United States Department of State Bureau of Oceans and International Environmental and Scientific Affairs

Draft Supplemental Environmental Impact Statementfor the

Keystone XL ProjectVolume IIMarch 2013Applicant for Presidential Permit: TransCanada Keystone Pipeline, LP

United States Department of StateDraft Supplemental Environmental Impact StatementFor the

KEYSTONE XL PROJECTApplicant for Presidential Permit: TransCanada Keystone Pipeline, LP

Volume IIGenevieve Walker NEPA Contact & Project Manager United States Department of State Bureau of Oceans and International Environmental and Scientific Affairs 2201 C Street NW, Room 2726 Washington, DC 20520

Cooperating Agencies U.S. Army Corps of Engineers (USACE) U.S. Department of AgricultureFarm Service Agency (FSA) U.S. Department of AgricultureNatural Resource Conservation Service (NRCS) U.S. Department of AgricultureRural Utilities Service (RUS) U.S. Department of Energy (DOE) U.S. Department of InteriorBureau of Land Management (BLM) U.S. Department of InteriorNational Park Service (NPS) U.S. Department of InteriorU.S. Fish and Wildlife Service (USFWS) U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety (PHMSA) U.S. Environmental Protection Agency (USEPA) Assisting Agencies U.S. Department of the Interior, Bureau of Reclamation (BOR) Nebraska Department of Environmental Quality (NDEQ) Various State and Local Agencies in Montana, South Dakota, Nebraska, and Kansas

March 1, 2013

Volume I1.0 2.0 3.0 Introduction Description of the Proposed Project and Alternatives Affected Environment

Volume II4.0 5.0 6.0 7.0 8.0 Environmental Consequences Alternatives List of Preparers Distribution ListSupplemental EIS or Executive Summary Index

Volume IIIAppendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Governor Approval of the Keystone XL Project in Nebraska PHMSA 57 Special Conditions for Keystone XL and Keystone Compared to 49 CFR 195 Market Analysis Supplemental Information Waterbody Crossing Tables and Required Crossing Criteria for Reclamation Facilities Record of Consultation Scoping Summary Report Construction, Mitigation, and Reclamation Plan (CMRP)

Volume IVAppendix H Appendix I 2012 Biological Assessment Spill Prevention, Control, and Countermeasure Plan, and Emergency Response Plan Sections Appendix J Basin Electric Big Bend to Witten 230-kV Transmission Project Routing Report Appendix K Historical Pipeline Incident Analysis Appendix L Oil and Gas Wells within 1320 ft of Proposed Right-of-Way Appendix M Soil Summary for Montana, South Dakota, and Nebraska Appendix N Supplemental Information for Compliance with MEPA Appendix O Socioeconomics Appendix P Crude Oil Material Safety Data Sheets Appendix Q Pipeline Risk Assessment and Environmental Consequence Analysis Appendix R Construction/Reclamation Plans and Documentation Appendix S Pipeline Temperature Effects Study Appendix T Literature Review Appendix U Screening Level Oil Spill Modeling Appendix V Past, Present, and Reasonably Foreseeable Future Project Descriptions Appendix W Life-Cycle Greenhouse Gas Emissions of Petroleum Products from WCSB Oil Sands Crudes Compared with Reference Crudes Appendix X Canadian Environmental Assessment Act Appendix Y Pipeline Construction in Sand Hills Native Rangelands Appendix Z Estimated Criteria Pollutants, Noise, and GHG Emissions

Draft Supplemental Environmental Impact Statement Keystone XL Project

4.0

ENVIRONMENTAL CONSEQUENCES

This chapter describes the direct and indirect environmental impacts that would be caused by the construction, operation, maintenance, and decommissioning of the proposed Project. The Department has issued this Supplemental Environmental Impact Statement that builds on the analysis completed in August 2011. That analysis has been revised, expanded, and updated to include significant new circumstances or information that is now available. Particular attention has been placed on impacts within those portions of the proposed Project and its connected actions that differ from the previously proposed Keystone XL pipeline route. Cumulative environmental impacts of the proposed Project and other past, present, and reasonably foreseeable projects are described separately in Section 4.15, Cumulative Effects Assessment. Impacts associated with alternatives to the proposed Project are described in Chapter 5.0, Alternatives. As noted in Chapter 3.0, Affected Environment, this Supplemental Environmental Impact Statement does not include an analysis of environmental impacts from the proposed Project in Canada, as these have been assessed separately by the Canadian government consistent with Executive Order 12114 (Environmental Effects Abroad of Major Federal Actions).

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4.1 4.1.1

GEOLOGY Introduction

This section describes potential impacts to geological resources associated with the construction and operation of the proposed Project and connected actions and discusses potential mitigation measures that would avoid or minimize the potential impacts. The information, data, methods, and/or analyses used in this discussion are based on information provided in the 2011 Final Environmental Impact Statement (Final EIS) as well as new circumstances or information relevant to environmental concerns that have become available since the publication of the Final EIS, including the proposed reroute in Nebraska. The information that is provided here builds on the information provided in the Final EIS, and in many instances replicates that information with relatively minor changes and updates. Other information is entirely new or substantially altered from that presented in the Final EIS. Specifically, the following items have been substantially updated from the 2011 document related to impacts to geological resources: A new section, Section 4.1.2, Impact Assessment Methodology, was added to explain the assessment methodology used to evaluate potential geologic impacts associated with the proposed Project; Impacts to paleontological resources have changed due to the availability of results from additional field surveys that were conducted in 2011 and 2012 in Montana and South Dakota; The discussion of procedures to minimize and mitigate adverse effects of pipeline construction activities on significant paleontological materials has been expanded; The number of miles identified with the potential for rock ripping has been changed due to the proposed Nebraska reroute; and Additional discussion about the Bakken Marketlink connected action has been incorporated in the context of mineral and fossil fuel resources.

4.1.2

Impact Assessment Methodology

The impacts of the proposed Project on the geological resources are evaluated using a combination of quantitative and qualitative methods, including the following: Qualitative evaluation of the effects of the proposed Project on the surficial and bedrock geology; Calculation of areas along the proposed pipeline route that may require rock ripping for the construction of the proposed pipeline; Calculation of the distance of the proposed pipeline route to nearby fossil fuel and mineral resources and its direct effect to the resource or indirect effect to the accessibility to the resource; Evaluation of the effects of the proposed Project to fossil-bearing geologic formations and paleontological resources; and Evaluation of the risks that a geology hazards found along the proposed pipeline route may have to the proposed pipeline.4.1-1

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4.1.34.1.3.1

Potential ImpactsGeological Resources

Construction Most of the proposed Project route passes through areas where bedrock is buried under unconsolidated sediments consisting of glacial till, alluvium, colluvium, loess, and/or aeolian deposits. In these areas, impacts to bedrock would be expected to be minimal and limited to areas where bedrock is within 8 feet of the surface, which reflects the typical maximum depth of trench excavation. Rock ripping (the break up and removal of rock material with an excavator) could be necessary where dense material, paralithic bedrock, abrupt textural change, or strongly contrasting textural stratification is present within 8 feet of the ground surface. Approximately 202 miles of the proposed Project route would cross areas identified as potential ripping locations. Table 4.1-1 summarizes the approximate locations of expected ripping operations by state, county, and approximate milepost. Table 4.1-1Milepost Range 10.9618.73 25.8257.59 90.26156.74 156.74197.13 197.85218.06 218.54282.67 282.83354.31 355.07358.10 358.1373.36 373.36424.61 426.26426.28 426.28484.45 485.29523.42 530.94536.83 537.56596.84 871.49871.53 871.62871.69 872.11872.22 872.27872.32 Proposed Project Totala

Potential Ripping Locations for the Proposed ProjectaState Montana Montana Montana Montana Montana Montana South Dakota South Dakota South Dakota South Dakota South Dakota South Dakota South Dakota South Dakota South Dakota Nebraskaa Nebraskaa Nebraskaa Nebraskaa County Phillips Valley McCone Dawson Prairie Fallon Harding Butte Perkins Meade Pennington Haakon Jones Lyman Tripp Jefferson Jefferson Jefferson Jefferson Length (miles) 1.23 3.31 19.30 9.45 6.40 19.67 35.94 1.03 13.94 30.86 0.02 17.76 25.50 2.05 15.26 0.04 0.07 0.11 0.05 201.99

Shallow bedrock areas (98.0

Invertebratea

Source: Appendix Q Pipeline Risk Assessment and Environmental Consequence Analysis, Table 4-6. Test endpoint was mortality unless denoted with an asterisk (*). The test endpoint for these studies was growth.

Significantly, some constituents in crude oil may have greater environmental persistence than lightweight compounds (e.g., benzene), but their limited bioavailability renders them substantially less toxic than other more soluble compounds. Based on the combination of toxicity, solubility, and bioavailability, benzene was determined to dominate toxicity associated with potential crude oil spills. The potential impacts to aquatic organisms of various sized spills to waterbodies were modeled assuming the benzene content within each type of crude oil completely dissolved in the water. The benzene concentration was predicted based on amount of crude oil spilled and streamflow. The estimated benzene concentrations were compared to conservative acute and chronic toxicity values for protection of aquatic organisms. For aquatic biota, the lowest acute and chronic toxicity thresholds for benzene are 7.4 and 1.4 ppm, respectively, based on standardized trout toxicity tests (USEPA 1994). These toxicity threshold values are considered protective of acute and chronic effects to aquatic biota. Although trout are not found in many of the habitats crossed by the proposed project route, trout are among the most sensitive aquatic species and reliable acute and chronic trout toxicity data are available. Using trout toxicity thresholds, therefore, provides a conservative benchmark to screen for the potential for toxicity. Tables 4.13-22 through 4.13-24 summarize a screening-level assessment of acute and chronic toxicity to aquatic resources.

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Table 4.13-22

Comparison of Estimated Benzene Stream Concentrations Following a Diluted Bitumen Spill to the Chronic Toxicity Threshold for Aquatic Life (1.4 ppm)aStream Flow Rate (cfs) 10 100 1,000 10,000 Acute Toxicity Threshold (ppm) 1.4 1.4 1.4 1.4 Small Spill Benzene Occurrence Concentration Interval (ppm) (years) 0.06 25,461 0.006 17,823 0.0006 0.00006 13,367 7,638 Product Released Medium Spill Benzene Occurrence Concentration Interval (ppm) (years) 1.3 118,319 0.13 82,824 0.013 0.0013 62,118 35,496 Large Spill Benzene Occurrence Concentration Interval (ppm) (years) 12.9 502,857 1.3 352,000 0.13 0.013 264,000 150,857

Throughput 435,000 bpd Low Flow Stream Lower Moderate Flow Stream Upper Moderate Flow Stream High Flow Streama

Historical data indicate that the most probable spill volume would be 3 bbl or less. However, this analysis is based on conservative incident frequencies and volumes defined for this Supplemental EIS, which overestimates the proportion of larger spills. Estimated proportion of benzene in the transported material is 0.15 percent, and is assumed to be entirely water solubilized in the event of a spill. The resulting concentration was calculated by multiplying 0.15 percent of the total amount of material released divided by 7 days of stream flow volume. The model assumes uniform mixing conditions. The chronic toxicity value for benzene is based on a 7-day toxicity value of 1.4 ppm for trout. Exposure concentrations were estimated over a 7-day period since the chronic toxicity value was based on a 7-day exposure. Shading indicates concentrations that could potentially cause chronic toxicity to aquatic species. The darkest shading represents high probability of chronic toxicity (>10 times the toxicity threshold); lighter shading represents moderate probability of chronic toxicity (1 to 10 times the toxicity threshold); and unshaded areas represent low probability of chronic toxicity (10 times the toxicity threshold); lighter shading represents moderate probability of chronic toxicity (1 to 10 times the toxicity threshold); and unshaded areas represent low probability of chronic toxicity (10 times the toxicity threshold); lighter shading represents moderate probability of chronic toxicity (1 to 10 times the toxicity threshold); and unshaded areas represent low probability of chronic toxicity (3 years) in areas where regrowth would be allowed and permanent in areas where regrowth would be prohibited. Impacts to function would be minimized and restored according to the CMRP. There is a greater potential for cumulative impacts due to forested wetland conversion because forested wetlands are a limited resource in the proposed Project area. Change in scrub-shrub wetland function would be long-term (>3 years) in areas where regrowth would be allowed and permanent in areas where regrowth would be prohibited. Impacts to function would be minimized and restored according to the CMRP. Potential cumulative effects would be considered to have low overall cumulative significance considering the relatively small area of foreseeable functional change due to proposed Project. Emergent wetland vegetation would be allowed to regrow in the construction and operations ROW with recovery expected in 3 to 5 years; therefore, impacts to emergent function would be long term, but not permanent. Impacts to function would be minimized and restored according to the CMRP. Potential cumulative effects would be considered to have low overall cumulative significance considering the shorter recovery period of affected emergent wetlands.

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Weeds would be controlled during the construction and operational phases per the CMRP. Weeds have the potential to encroach within disturbed areas despite control efforts over the long-term and spread into areas adjacent to the proposed Project area. Potential cumulative effects would be considered to have low overall cumulative significance considering the Projects stated commitments to controlling weeds.

The potential for a given impact to contribute to cumulative impacts is based on the assumption that the CMRP (Appendix G) is successful and near pre-construction conditions are restored and maintained within the anticipated timeframes. Impacts to wetland resources from the construction and operation of the connected actions (Bakken Marketlink Project, Big Bend to Witten 230-kV Transmission Line, and Electrical Distribution Lines and Substations) are not substantially different from the proposed Project. Most wetlands would be spanned, avoided, minimized, and/or mitigated. In summary, with respect to wetland resources, the primary impact concern with respect to potential cumulative effects is the conversion of wetlands to uplands, and the conversion of forested wetlands to emergent wetlands. These impacts represent the primary area for cumulative impacts to occur with other past, present, and reasonably foreseeable future projects. As described above, the proposed Project would mitigate for wetland losses per federal and state requirements, as well as the CMRP (Appendix G). However, it is noted that there is a greater potential for cumulative impacts as a result of forested wetland conversion, because forested wetlands are a limited resource in the proposed Project area. Historical activities and past projects are linked to wetland losses (although the proportion of forested wetland acres impacted is unknown). In the mid-1950s through the mid-1970s, there were major wetland losses, although since then the rate of loss has decreased dramatically, primarily through the implementation and enforcement of wetland protection measures, public outreach/education, and restoration programs (U.S. Environmental Protection Agency [USEPA] 2012a). In Montana (particularly in north-central and eastern Montana), South Dakota (notably in the prairie pothole region), and Nebraska, wetlands conversion to agricultural use (assumed to include livestock grazing) accounts for most historic wetland losses (U.S. Geological Survey [USGS] 1996); other development activities and urbanization follow in significance. The relatively low numbers of wetland acres permanently impacted by the proposed Project heavily influences the evaluation of cumulative effects to wetlands overall. The relative contribution to wetland loss or conversion by the proposed Project in the larger regional context is negligible (