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EXECUTIVE SUMM RY

Final Environmental Impact Statement

EXECUTIVE SUMM RY

Final Environmental Impact Statementinal Environmental Impact Statement

for the Proposed Keystone XL Project

Final Environmental Impact Statement

for the Proposed Keystone XL Project

August 26, 2011

United States Department of StateBureau of Oceans and International

Environmental and Scientific Affairs


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Keystone XL Project Executive Summary Final EIS

ES-i

Table of Contents

INTRODUCTION .................................................................................................................................................. ES-1

PRESIDENTIAL PERMITTINGPROCESS .......................................................................................................... ES-1

SUMMARYOFTHEKEYSTONEXLPROJECT .................................................................................................. ES-1

Transport of Canadian Oil Sands Crude Oil ..................................................................................................... ES-2Transport of U.S. Crude Oil .............................................................................................................................. ES-3

Other Connected Actions ................................................................................................................................. ES-3

PURPOSEOFANDNEEDFORTHEKEYSTONEXLPROJECT ........................................................................ ES-5

PROJECTDESIGNANDSAFETY ....................................................................................................................... ES-6

Pipe Design and Manufacturing ....................................................................................................................... ES-7

System Design, Construction and Testing ....................................................................................................... ES-7

Operations, Maintenance, and Monitoring........................................................................................................ ES-7

Reporting, Record Keeping, and Certification .................................................................................................. ES-7

SPILLPOTENTIALANDRESPONSE .................................................................................................................. ES-8

Estimated Frequency of Spills .......................................................................................................................... ES-8

Spills from the Existing Keystone Oil Pipeline System ..................................................................................... ES-8

Maximum Spill Volume ..................................................................................................................................... ES-9

Emergency Planning ........................................................................................................................................ ES-9

Local Emergency Planning Committees (LEPCs) ............................................................................................ ES-9

POTENTIALENVIRONMENTALIMPACTSOFOILSPILLS ................................................................................ ES-9

General Types of Potential Impacts ................................................................................................................. ES-9

Potential Impacts to the Ogallala Aquifer and other Groundwater Areas ....................................................... ES-10

Potential Environmental Justice Concerns ..................................................................................................... ES-10

ALTERNATIVESCONSIDERED ........................................................................................................................ ES-10

No Action Alternative ...................................................................................................................................... ES-11

System Alternatives ....................................................................................................................................... ES-11

Major Route Alternatives ................................................................................................................................ ES-12

Route Variations and Minor Realignments ..................................................................................................... ES-12Other Alternatives Considered ....................................................................................................................... ES-14

Agency Preferred Alternative ......................................................................................................................... ES-14

ENVIRONMENTALANALYSES ......................................................................................................................... ES-14

Environmental Justice .................................................................................................................................... ES-14

Greenhouse Gas Emissions ........................................................................................................................... ES-15

Geology and Soils .......................................................................................................................................... ES-15

Water Resources ........................................................................................................................................... ES-16

Wetlands ........................................................................................................................................................ ES-16

Terrestrial Vegetation ..................................................................................................................................... ES-18

Wildlife............................................................................................................................................................ ES-18

Fisheries Resources ...................................................................................................................................... ES-19

Threatened and Endangered Species ............................................................................................................ ES-20

Cultural Resources ......................................................................................................................................... ES-20

Air Quality and Noise ..................................................................................................................................... ES-21

Land Use, Recreation, and Visual Resources ................................................................................................ ES-21

Socioeconomics ............................................................................................................................................. ES-22

Cumulative Impacts ........................................................................................................................................ ES-22

Environmental Impacts in Canada ................................................................................................................. ES-22

EISCONTENTS ..................................................................................................................................................... ES-24


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ES-1

Aboveground Faci li ti es

30 pump stations on 5- to15-acresites

Delivery facilities at Cushing,Oklahoma and Nederland andMoore Junction, Texas

Densitometer sites located at allinjection points and at all deliverypoints

112 mainline valves along pipelineand 2 mainline valves at eachpump station

Tank farm at Cushing, Oklahomaon a 74-acre site

See Section 2.2 for further

information on aboveground facilities.

INTRODUCTION

In September 2008, TransCanada Keystone Pipeline,LP (Keystone) filed an application for a PresidentialPermit with the U.S. Department of State (DOS) to

build and operate the Keystone XL Project. Theproposed Project would have the capacity to transport700,000 barrels per day (bpd) of crude oil to deliverypoints in Oklahoma and southeastern Texas.

This Executive Summary of the final environmentalimpact statement (final EIS) summarizes theproposed Project, including the purpose of and needfor the Project, and the major conclusions and areasof concern raised by agencies and the public. Moredetailed information on the proposed Project,alternatives to the proposed Project,and the associated potential

environmental impacts is presented inthe final EIS that is provided in the CDin the sleeve on the back page.

PRESIDENTIAL PERMITTINGPROCESS

All facilities which cross theinternational borders of the UnitedStates require a Presidential Permit.For liquid hydrocarbon pipelines, thePresident, through Executive Order

13337, directs the Secretary of State todecide whether a project is in thenational interest before granting a Presidential Permit.

As part of the Presidential Permit review process,DOS determined that it should prepare an EISconsistent with the National Environmental Policy Act(NEPA). DOS is the lead federal agency for theNEPA environmental review of the Proposed Projectbecause the need for a Presidential Permit is themost substantial federal decision related to theProposed Project. To assist in preparing the EIS,DOS retained an environmental consulting firm,

Cardno ENTRIX, following DOS guidelines on third-party contracts. The DOS environmental and safetyreview of the proposed Project that lead to the finalEIS was conducted for nearly 3 years and includedconsultations with the third-party contractor,cooperating agencies, and scientists and engineers

with expertise in key areas of concern related to theproposed Project.

The determination of national interest involvesconsideration of many factors, including energy

security; environmental, cultural, and economicimpacts; foreign policy; and compliance with relevantfederal regulations. Before making a decision, DOSwill consult with the eight federal agencies identifiedin Executive Order 13337: the Departments ofEnergy, Defense, Transportation, Homeland Security,Justice, Interior, and Commerce, and theEnvironmental Protection Agency (EPA). DOS willalso solicit public input on the national interestdetermination by accepting written comments and

holding comment meetings in the sixstates traversed by the proposedroute and in Washington, D.C.

Figure ES-1 lists the major events,public outreach activities, and otherdetails of the environmental reviewand national interest determinationprocesses.

SUMMARY OF THE KEYSTONEXL PROJECT

The proposed Keystone XL Projectconsists of a crude oil pipeline andrelated facilities that would primarilybe used to transport WesternCanadian Sedimentary Basin crude

oil from an oil supply hub near Hardisty, Alberta,Canada to delivery points in Oklahoma and Texas.The proposed Project would also be capable oftransporting U.S. crude oil to those delivery points.The U.S. portion of the pipeline would begin nearMorgan, Montana at the international border of theUnited States and extend to delivery points inNederland and Moore Junction, Texas. There wouldalso be a delivery point at Cushing, Oklahoma.These three delivery points would provide access tomany other U.S. pipeline systems and terminals,including pipelines to refineries in the U.S. Gulf Coastregion. Market conditions, not the operator of thepipeline, would determine the refining locations of thecrude oil.


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ES-2

Figure ES-1U.S. Department of State Environmental and National Interest Determination Review Processes

The proposed Keystone XL pipeline would consist ofapproximately 1,711 miles of new 36-inch-diameterpipeline, with approximately 327 miles of pipeline inCanada and 1,384 miles in the U.S. Figure ES-3depicts the three segments of the proposed Project inthe U.S. As noted in that illustration, the proposedProject would connect to the northern and southernends of the existing Cushing Extension of theKeystone Oil Pipeline System.

Figure ES-4 illustrates the construction sequence thatwould be followed for the proposed Project. Theproposed Project would also include 30 electricallyoperated pump stations, 112 mainline valves, 50permanent access roads, and a new oil storagefacility in Cushing, Oklahoma. If market conditionschange, the capacity of the proposed Project could beincreased to 830,000 bpd by increasing pumpingcapacity at the proposed pump stations.

The overall proposed Keystone XL Project isestimated to cost $7 billion. If permitted, it wouldbegin operation in 2013, with the actual date

dependant on the necessary permits, approvals, andauthorizations.

Transport of Canadian Oil Sands Crude Oil

The proposed Keystone XL Project would primarilytransport crude oil extracted from the oil sands areasin Alberta, Canada. Oil sands (which are alsoreferred to as tar sands) are a combination of clay,sand, water, and bitumen, which is a material similarto soft asphalt. Bitumen is extracted from the groundby mining or by injecting steam underground to heat

the bitumen to a point where it liquefies and can bepumped to the surface.

Bitumen is treated in several ways to create crude oilsuitable for transport by pipeline and refining. Thetypes of Canadian crude oil that would be transportedby the proposed Project would primarily consist ofsynthetic crude oil and diluted bitumen.

Synthetic crude oil is produced from bitumen usingrefining methods a process termed upgrading that

in general converts bitumen into lighter liquidhydrocarbons. In other words, the bitumen isconverted into a crude oil similar to conventionalcrude oil.

Figure ES-236-Inch-Diameter Crude Oil Pipe


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ES-3

Pipe Specifications

Material: High-strength X70steel pipe, API 5L

Outside diameter: 36 inches Operating Pressure: 1,308 psig External Coating: fusion-bonded

epoxy

See Section 2.3.1 for furtherinformation on pipe specifications.

Figure ES-1 (Cont.)U.S. Department of State Environmental and National Interest Determination Review Processes

Diluted bitumen often termed dilbit consists ofbitumen mixed with a diluent, which is a lighthydrocarbon liquid such as natural gas condensate orrefinery naphtha. The bitumen is diluted to reduce itsviscosity so that it is in a more liquid form that can betransported via pipeline. Dilbit is also processed toremove sand, water, and other impurities. Thediluents in dilbit are integrally combined with thebitumen to form a crude oil that is a homogenousmixture that does not physically separate whenreleased.

Both synthetic crude oil and dilbit aresimilar in composition and quality to thecrude oils currently transported inpipelines in the U.S. and being refinedin Gulf Coast refineries. Neither type ofcrude oil requires heating for transportin pipelines.

Transport of U.S. Crude Oil

In late 2010, Keystone Marketlink, LLC announced

plans for two separate projects that would enablecrude oil from domestic sources to be transported inthe proposed Keystone XL Project. Those twoprojects, the Bakken Marketlink Project and theCushing Marketlink Project, are consideredconnected actions under NEPA. The BakkenMarketlink Project would allow transport of up to100,000 bpd of crude oil from the Bakken formation inthe Williston Basin in Montana and North Dakota.

These fields have experienced high growth in the lastfew years as new technology has allowed the oil to beprofitably extracted. Keystone currently has long-term commitments for transporting 65,000 bpd ofcrude oil in the proposed Keystone XL Project fromthe Bakken Marketlink Project.

The Cushing Marketlink Project would allow transportof up to 150,000 bpd on the proposed Project fromthe Cushing, Oklahoma area to the proposed

Keystone XL Project delivery points in Texas.

Other Connected Actions

In addition to the Marketlink projects,there are two other types of connectedactions associated with the proposedProject: electrical distribution lines andsubstations that would provide powerfor the pump stations, and an electricaltransmission line that would be requiredto ensure transmission system reliability

when the proposed Project is operating at maximum

capacity. Those projects would not be built oroperated by Keystone, and the permit applications forthose projects would be reviewed and acted on byother agencies. Although only limited information wasavailable on the design, construction, and operationof the projects, DOS assessed the potential impactsof the projects based on currently availableinformation.


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ES-4

Figure ES-3Proposed Pipeline Route


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ES-5

Figure ES-4Typical Pipeline Construction Sequence

PURPOSE OF AND NEED FOR THEKEYSTONE XL PROJECT

The primary purpose of the proposed Project is toprovide the infrastructure necessary to transportWestern Canadian Sedimentary Basin heavy crudeoil from the U.S. border with Canada to deliverypoints in Texas in response to the market demand ofGulf Coast refineries for heavy crude oil. This marketdemand is driven by the need of the refiners toreplace declining feed stocks of heavy crude oilobtained from other foreign sources with crude oilfrom a more stable and reliable source. Keystonecurrently has firm, long-term contracts to transport380,000 bpd of Canadian crude oil to the Texasdelivery points.

An additional purpose of the proposed Project is totransport Canadian heavy crude oil to the proposedCushing tank farm in response to the market demandof refineries in the central and Midwest U.S. for heavycrude oil. Keystone also has firm contracts totransport 155,000 bpd of Canadian crude oil to

Cushing, Oklahoma in the existing Keystone OilPipeline Project. If the proposed Project is approvedand implemented, Keystone would transfer shipmentof crude oil under those contracts to the proposedProject. Although there is sufficient pipeline capacityfrom Canada to the U.S. in general to accommodateprojected additional imports of Canadian crude in theshort to medium term, there is extremely limitedpipeline transport capacity to move such crude oils toGulf Coast refineries.

The 58 refineries in the Gulf Coast District provide atotal refining capacity of approximately 8.4 millionbpd, or nearly half of U.S. refining capacity. Theserefineries provide substantial volumes of refinedpetroleum product, such as gasoline and jet fuel, viapipeline to the Gulf Coast region as well as the EastCoast and the Midwest.

In 2009, Gulf Coast refineries imported approximately5.1 million bpd of crude oil from more than 40countries. The top four suppliers were Mexico,Venezuela, Saudi Arabia, and Nigeria. Of the total


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volume imported, approximately 2.9 million bpd washeavy crude oil similar to the crude oil that would betransported by the proposed Project; Mexico andVenezuela were the major suppliers. However,imports of heavy crude oil from these two countrieshave been in steady decline while Gulf Coast refiningcapacity is projected to grow by at least 500,000 bpd

by 2020, with or without the proposed Project.

PROJECT DESIGN AND SAFETY

The Pipeline and Hazardous Materials SafetyAdministration (PHMSA), a federal agency within theU.S. Department of Transportation, is the primaryfederal regulatory agency responsible for ensuring thesafety of America's energy pipelines, including crudeoil pipeline systems. As a part of that responsibility,PHMSA established regulatory requirements for theconstruction, operation, maintenance, monitoring,inspection, and repair of hazardous liquid pipelinesystems.

In 2009, Keystone applied to PHMSA for a SpecialPermit to operate the proposed Project at a slightlyhigher pressure than allowed under the existingregulations. DOS worked with PHMSA to developProject-specific Special Conditions that would have

been incorporated into the Special Permit. However,in August 2010, Keystone withdrew its application toPHMSA for a Special Permit. However, to enhancethe overall safety of the proposed Project, DOS andPHMSA continued working on Special Conditionsspecific to the proposed Project and ultimatelyestablished 57 Project-specific Special Conditions.

As a result, Keystone agreed to design, construct,operate, maintain, and monitor the proposed Projectin accordance with the more stringent 57 Project-specific Special Conditions in addition to complyingwith the existing PHMSA regulatory requirements.

In consultation with PHMSA, DOS determined thatincorporation of the Special Conditions would result ina Project that would have a degree of safety greaterthan any typically constructed domestic oil pipelinesystem under current regulations and a degree ofsafety along the entire length of the pipeline systemthat would be similar to that required in highconsequence areas as defined in the regulations.Key aspects of the Special Conditions aresummarized below. Appendix U of the EIS presentsthe Special Conditions and a comparison of theconditions with the existing regulatory requirements.

Figure ES-5Pipeline Cross-section


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ES-7

Pipe Design and Manufacturing

The first nine Special Conditions present designstandards to be used in manufacturing the pipe andrequirements for pipe materials, pipe inspections atthe mill and in the field, performance tests, and qualitycontrol procedures.

System Design, Construct ion and Testing

Conditions 10 through 23 address design andconstruction of the proposed Project, including testingof Project components. Those Conditions presentrequirements for aspects of the proposed Projectsuch as field coatings, depth of cover over thepipeline, temperature and overpressure control,welding procedures, and testing prior to operations.Testing requirements include hydrostatic testing, a

process which involves filling the line with water andincreasing the pressure within the pipeline to test thepipelines ability to withstand pressure. If the testwater pressure drops, further testing must beconducted and reported to PHMSA, and faultypipeline sections must be repaired or replaced.Operations could not begin until the entire system haspassed the required hydrostatic testing.

Operations, Maintenance, and Monito ring

Conditions 24 through 49 present the requirementsfor the Supervisory Control and Data Acquisition

(SCADA) system that would be used to remotelymonitor and control the pipeline, as well asrequirements for internal corrosion inspection,cathodic protection, identification of the location of thepipeline with aboveground markers, internal pipelineinspections using electronic sensing devices termedsmart pigs, visual monitoring of the pipeline corridor,and repair procedures. The SCADA system wouldalert the Operations Control Center of an abnormaloperating condition, indicating a possible release ofoil. The system would include automatic features thatwould ensure operation within prescribed pressure

limits. There would also be a complete backupsystem.

Figure ES-6Smart Pig

Pipeline pressure is the primary indicator used by the

SCADA system to detect an oil spill. If the monitoringsystem identifies a pressure change in the pipeline,the controller would evaluate the data to determine ifit is a false alarm or an actual spill. Using pipelinepressure allows the operator to detect leaks down toapproximately 1.5 to 2 percent of pipeline flow rate.

The proposed Project would also include a computer-based system that does not rely on pipeline pressureto assist in identifying leaks below the 1.5 to 2 percentdetection thresholds.

In addition to computer monitoring, there would be

scheduled patrols of the pipeline right-of-way as wellas public and landowner awareness programs.Communities along the pipeline would be giveninformation to facilitate the reporting of suspectedleaks and events that could suggest a threat topipeline safety.

Reporting, Record Keeping, and Certification

The final eight conditions present requirements formaintaining detailed records, development a right-of-way management plan, reporting to PHMSA, andproviding PHMSA with certification from a senior

officer of Keystone that it has complied with theSpecial Conditions.


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ES-8

SPILL POTENTIAL AND RESPONSE

Spills could result from many causes, includingcorrosion (external or internal), excavation equipment,defects in materials or in construction, over-pressuring the pipeline, and geologic hazards, suchas ground movement, washouts, and flooding.

Although the leak detection system would be in place,some leaks might not be detected by the system. Forexample, a pinhole leak could be undetected for daysor a few weeks if the release volume rate were smalland in a remote area.

In most cases the oil from a small leak would likelyremain within or near the pipeline trench where itcould be contained and cleaned up after discovery.

As a result, for most small leaks it is likely that the oilwould be detected before a substantial volume of oilreaches the surface and affects the environment.Spills may be identified during regular pipeline aerial

inspections, by ground patrols and maintenance staff,or by landowners or passersby in the vicinity of thespill.

For larger spills, the released oil would likely migratefrom the release site. However, DOS analysis ofprevious large pipeline oil spills suggests that thedepth and distance that the oil would migrate wouldlikely be limited unless it reaches an active river,stream, a steeply sloped area, or another migrationpathway such as a drainage ditch.

Estimated Frequency of Spills

In spite of the safety measures included in the design,construction, and operation of the proposed Project,spills are likely to occur during operation over thelifetime of the proposed Project. Crude oil could bereleased from the pipeline, pump stations, or valvestations.

Although a large spill could occur at the proposedCushing tank farm, each of the three 350,000-barreltanks would be surrounded by a secondarycontainment berm that would hold 110 percent of thecontents of the tank plus freeboard for precipitation.

Therefore, there would have to be a concurrent failureof the secondary containment berm for a tank-farmspill to reach the area outside of the tank. Such anevent is considered unlikely.

DOS calculated estimates of spill frequency and spillvolumes. Those estimates included potential spillsfrom the pipeline, pump stations, and valve stations.The calculations used data from the PHMSA spillincident database for hazardous liquid pipelines andcrude oil pipelines, and from the National Response

Center (NRC) database for releases and spills ofhazardous substances and oil.

Based on those data, DOS calculated that there couldbe from 1.18 to 1.83 spills greater than 2,100 gallonsper year for the entire Project. The estimatedfrequency of spills of any size ranged from 1.78 to

2.51 spills per year.Keystone submitted a risk analysis that also includedan estimate of the frequency of spills over the life ofthe proposed Project. Keystones analysis was forthe pipeline only and did not include releases frompump stations, valve stations, or the tank farm.

Keystone initially calculated a spill frequency of 1.38spills per year based only on the historical PHMSAspill incident database available in 2008 when theapplication was submitted. Keystone also calculateda Project-specific spill frequency for the pipeline that

considered the specific terrain and environmentalconditions along the proposed Project corridor,required regulatory controls, depth of cover, strengthof materials, and technological advances in thedesign of the proposed Project. Using those factors,Keystone estimated that there could be 0.22 spills peryear from the pipeline.

Spills from the Existing Keystone Oil PipelineSystem

The existing Keystone Oil Pipeline System hasexperienced 14 spills since it began operation in June

2010. The spills occurred at fittings and seals atpump or valve stations and did not involve the actualpipeline. Twelve of the spills remained entirely withinthe confines of the pump and valve stations. Ofthose spills, 7 were 10 gallons or less, 4 were 100gallons or less, 2 were between 400 and 500 gallons,and 1 was 21,000 gallons.

The spill of 21,000 gallons occurred when a fittingfailed at the Ludden, North Dakota pump station. Asa result, PHMSA issued a Corrective Action Order,halting pipeline operation. Keystone was required toconsult with PHMSA before returning the pipeline tooperation. In that incident, most of the oil wascontained within the pump station, but 210 gallonsdischarged from the pump station to adjacent land.The land affected was treated in place in compliancewith North Dakota Department of Health landtreatment guidelines.


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Maximum Spill Volume

Keystone conducted an assessment of the maximumpotential pipeline spill volume from a completepipeline structural failure. Keystone estimated thatthe maximum spill volume would be approximately2.8 million gallons, which would be possible alongless than 1.7 miles of the proposed pipeline route dueto topographic conditions. For approximately 50percent of the proposed pipeline route (approximately842 miles), the maximum spill volume would beapproximately 672,000 gallons.

Figure ES-7Pump Station on the Existing Keystone Oil

Pipeline System

Emergency Planning

As required by PHMSA regulations, Keystone mustsubmit an Emergency Response Plan and a PipelineSpill Response Plan to PHMSA for review prior toinitiation of operation of the proposed Project. Theseplans would not be completed until the final details ofthe proposed Project are established in all applicablepermits.

If a leak is suspected, the Emergency Response Planand Pipeline Spill Response Plan would be initiated.After confirmation that a spill occurred, the operatorwould shut down pumps and close the isolation

valves, actions that would require approximately 12minutes.

Local Emergency Planning Committees (LEPCs)

LEPCs were established as a part of the EmergencyPlanning and Community Right-to-Know Act.Keystone has committed to a communication programto reach out to LEPCs along the proposed pipelinecorridor during development of the EmergencyResponse Plan and the Pipeline Spill Response Plan,with particular consideration given to emergency

planning for low income and minority populations.The LEPCs would participate in emergency responseconsistent with their authority under the Right-to-Know Act and as required by their local emergencyresponse plans.

POTENTIAL ENVIRONMENTAL IMPACTS OF

OIL SPILLS

Impacts from an oil spill would be affected byvariables such as the weather, time of year, waterlevel, soil, local wildlife, and human activity. Theextent of impact would also depend on the responsetime and capabilities of the emergency responseteam.

The greatest concern would be a spill inenvironmentally sensitive areas, such as wetlands,flowing streams and rivers, shallow groundwaterareas, areas near water intakes for drinking water or

for commercial/industrial uses, and areas withpopulations of sensitive wildlife or plant species.

General Types of Potential Impacts

There are two primary types of impacts that occurwith a spill of crude oil physical impacts andtoxicological impacts. Physical impacts typicallyconsist of the coating of soils, sediments, plants, andanimals. The coating of organisms can result ineffects such as preventing them from feeding orobtaining oxygen, reducing the insulating ability of furor feathers, and adding weight to the organism so thatit cannot move naturally or maintain balance. Inaddition, oil may coat beaches along rivers or lakesand foul other human-use resources.

Toxicological impacts of an oil spill are a function ofthe chemical composition of the oil, the solubility ofeach class of compounds in the oil, and the sensitivityof the area or organism exposed. Crude oil may betoxic when ingested. Ingestion typically occurs whenan oiled animal attempts to clean its fur or feathers.Some of the possible toxic effects include directmortality, interference with feeding or reproductive

capacity, disorientation, reduced resistance todisease, tumors, reduction or loss of various sensoryperceptions, and interference with metabolic,biochemical, and genetic processes.

Birds typically are the most affected wildlife due to anoil spill. Oil on feathers causes hypothermia ordrowning due to the loss of flotation, and birds maysuffer both acute and chronic toxicological effects. Inaddition, dead oiled birds may be scavenged by otheranimals.


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Fish and aquatic invertebrates could also experiencetoxic impacts of spilled oil. The potential impactswould generally be greater in standing water habitatssuch as wetlands, lakes and ponds than in flowingrivers and creeks.

Crude oil spills are not likely to have toxic effects onthe general public because of the many restrictionsthat local, state and federal agencies impose to avoidenvironmental exposure after a spill.

Potential Impacts to the Ogallala Aquifer andother Groundwater Areas

DOS recognizes the publics concern for the NorthernHigh Plains Aquifer System, which includes theOgallala aquifer formation and the Sand Hills aquiferunit.

The Northern High Plains Aquifer system supplies 78percent of the public water supply and 83 percent ofirrigation water in Nebraska and approximately 30percent of water used in the U.S. for irrigation andagriculture. Of particular concern is the part of theaquifer which lies below the Sand Hills region. In thatregion, the aquifer is at or near the surface.

DOS assessed the potential impacts of the proposedProject on many aquifer systems. The aquiferanalysis included the identification of potablegroundwater in water wells within 1 mile of theproposed centerline of the pipeline. More than 200Public Water Supply wells, most of which are in

Texas, are within 1 mile of the proposed centerline,and 40 private water wells are within 100 feet of thecenterline. No sole-source aquifers, or aquifersserving as the principal source of drinking water foran area, are crossed by the proposed pipeline route.

The potential for a crude oil spill to reach groundwateris related to the spill volume, the viscosity and densityof the crude oil, the characteristics of the environmentinto which the crude oil is released (particularly thecharacteristics of the underlying soils), and the depthto groundwater. The depth to groundwater is lessthan 10 feet for about 65 miles of the proposed route

in Nebraska and there are other areas of shallowgroundwater in each state along the proposed route.Diluted bitumen and synthetic crude oil, the two typesof crude oil that would be transported by the proposedProject, would both initially float on water if spilled.Over time, the lighter aromatic fractions of the crudeoil would evaporate, and water-soluble componentscould enter the groundwater.

Studies of oil spills from underground storage tanksindicate that potential surface and groundwater

impacts are typically limited to several hundred feet orless from a spill site. An example of a crude oilrelease from a pipeline system into an environmentsimilar to the Northern High Plains Aquifer systemoccurred in 1979 near Bemidji, Minnesota.

While the conditions at Bemidji are not fullyanalogous to the Sand Hills region, extensive studiesof the Bemidji spill suggest that impacts to shallowgroundwater from a spill of a similar volume in theSand Hills region would affect a limited area of theaquifer around the spill site. In no spill incidentscenario would the entire Northern High Plains

Aquifer system be adversely affected.

In addition to the Northern High Plains Aquifersystem, there are other groundwater areas along theproposed route, including shallow or near-surfaceaquifers. DOS in consultation with PHMSA and EPAdetermined that Keystone should commission an

independent consultant to review the Keystone riskassessment. The independent review will beconducted by a firm approved by DOS in concurrencewith PHMSA and EPA, and would focus on a reviewof valve placement and the possibility of deployingexternal leak detection systems in areas ofparticularly sensitive environmental resources, butwould not be limited to those issues. The specificscope of the analysis will be approved by DOS,PHMSA, and EPA. DOS, with concurrence fromPHMSA and EPA, will determine the need for anyadditional mitigation measures resulting from the

analysis.

Potential Environmental Jus tice Concerns

Low income and minority communities could be morevulnerable to health impacts than other communitiesin the event of a spill, particularly if access to healthcare is less available in the release area. Exposurepathways could include direct contact with the crudeoil, inhalation of airborne contaminants, orconsumption of food or water contaminated by eitherthe crude oil or components of the crude oil.Keystone agreed to remediate spills, restore the

affected areas, and provide alternative water suppliesif a spill contaminates groundwater or surface water.Keystone also agreed to develop communicationsdirected at bilingual communities, such as signage inboth English and Spanish languages, and emergencycommunications in both languages.

ALTERNATIVES CONSIDERED

DOS considered the following three major alternativescenarios:


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No Action Alternative potential scenarios thatcould occur if the proposed Project is not built andoperated;

System Alternatives the use of other pipelinesystems or other methods of providing Canadiancrude oil to the Cushing tank farm and the Gulf

Coast market; Major Route Alternatives other potential pipeline

routes for transporting heavy crude oil from theU.S./Canada border to Cushing, Oklahoma andthe Gulf Coast market.

No Action Alternative

Under the No Action Alternative, the potential adverseand positive impacts associated with building andoperating the proposed Project would not occur.However, there is an existing market demand forheavy crude oil in the Gulf Coast area. The demandfor crude oil in the Gulf Coast area is projected toincrease and refinery runs are projected to grow overthe next 10 years, even under a low demand outlook.

A report commissioned by the Department of Energy(DOE) indicated that whether the proposed Project isbuilt or not is unlikely to impact the demand for heavycrude oil by the Gulf Coast refineries. Even ifimproved fuel efficiency and broader adoption ofalternative fuels reduced overall demand for oil,demand for Canadian heavy crude oil at Gulf Coastrefineries would not be substantially affected.

At the same time, three of the four countries that aremajor crude oil suppliers to Gulf Coast refineriescurrently face declining or uncertain productionhorizons. As a result, those refineries are expected toobtain increased volumes of heavy crude oil fromalternative sources in both the near term and furtherinto the future. Implementation of the No Action

Alternative would not meet this need.

If the proposed Project is not built and operated, GulfCoast refineries could obtain Canadian crude oiltransported through other new pipelines or by rail ortruck transport. Other pipeline projects have beenproposed to transport Canadian crude oil to the GulfCoast area, and both rail transport and bargetransport could be used to meet a portion of the need.In addition, the Gulf Coast refineries could obtaincrude oil transported by marine tanker from areasoutside of North America. Many of the sourcesoutside of North America are in regions that areexperiencing declining production or are not secure

and reliable sources of crude oil, including the MiddleEast, Africa, Mexico, and South America.

As a result of these considerations, DOS does notregard the No Action Alternative to be preferable tothe proposed Project.

If the proposed Project is not implemented, Canadianproducers would seek alternative transportationsystems to move oil to markets other than the U.S.Several projects have been proposed to transportcrude oil out of using pipelines to Canadian ports.

Whether or not the proposed Project is implemented,Canadian producers would seek alternativetransportation systems to move oil to markets otherthan the U.S. Several projects have been proposedto transport crude oil out of the oil sands area of

Alberta using pipelines to Canadian ports.

System Alternatives

System alternatives would use combinations ofexisting or expanded pipeline systems, pipelinesystems that have been proposed or announced, andnon-pipeline systems such as tank trucks, railroadtank cars, and barges and marine tankers to transportCanadian heavy crude oil to Gulf Coast refineries.

None of the pipeline systems considered would becapable of transporting Canadian crude oil to GulfCoast delivery points in the volumes required to meetKeystones commitments for transporting 380,000bpd to delivery points in Texas. Therefore they wouldnot meet the purpose of the proposed Project. Acombination of the pipeline systems consideredcould, over time, deliver volumes of Canadian oilsands crude oil in volumes similar to the volumes thatwould be transported by the proposed Project.However, that would not meet the near-term need forheavy crude oil at the Gulf Coast refineries.Expanding the pipeline systems that were consideredto meet the purpose of the proposed Project orconstruction of new components or a combination ofthose systems would result in impacts similar to those

of the proposed Project.

The trucking alternative would add substantialcongestion to highways in all states along the routeselected, particularly at and near the border crossingand in the vicinity of the delivery points. At thoselocations it is likely that there would be significantimpacts to the existing transportation systems.Trucking would also result in substantially highergreenhouse gas emissions and a higher risk ofaccidents than transport by pipeline.


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Development of a rail system to transport the volumeof crude oil that would be transported by the proposedProject would likely produce less impact fromconstruction than would the proposed Projectbecause it could be done using existing tracks.However, there would be greater safety concerns andgreater impacts during operation, including higher

energy use and greenhouse emissions, greater noiseimpacts, and greater direct and indirect effects onmany more communities than the proposed Project.

As a result of these considerations as described inSection 4.2 of the EIS, system alternatives wereconsidered either not reasonable or notenvironmentally preferable.

Major Route Alternatives

The analysis of route alternatives considered 14major route alternatives. Figure ES-8 depicts the

alternative routes considered. The analysis ofalternatives routes was conducted following theapproach to assessments of alternative pipelineroutes used by the Federal Energy RegulatoryCommission. As a result, the analysis began with ascreening process that first established criteria forscreening alternatives, then identified potentialalternatives that met the criteria, and determinedwhether or not they would (1) meet the purpose ofand need for the proposed Project, and (2) betechnically and economically practicable or feasible.For those alternatives meeting the criteria, DOS

assessed whether or not the alternative offered anoverall environmental advantage over the proposedroute.

Due to public concern regarding the Ogallala Aquifer(Northern High Plains Aquifer system) and the SandHills region, 5 of the alternative routes weredeveloped to either minimize the pipeline length overthose areas or avoid the areas entirely. Thesealternative routes consisted of I-90 Corridor

Alternatives A and B, Keystone Corridor Alternatives1 and 2 (which are parallel to all or part of the route ofthe existing Keystone Oil Pipeline System), and theWestern Alternative.

The assessment considered the environmentalcharacteristics of the areas that these alternativeswould cross, including the presence of aquifers, thedepth of wells, developed land, forested areas,wetlands, and streams and rivers.

The Western Alternative was eliminated since it wasfinancially impracticable. Although the other fourroute alternatives could have been eliminated basedon consideration of economical and technicalpracticability and feasibility without further evaluation,they were nonetheless examined further with anemphasis on groundwater resources. The I-90

Corridor and Keystone Corridor alternatives would allavoid the Sand Hills; however, they would not avoidthe Northern High Plains Aquifer system, and theywould not avoid areas of shallow groundwater.Instead, these routes would shift risks to other areasof the Northern High Plains Aquifer system and toother aquifers.

In addition, these alternatives would be longer thanthe proposed route and would disturb more land andcross more water bodies than the proposed route. Inaddition, I-90 Corridor Alternatives A and B require

crossing Lake Francis Case on the Missouri Riverwhich would pose technical challenges due to thewidth of the reservoir and the slope of the westernside of the crossing area.

Keystone Corridor Alternatives 1 and 2 would costabout 25 percent more than the proposed Project(about $1.7 billion more) and implementation of eitherof those alternatives would compromise the BakkenMarketlink Project and the opportunity to transportcrude oil from the producers in the Bakken formationto markets in Cushing and the Gulf Coast.

Based on the above considerations and as describedin Section 4.3 of the EIS, DOS eliminated the majorpotential route alternatives from further consideration.

Route Variations and Minor Realignments

A route variation is a relatively short deviation from aproposed route that replaces a segment of theproposed route. Variations are developed to resolvelandowner concerns and impacts to cultural resourcesites, wetlands, recreational lands, and terrain.

DOS consulted with the Bureau of Land Management

and state agencies to negotiate route variations andminor realignments, including nearly 100 in Montanaand about 240 minor realignments in other statesalong the proposed route. Additional route variationsand minor realignments may be added in response tospecific conditions that may arise throughout theconstruction process.


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Figure ES-8Major Route Alternatives


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The variations and minor realignments would replaceshort segments of the proposed Project, are relativelyclose to the proposed route, and would beimplemented in accordance with applicable regulatoryrequirements of federal, state, or local permittingagencies. DOS considers the variations and minorrealignments selected to have been evaluated

sufficiently to meet the environmental reviewrequirements of the National EnvironmentalProtection Act.

Other Alternatives Considered

DOS also considered several other scenarios inresponse to comments on the draft EIS. Thealternative pipeline designs considered consisted ofan aboveground pipeline and a smaller diameter pipeto decrease the volume of oil released from a spill.DOS also considered alternative sites for the majoraboveground facilities of the proposed Project,including pump stations, mainline valves, and theCushing tank farm. None of the alternative designs orfacility locations were considered safer orenvironmentally preferable to the proposed Projectdesign.

Agency Prefer red Al ternat ive

DOS did not find any of the major alternatives to bepreferable to the proposed Project for the reasonspresented in the final EIS and summarized above. Asa result, the agency-preferred alternative is the

proposed Project route with the variations and minorroute realignments described in the EIS, and theproposed location of the Cushing tank farm.

ENVIRONMENTAL ANALYSES

Four levels of impact duration were considered in theanalysis of potential environmental impacts due toconstruction and normal operation of the proposedProject: temporary, short-term, long-term, andpermanent. Temporary impacts generally occurduring construction, with the resources returning topre-construction conditions almost immediately

afterward. Short-term impacts could continue forapproximately 3 years after construction, and impactswere considered long term if the resources wouldrequire more than 3 years to recover. Permanentimpacts would occur if the resources would not returnto pre-construction conditions during the life of theproposed Project, such as impacts to land use due toinstallation of pump stations.

Conclusions in the EIS are based on the analysis ofenvironmental impacts and the understanding that:

Keystone would comply with all applicable lawsand regulations;

The proposed Project would be constructed,operated, and maintained as described in theEIS;

Keystone has agreed to incorporate the 57

Project-specific Special Conditions developed byPHMSA into the proposed Project;

Keystone has agreed to implement the measuresdesigned to avoid or reduce impacts described inits application for a Presidential Permit andsupplemental filings with DOS, the measures inits Construction, Mitigation, and Reclamation(CMR) Plan presented in Appendix B of the EIS,and the construction methods for the Sand Hillsregion described in Appendix H to the EIS; and

Keystone would incorporate the mitigation

measures required in permits issued byenvironmental permitting agencies into theconstruction, operation, and maintenance of theproposed Project.

Environmental Justice

Executive Order 12898 requires federal agencies toaddress and mitigate potential adverse impacts tominority and low income populations. In consultationwith EPA, DOS identified these communities within a4-mile-wide corridor centered on the pipeline usingcensus and county level data.

Potential Construction Impacts: The assessmentsuggested that potential impacts to minority and lowincome populations could occur primarily in Harris,Jefferson, and Angelina Counties in Texas and inLincoln County, Oklahoma. During construction,potential impacts include exposure to increased dustand noise, disruption of traffic patterns, and increasedcompetition for social services in underservedpopulations. At any given location along theproposed pipeline route, the duration of theconstruction period would typically range from 20 to

30 working days. As a result, the impacts to minorityand low-income populations due to constructionwould be temporary and minor.

Medical Services:Areas along the pipeline route thatare medically underserved may be more vulnerableduring construction periods. These communities havebeen identified as Health Professional Shortage

Areas or Medically Underserved Areas/Populations.However, construction-related disruptions in thoseareas would be temporary and minor. In areas in


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Montana and South Dakota, minor medical needs ofworkers would be handled in construction camps toavoid or minimize the need for medical services fromthe surrounding communities.

Ai r Emiss ions Related to Env ironmental Just iceIssues: The refineries that are likely to receive oiltransported by the pipeline are already configured toprocess heavy crude oil, and in the future would seekto continue processing heavy crude oil whether or notthe proposed pipeline is constructed. The analysis inthe EIS, including a DOE-commissioned study,indicates that the proposed Project would not likelyaffect the overall quality or quantity of crude oilrefined in the Gulf Coast region, and, as a result,would not likely effect refinery emissions.

Greenhouse Gas Emissions

DOS commissioned a detailed study of greenhouse

gas life-cycle emissions that compared Canadian oilsands crude with other selected reference crudes.This study was a thorough review of recent scientificliterature on greenhouse gas life-cycle emissions forCanadian oil sands crude including extraction,upgrading, transportation, refining, and combustion.

The studys major conclusion was that, throughout itslife cycle, oil sands crude is, on average, moregreenhouse gas intensive than the crude oil it wouldreplace in the U.S. However, the relative greenhousegas intensity varies depending on (1) study designfactors, such as the reference crudes selected for

comparison with Canadian oil sands crudes (e.g.,2005 U.S. average crude oil, VenezuelanBachaquero, Middle East Sour, and Mexican Heavy)and the timeframe selected, and (2) studyassumptions, such as the extraction method and themix of crudes that would be transported by thepipeline.

For example, the Department of Energys NationalEnvironmental Technology Lab (NETL) studyindicated that the life-cycle greenhouse gasemissions of gasoline produced from Canadian oil

sands crude are approximately 17 percent higherthan gasoline from the 2005 average mix of crude oilconsumed in the U.S. The NETL study serves as akey input for analyses conducted by EPA and DOE.In comparison, a study conducted by TIAX, LLC,found that the greenhouse gas emissions fromgasoline produced from Canadian oil sands crude areonly 2 percent higher when compared to gasolinefrom Venezuelan heavy crude, a type of crude oil thatis similar to the crude oil that would be transported by

the proposed Project and is currently refined in largequantities by Gulf Coast refineries.

The proposed Project is not likely to impact theamount of crude oil produced from the oil sands.However, for illustrative purposes, the DOS-commissioned study estimated that incremental life-cycle U.S. greenhouse gas emissions from displacingreference crude oils with Canadian oil sands crudeoils imported through the proposed Project would bebetween 3 and 21 million metric tons of carbondioxide emissions annually. This range is equivalentto annual greenhouse gas emissions from thecombustion of fuels in 588,000 to 4,061,000passenger vehicles.

In addition, current projections suggest that theamount of energy required to extract all crude oils isprojected to increase over time due to the need toextract oil from ever deeper reservoirs using more

energy intensive techniques. However, while thegreenhouse gas intensity of reference crude oils maytrend upward, the projections for the greenhouse gasintensity of Canadian oil sands crude oils suggeststhat they may stay relatively constant. Although thereis some uncertainty in the trends for both referencecrude oils and oil sands derived crude oils, onbalance it appears that the gap in greenhouse gasintensity may decrease over time.

Geology and Soils

Geologic Hazards: Potential geologic hazards

assessed in the EIS include seismic hazards(earthquakes), landslides, or subsidence (sink holes).The proposed route extends through relatively flatand stable areas and the potential for these events islow. The pipeline would not cross any known activefaults with confirmed surface offsets. Duringconstruction, land clearing could increase the risk oflandslides and erosion. Keystone agreed to constructtemporary erosion control systems and revegetate theright-of-way after construction.

There is a risk of subsidence (sink holes) where the

proposed route potentially crosses karst formations inNebraska, Oklahoma, and Texas. Site-specificstudies would be conducted as necessary tocharacterize the karst features, if they areencountered, and evaluate and modify constructiontechniques as necessary in these areas. The overallrisk to the pipeline from karst-related subsidence isexpected to be minimal.

Soils and Sediments: Potential impacts to soilsinclude soil erosion, loss of topsoil, soil compaction,soil contamination, damage to existing tile drainage


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systems, and permanent increases in the proportionof large rocks in the topsoil. However, Keystoneagreed to construction procedures that are designedto reduce the likelihood and severity of Projectimpacts to soils and sediments, including topsoilsegregation methods, and to mitigate impacts to theextent practicable.

Sand Hills Region: Of particular concern is the soilof the Sand Hills region of Nebraska, which isparticularly vulnerable to wind erosion. To addressthis concern, Keystone developed and agreed toconstruction, reclamation, and post-constructionprocedures specifically for this area in consultationwith local experts and state agencies. The goal of theSand Hills region reclamation plan is to protect thissensitive area by maintaining soil structure andstability, stabilizing slopes to prevent erosion,restoring native grass species, and maintainingwildlife habitat and livestock grazing areas. Keystoneagreed to monitor the right-of-way through the SandHills region for several years to ensure thatreclamation and revegetation efforts are successful.

Water Resources

Groundwater: Many of the aquifers along theproposed route are isolated from the surface due tosoil types above the aquifers that prevent or slowdownward migration of water. However, shallow ornear-surface aquifers are also present along theproposed route, as discussed above. Construction of

the proposed Project may result in temporary to short-term increases in suspended solids in the shallowaquifers. The risk of dewatering shallow groundwateraquifers during construction or reducing groundwaterquality due to increased sediments in the water wouldbe temporary to short term.

At some locations, groundwater may be used as asource of water for pressure testing the pipelineduring construction. Keystone must obtain allapplicable water withdrawal and discharge permitsprior to testing, and the test water would be testedand discharged in accordance with permit

requirements.

River and Stream Crossings: Surface water bodieswould be crossed using one of three methods: theopen-cut wet method, the dry-cut method, or thehorizontal directional drilling method. The methodselected would be based on the characteristics of the

crossing location and the requirements of thepermitting agencies.

The open-cut wet method, which involves trenchingwhile the stream is flowing, would result in temporaryincreases in turbidity and bank erosion wherevegetation is removed. The dry-cut method, whichinvolves diverting stream flow around the constructionsite, results in lower increases in turbidity than theopen-cut wet method.

Horizontal directional drilling would minimize impactsto the stream or river because it involves drilling wellbelow the streambed. This method would be selectedat large body crossings to avoid disturbing thestreambeds and streamflow and to reduce thepotential that deep scour during flooding wouldendanger pipeline integrity. Figure ES-9 presents across section of a river crossing using the horizontaldirectional drilling method.

At all water crossings, Keystone agreed to usevegetative buffer strips, drainage diversion structures,and sediment barriers, and limit vegetation clearing toreduce siltation and erosion. After construction, theright-of-way would be restored and revegetated toreduce the potential for erosion of the stream bank.

Hydrostatic Test Water: Water used to pressure testthe pipeline during construction would be dischargedto its source waters or to an approved upland areawithin the same drainage and tested to ensure itmeets applicable water quality standards and

discharge rates.

Wetlands

The proposed Project route crosses emergent,scrub/shrub, and forested wetlands that are protectedby the U.S. Army Corps of Engineers (USACE) andapplicable state agencies under the review of EPAthrough Section 401 and 404 of the Clean Water Act.Specific plans regarding wetland avoidance andminimization of impacts, and the development ofmitigation to compensate for the permanent loss orconversion of forested to emergent wetlands would

be further developed during the permitting process.Wetland impacts presented in the EIS representpreliminary estimates based on the best availablewetland information. DOS reviewed potential impactsto wetlands and the avoidance, minimization, andmitigation process that would be followed withUSACE and EPA.


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Figure ES-9Cross Section o f Horizontal Directional Drilli ng Method

Most wetlands crossed by the proposed Project inMontana, South Dakota, and Nebraska are emergentwetlands, and most wetlands crossed by theproposed Project in Oklahoma and Texas areforested wetlands. Construction of the pipeline wouldaffect wetlands and their functions primarily duringand immediately after construction activities, butpermanent changes also are possible. Keystoneagreed to use construction methods that avoid orminimize impacts to wetlands. These measuresinclude installing trench breakers and/or sealing thetrench to maintain the original wetland hydrology toavoid draining wetlands, using timber mats to protectwetlands during construction, and restoring wetlandareas to a level consistent with the requirements ofthe applicable permits.

Most wetland vegetation communities would transitionback into a community that would function similarly tothe previously undisturbed wetland. Because mostwetlands would be restored, the overall impact of theproposed Project to wetlands would be minor to

moderate and would range in duration from short termto the life of the proposed Project. However, someforested and scrub-shrub wetlands over the pipelinewould be converted to herbaceous wetlands sincetrees and shrubs would not be allowed to grow overthe pipeline for inspection and integrity purposes.Keystone is working with each USACE district alongthe proposed route to identify wetlands and todevelop wetland mitigation and compensation plansfor the permanent conversion of forested wetland toherbaceous wetland.

Texas Bot tomland Hardwood Wetlands:These areforested wetlands with trees, such as Bald Cypress,Water Oak, Water Hickory, and Swamp Tupelo thatcan exist in lowland floodplains in the Gulf Coaststates. Clearing bottomland hardwood trees duringconstruction would result in long-term to permanentimpacts because forests require decades to re-establish and would mature over the span ofcenturies. DOS reviewed potential Project impacts onbottomland hardwood wetlands with EPA andUSACE. Preliminary mitigation measures to protectbottomland hardwood wetlands are discussed in theEIS and would be developed further by the USACEduring the wetland permitting process.

Figure ES-10Texas Bottomland Hardwood Wetland


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Terrestrial Vegetation

The proposed Project crosses primarily grasslandsand rangelands, followed by croplands, uplandforests, developed lands, and wetlands. Afterconstruction, Keystone agreed to restore topsoil,slopes, contours, and drainage patterns topreconstruction conditions as practicable and toreseed disturbed areas to restore vegetation cover,prevent erosion, and control noxious weeds.Keystone committed to controlling the introductionand spread of noxious weeds and pests by adheringto construction and restoration proceduresrecommended by local, state, and federal agencies.Soils and vegetation over the pipeline would bewarmed slightly compared to surrounding soils byheat loss from the pipeline during operation.

Native Grasslands and Rangelands: Native mixedshrub rangelands would be crossed by the proposed

Project in Montana and South Dakota and nativegrasslands would be crossed by the proposed Projectin the Sand Hills region in Nebraska. Both of thesenative prairie habitats would be challenging toreclaim. In recognition of these challenges, Keystonedeveloped specific construction and reclamationmethods for the proposed Project in consultation withlocal, state, and federal agencies and local experts toensure that sagebrush and native grasses arerestored to rangelands in Montana and South Dakotaand that fragile soils and diverse native vegetationcover are re-established in the Sand Hills region of

Nebraska.Figure ES-11

Sand Hills Grassland

Upland and Riparian Forests: Native forests,especially forested floodplains, were once an integralcomponent of the landscape throughout the GreatPlains and they provide important habitats for wildlife.Clearing trees in upland and riparian forest

communities would result in long-term impactsbecause trees would be required to remain outside ofthe 50-foot-wide permanent right-of-way. Theseimpacts would last throughout the life of the proposedProject because trees would not be allowed toreestablish within the permanent right-of-way andbecause forests require decades to re-establish and

would mature over the span of centuries.

Wildlife

Big game animals, small game animals andfurbearers, waterfowl and game birds, and othernongame animals use habitats in and around the sixstates crossed by the proposed Project. Constructionwould result in the temporary and permanent loss andalteration of habitats which provide foraging, cover,and breeding habitats for wildlife. Most habitat losswould be temporary as vegetation cover would be re-established after construction and would be small incontext to habitats available throughout the regioncrossed by the proposed Project. Loss of shrublandsand wooded habitats would be long-term (from 5 to20 years or more), however; and trees and tall shrubswould not be allowed to re-establish over the pipelinefor inspection and integrity purposes. Abovegroundfacilities would result in some permanent habitat loss.Power lines to pump stations can provide vantageperches for raptors that lead to increased predationon ground nesting birds and small mammals.Construction can produce short-term barriers towildlife movement, direct and indirect mortality, and

reduced survival and reproduction. Disturbance fromconstruction activities may have moderate localaffects on wildlife if important remnant habitats arecrossed or when sensitive breeding or overwinteringperiods are not avoided. Habitat alteration andfragmentation caused by the pipeline right-of-waymay reduce habitat suitability and use by wildlife.

Construction could also produce short-term barriers towildlife movement, direct and indirect mortality, andreduced survival and reproduction. Disturbance fromconstruction activities would have moderate local

affects on wildlife if important remnant habitats arecrossed or when sensitive breeding or overwinteringperiods are not avoided. Habitat alteration andfragmentation caused by construction of the pipelinecould reduce habitat suitability and use by wildlife.

During the environmental review of the proposedProject, state and federal wildlife managementagencies were contacted and they providedinformation on sensitive seasons and wildlife habitatssuch as big game overwintering habitats, importantriparian corridors, and raptor and other migratory bird


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nesting habitats. In addition state and federal wildlifemanagement agencies provided recommendations forsurveys to more specifically locate areas such asraptor nests and prairie dog colonies that couldpotentially be avoided. Keystone is working with stateand federal wildlife management agencies tominimize impacts to wildlife during sensitive breeding

periods. Measures developed to minimize impacts towildlife include development of a Migratory BirdConservation Plan in consultation with the USFWS,removal of litter and garbage that could attractwildlife, control of unauthorized off-road vehicleaccess to the construction right-of-way, andreclamation of native range with native seed mixes.Overall, the impact of construction to wildlife isexpected to be minor and would be primarilytemporary to short term. Normal Project operationwould result in negligible effects to wildlife.

Figure ES-12

Mule Deer

Keystone must work with state and federal wildlifemanagement agencies to minimize impacts to wildlifeduring sensitive breeding periods. Overall, the impactof construction to wildlife is expected to be minor andwould be primarily temporary to short term. NormalProject operation would result in negligible effects towildlife.

Fisheries Resources

The proposed route would cross rivers and streams,including perennial streams that support recreationalor commercial fisheries. Most potential impacts tofisheries resources would occur during constructionand would be temporary to short term. Potential

impacts from construction of stream crossings includesiltation, sedimentation, bank erosion, sedimentdeposition, short-term delays in movements of fish,and transport and spread of aquatic invasive animalsand plants. Keystone has agreed to minimize vehiclecontact with surface waters and to clean equipment toprevent transportation of aquatic invasive animals and

plants on equipment.

Most streams would be crossed using one of severaltrenching methods. Trenching stream crossingswhen water is still flowing through the stream bed canresult in destruction of fish that do not avoid theconstruction area. Trenching methods may also usedams, pumps, and flumes to divert the stream flowaround the trench location to allow a dry trenchingmethod. However, direct disturbance to the streambed can release fine sediments during constructionthrough flowing waters or after the flow is returned tothe stream bed. Sediment would be transporteddownstream and could affect fish, other aquatic life,and aquatic habitats through either direct exposure orsmothering. Most stream crossings would becompleted in less than 2 days, grading anddisturbance to waterbody banks would be minimized,and crossings would be timed to avoid sensitivespawning periods, such that resulting steam beddisturbance and sediment impacts would betemporary and minor.

Most large rivers would be crossed using thehorizontal directional drilling method which would

install the pipeline well below the active river bed. Asa result, direct disturbance to the river bed, fish,aquatic animals and plants, and river banks would beavoided. Keystone has developed site specific plansfor horizontal directional drill crossings and hasagreed to develop site-specific contingency plans toaddress unintended releases of drilling fluids thatinclude preventative measures and a spill responseplan.

Figure ES-13Recreational Fishing


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Threatened and Endangered Species

The U.S. Fish and Wildlife Service (USFWS) isresponsible for protecting threatened and endangeredspecies under the Endangered Species Act (ESA).Federally-protected threatened or endangeredspecies that are known or thought to be in the vicinityof the proposed Project include three mammals, fivebirds, one amphibian, five reptiles, three fish, twoinvertebrates, and four plants. DOS prepared aBiological Assessment and consulted with USFWS toevaluate the proposed Projects potential impact onfederally-protected threatened or endangeredspecies.

USFWS has determined that the proposed Projectwould have no affect on 12 of the listed species, andmay affect, but is not likely to adversely affect 10 ofthose species. These evaluations are based onspecies occurrence and conservation measures

developed in consultation with USFWS that Keystonehas agreed to implement. DOS and USFWSdetermined that the proposed Project would likelyadversely affect the American burying beetle and aformal consultation was initiated to determine whetherimpacts could jeopardize the continued existence ofthe species and to further develop conservationmeasures and an incidental take statement. Basedon the formal consultation, USFWS is formulating aBiological Opinion that would be required prior to theissuance of a Record of Decision by DOS or anyother federal cooperating agency.

Direct impacts to beetles could occur due to habitatloss, construction, and pre-construction conservationmeasures (where beetles would be trapped andrelocated away from the project area). Duringoperation, the flow of oil through the pipeline wouldgenerate heat that would warm the surrounding soilsand could affect beetles during the winter when theybury themselves in the soil to hibernate. Duringformal consultation with the USFWS, conservationmeasures were developed that include Keystoneproviding funding for conservation efforts andmonitoring of American burying beetle habitat

restoration, and the establishment of a performancebond for supplemental habitat reclamation if initialreclamation efforts are unsuccessful.

Several candidate species for federal protectionunder the ESA are known or thought to be in thevicinity of the proposed Project including three birds,one reptile, one fish, and two plants. Measures thathave been developed to avoid and minimize potentialimpacts to these species include reclamation of nativerange with native seed mixes, development of a

Migratory Bird Conservation Plan in consultation withUSFWS, and development of greater sage-grousemitigation implementation plans for Montana andSouth Dakota in consultation with state and federalagencies.

Figure ES-14American Burying Beetle

A total of 35 state-protected species may also bepresent along the proposed right-of-way. Thesespecies have been designated by state wildlifemanagement agencies as being of concern to assistwith conservation planning and maintenance of thestates natural heritage. Conservation measuresdeveloped in consultation with state agencies includeconducting additional species-specific surveys todetermine whether nests, dens, or suitable habitatsare present along the proposed right-of-way; adhering

to construction timing restrictions to avoid thebreeding, denning, and spawning seasons; andreducing the width of the construction right-of-way inareas where state-protected plant populations havebeen identified.

Cultural Resources

DOS, in coordination with consulting parties, hasminimized the potential for adverse effects to historicproperties along the Area of Potential Effect (APE) ofthe proposed Project by the development ofavoidance and mitigation measures. Since 2008,

DOS has consulted with Indian tribes, State HistoricPreservation Officers, federal agencies and localagencies under Section 106 of the National HistoricPreservation Act. As part of this effort, DOS initiallycontacted over 95 Indian tribes to find out their levelof interest in becoming a consulting party. DOS alsoconducted Section 106 government-to-governmentconsultation with the consulting parties for theproposed Project. DOS also invited the consultingtribes to prepare Traditional Cultural Property studiesas part of the lead agency responsibilities for the


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identification, evaluation and mitigation of historicproperties.

A Programmatic Agreement was developed by DOSand the parties. The Programmatic Agreementestablishes a procedure for the further identification,evaluation, mitigation, and treatment of historicproperties and will be completed prior to constructionof the proposed Project. The Advisory Council onHistoric Preservation participated in the developmentof this agreement with DOS and the other consultingparties. As part of this agreement, a Tribal MonitoringPlan and a Historic Trails and ArchaeologicalMonitoring Plan were also developed. If previouslyunidentified archaeological sites are encounteredduring construction of the proposed Project,Keystone, DOS, and the consulting parties wouldfollow the procedures described in the UnanticipatedDiscovery Plans.

Ai r Quali ty and Noise

Ai r Qual ity: Air quality impacts from constructionwould include emissions from constructionequipment, temporary fuel transfer systems, fuelstorage tanks, and dust and smoke from openburning. Most of these emissions would occur onlyintermittently, would be limited to active constructionareas, and would be controlled to the extent requiredby state and local agencies.

All pump stations will be electrically powered by localutility providers. As a result, during normal operation

there would be minor emissions from valves andpumping equipment at the pump stations. Therewould also be low levels of emissions from mobilesources, and low levels of emissions from theproposed Cushing tank farm and the surge reliefsystems at the delivery points. The proposed Projectwould not cause or contribute to a violation of anyfederal, state, or local air quality standards and itwould not require a Clean Air Act Title V operatingpermit.

The proposed Project would cross five counties

where the background concentration of ozone isgreater than the national ambient air qualitystandards. Those areas are designated asnonattainment for the federal 8-hour ozone standard.However, the emissions from the proposed Projectwould be consistent with state implementation plansfor air quality issues.

Noise: During construction there would beintermittent, temporary, and localized increases insound levels as construction activities move throughan area. To reduce construction noise impacts,

Keystone agreed to limit the hours during whichactivities with high-decibel noise levels are conductedin residential areas, require noise mitigationprocedures, monitor sound levels, and develop site-specific mitigation plans to comply with regulations.

As a result, the potential noise impacts associatedwith construction would be minor and temporary.

During operation, sound levels within 2,300 feet ofpump stations would increase. Outside of thisdistance, noise levels would remain at existing soundlevels. Keystone committed to performing a noiseassessment survey and to mitigating identifiedimpacts by installing noise reducing measures at thepump stations.

Land Use, Recreation, and Visual Resources

The majority of land that would be affected by theproject is privately owned (21,333 acres) with nearly

equal amounts of state (582 acres) and federal (579acres) lands being impacted.

Agricu lture:After construction, nearly all agriculturalland and rangeland along the right-of-way would beallowed to return to production with little impact onproduction levels in the long term. However, therewould be restrictions on growing woody vegetationand installing structures within the 50-foot-widepermanent right-of-way. Keystone has agreed tocompensate landowners for crop losses on a case-by-case basis.

There are 102 tracts of land that would be impactedwhich are part of the Conservation Reserve Program.The proposed Project is not expected to affectlandowner ability to participate in that program.

Keystone agreed to use construction measuresdesigned to reduce impacts to existing land uses,such as topsoil protection, avoiding interference withirrigation systems except when necessary, reducingconstruction time in irrigated areas, repairing orrestoring drain tiles, restoring disturbed areas withcustom seed mixes to match the native plants,providing access to rangeland during construction,

installing temporary fences with gates aroundconstruction areas to prevent injury to livestock orworkers, providing trench crossing areas to allowlivestock and wildlife to cross the trench safely, andcontrolling noise and dust control.

Recreation: Operation of the proposed Project wouldnot affect recreational resources, national or stateparks, or users of those resources. Keystone hascommitted to cooperating with private landowners,and with federal, state, and local agencies to reduce


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the conflict between recreational users and Projectconstruction.

Visual Resources:During construction, there wouldbe visual impacts associated activities along theproposed right-of-way such as clearing, trenching,pipe storage, and installing above-ground structures.Most of the visual impacts of the pipeline corridor inagricultural and rangeland areas would besubstantially reduced with restoration andrevegetation. Keystone agreed to install vegetativebuffers around the pump stations to reduce the visualimpacts of those facilities. Overall, the visual impactsof the proposed Project would generally be minor tomoderate.

Socioeconomics

During construction, there would be temporary,positive socioeconomic impacts as a result of local

employment, taxes on worker income, spending byconstruction workers, and spending on constructiongoods and services. The construction work forcewould consist of approximately 5,000 to6,000 workers, including Keystone employees,contractor employees, and construction andenvironmental inspection staff. That would generatefrom $349 million to $419 in total wages. Anestimated $6.58 to $6.65 billion would be spent onmaterials and supplies, easements, engineering,permitting, and other costs.

Adverse impacts during construction could include

temporary and minor increases in the need for publicservices, disruption of local transportation corridors,and reduced availability of transient housing.Keystone would establish four temporary work campsin southeastern Montana and northwestern SouthDakota to minimize impacts to transient housing andpublic services in those areas. Operation of theproposed Project would also result in long-term topermanent beneficial socioeconomic impacts,including employment and income benefits resultingfrom long-term hires and local operatingexpenditures, and increased property tax revenues.

An estimated $140.5 million in annual property taxrevenues would be generated by the proposedProject.

Cumulative Impacts

The analysis of cumulative impacts combined thepotential impacts of the proposed Project with theimpacts of past, present, and reasonably foreseeablefuture actions in the vicinity of the proposed route.This assessment included consideration of the many

existing pipelines, electrical transmission lines, androadways, as well as other linear projects that areunder construction, planned, proposed, or reasonablyforeseeable in the vicinity of the proposed route. Theanalysis also included existing and likely energydevelopment projects.

During construction, the proposed Project wouldcontribute to cumulative dust and noise generation,loss of vegetation or crop cover, and minor localizedtraffic disruptions where other linear projects areunder construction at the same time and are in thevicinity of the proposed route.

One of the primary contributions to cumulative effectsduring operation would be emissions from storagetanks. However, the proposed Project and all otherpetroleum storage projects would have to comply withthe emissions limitations of air quality permits. Inaddition, where Project-related aboveground facilities

and visible corridors are present along with those ofother projects, there would be cumulative effects tovisual resources. Other cumulative impactsassociated with operation include changes in landuse, terrestrial vegetation, wetland function, andwildlife habitat, as well as increases in tax revenues,and employment. Where the pump stations orcompressor stations of other pipeline systems are inthe vicinity of the pump stations for the proposedProject, there would also be cumulative noiseimpacts.

An increase in the development of wind power

projects in the central plains region as well asincreased need for electrical power is likely toincrease the number of electrical transmission lines inthe vicinity of the proposed route. If the constructionof power distribution or transmission lines in thevicinity of the proposed route overlaps withconstruction of the proposed Project, short-termcumulative impacts associated with noise, dust, andgeneral construction activity could occur. Likelycumulative impacts of the proposed Project andoperation of new transmission lines include viewsheddegradation, changes to land uses and vegetation,

and impacts to birds.

Environmental Impacts in Canada

An evaluation of the impacts resulting from extractionof crude oil from the oil sands in Canada is outside ofthe scope of analysis required under the NationalEnvironmental Policy Act. However, in response tocomments and as a DOS policy decision, the generalregulatory oversight and the environmental impacts in


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Canada related to oil sands production weresummarized in the EIS.

The potential environmental effects of the proposedProject have been assessed on both sides of theinternational border. In March 2010, the NationalEnergy Board of Canada determined that theproposed Keystone XL Project is needed to meet thepresent and future public convenience and necessity,provided that the Boards terms and conditionspresented in the project certificate are met. TheBoards assessment included evaluations of need,economic feasibility, potential commercial impacts,potential environmental and socioeconomic effects,appropriateness of the general route of the pipeline,potential impacts on Aboriginal interests, and otherissues.

Oil sands development projects undergo anenvironmental review in Canada under Albertas

Environmental Protection and Enhancement Act andother environmental regulations. Other federal andprovincial agencies may participate in the review asResponsible Authorities or as Federal Authorities withspecialist advice. Government regulators of oil sandsactivities in Canada are working to manage andprovide regional standards for air quality, land impact,

and water quality and consumption based on

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