from the April 1, 2013 issue of the National Law Journal
http://www.pipelinelaw.com/files/2014/02/After_Keystone_A_question_of_presidential_permits.pdf
As the name suggests, presidential permits are a creation of the executive branch alone, with no
legislative authorization and limited judicial review to date. Presidential permits are intended to
provide executive branch review of trans-border facilities and commercial activities between the
United States and either Canada or Mexico. No statute authorizes their creation or use, and few
regulations govern their review or issuance.
...
In 1968, permitting authority for oil pipelines, among other facilities, was officially delegated to the State Department under President Lyndon Johnson’s Executive Order 11,423 and amended by another executive order in 1994 to include requirements to consult with various federal departments. In 2004, an executive order by President George W. Bush established the State Department’s procedures for reviewing presidential permit applications for oil pipelines. Those procedures include referral of the application and request for consulting agency reviews within 90 days and directions to approve those applications that serve the national interest.
The State Department is currently responsible for issuing presidential permits for oil pipelines, -while the Federal Energy Regulatory Commission (FERC) issues such permits for natural gas pipelines, and the Department of Energy (DOE) issues presidential permits for electric transmission lines. Both FERC and DOE have promulgated regulations governing their presidential permit process.
Keystone XL Pipeline Project: Key Issues
The executive branch has exercised permitting authority over the construction and operation of “pipelines, conveyor belts, and similar facilities for the exportation or importation of petroleum, petroleum products” and other products at least since the promulgation of Executive Order 11423 in 1968.
Executive Order 13337 amended this authority and the procedures associated with the review, but did not substantially alter the exercise of authority or the delegation to the Secretary in E.O. 11423.
However, the source of the executive branch’s permitting authority is not entirely clear from the text of these Executive Orders. Generally, powers exercised by the executive branch are authorized by legislation or are inherent presidential powers based in the Constitution. E.O. 11423 makes no mention of any authority, and E.O. 13337 refers only to the “Constitution and the Laws of the United States of America, including Section 301 of title 3, United States Code.”
Section 301 simply provides that the President is empowered to delegate authority to the head of any department or agency of the executive branch. The legitimacy of this permitting authority has been addressed by federal courts. In Sisseton v. United States Department of State , the plaintiff Tribes filed suit and asked the court to suspend or revoke the Presidential Permit issued under E.O. 13337 for the TransCanada Keystone Pipeline.
The U.S. District Court for the District of South Dakota found that the plaintiffs lacked standing because they would be unable to prove their injury could be redressed by a favorable decision.
The court determined that even if the plaintiff’s injury could be redressed, “the President would be free to disregard the court’s judgment,” as the case concerned the President’s “inherent Constitutional authority to conduct foreign policy,” as opposed to statutory authority granted to the President by Congress.
The court further found that even if the Tribes had standing, the issuance of the Presidential Permit was a presidential action, not an agency action subject to judicial review under the Administrative Procedure Act (APA).
The court stated that the authority to regulate the cross-border pipeline lies with either Congress or the President.
The court found that “Congress has failed to create a federal regulatory scheme for the construction of oil pipelines, and has delegated this authority to the states. Therefore, the President has the sole authority to allow oil pipeline border crossings under his inherent constitutional authority to conduct foreign affairs.”
The President could delegate his permitting authority to the U.S. Department of State, but delegation did not transform the permit’s issuance into an agency action reviewable under the APA.
In Sierra Club v. Clinton , the plaintiff Sierra Club challenged the Secretary’s decision to issue a Presidential Permit authorizing the Alberta Clipper pipeline. Among the plaintiff’s claims was an allegation that issuance of the permit was unconstitutional because the President had no authority to issue the permits referenced in E.O. 13337 (in this case, for the importation of crude oil from Canada via pipeline).
The defendant responded that the authority to issue Presidential Permits for these border-crossing facilities “does not derive from a delegation of congressional authority ... but rather from the President’s constitutional authority over foreign affairs and his authority as Commander in Chief.”
The U.S. District Court for the District of Minnesota agreed, noting that the defendant’s assertion regarding the source of the President’s authority has been “well recognized” in a series of Attorney General opinions, as well as a 2009 judicial opinion.
The court also noted that these permits had been issued many times before and that “Congress has not attempted to exercise any exclusive authority over the permitting process. Congress’s inaction suggests that Congress has accepted the authority of the President to issue cross-border permits.”
Based on the historical recognition of the President’s authority to issue these permits and Congress’s implied approval through inaction, the court found the Presidential Permit requirement for border facilities constitutional.