Presidential permits for cross-border energy facilities

Thursday, November 3, 2011

Presidential permits for the import and export of energy resources across the United States' borders are critical to the development of cross-border energy facilities.

Millions of dollars of energy resources flow across the United States' borders every day.  Trade in energy resources with Canada and Mexico accounts for the bulk of these transactions.  Canada is the single largest foreign supplier of energy to the United States, providing about 20% of U.S. oil imports and 18% of U.S. natural gas imports according to the U.S. State Department.  Canada and the United States share an integrated electricity grid and provide all of each other's electricity imports.  Today and tomorrow, members and guests of the New England - Canada Business Council are meeting in Boston to discuss this close relationship.

Facilities spanning the border -- whether pipelines for oil or natural gas or transmission lines for electricity -- can only be built and operated once a federal approval called a "presidential permit" has been obtained.  Since a 1968 Executive Order, presidential permits have been issued by the State Department.  Presidential permits cover not only the facilities themselves, but also the commodities (oil, gas, electricity) transmitted over those facilities.

For example, the proposed Keystone XL pipeline from Canada to Texas will require a presidential permit.  In today's news, President Obama is reported as saying that he will be the one to make the final decision on whether TransCanada will obtain its permit.

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