Mr. LUGAR. Madam President, I rise today in support of American jobs and national security.

First, I would like to take a moment to express my condolences to families who have lost loved ones in the tornadoes that struck Indiana and other States on March 2.

Last weekend Senator Coats and I toured the damaged areas of southern Indiana and met with people who are dedicated to a full recovery from total devastation. I wish to pay special tribute to advanced preparedness by the schools and many others that prevented an even greater loss of life. Also, our gratitude goes out to the first responders who are doing amazing work, in some cases while facing their own devastating circumstances.

I am returning this weekend to encourage the continuing progress toward recovery, and I am working closely with Governor Daniels and other State officials to coordinate Federal assistance that is appropriate given the level of devastation.

AMENDMENT NO. 1537 Madam President, I rise in support of American jobs and national security in a very strong way and to encourage my colleagues to support the Keystone XL Pipeline amendment I have offered with Senators HOEVEN, VITTER, and others. The Hoeven-Lugar-Vitter amendment No. 1537 mirrors legislation that 46 Senators from both parties have cosponsored. Let me give special thanks to John Hoeven for his partnership and his leadership in this effort.

My own advocacy for the Keystone XL pipeline derives from its benefits for national security, job creation, and economic growth. Keystone XL will reduce our vulnerability to oil market [Page: S1520] manipulation by unfriendly foreign regimes, thereby giving our military and diplomats more flexibility in addressing national security priorities such as stopping Iran's nuclear weapons capability. Keystone XL will create thousands of private sector American jobs almost immediately and without taxpayer subsidy. The more than 7 billion private sector dollars invested for Keystone XL will benefit American workers far beyond those installing the pipeline.

Moreover, analysis from the Department of Energy just last year found that oil supplies coming via Keystone XL would most likely lower gas prices.

President Obama's denial of the Keystone XL pipeline permit is not in the national interest. Americans are screaming for more affordable oil supplies. The irony is that Democratic Senate leadership is calling for more oil from Saudi Arabia even as they continue to oppose oil from Canada.

The Obama Administration's failure to approve Keystone XL detrimentally impacts Americans today. If the State Department had conducted its review in a timely manner of 18 to 24 months, the southern half of Keystone XL would already have been in operation, relieving the bottleneck currently keeping more affordable U.S. oil away from consumers. The remainder of Keystone XL would have been in operation any day now, so today's markets, tighter from supply reductions in Iran and Sudan, would have had reliable sources online soon. We should not delay needed market liquidity any longer.

The Democratic alternative to our legislation would add more delay to American jobs, enable a large government overreach into private industry decisions, and jeopardize the jobs of American refinery workers.

It is not the normal course of events that Congress would be acting on a single private sector project. As ranking member of the Senate Foreign Relations Committee, for months I encouraged timely evaluation of this the project on the merits, even while sharing my own support for its completion. Historically, pipeline applications have been treated in a technocratic matter by both Republican and Democratic administrations. For that reason, Congress has not generally been compelled to assert its constitutional authority over border crossings for oil pipelines as we have for bridges, ports, and immigration.

Regrettably, actions by the Obama Administration to first delay and then deny the Keystone XL application point to election year politics overwhelming the need for objective consideration of the national interest.

In that circumstance, last December 89 Senators voted to pass into law the Lugar-Hoeven-Vitter legislation, S. 1932, which required President Obama to conclude more than 3 years of analysis. In other words, we tried to give President Obama a chance to finish the job. Immediately upon passage, the White House complained that they did not have sufficient time to make a decision. In reality, the Obama Administration issued a Final Environmental Impact Statement on August 26, 2011, and pondered the Keystone XL application for 1,217 days before rejecting it in January.

The lengthy delay in permitting Keystone XL is incongruous with our country's dire need to diversify oil sources and promote job creation. The first Keystone pipeline's permit was granted in 693 days. The Obama Administration approved the Alberta Clipper permit after an 829 day review.

Incredibly, even after 1,217 days the Obama Administration still was unable to determine the national interest, even at this time when oil markets are the tightest they have been in years, gas prices are soaring, and unemployment remains at 8.3%.

The only reason that has been given for delay is that the Keystone XL route through Nebraska is being shifted to avoid some sensitive areas. Benefiting from the diligent efforts of Senator Johanns and his staff, the Hoeven-Lugar-Vitter amendment protects that state process, giving Nebraskans all the time they need while not unduly holding up construction in other states. The Federal government need not tell Nebraskans where to put the pipeline on their territory; our legislation trusts Nebraskans to do what is best for Nebraska.

Mr. President, it may surprise some colleagues to learn that it is not the Federal government's role to decide when an oil pipeline should be built or where it will be placed. The primary Federal role is to ensure safety and environmental standards are met. Our legislation contains safety and environmental requirements in excess of current law and already endorsed by 89 Senators in December. With our bill, Keystone XL would be perhaps the most advanced oil pipeline in the country.

It is only by virtue of crossing our international border with Canada that Keystone XL came into the unfortunate situation of requiring Presidential permission. Our legislation removes the need for an international border-crossing permit for Keystone XL, which currently is required only by Executive Order and not U.S. law. The pipeline could enter the United States at Phillips County, Montana, and nowhere else. In doing so, it recognizes not only that trade in reliable and affordable oil with our closest economic and strategic ally is in the national interest, it also recognizes that in large part the U.S. and Canadian energy systems are integrated to our mutual advantage.

The Hoeven-Lugar-Vitter bill resets evaluation and permitting for all portions of the pipeline to where it was before November 11, 2011, when the President announced he would delay a decision for more than a year until after the 2012 election. The Final Environmental Impact Statement issued by the State Department would be reinstated, along with associated Federal permissions. Keystone XL would still be required to go through regular order in receiving permits that it had not received prior to that date, including from the Army Corps of Engineers and Bureau of Land Management.

Importantly, our legislation recognizes the vital role of individual states in approving oil pipelines. Keystone XL must have all State permissions required by the States that it proposes to cross. That also applies to eminent domain, which is the jurisdiction of the States when it comes to oil pipelines.

I recognize that there is opposition to Keystone XL among certain segments of the environmental community. I take these concerns seriously. That is why our legislation contains perhaps the strongest environmental and safety safeguards for a pipeline ever put into U.S. law. It reflects work of the State Department, the Transportation Department, and other Agencies that identified expansive and specific requirements for pipeline construction and operation. TransCanada has pledged to follow those guidelines, which would have the force of law through our legislation.

In the course of debate we will likely hear a number of Democratic colleagues attest their support for pipelines and for Keystone XL in particular. Surely more will profess their concern for the thousands of workers that would earn incomes with Keystone XL, as well as for the numerous unions that support them. I have no doubt that many Senators, regardless of party affiliation, share those sentiments. Yet, sentiments mean little if in the next breath they oppose reasonable legislation we have offered to make it happen, namely the Hoeven-Lugar-Vitter bill.

I understand that there can be reasonable questions, even concerns on a project of this size. I, along with Senator Hoeven and other cosponsors, have repeatedly offered to Democratic colleagues to hear any genuine concerns with our legislation and to negotiate changes that would earn their votes. Those offers have been refused. Instead, the Democratic leadership has offered a last minute side-by-side amendment that would add more delay, jeopardize the prospect of any Keystone XL jobs being created, and undermine the job prospects of American refinery workers.

I am hopeful that Democratic colleagues will join me in supporting jobs and energy security by voting in favor the Hoeven-Lugar-Vitter amendment. Voting against the Hoeven-Lugar-Vitter amendment while simultaneously refusing to negotiate is a vote against Keystone XL, against the private sector jobs it will produce, against the chance it brings for lower gasoline prices, and against the relief it can provide from our dangerous dependence on [Page: S1521] oil from the Middle East and Venezuela.

Mr. President, in my judgment, there is no doubt that the Keystone XL pipeline would benefit United States national security, energy reliability, economic growth, and job creation. It would be the most advanced pipeline in the United States, thus minimizing environmental risks.

United States dependence on foreign oil is one of our foremost national security vulnerabilities. Iran's threat to shatter global economic recovery and splinter allied opposition to their nuclear weapons program by using their oil exports as leverage is just the most visible example today. The dollars we use to buy oil from autocratic regimes complicate our own national security policies by entrenching corruption, financing regional aggression and repression, and inflating Defense Department costs. Crude oil from Canada, North Dakota, and Montana delivered by Keystone XL will replace a substantial part of future imports of heavy oil from Venezuela and the Middle East.

The less we are directly dependent on oil from unstable and unfriendly regimes, the more flexibility we will have in diplomatic and defense options. Consider, for example, some of the flashpoints in oil-rich countries over the more than three years that the Obama Administration examined the Keystone XL pipeline application: Iran threats against Israel, the Strait of Hormuz, and the U.S. Navy; Venezuelan antagonism; war in Libya; hostilities in Iraq; a stalemate in Sudan; unrest in Russia; the Arab Spring; strained relations with Saudi Arabia; violence in Nigeria; and the ongoing threat of terrorism against energy infrastructure.

In contrast, the only uncertainty in oil trade with Canada has been the U.S. indecision over Keystone XL. This delay has caused the Canadian government to openly question whether the U.S. is a reliable market and whether it should devote new oil capacity to supplying China's voracious appetite for energy.

No single project or policy is a cure-all, but having more independence from unstable regimes will give more options to avoid being drawn into oil-driven conflicts and to diplomatically advance national security objectives. For example, among the most significant challenges to enforcing strong sanctions on Iranian oil is concern over high gas prices driven by a weakening global supply margin. More than 3 years of bureaucratic delay on Keystone XL means that the Obama Administration has prevented Keystone XL oil from helping Americans hit by high gas prices today. Approval now would send a strong signal to markets of coming supply, and with our legislation, Keystone XL would be in place to help address future emergencies.

Having built-in first access to Canadian crude via pipeline is a strategic and economic advantage when global oil markets are under threat of shortage, as powerfully illustrated by Iranian threats against 20 percent of world oil that traverses the Strait of Hormuz.

The global oil market has fundamentally changed. Booming demand by China, India, and other emerging economies is quickly absorbing new supplies. Old oil fields are running low and new ones are expensive and harder to find. World markets are likely to remain tight for the foreseeable future, which means that supply disruptions due to political, terrorist, or weather events can lead to shortages much more easily than in the past. Tight global oil markets will invite threats to supplies for years to come, whether by Iran or other hostile actors. Having oil flow to the United States, instead of to China, via Keystone XL would give Americans the benefits of first access in times of trouble.

In Indiana job creation is the number one priority. The situation is urgent for families struck by our 9 percent unemployment rate, and many more are underemployed. Having the private sector willing to inject more than $7 billion into the economy for the Keystone XL pipeline is a tremendous vehicle for putting people back to work, and it will have a multiplier effect for economic growth. Moreover, it is estimated that approximately 90 percent of the money Americans send to Canada for imports is returned to the United States, thereby encouraging more trade beyond the energy sector.

Keystone XL is perhaps the largest private infrastructure project available for construction almost immediately. It is expected to directly create 20,000 jobs, particularly in the hard-hit construction and manufacturing sectors. In addition, tens--if not hundreds--of thousands of other American workers will have their jobs bolstered through the supply chain. Many of these are small American businesses that manufacture specialty parts or provide services.

Already Hoosiers working at Koontz-Wagner in South Bend, IN, have benefited from some of the $800 million that has already been spent for Keystone XL supplies. As a subcontractor for Siemens, Koontz-Wagner last week finished the last of 78 equipment shelters for Keystone XL. The largest of the shelters measures 62 feet long, 14 feet wide, and weighs about 8,500 pounds. Manufacture of the 78 units for Keystone XL generated 140,000 ``man hours'' of work, allowing 50 60 new employees to be hired.

It is the single largest contract for that company in South Bend. The people of Koontz-Wagner are fortunate that they are an early contractor. Meanwhile, thousands of additional workers are waiting for their chance.

Other Indiana firms stand to benefit from the Keystone XL pipeline. I visited Endress+Hauser in Greenwood where they already have manufactured $600,000 worth of flow and temperature devices, Caterpillar in Lafayette where they manufacture the engines for the heavy equipment developing the oil sands, and Fairfield Manufacturing in Lafayette where they manufacture large gears and other components of the Caterpillar machines, in addition to other industrial machinery.

More than 2,400 American companies in 49 States, including over 100 in Indiana, supply goods and services for oil sands development and transport, according to industry estimates. Virtually all of these American companies stand to benefit from robust trade with Canada, and stand to lose from Canada turning its trade preferences toward Asia.

An important testament to the job-creating opportunities of Keystone XL is the strong support of several unions, such as the AFL CIO Building and Construction Trades Department, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the U.S. & Canada, International Union of Operating Engineers, Laborers' International Union of North America, International Brotherhood of Teamsters, and the International Brotherhood of Electrical Workers.

Private sector job creation must be our top domestic priority. Some argue that the estimate of 20,000 new jobs from Keystone XL construction is too high even while they admit that many thousands of new jobs will be created. Even a smaller number of new private sector jobs are important gains during this time of 8.3 percent unemployment nationally and 9 percent in Indiana. Whether it is a pipeline, a road, or a house, it is the nature of the construction industry that jobs created are temporary in the sense that once a single project finishes, another needs to take its place. A benefit of a project as large as Keystone XL is that the temporary employment is actually quite long and desperately needed by workers and their families.

Keystone XL is privately financed. No taxpayer money is needed to bring these jobs--all that is needed is for government to get out of the way.

In my judgment, further delaying these benefits is not in the national interest. With the firm go-ahead offered by our legislation, Americans can get to work almost immediately in manufacturing goods and in building the pipeline.

Kicking the can down the road is not simply a delay in construction. Delay opens more rounds of duplicative review with no definite conclusion that the pipeline will be built. Meanwhile, the Government of Canada is racing ahead with plans to export crude to China. Recent high-level agreements between Canada and China demonstrate no reluctance for oil trade through Puget Sound and across the Pacific.

The national imperative to reduce dependence on foreign oil from adversarial and unreliable regimes is not a partisan issue. Increased development [Page: S1522] of domestic energy resources, including domestic oil, alternative liquid fuels from biomass and coal, and innovation for fuel efficiency and electrification are all needed. I have offered my Practical Energy Plan, REFRESH farm bill, and Open Fuels Standard with Senator CANTWELL to aid in those efforts.

My legislation, if implemented, would reduce our need for foreign oil by 6.3 million barrels per day by 2030--more than two-thirds of current imports.

It is ultimately the expected resilience of higher average global oil prices and technological breakthroughs that will determine the success of alternatives, not the presence of oil pipelines. We must be realistic: Even with rapid improvement in alternatives and efficiency innovations, oil will continue to be an important part of our economy, and oil from domestic sources and reliable neighbors will be more affordable and secure than far-flung imports.

Even if we achieve domestic production and efficiency goals, we cannot afford to ignore the source of our foreign oil. Canada is our most reliable and safest oil trading partner. The Keystone XL Pipeline alone could virtually eliminate the need for oil from Venezuela. Even if in the future we do not ourselves consume all the Canadian oil imported, having that crude in the U.S. system would give us tremendous flexibility to deal with supply shortages caused by conflict, political manipulation, terrorism, or natural disaster.

But perversely, opponents of the pipeline have thrown up a series of canards against the project to distract from the overwhelming arguments in favor of it. One such canard is that Keystone XL is intended to use American soil to convey Canadian oil to markets abroad. The facts are otherwise. The United States is a huge net importer of crude oil about 9 million barrels every day. It is that reality that has perverted our national security policy for decades. Analysis from the Department of Energy finds the likelihood of crude exports from Keystone XL to be extremely low because U.S. refinery capacity for heavy oil is expected to exceed supply from Canada and because transport of oil via Keystone XL, then tanker would be considerably more expensive than domestic Canadian export options.

Overall U.S. exports of refined products are running at an unusually high 15 percent of total production because America's struggling economy has sapped domestic demand, and those export levels likely will shrink again as the economy gains steam. Simply put, we are keeping some of America's 108,000 refinery workers, including about 2,245 in Indiana, employed by selling at home and overseas.

Moreover, it is especially curious that the prospect of even a small amount of exports manufactured at U.S. refineries comes under scrutiny since President Obama has identified the doubling of U.S. exports as a goal. According to the Department of Commerce, the President already has the authority to prohibit petroleum exports if he deems it to be in the national interest.

In my view, exporting a small percentage of refined products to maintain refinery capacity is not a problem to be solved. In the event of a global energy crisis, exports from U.S. Gulf refineries could quickly be diverted back to American gas pumps, providing that their source is a secure supply from the U.S. or Canada, not overseas.

Even as Democrats seek to block the prospect of even a small amount of manufactured petroleum products from being exported, they are also arguing to block the import of products through ``domestic content'' mandates. The Keystone XL Pipeline is a private project and does not receive taxpayer subsidy. The Federal Government has no place in making procurement decisions of private companies. According to TransCanada, of the expected total procurement for Keystone XL, 98 percent is already under contract. In other words, a domestic content requirement may force it to violate existing contracts.

In the end, the most vigorous opposition to Keystone XL is not over the pipeline itself; it is against further development of the Canadian oil sands in an effort to stem greenhouse gas emissions. In considering this issue, it is important to understand that extensive investment in coking capacity at U.S. refineries means that oil from the oil sands will mostly replace other heavy oil, such as that from Venezuela.

But more to the point, there is no doubt that Canada will continue to develop the oil sands regardless of U.S. decisionmaking on Keystone XL. The Canadians have already spent billions of dollars developing this resource, which they see as an essential national asset and job producer. The value of this asset will increase over time as the growth in global populations and living standards increases the demand for oil. Shipping the oil to the Canadian Pacific or Arctic coasts and onward via tanker for sale to China would compound environmental risks, while denying our country the strategic and economic benefits associated with oil sands production.

The strong majority of American people agree with our support for the Keystone XL Pipeline. Polling by Rasmussen and United Technologies/National Journal clearly indicates that a majority of Americans support the Keystone XL Pipeline. The Pew Research Center released a poll on February 23, 2012, that found 66 percent of people who have heard about Keystone XL support its approval, while just 23 percent oppose. These findings are reinforced by the dozens of Hoosier citizens, mayors, and retired service personnel who have written in favor of Keystone XL and the Indiana State Senate that voted in unanimous support.

America's overdependence on oil imports from unstable and hostile regimes endangers our national security and puts our warfighters and civilian personnel at risk. It also worsens our national budget situation, as we spend billions of dollars to ensure safe passage of oil around the world. But today we have a dramatic opportunity to change that energy and national security equation by building the Keystone XL Pipeline to bring oil from Canada, our good friend, to North Dakota and Montana and then to the gulf refineries.

Better yet, building Keystone XL, a private sector project, will create thousands of American jobs now. Job creation is the No. 1 issue in our Nation. The Keystone XL Pipeline is the country's largest shovel-ready infrastructure project. President Obama had the opportunity to create thousands of new jobs right away, plus bolster job prospects for thousands more throughout the manufacturing supply chain, such as our Hoosiers firms Endress+Hauser, Koontz-Wagner, and Caterpillar. Allowing $7 billion of private economic activity should be a no-brainer.

Incredibly, even after reviewing Keystone XL for 1,217 days and in the midst of Iranian threats against global oil supplies and the U.S. Navy, President Obama caved to pressure from extreme environmentalists by rejecting Keystone XL jobs and security. The President ignored analysis from his own Department of Energy that said oil supplies coming via Keystone XL would most likely lower gas prices.

President Obama's rejection of Keystone XL implicitly says that the administration prefers to send billions of dollars to unfriendly regimes rather than expand trade with Canada. It says that Democratic leadership prefers going hat-in-hand seeking more oil from Saudi Arabia rather than taking control of our energy future. It is incomprehensible. No objective standard of U.S. national security interest could justify such a decision.

I recognize there is opposition to Keystone XL among certain segments of the environmental community, and I take those efforts and concerns seriously. That is why our legislation contains perhaps the strongest environmental and safety safeguards for a pipeline ever put into U.S. law. It ensures that the Federal Government will not interfere with individual property rights or tell Nebraskans what to do in their own State.

Opponents believe that by blocking the pipeline, they will stop development of the oil sands in Alberta. That is a false hope. There is no doubt that Canada will continue to develop the oil sands regardless of U.S. decisionmaking on Keystone XL. The Government of Canada is racing ahead with plans to export crude to China. Recent high-level agreements between Canada and China demonstrate no reluctance for oil trade through the Puget Sound and across the Pacific. [Page: S1523] Others say we should encourage alternatives to oil, and greater fuel efficiency, and I agree with that, but even under the most optimistic scenarios, oil will continue to be an important part of our economy, and oil from domestic sources and reliable neighbors will be more affordable and secure than far-flung imports.

Crude oil from Keystone XL will replace heavy oil imports from Venezuela and the Middle East. The less we depend on oil from adversarial and unreliable regimes, the more protection Americans will have from price spikes and shortages and the more flexibility we will have in diplomatic and defense options in oil-rich lands.

Finally, let me say that Politico reports that President Obama is so anti-Keystone that he is personally calling Senators to oppose our bill. The Democratic alternative aligns with President Obama's rejection of Keystone XL and is a massive overreach into the private sector. Senator Wyden's bill would ultimately hurt the workers it claims to help and would penalize America's 108,000 refinery workers directly.

In sum, the Keystone XL Pipeline will create thousands of private sector jobs, and it will help protect the national security interests of the United States. It comes at no taxpayer expense, and it will strengthen vital ties with our ally Canada. I urge my colleagues to support the Hoeven-Lugar-Vitter Keystone XL amendment.

Madam President, I yield the floor.