Whatever hopes there might have been for a new era of bipartisan cooperation between Congress and the White House on fast-tracking Keystone XL were quickly shattered Jan. 6.
Having taken control of both houses for the first time in eight years, the Republicans, with some Democratic backing, wasted no time introducing a bill to speed approval of XL by hinting at measures to skirt any veto by President Barack Obama.
Just as quickly, the White House let it be known that Obama would not budge from his entrenched position, which includes tackling climate change as part of his legacy.
White House spokesman Josh Earnest listed a series of other concerns about XL, arguing it would not lower American gasoline prices, would create few permanent jobs, could be used to export refined Canadian heavy crude from the Gulf Coast, could impact carbon emissions and still needed a final federal view once the Nebraska Supreme Court renders its verdict on jurisdictional control over the pipeline route.
TransCanada promptly lashed back, taking special issue with White House claims that XL is an export pipeline.
“Why on earth would Canadian and U.S. companies pay to ship their oil to Gulf Coast refineries, then pay again to ship that same oil overseas, only to pass tankers bringing millions of barrels into America?” the company asked.
“Every barrel of Canadian and American oil transported by Keystone XL that replaces imports from the Middle East and Venezuela improves U.S. and North American energy independence.”
API weighs in
Jack Gerard, president of the American Petroleum Institute, joined combat Jan. 6, rejecting Obama’s assertions that XL will generate only temporary jobs while providing a means for Alberta oil sands producers to access foreign crude markets.
He told reporters that XL will provide 42,000 “well paid” construction jobs and thousands more in the Gulf Coast refinery region.
Noting that the energy industry in the United States has been built on temporary jobs, he dryly observed that “even the President’s job is temporary,” regardless of how important.
Gerard also said TransCanada has committed about one-quarter of the initial 700,000 barrels per day of capacity on XL to Bakken crude from North Dakota and Montana.
He said there had been hope that the bill introduced by North Dakota Sen. John Hoeven to approve XL would represent the “new normal” in Congress and give Obama a chance for “new collaboration” in Washington, D.C.
But the initial response aside, Gerard said he believed XL would receive a go ahead in 2015 after “going through several iterations.”
Votes, veto and tactics
The Hoeven bill, with 60 original co-sponsors - 53 other Republicans, including Lisa Murkowski of Alaska, and six Democrats including Montana’s Jon Tester and North Dakota’s Heidi Heitkamp - needs 67 votes to override a veto from Obama. Gerard said he understood three more Democrats are prepared to add their support.
Hoeven told Reuters that even if the counter-veto numbers cannot be mustered, the Senate Republicans may engage in a two-step process.
Lawmakers who support XL have indicated they will consider attaching measures to expand the legislation with items that Obama would find harder to veto, such as energy efficiency, exporting natural gas or spending authorizations.
Mitch McConnell, the Senate’s new majority leader, has promised to open the amendment process on legislation to participation by the full Senate before the XL legislation goes to a vote several weeks from now.
“Serious adults are in charge here and we intend to make progress,” McConnell has said, in a thinly veiled reference to the years when Sen. Harry Reid, the Democratic majority leader, often kept legislation passed by the Republican House from ever reaching the Senate floor.
However, some Democrats have indicated they will incorporate into the XL bill amendments that would create a new headache for Canadian Prime Minister Stephen Harper, an outspoken champion of XL whose support of the project has chilled his dealings with Obama.
One would require U.S.-produced iron, steel and manufactured goods “to be used for the pipeline construction, connection, operation and maintenance.”
That could violate key provisions of the North American Free Trade Agreement, presenting the Harper government with a tough choice between defending Canadian steelmakers and risking further costly delays to XL, or turning a blind eye to a potentially damaging precedent.
Girling’s frustration
TransCanada Chief Executive Officer Russ Girling said there is “seemingly no end in sight” to the XL saga which entered the regulatory phase more than six years ago.
He argued that XL was “needed when oil prices were less than $40 in 2008 when we first made our application, more than $100 last year or $50 today.”
During interviews over the holiday season, Girling said his company went through a regulatory process which generated 17,000 pages of documents that conclusively demonstrated that XL could be built in an environmentally safe manner, only to “find that the bar keeps getting raised.”
Earnest said “there is an important principle at stake here. There is a well-established process (a claim scorned by Girling) for evaluation of transportation infrastructure projects like this that cross international borders to determine whether the completion of those projects is in the clear best interests of the United States.”
Once the Nebraska court verdict is delivered, the State Department can resume its assessment, opening the way for Obama to decide whether to issue a Presidential Permit.
