Keystone XL: States’ Authority to Tax Interstate and Foreign Commerce
to Discourage Pipeline Siting Within Their Borders
Tyler L. Burgess
Introduction
TransCanada’s Keystone XL pipeline project has been the source of significant
controversy due to, inter alia, its potential environmental and safety concerns. The pipeline will
bring tar sands oil from Alberta, Canada across the United States and ultimately reach the
refineries near the Gulf of Mexico. Environmentalists have raised concerns over a number of
issues ranging from potential spills to increases in greenhouse gas emissions.
The original proposed pipeline crossed the sand hills region of Nebraska and the Ogallala
aquifer, which provides drinking water to 1.5 million people and irrigation water to most of the
Midwest. While the proposed path through sensitive areas of Nebraska was altered, the change
has done little to alleviate the concerns of the project’s opponents.
Coming on the heels of the Deepwater Horizon spill in the Gulf of Mexico and Exxon
Mobil’s pipeline spill in Montana, environmental and public safety concerns have taken center
stage. Dr. John Stansbury, a professor at the University of Nebraska concluded that “the 1,700mile Keystone XL pipeline is likely to have more than eight times as many spills, take more than
10 times as long to shut down in the event of a rupture and spill more than six times as much as
raw tar sands oil as TransCanada estimates.”1
Others are concerned with the use of eminent domain to acquire the required right-of-way
for the project. Landowners have become outspoken about the fact that a Canadian company is
1
Mamta Badkar, Why The $7 Billion Keystone XL Pipeline Is The Most Controversial Business Venture In America,
BUSINESS INSIDER (Nov. 8, 2011), http://www.businessinsider.com/keystone-xl-project-controversy-2011-11?op=1.
1
using eminent domain laws to acquire private land. This particularly unpopular issue has
brought together unlikely allies in the environmentalists and property rights advocates.
State governments are seeking to understand the recourse they may have to protect the
interests of their citizens in both property rights and public health and welfare through taxation
of the Keystone XL project. Part I of this discussion addresses the ability of states to lay taxes
on interstate commerce including oil that passes through pipelines within their borders. Part II
considers the states’ right to tax foreign commerce such as the oil originating in Canada.
Part I
State Taxation of Interstate Commerce
One response that states have considered is whether they have the ability to impose a tax
or excise fee on the tar sands oil passing through their state, but not used or refined in the state.
The test to determine whether a state tax impermissibly burdens interstate commerce was defined
by the Supreme Court in its Complete Auto Transit, Inc. v. Brady2 decision announced in 1977.
In addressing a Mississippi tax on gross revenues for the privilege of doing business in the state,
the court noted that “[i]t is a truism that the mere act of carrying on business in interstate
commerce does not exempt a corporation from state taxation [and]. . . [i]t was not the purpose of
the commerce clause to relieve those engaged in interstate commerce from their just share of
state tax burden even though it increases the cost of doing business.”3
The four part test to evaluate whether a state tax violates the commerce clause considers:
1) whether the tax is applied to an activity with a substantial nexus to the taxing state; 2) if the
tax is fairly apportioned so as to tax only the activities connected to the taxing state; 3) whether
2
430 U.S. 274 (1977).
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 288 (1977) (citing Western Live Stock v. Bureau of Revenue,
303 U.S. 250, 254, (1938), Colonial Pipeline Co. v. Traigle, 421 U.S. 100, 108 (1975)).
3
2
the tax discriminates against out-of-staters; and 4) whether the tax is fairly related to services
provided by the state.4 Each of these factors is considered further in the following sections.
Substantial Nexus
A state tax will survive a commerce clause challenge only if there is a “substantial nexus”
or significant connection between the state and the property being taxed.5 This protects against
an unfair imposition of tax on an activity or entity that has little connection to a state. The
significant nexus requirement ensures that a state will not be able to exact fees and taxes on
goods merely passing through the state.6 “If a state could tax such movement, every state
through which goods passed could levy the same tax and the impact on the national economy
would be grave.”7
In Braniff Airways, Inc. v. Nebraska State Board of Equalization and Assessment,8 the
Supreme Court upheld a Nebraska ad valorem tax on aircraft used in interstate commerce.
Braniff Airways contended that the aircraft were immune from taxation since the company did
not have significant ties to the state and air navigation is governed by federal law.9 Braniff did
not own or maintain facilities in Nebraska, but did rent space to repair and store its aircraft.10
The airline operated out of a number of states and the stops in Nebraska were of a short duration
4
Id. at 277-78; see also Am. Trucking Ass’n v. Mich. Pub. Serv. Comm’n, 545 U.S. 429, 438 (2005) (upholding the
constitutionality of Michigan’s annual fee on trucks that engage in intrastate commercial hauling as permissible
under the interstate commerce clause pursuant to the Complete Auto test); Directtv, Inc. v. Treesh, 487 F.3d 471,
478-81 (6th Cir. 2007) (applying the Complete Auto test in dismissing a satellite television operator’s challenge to
the Kentucky corporation tax by finding that it was not a protective tariff that discriminated against interstate
commerce).
5
See Overstock.com v. New York State Dep’t of Taxation, 20 N.Y.3d 586 (N.Y. 2013) (finding that the state’s
internet tax satisfied the “substantial nexus” test set forth in Complete Auto since an online retailer solicits a
significant amount of business through the internet that generates a large revenue stream, demonstrating its contact
with the state).
6
In re Assessment of Pers. Prop. Taxes Against Mo. Gas Energy, Div. of S. Union Co., for Tax Years 1998, 1999,
& 2000, 234 P.3d 938, 954 (Okla. 2008).
7
Id.
8
347 U.S. 590 (1954).
9
Id. at 591.
10
Id. at 592.
3
for the purpose of refueling and loading and unloading passengers, mail and freight.11 The court
held that the habitual employment of aircraft in the state was sufficient to establish a “significant
nexus” with the state and subject the aircraft to the ad valorem tax under the commerce clause.12
Moreover, the Supreme Court in Colonial Pipeline Co. v. Traigle,13 upheld a fairly
apportioned and nondiscriminatory corporate franchise tax requiring businesses to be licensed to
carry on business in the state of Louisiana as consistent with the commerce clause.14 Colonial
Pipeline Co. was an interstate carrier of liquefied petroleum products and owned approximately
258 miles of pipeline crossing through Louisiana.15 While Colonial did not maintain its place of
business in Louisiana, it owned and operated several pumping stations that keep the petroleum
products flowing in the pipeline at a sustained rate.16 In addition, Colonial maintained various
storage tank facilities that were used to inject or withdraw products into or out of their
pipelines.17 The court found this connection to the state to meet the substantial nexus
requirement under Complete Auto and its progeny.18
The substantial nexus requirement finds its constitutional authority under both the
commerce clause and due process. The court has suggested that the substantial nexus and
11
Id. at 592.
Id. at 601.
13
421 U.S. 100 (1975)
14
Colonial Pipeline Co. v. Traigle, 421 U.S. 100, 109 (1975).
15
Id. at 101.
16
Id.
17
Id.
18
Id.; but see Midwestern Gas Transmission Co. v. Wisc. Dept. of Revenue, 267 N.W.2d 253, 255 (Wisc. 1978)
(holding that some activity took place within the state including engines providing pressure necessary to propel
natural gas through a pipeline, the majority of taxpayer's gas constituted interstate commerce and did not have a
substantial nexus with the state; therefore, was immune from state taxation pursuant to the commerce clause).
Courts have come to differing conclusions as to whether storage of natural gas would meet the substantial nexus test.
See In re Assessment of Pers. Prop. Taxes Against Mo. Gas Energy, Div. of S. Union Co., for Tax Years 1998,
1999, & 2000, 234 P.3d at 954 (upholding the state’s ad valorem tax levied on natural gas stored by a pipeline
company in the state and finding a substantial nexus based on the large volumes of the gas were stored in the state
for substantial part of the year); but see Peoples Gas, Light, and Coke Co. v. Harrison Central Appraisal Dist., 270
S.W.3d 208, 219 (Tex. App. 2008) (finding that an ad valorem tax on natural gas stored in the state failed the
substantial nexus prong of the Complete Auto test since the company that owned the gas lacked sufficient contact
with the state).
12
4
minimum contacts requirements may be different, with the potential for a tax to meet one test but
not the other. “These requirements are not identical and are animated by different constitutional
concerns and policies.”19 The Supreme Court explains that the substantial nexus requirement is
rooted in structural concerns of the commerce clause and the impact that states can have on the
national economy through regulation of interstate commerce.20 It differs from the minimum
contacts test for due process because its purpose is to limit state burdens on interstate commerce
rather than guarantee individual rights.21
In F. W. Woolworth Co. v. Taxation and Revenue Department of New Mexico, the court
struck down a state tax on dividend income on corporations that had no contact with the taxing
state, other than ownership of stock in another corporation, as against due process for lack of
minimum contact with the taxing state. “[I]ncome attributed to [a] State for tax purposes must
be rationally related to values connected with the taxing State.”22
In sum, in order for a state to tax a pipeline company for the oil passing through its
borders, it must demonstrate both that the oil has a substantial nexus to the taxing state and the
company maintains sufficient minimum contact in order to meet due process considerations. As
with Traigle, a company that maintains a significant length of pipeline including pumping
stations and other appurtenances of pipeline operations will likely satisfy this prong of the
Complete Auto test.
Fair Apportionment
A state tax may only be applied to the portion of a company’s business that is connected
to the state imposing the tax. This requirement is based on the need to protect interstate business
19
504 U.S. 298, 299 (1992).
Id. at 312-13.
21
Id.
22
F. W. Woolworth Co. v. Taxation and Revenue Dept. of State of N.M., 458 U.S. 354, 363 (1982).
20
5
from cumulative taxation that would result if every state could tax the entirety of a company’s
business. “The simple but controlling question is whether the state has given anything for which
it can ask return.”23
The court further defines the test for fair apportionment in Oklahoma Tax Commission v.
Jefferson Lines, Inc.24 to include an evaluation of the internal and external consistency of the tax.
“Internal consistency is preserved when the imposition of a tax identical to the one in question by
every other State would add no burden to interstate commerce that intrastate commerce would
not also bear.”25 External consistency, in contrast evaluates “the economic justification for the
State's claim upon the value taxed, to discover whether a State's tax reaches beyond that portion
of value that is fairly attributable to economic activity within the taxing State.”26
Ultimately, the fair apportionment prong of the test ensures that multiple jurisdictions do
not impose taxes on the same instruments of commerce. It is unclear what factors would
persuade the court that a tax on oil passing through a pipeline is fairly apportioned;27 however,
any tax proposed would need to avoid laying a tax on oil that is also taxed in another jurisdiction.
23
Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444 (1940).
514 U.S. 175 (1995) (holding that Oklahoma’s sales tax on bus tickets from Oklahoma to another state did not
violate the dormant commerce clause); see also Mayor & City Council of Baltimore v. Priceline.com, 2012 WL
3043062, at *5-6 (D. Md. 2012) (finding that a Baltimore tax on hotel occupancy met the fair apportionment test of
Complete Auto despite the act of booking the hotel room took place online and not in Baltimore, as the tax on hotel
occupancy is most sensibly applied to the place of the hotel and the tax was fairly related to the business in the
taxing jurisdiction).
25
Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 185 (1995).
26
Id.
27
The Supreme Court considered the constitutionality of a state tax on a pipeline company in Colonial Pipeline Co.
v. Traigle, but the fairness of the apportionment was not contested and the court provided no instructive analysis
regarding the application of the fair apportionment test . 421 U.S. at 101.
24
6
Discrimination Against Out-of-Staters
The dormant commerce clause provides a strong presumption against validity of state
laws that discriminate against out-of-staters and typically are declared per se invalid.28 The most
obvious discriminatory taxes explicitly tax out of state parties while not taxing in state parties. 29
Taxes that are facially neutral, but have a disparate impact on out of state parties can be more
difficult to identify.30 “A State may not “impose a tax which discriminates against interstate
commerce . . . by providing a direct commercial advantage to local business.”31
One example of a facially neutral, but discriminatory tax was found in West Lynn
Creamery, Inc. v. Healy.32 The court struck down a Massachusetts tax on milk production, the
proceeds of which supported a subsidy for in-state producers.33 This subsidy had the effect of
making out of state milk more expensive.34 Therefore, despite the facially neutral taxation of
milk production both in and out of state, the effect was discriminatory of interstate commerce in
violation of the commerce clause.35
Any state developing a tax on interstate commerce such as oil travelling in pipelines
could easily avoid the pitfall of a facially discriminatory tax, but will need to carefully construct
the tax to avoid any indirect effects of discrimination. As long as the tax does not treat in-state
28
See Or. Waste Sys., Inc. v. Dep’t of Envtl. Quality of Or., 511 U.S. 93, 99 (1994).
See Associated Indus. of Mo. v. Lohman, 511 U.S. 641, 644 (1994) (declaring a state’s use tax on the privilege of
storing, using, or consuming within the state any article of personal property purchased outside the state
unconstitutional).
30
See American Trucking Associations, Inc. v. Scheiner, 483 U.S. 266 (1987) (holding that a flat tax on trucks road
use was not based on the amount of time the vehicle travelled in the state or number of miles travelled violates the
commerce clause since it has the effect of imposing a higher tax burden on multistate carriers than in-state carriers).
31
Okla. Tax Comm'n v. Jefferson Lines, Inc., 514 U.S. at 197.
32
512 U.S. 186 (1994); See also Md. State Comptroller of Treasury v. Wynne, 2013 WL 310089, at *11 (Md. 2013)
(finding that the application of the county tax to pass-through S corporation income without application of an
appropriate credit had the effect of discriminating against out-of-staters and failed the third prong of the Complete
Auto test).
33
West Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 194-95 (1994).
34
Id.
35
Id.
29
7
and out-of-state interests differently, it will likely withstand any constitutional challenge under
the commerce clause.
Fair Relationship to State Services
The final prong of the Complete Auto test asks whether a tax has a fair relationship to the
services provided by the state. Although similar to fair apportionment, the fair relationship test
focuses on the relationship of the tax to the services provided by the state in return. This test
ensures that the taxpayer has received a benefit that justifies payment of the tax.
In Commonwealth Edison v. Montana,36 the court considered a state tax on coal extracted
in Montana and concluded that it satisfied the fair relationship test. The tax was measured as a
percentage of the value of the coal extracted from Montana. “When a tax is assessed in
proportion to a taxpayer's activities or presence in a State, the taxpayer is shouldering its fair
share of supporting the State's provision of “police and fire protection, the benefit of a trained
work force, and ‘the advantages of a civilized society.”37 The court upheld the tax finding that it
was proportionate to the coal company’s activity within the state.
This prong of the Complete Auto test is easily demonstrable in the context of taxing oil
pipelines. Significant local resources are required to provide emergency planning and response
plans in the case of any failure or spills. Creating and implementing emergency response plans
requires the participation of the state’s trained workforce such as emergency responders and
environmental experts and provides a clear benefit to pipeline companies; therefore,
36
453 U.S. 609 (1981).
Commonwealth Edison Co. v. Mont., 453 U.S. 609, 627 (1981); see also Md. State Comptroller of Treasury, 2013
WL 310089, at *7 (noting that the hotel occupancy tax maintained a fair relationship to the taxing state since online
travel companies merely collected the tax, which was actually paid by the hotel occupant who receives the benefit of
the civil services provided by the city to the hotel).
37
8
development of a state tax on oil pipelines can reasonably be justified based on the services
provided by the taxing state.
Part II
State Taxation of Foreign Commerce
Since the Keystone XL pipeline crosses international boundaries, it is important to
consider any potential implications that a state tax may have on foreign commerce. Assuming
arguendo that Canadian companies extract oil from the tar sands and ship it through the
Keystone XL pipeline to a Gulf Coast port for transport to other foreign nations without making
any stops along the way, one must examine whether taxing the oil is permissible. Two
constitutional sources, the foreign commerce clause and the import-export clause, should be
considered in determining the constitutionality of a state tax on foreign oil.
Foreign Commerce Clause
The foreign commerce clause states that “[t]he Congress shall have power . . . [t]o
regulate Commerce with foreign Nations”38 The Supreme Court has noted that when it is
construing regulation of commerce with a foreign nation, a more extensive inquiry is required. 39
In Japan Line, Ltd. v. County of Los Angeles, the court was addressing whether foreign owned
and registered cargo containers that were used exclusively in international commerce may be
subjected to apportioned ad valorem taxation by a state.40 The tax was found unconstitutional as
38
U.S. Const. art. I, § 8, cl. 3.
Japan Line, Ltd. v. Los Angeles Cnty., 441 U.S. 434, 446 (1979).
40
Id. at 434.
39
9
inconsistent with the foreign commerce clause based on the potential for multiple taxation and
potential inconsistencies with Congress’ power to regulate commerce with foreign nations. 41
Noting that while “[w]e may assume that, if the containers at issue here were
instrumentalities of purely interstate commerce, Complete Auto would apply and be satisfied, and
our Commerce Clause inquiry would be at an end”; the court however, finds that when
construing Congress’ power to regulating commerce with foreign nations, a more scrutinizing
inquiry is required.42 The court then formulated the foreign commerce clause test by adding two
additional inquiries to the Complete Auto test for interstate commerce.43 The two prong test
considers: “1) whether the tax, notwithstanding apportionment, creates a substantial risk of
international multiple taxation, and 2) whether the tax may impair federal uniformity and prevent
the federal government from speaking with one voice when regulating commercial relations with
foreign governments.”44
The first prong of the test considers the possibility that the instrumentality of commerce
will encounter taxation from multiple taxing bodies. The Complete Auto test does examine
whether a tax has been fairly apportioned; however, foreign commerce can be distinguished from
interstate commerce by its potential to be taxed by foreign nations in addition to any taxes levied
by states. “[N]either this Court nor this Nation can ensure full apportionment when one of the
taxing entities is a foreign sovereign.”45 Therefore, if a state seeks to tax an instrumentality that
41
Id. at 454; see also Odebrecht Const. Inc. v. Prasad, 876 F. Supp. 2d 1305, 1318-19 (S.D. Fla. 2012) (holding a
state statute prohibiting the State of Florida from awarding contracts to companies having business operations in
Cuba unconstitutional as against foreign commerce under the Japan Line test due to its facial discrimination against
foreign commerce and disruption of the nation speaking with one voice).
42
Id. at 445-46.
43
Id. at 446; see also CSX Transp. v. Ala. Dep’t of Revenue, 892 F. Supp. 2d 1300, 1316-17 (N.D. Ala. 2012)
(applying both the Complete Auto and Japan Line tests in upholding an Alabama tax under the commerce clause).
44
Nueces County Appraisal Dist. v. Diamond Shamrock Ref. & Mktg. Co., 853 S.W.2d 212, 217 (Tex. App. 1993)
(citing Japan Line, Ltd., 441 U.S. at 446).
45
Japan Line, Ltd. 441 U.S. at 446.
10
is also taxed by a foreign nation, multiple taxation will result. This prong of the Japan Line test
seeks to prevent such a result.
The second prong focuses on providing federal uniformity in regulating foreign
commerce. A state tax could disadvantage a foreign nation that could in turn retaliate against
domestic trade, which could affect the nation’s economy and not merely the taxing state. 46 In
addition, “[i]f other States followed the taxing State's example, various instrumentalities of
commerce could be subjected to varying degrees of multiple taxation, a result that would plainly
prevent this Nation from “speaking with one voice” in regulating foreign commerce.”47 Here,
the court found that the California ad valorem tax on shipping containers was unconstitutional
based on the existence of a corresponding tax in Japan.48 Moreover, the Customs Convention on
Containers is an international convention, of which the United States is a member, which serves
as the unified national voice for the United States and the court suggested that the California tax
would interfere with the Convention.49
As with the fair apportionment standard discussed under the Complete Auto test, the
Japan Line test seeks to ensure that multiple taxation does not result from the state tax imposed
on commerce. States seeking to impose taxes on oil from the Keystone XL pipeline must be able
to withstand the increased scrutiny the court utilizes to evaluate the whether a tax discriminates
against foreign commerce. Any tax on the oil must also meet the Japan Line’s requirement that
the nation speak with one voice by considering any taxes that are imposed on the country of
origin and other international treaties that control.
46
Id. at 450.
Id. at 450-51.
48
Id. at 453.
49
Id. at 454.
47
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Import-Export Clause
The import-export clause states that “[n]o State shall, without the consent of the
Congress, lay any imposts or duties on imports or exports, except what may be absolutely
necessary for executing its inspection laws: and the net produce of all duties and imposts laid by
any State on imports or exports, shall be for the use of the treasury of the United States: and all
such laws shall be subject to revision and control of the Congress.” 50
In Michelin Tire Corp. v. W.L. Wages,51 the Supreme Court considered whether a
Georgia ad valorem tax on imported tires was in conflict with the import-export clause of the
constitution. The court discussed the policy considerations behind the clause and developed a
three prong test to evaluate whether a tax is consistent with the import-export clause.
The Framers of the Constitution thus sought to alleviate three main concerns by
committing sole power to lay imposts and duties on imports in the Federal
Government, with no concurrent state power: [1] the Federal Government must
speak with one voice when regulating commercial relations with foreign
governments, and tariffs, which might affect foreign relations, could not be
implemented by the States consistently with that exclusive power; [2] import
revenues were to be the major source of revenue of the Federal Government and
should not be diverted to the States; [3] and harmony among the States might be
disturbed unless seaboard States, with their crucial ports of entry, were prohibited
from levying taxes on citizens of other States by taxing goods merely flowing
through their ports to the other States not situated as favorably geographically.52
The court upheld Georgia’s nondiscriminatory ad valorem property tax against
Michelin’s imported tires finding that the tax that was “not on goods still in transit” would have
“no impact whatsoever on the federal government’s exclusive regulation of foreign
commerce.”53 Moreover, the tax would not deprive the federal government of its exclusive
50
U.S. Const. art. I, § 10, cl. 2.
Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976).
52
Id. at 285-86.
53
Id. at 286; see also Am. Honda Motor Co., Inc. v. City of Seattle, 273 P.3d 498, 500-01 (Wash. Ct. App. 2012)
(upholding the state’s business and occupation tax as consistent with the import-export clause of the constitution
pursuant to the test set forth in Michelin).
51
12
rights to revenues since property taxes do not fall into the category of revenue sources subject to
imposts and duties that are traditionally regulated by the import-export clause.54 Imposts and
duties are taxes on the privilege of bringing goods into the country whereas property taxes, such
as the ad valorem tax at issue here, are a mechanism for the state to apportion the cost of police,
fire, and other protections provided by the state among the respective beneficiaries.55 Finally,
the court found nothing in the tax that interfered with the free flow of imported goods among the
states since the tax is justified as an exchange for benefits actually conferred by the state and
modern transportation systems can easily move goods to the inland states and avoid such taxes if
desired.56
A number of courts have upheld state taxes against import-export clause challenges in the
context of the importation of petroleum products. The Supreme Court of South Dakota found
that a statute that provides for inspection of oil products before they are sold and requires the
payment of a per barrel fee to defray the cost of the inspection does not violate the import-export
clause.57 Moreover, the Court of Appeals of Texas upheld an ad valorem tax on crude oil
imported from foreign sources to a Texas terminal.58 Finally, the Superior Court of Delaware
upheld a gross receipts tax on shipments of foreign crude oil under the Michelin Tire test.59
These cases suggest that a state tax on oil flowing through pipelines within its borders will likely
be permissible under the import-export clause.
54
Id.
Id. at 287.
56
Id. at 288-89.
57
Peterson Oil Co. v. Frary, 192 N.W. 366 (S.D. 1923), aff’d sub nom, 264 U.S. 570 (1924) (upholding state
inspection law for oil products against constitutional challenge as within the police powers of the state and not
repugnant to interstate commerce, due process, or the import-export clause).
58
Nueces County Appraisal Dist., 853 S.W.2d at 215-16.
59
Saudi Refining Inc. v. Director of Revenue, 715 A.2d 89 (Del. Super. Ct. 1998).
55
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Conclusion
In conclusion, opportunities for both taxation of interstate commerce and foreign
commerce with respect to the oil transported through the Keystone XL pipeline are not
foreclosed; however, any state action must be meticulously crafted to withstand a constitutional
challenge.
States may tax some activities related to the Keystone XL pipeline through carefully
structured taxes that meet the constitutional limitations of the commerce clause, foreign
commerce clause, import-export clause, and due process. Pipeline operators may be able to
escape tax liabilities if they do not have a substantial nexus to the taxing state. Courts have
found that pumping stations and other facilities used to ensure the oil flows through the pipeline
are sufficient to establish such a nexus. It is likely that any facilities used to pump oil into or out
of the pipeline as well as any storage facilities will be upheld.
14