	Background

In September 2008, TransCanada Corp., a Canadian company, applied to the U.S. Department of State (State Department) for a permit to cross the U.S.-Canada international border with the Keystone XL pipeline project. As originally proposed, the pipeline would carry crude oil produced from the oil sands region of Alberta, Canada, to U.S. Gulf Coast refineries. As required by Title V of the act, on January 18, 2012, the State Department recommended that "the presidential permit for the proposed Keystone XL pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest." The same day, the President stated his determination that the Keystone XL pipeline project "would not serve the national interest." This legislative interest has not abated in the 113 th Congress, as multiple bills have been introduced that would effectively supersede the State Department's permitting authority and grant a presidential permit for TransCanada to construct and operate the border-crossing facility of the Keystone XL pipeline, including H.R. Meanwhile, on March 1, 2013, the State Department issued a Draft Supplemental Environmental Impact Statement (draft SEIS) as required by NEPA, evaluating the environmental impacts of the revised proposal. After the comment period ends, the State Department may issue the Final EIS, and subsequently a decision on whether to issue the presidential permit. This recent legislative activity intended to direct action on the two Keystone XL presidential permit applications appears to represent the first congressional efforts to amend the established executive branch procedure for the permitting of cross-border pipeline facilities, and there is some question as to whether this raises constitutional issues related to the jurisdiction of the two branches over such facilities. Additionally, as states considered taking action with respect to the pipeline, questions arose regarding whether state siting of a federally approved pipeline is preempted by federal law. Another question was whether a state's dictating the route of the pipeline was a violation of the dormant Commerce Clause of the Constitution, which prohibits one state from acting to protect its own interests to the detriment of other states. This report reviews those legal issues, observing generally that legislation altering the pipeline border crossing approval process appears likely to be a legitimate exercise of Congress's constitutional authority to regulate foreign commerce and that state oversight of pipeline siting decisions does not appear to violate existing federal law or the Constitution. The report also suggests that the State Department's implementation of its authority to issue presidential permits appears to allow for judicial review of its NEPA determinations. A companion report from CRS focusing on policy issues associated with the proposal, CRS Report R41668, Keystone XL Pipeline Project: Key Issues , by [author name scrubbed] et al., is also available. Executive Order 13337 is a modification of Executive Order No. Keystone XL NEPA Background

The Keystone XL project has had a series of environmental reviews under NEPA initiated by the January 28, 2009, State Department announcement that it would prepare an EIS:
With respect to the application submitted by Keystone, the Department of State has concluded that the issuance of the Presidential permit would constitute a major Federal action that may have a significant impact upon the environment within the meaning of the National Environmental Policy Act (NEPA) of 1969.
In 2008, TransCanada Corp. applied for a presidential permit from the State Department to construct and operate an oil pipeline across the U.S.-Canada border in a project known as Keystone XL. The Keystone XL pipeline would transport oil produced from oil sands in Alberta, Canada, to Gulf Coast refineries. The permit application was subjected to review by the State Department pursuant to executive branch authority over cross-border pipeline facilities as articulated in Executive Order 13337, and subsequently denied by the State Department. Pursuant to the requirements of legislation passed in the 112th Congress which directed a decision on the application within a particular time frame, on January 18, 2012, the State Department recommended that "the presidential permit for the proposed Keystone XL pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest." The same day, the President stated his determination that the Keystone XL pipeline project "would not serve the national interest."
Following this initial denial, TransCanada Corp. reapplied to the State Department for the presidential permit needed for the border-crossing Keystone XL pipeline proposal on May 4, 2012. On March 1, 2013, the agency released a draft Supplemental Environmental Impact Statement (draft SEIS) on the new presidential permit application, as required by the National Environmental Policy Act (NEPA). A final decision from the State Department and the Administration on whether to grant the presidential permit is expected after expiration of the comment period for the draft SEIS in late April 2013.
Legislative activity in the 112th Congress and sustained interest in the 113th Congress with respect to the permitting of the Keystone XL pipeline and similar border-crossing facilities, a subject previously handled exclusively by the executive branch, has triggered inquiries as to whether this raises constitutional issues related to the jurisdiction of the two branches over such facilities. Additionally, as states contemplated taking action with respect to the pipeline siting, some questioned whether state siting of a pipeline is preempted by federal law. Others argued that states dictating the route of the pipeline violates the dormant Commerce Clause of the Constitution which, among other things, prohibits one state from acting to protect its own interests to the detriment of other states.
This report reviews these legal issues raised during the ongoing debate over the Keystone XL project. First, it suggests that legislation related to cross-border facility permitting is unlikely to raise significant constitutional questions, despite the fact that such permits have traditionally been handled by the executive branch alone pursuant to its constitutional "foreign affairs" authority. Next, it observes generally that state oversight of pipeline siting decisions does not appear to violate existing federal law or the Constitution. Finally, the report suggests that State Department's implementation of the existing authority to issue presidential permits appears to allow for judicial review of its National Environmental Policy Act determinations.
A companion report from CRS focusing on policy issues associated with the proposal, CRS Report R41668, Keystone XL Pipeline Project: Key Issues, by [author name scrubbed] et al., is also available.