canada's citizens and federal government would take a tremendous amount of convincing to build a pipeline to the U.S. After Trump substantially disrupted existing trade relationships and policies between the U.S. and Canada, Canada has begun seeking other trading partners for all types of goods and commodities, looking for stable, dependable markets. All talk now of oil pipelines in the country centers around an east-west pipeline extending to one or both of the country's coasts to reach markets outside North America.

HR-3062 was supported by various lobbying agencies such as the National Taxpayers Union, which also cited Keystone XL and environmentalists as it urged House representatives to support the bill before the vote. "Enactment of H.R. 3062 is much-needed because of hostility toward traditional fuel sources from radical activists," the group stated earlier this month. "Previous administrations were influenced to use the power of the federal government to stop development of pipelines that carry oil and gas across international borders, particularly from Canada. Presidents Obama and Biden unilaterally revoked permits for the Keystone XL Pipeline, killing thousands of blue-collar jobs and stranding billions in capital investment. ... Such an unpredictable permitting process creates uncertainty for a highly capital-intensive industry and leaves it at the whims of politically-charged decisions." Also supporting the bill were the Edison Electric Institute, which represents investor-owned power utilities; the Interstate Natural Gas Association of America; and the American Petroleum Institute.

The bill passed the House by a vote of 224-203, split largely along party lines, with seven of the House's 213 Democrats joining all voting Republicans to back the bill, and five members abstaining.

If HR-3062 removes authority from the president for these projects, who will have the ultimate say in whether they move forward? That power will primarily shift to regulatory agencies the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE). FERC would be responsible for oil and natural gas pipelines, while the DOE would regulate cross-border power transmission projects. These agencies would provide a "certificate of crossing" to the relevant companies if a project is approved.

To give the agencies time to prepare for the changes, the legislation would take effect one year after the bill is signed into law.

The bill also seeks to expediate the permitting process by setting time limits for approval. The certificate of crossing must be issued within 120 days of a permit's submission, unless the project is deemed to be against public interest. The timeline is even tighter for natural gas transmission, setting a 30-day limit from application receipt to a final decision for both natural gas import and export projects with Canada and Mexico. The bill also may be seeking to shorten the environmental reviews of cross-border facilities by defining "border-crossing facility" as the portion of a pipeline or power line extending within only 1,000 feet of the U.S. border.

In addition to shifting approval for these projects from the president to FERC and the DOE, the bill also limits the executive's abilities to cancel projects that have been approved by the agencies. Under the bill, the president must receive congressional approval before revoking any previously permitted projects by an executive order. The bill would also ease the requirements needed to make improvements or modifications to existing cross-border facilities.

Perhaps not wanting to earn the ire of its base, the Executive Branch, which under the current administration has done much to extend its powers both within and beyond existing legal limits and precedents, has been tight-lipped about this possible curtailment of presidential authority. The White House may assume the bill will have more of a problem passing the Senate, where it awaits review by the Committee on Energy and Natural Resources. If the party lines shown in the House's vote are indicative of how it may fare in the upper chamber, the Senate may prove a harder sell as Republicans there outnumber Democrats and Independents by only a few seats. Filibusters and a presidential veto could also be part of the process down the line, but whether the bill actually makes it out of committee and on to the Senate's legislative calendar remains to be seen.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).