9. KEYSTONE XL:

Reid says he'll consider pipeline if crude is not exported

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Senate Majority Leader Harry Reid (D-Nev.) yesterday linked his opposition to the Keystone XL pipeline to the potential that other countries could benefit from the crude it carries, intensifying his party's association with the anti-export message being used against the controversial project.

Reid wrote a letter to the Obama administration last fall that slammed the $7 billion pipeline as "increasing our dependency on unsustainable supplies of dirty and polluting oil that could easily be exported." In remarks to reporters yesterday, he vowed to oppose any fast-tracking of the XL link unless "the oil is not sold to other countries."

If Republican proponents of a bill that would override President Obama's veto of the 1,700-mile project can ensure that its fuel supplies would remain in the United States, Reid added, "then I'll take a look at it."

The refining industry is beginning to push back against Democratic condemnation of Keystone XL as a giveaway to oil companies seeking new export markets for the Canadian and Midwestern crude that it would carry. With Republicans and Democrats claiming that the politically volatile pipeline would have the opposite effect on pump prices -- the GOP vowing cheaper gas, Democrats predicting an increase -- the export message is one that could resonate with voter concern about high U.S. gas prices in the run-up to the summer driving season (Greenwire, Jan. 31).

Republicans continue to push for the pipeline as an add-on to the two most high-priority bills moving through Congress, a new long-term transportation bill and payroll tax cuts (see related story). That effort only adds to the pressure on Reid to keep Keystone XL, bitterly opposed by greens due to the heavy emissions of its Canadian crude, on the sidelines in his chamber.

House Minority Whip Steny Hoyer (D-Md.) yesterday exemplified the downside risk to Democrats of more pipeline debate, telling reporters that he believes the project "has merit" even as he warned that any attempt to "jam the president" on the XL link would alienate his party (E&ENews PM, Jan. 31).