7. OIL AND GAS:

House OKs controversial bill to hasten Keystone XL decision

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The House yesterday signed off on a bill pressing the White House "to expedite the consideration and approval" of a $7 billion U.S.-Canada oil pipeline decried by environmentalists as a safety and ecological risk.

The 279-147 vote to pass H.R. 1938 came after the House shot down nine Democratic amendments, most aimed at public health and economic concerns related to the Keystone XL pipeline. Forty-seven Democrats joined the majority in approval, while three Republicans -- Reps. Jeff Fortenberry of Nebraska, Nan Hayworth of New York and Charlie Bass of New Hampshire -- crossed party lines to vote no.

The legislation's chances of clearing the Senate are slim at best, but it represents the latest in a series of House GOP nudges to influence the course of Obama administration energy policymaking. Keystone XL is currently under review by the State Department with a final ruling expected by year's end, a timeframe that the White House cited this week in calling the House bill "unnecessary" (E&ENews PM, July 25).

Rep. Henry Waxman of California, the Energy and Commerce Committee's top Democrat, said yesterday that he has not "heard any interest in the Senate" in the XL bill, adding: "I think this is one of those bills that passes the committee and the House floor, and I hope that's the end of it."

Off Capitol Hill, however, the pipeline bill attracted intense interest from both sides in the escalating political battle over the project.

Green groups bitterly opposed to the XL link are locking arms with some local landowners and activists in the six states that the pipeline would cross en route from the Canadian oil sands to the Gulf Coast. Those critics argue that Keystone XL's potential to double U.S. imports of oil-sands crude would lead to a surge in greenhouse gas emissions while putting extra stress on federal safety regulators after a year marked by high-profile pipeline ruptures in Montana and Michigan.

Oil industry and other business groups hotly dispute those contentions, touting the pipeline's power to create thousands of jobs and provide a steady supply of fuel from a friendly ally to displace foreign oil imports. Their case was simple: The State Department's review has lasted for more than two years and should be wound down by Nov. 1, the deadline selected by the House bill's sponsors.

"Adding Canada's oil sands resources to U.S. reserves, North America is now the strongest growing non-[Organization of Petroleum Exporting Countries] region for oil production," American Petroleum Institute (API) Vice President Marty Durbin said in a statement. "It's puzzling, therefore to see our government urging OPEC to produce more crude and tapping our emergency supply from the Strategic Petroleum Reserve while delaying this critical pipeline."

Joining API in hailing the House bill were the National Association of Manufacturers and the U.S. Chamber of Commerce, both of which ranked it as a "key vote" for their annual lawmaker scorecards.

Conservationists, meanwhile, joined liberal Democrats in blasting the bill as a giveaway to oil companies that would benefit from the pipeline.

"This pipeline legislation, which would threaten the environment and jeopardize the health and safety of surrounding communities, is just the latest in a series of reckless bills being pushed by Big Oil and its allies in Congress," Tiernan Sittenfeld, vice president for government affairs at the League of Conservation Voters, said in a statement.

The Sierra Club, Friends of the Earth, and the Natural Resources Defense Council called the bill "a reckless and politically tainted ploy" in a joint statement.

During floor debate, Democrats cited this month's Yellowstone River pipeline break in Montana in urging a rejection of any fast-track process for Keystone XL's permit bid. Rep. Anna Eshoo (D-Calif.) unsuccessfully tried to amend the bill to require a study by federal pipeline safety regulators of specific challenges involving the transport of Canadian oil-sands crude.

"This approach makes sense because it's far less costly to build pipelines correctly than to try to fix or replace a line that's already built," Eshoo said. "Let's protect lives, money and property, and take the proper precautions now."

One Democratic amendment supportive of increased oil-sands imports from Canada, offered by Rep. Sheila Jackson-Lee of Texas, was accepted by voice vote.

Republicans countered opposition by warning that the economic benefits of the project could slip through Americans' fingers if the Obama administration does not approve the XL link by year's end.

"If we don't build this pipeline, Canada will find another buyer," Energy and Commerce Chairman Fred Upton (R-Mich.) said in a floor speech ahead of the vote. "Are we going to stand by and watch China receive imports from our ally while we are forced to rely on imports from unstable countries? I sure hope not."

The Michigander, whose district was affected by a pipeline rupture that spilled an estimated 800,000 gallons of crude one year ago this week, vowed to pursue stronger federal safety rules while also pushing for Keystone XL's construction. To that end, a subpanel of the Energy and Commerce Committee today will begin marking up legislation to strengthen the oversight authority of the Pipeline and Hazardous Materials Safety Administration (E&E Daily, July 22).

In his floor remarks, Upton also quoted a 2010 study prepared for the Energy Department as stating that the XL link would "essentially eliminate" oil imports from the Middle East. In fact, the report in question drew a more measured conclusion, stating that "a combination of increased Canadian crude imports and reduced U.S. product demand could essentially eliminate Middle East crude imports longer term."

Reporter John McArdle contributed.