Keystone XL

Keystone Pipeline's Cancellation Shows How Arbitrary Presidential Power Subverts the Rule of Law

Citizens and companies increasingly cannot count on the stability of the law when making decisions about their lives and businesses.


The rule of law can be serviceably defined as restricting the arbitrary exercise of power by subordinating it to well-defined and established laws. Unfortunately, politicians have learned how to subvert the rule of law by laundering their decisions through supine federal bureaucracies that interpret badly-defined laws and regulations to suit the desires of the president and his minions.

The decade-long saga of the Keystone XL oil pipeline is a near-perfect example of how this works. (Don't get me started on arbitrary presidential power to impose tariffs and exercise secret emergency powers.)

Earlier this week, bowing to President Biden's January declaration that its pipeline was not in the U.S.'s national interest, the builder of the pipeline, TC Energy, announced that it was permanently canceling construction of its Keystone pipeline. That project would have transported more than 800,000 barrels of Canadian oil daily to refineries on the Gulf Coast.

Let's jump into the federal policy WABAC Machine to see how this capricious melodrama unfolded. Back in September 2008, TransCanada Keystone Pipeline (TC Energy now) filed an application for a Presidential Permit with the Department of State to build and operate the Keystone XL Project. That began a three-year-long process in which the Department of State oversaw the compilation and issuance of a Final Environmental Impact Statement in 2011 that concluded that the Keystone XL would have "no significant impact" on land and water resources along its route and a negligible effect on man-made climate change.

All that these sorts of assessments are supposed to do is supply the information to federal agency appointees who then make national interest determinations. Reasonable people would agree that a finding of "no significant impact" would suggest that the project is in the national interest and should be approved, right? Wrong.

The findings were evidently not the right answers for then-Secretary of State John Kerry, so he sent the report back for further deliberation. The requirement for further deliberation meant that certain deadlines were missed and the company was obliged to reapply for a presidential permit in 2012. Because President Obama did not want to alienate either the blue-collar unionists who favored the pipeline or the environmental activists who were protesting frequently in front of the White House, he strategically dithered for years.

In 2013, a Draft Supplemental Environmental Impact Statement again concluded, "Approval or denial of the proposed project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area" and would be unlikely to alter the future trajectory of global greenhouse gas emissions. Again, the wrong findings. So the bureaucrats were sent back to their desks again for further consideration.

The result was a January 2014 Final Environmental Impact Statement that more comprehensively analyzed the project's greenhouse gas emissions and their likely impact on global climate. Among other things, the new report outlined a scenario in which blocking the pipeline would shift Canadian crude oil transport to railways. That switch would actually increase greenhouse gas emissions by 27 percent over those emitted by the proposed pipeline.

Despite yet another finding that building the pipeline would have only minor impacts on land, water, and climate, on November 6, 2015, Secretary Kerry issued a determination that "the proposed project would not serve the national interest." Kerry stated, "The critical factor in my determination was this: moving forward with this project would significantly undermine our ability to continue leading the world in combatting climate change."

Then came the 2016 election of Donald Trump as president. During the presidential campaign, Trump promised to allow the Keystone pipeline to be built in return for "a big piece of the profits" for the American people. Four days after he took office, Trump issued the Presidential Memorandum Regarding Construction of the Keystone XL Pipeline, in which he basically ordered the same bureaucracies to redo the Final Environmental Impact Statement on the pipeline. When various court fights delayed that process, President Trump acted unilaterally and simply issued a Presidential Permit on March 29, 2019, authorizing construction, connection, maintenance, and operation of the project at the U.S.-Canada border.

Still, the wheels of bureaucracy ground on. In December 2019, the Trump administration's Department of State issued an updated Final Environmental Impact Assessment that concluded that the effects on land use, water, biological and cultural resources, and climate change of the building and maintaining the pipeline would range all the way from negligible to minor.

During the 2020 campaign, Democratic presidential nominee Joe Biden promised to reverse the decision allowing the construction of the pipeline. Biden didn't even bother with ordering another Environmental Impact Statement. Citing Kerry's 2015 determination, Biden on his first day in office revoked the permit, declaring that "approving the proposed Keystone XL pipeline would not serve the U.S. national interest." Why not? Because "the Keystone XL pipeline disserves the U.S. national interest" due to the cumulating effects of man-made climate change.

Thirteen years after the pipeline was first proposed, the $8 billion project is kaput.

During his tenure, Trump arbitrarily reversed Obama administration decisions, including those on vehicle fuel economy standards, methane emissions, appliance energy efficiency standards, the establishment of national monuments, oil drilling in Alaska and offshore, calculating the social cost of carbon emissions, and clean water regulations. Now Biden's first executive order has arbitrarily reversed Trump's reversals.

This is not to say that either Trump or Biden is right or wrong with respect to the policies they seek to impose on the rest of us. The machinations around the Keystone Pipeline project highlight how modern American politicians have become adept at bending ostensibly fair and transparent bureaucratic procedures to justify decisions that they have already made. The result is that citizens and companies increasingly cannot count on the stability and certainty of the law when making decisions about their lives and businesses. Ever-expanding administrative autocracy is the opposite of the rule of law.