After six years, Congress confronts Obama with Keystone pipeline bill

The House of Representatives passed its eleventh bill approving the long-delayed Keystone XL pipeline Wednesday, and this time the bill goes straight to President Obama’s desk. The bill cleared the House in a 270 to 152 vote.

Mr. Obama has promised to veto the bill, opting instead for the State Department to continue its ongoing review of the pipeline. But Republicans and some Democrats accuse the administration of dragging its feet on TransCanada’s application to build the pipeline. It’s why Congress has tried repeatedly to force the president’s hand on the issue, only to be blocked in the Senate. But now that Republicans control the upper chamber of Congress as well, both chambers have passed pipeline approval bills placing the ball squarely in Obama’s court.

Senate Majority Leader Mitch McConnell, who made the pipeline his first legislative priority after Republicans captured the Senate, took to the Senate floor Wednesday to urge Obama to reconsider his veto threat.

"The Keystone jobs bill is just common sense," Mr. McConnell said, referring to the thousands of jobs Republicans say pipeline construction will create (Democrats counter by saying that it would only create 35 permanent jobs.) "That's why this bipartisan legislation already passed the Senate with support from both parties. That's why labor unions support it."

The 1,179-mile Keystone XL pipeline, now in its sixth year of delays, would carry 830,000 barrels a day of Alberta oil sands and North Dakota Bakken crude to US Gulf Coast refineries. The pipeline requires the green light from the State Department because of the portion that crosses the US-Canada border.

The President has said he will only approve the pipeline if it does not significantly exacerbate the problem of climate-warming carbon emissions. Obama’s promise ties pipeline approval more closely to the threat of climate change, pleasing environmentalists who say Keystone XL would encourage investment in emissions-heavy Canadian oil sands.

“Without Keystone, these tar sands might not be exploited,” Rep. Frank Pallone (D) of New Jersey, Ranking Member of the Energy and Commerce Committee, said in a House floor speech prior to Wednesday’s vote. “This is something the president needs to continue to review. We’re wasting our time today.”

With oil prices at the lowest levels in years, costly Canadian oil sands seem less relevant than when Keystone XL was first proposed, around the time Obama took office. Alberta’s oil sands sometimes need to fetch more than $100 a barrel for producers to break even. Oil prices today are around $50 a barrel, after collapsing 60 percent since June.

The US has also undergone a dramatic transformation into a major energy producer, potentially undermining the original need to boost oil imports from Canada. Fueled by a boom in hydraulic fracturing and in shale plays from Texas to North Dakota, the US today produces nearly as much oil as Saudi Arabia. The oil industry argues that pipeline construction would ease transportation constraints, helping crude get to market and expanding the US boom.

“After more than six years the time for review is over. We continue to urge President Obama to reconsider his veto threat,” Louis Finkel, executive vice president of the American Petroleum Institute, an industry group, said in a statement in early February. “All he has to do is look at his own State Department analysis on KXL to see that the project is in our national interest. It’s time to put good public policy ahead of politics.”

In floor speeches Wednesday, Republican members of Congress invoked falling oil prices, US job creation, and Middle Eastern instability as reasons to build the pipeline. Republicans and industry groups say the pipeline is an important way to bolster US energy security, particularly at a time when low oil prices are threatening relatively expensive US shale drilling in places like North Dakota and Texas.

“We are in a battle right now for global market share,” Sen. John Hoeven (R) of North Dakota said in a floor speech Wednesday before the House passed his Keystone XL approval bill. “Is it going to be OPEC? Is it going to be Russia? Or is it going to be the US?”

As soon as the House passed its pipeline bill, environmentalists applauded Obama for his promised veto.

“We commend President Obama for his commitment to veto the bill and urge him to reject the pipeline permit once and for all,” said Tiernan Sittenfeld, senior vice president of government affairs at the League of Conservation Voters, an environmental group, in a statement Wednesday. “After the hottest year on record, it’s long past time for Republican leaders in Congress to finally stand with the majority of Americans who support the President’s climate agenda rather than continuing to cater to their polluter allies.”