Was the President's Keystone XL rejection constitutional?

An oil pipeline near the Copper River in Alaska.  Photo: Luke Jones.

In the run-up to the COP 21 Climate Conference, US energy politics was dominated by President Obama's rejection of TransCanada's proposed Keystone XL pipeline.  The pipeline would have extended and modified the route of the existing Keystone pipeline, facilitating the extraction of Canadian tar sands oil and helping bring it to market.  Before the decision was made, I wrote about the impact a rejection of the pipeline might have on COP 21 negotiations:

If the pipeline were rejected before the COP 21 negotiations, it would further cement the feeling (shared by myself and others) that the Keystone XL fight is largely a symbolic one [...] Admittedly it's hard to quantify the extent to which a rejection of Keystone XL would bolster the US position on climate change during COP 21 negotiations, but if the administration is looking to maximize its leverage with other countries, a decision on the pipeline would be a bold move.  

As it turned out, the perception that Keystone XL would contribute to global climate change was a major factor in rejecting the project.  The State Department had already concluded that other environmental impacts would be minimal (a disputed claim), and even questioned the idea that Keystone XL would have a meaningful impact on GHG emissions.  Still, it would have been difficult to push the international community towards climate action if the US President didn't appear to be taking action himself.

It's now clear that TransCanada intends to use that reasoning against the President.  In a brief filed in January in a federal district court in Houston, Texas, TransCanada alleges that the President's rejection of the pipeline was unconstitutional.  This week several states (Oklahoma, Kansas, Montana, Nebraska, South Dakota, and Texas) filed a brief in support of TransCanada's claims.  The most interesting claim is that the President lacks the constitutional authority to reject a pipeline project.  Here is the gist of the argument:

Essentially, the argument boils down to this: Congress has constitutional authority to regulate foreign and domestic commerce; Congress has not delegated that authority to the President; and to the extent that Presidents have traditionally exercised approval power in the past, none have rejected an international pipeline on the basis that it would undercut the President's bargaining power in unrelated international negotiations.

There is some merit to the claim, but of course, the issue is not as clear-cut as the brief suggests.  While Congress has not expressly delegated approval powers to the President, it has not established a statutory scheme for regulating international pipelines either.  So there is an absence of regulation, within which several Presidents have stepped in to make approvals and regulate international pipelines to some extent.  Here is Prof. James Coleman on the federal government's likely response:

President Obama’s administration will raise several counterarguments. First, it will argue that the President has inherent and unilateral constitutional authority to control the nation’s borders, so he must have some kind of ability to control international border crossings. Second, if Congress has not established any criteria for the President to use in this decision, then he is free to create his own criteria. Third, President Johnson established this process almost fifty years ago and it has been frequently used to approve pipelines so Congress has, with the passage of time, acquiesced to this process. Fourth, federal district courts have upheld the President’s unilateral decision to approve international pipelines.

The process President Johnson established was Executive Order 11423 in 1968, which allowed the President to approve international pipelines as long as they serve the national interest.  Presidents have long followed this process, and until the Keystone XL rejection, it was largely uncontroversial.  What TransCanada is arguing, however, is not just that the President doesn't have constitutional authority to approve or reject international pipeline proposals; even if they lose that point, they can argue that in this specific case, the rejection was based on the project's perceived impacts, not its actual impacts.  

A comprehensive energy policy framework does not exist, and for the most part, has never existed.  That absence results in some constitutional ambiguities, such as the one in this case.  I think it likely that the President's authority to review and approve/reject international pipelines will be upheld in federal court; cross-border pipelines are sufficiently related to foreign affairs, even if foreign and domestic commerce is implicated as well.  However, the government should expect to receive some flack for its reasoning.  In the future, pipeline decisions may be more closely based on the substantive review of the project and its direct impact on the national interest as a result of this challenge.