Congressional deal starts 60-day clock on Keystone XL decision

Posted: Dec 27, 2011

Written by

ELANA SCHOR, Greenwire
Proposed Keystone XL pipeline route

Congress today kicked off a make-or-break two months for the Keystone XL oil pipeline, quickly approving a payroll tax-cut extension that forces President Obama to rule on a permit for the $7 billion Canada-to-U.S. project long before he faces voters in November.

The bill expediting a presidential decision on the pipeline, which is fueling an already intense lobbying battle over the 800,000-plus barrels of Canadian oil sands crude that it would carry to Gulf Coast refineries, passed after the House GOP abandoned a bruising quest to force Democrats into accepting their terms for a yearlong tax cut extension.

"It may not have been politically the smartest thing in the world, but you know what? I think our members waged a good fight," Speaker John Boehner (R-Ohio) told reporters last night after assenting to White House, Democratic and Senate Republican calls for passage of the two-month tax-cut extension with Keystone XL provisions attached.

The House GOP's abandonment by Senate Minority Leader Mitch McConnell (Ky.) -- who reminded fellow Republicans of their orchestrated push for Obama to weigh in on the oil pipeline proposal he delayed last month -- became the final blow that forced Boehner to give in and agree to today's unanimous-consent passage of the two-month bill (Greenwire, Dec. 22).

The agreement reached by House and Senate leaders last night included an extremely minor change to the underlying text of the upper-chamber's bill and a commitment by its majority leader, Sen. Harry Reid (D-Nev.), to appoint conferees for talks on a yearlong extension of the Social Security tax relief touted heavily by Obama.

The House's version of that longer measure includes a rollback of U.S. EPA's emissions regulations for boilers, opening the door for a GOP campaign to insert it in a new bill next year. And given the Obama administration's less-than-clear position on the pipeline language added to the now-passed payroll tax-cut plan, political combat over the 1,700-mile project is likely to grow even more clamorous once Congress returns to Washington.

Trusting State?

Senate Democratic Caucus Chairman Charles Schumer of New York underscored the stakes of the coming fight as he told reporters on Wednesday that Democratic negotiators "sort of surprised [Republicans] when we took the [provision] they highlighted the most" in the form of the pipeline fast-tracking plan crafted by Sen. Richard Lugar (R-Ind.).

After agreeing to force a ruling on the XL project before the 2013 timeframe that had been outlined by the administration, Obama aides and Democrats gave environmentalists hope by pointing to a Dec. 12 avowal by the State Department that a 60-day deadline would leave it "unable to make a determination to issue a permit" for the pipeline (E&E Daily, Dec. 13).

"We hope President Obama will keep his promise to reject the Keystone pipeline if forced to make a rushed decision within 60 days," Noah Greenwald, endangered species director at the Center for Biological Diversity, said in a statement after the announcement of a deal on the payroll tax cut.

But under the legislative language set to become law as soon as this weekend, the lack of a "determination" by State on the permit application by pipeline sponsor TransCanada Corp. would result in the approval of Keystone XL. In addition, the department that prolonged its three-year environmental review of Keystone XL to examine a potential rerouting of the pipeline around the sensitive soil of Nebraska's Sandhills region has declined to describe its Dec. 12 statement as a vow to veto the project.

"Under the current system," State spokeswoman Victoria Nuland told reporters last week, "we have to go through certain hoops before we can issue a permit." The Lugar-crafted provision, she added, "would appear to legislate a different process."

Environmentalists bitterly oppose Keystone XL because of the greenhouse gas emissions-intensive oil-sands fuel it would carry to the United States and the risk of future spills doing harm to human health and wildlife. By contrast, the oil industry and business lobby, along with several major labor unions, hails the project as a job-creation engine that could provide oil from a more stable alternative to exporting nations in the Middle East.

"The U.S. could meet all its liquid fuel needs through North American resources in 15 years with greater access to domestic and Canadian sources of oil," American Petroleum Institute President Jack Gerard said in a statement urging Obama to sign off on the pipeline within the 60-day window. "We should not pass up an opportunity to secure more stable supplies of energy for our growing needs."


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