KEYSTONE XL:

Pipeline builder refuses to join GOP victory dance after transportation vote

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To hear House Republicans tell it, yesterday's 293-127 vote for a short-term transportation bill stands as a "veto-proof majority" in favor of overriding the White House rejection of the Keystone XL pipeline on the same day that the project's sponsors settled on a new path through the flashpoint state of Nebraska.

But despite the GOP's victory lap, the $7 billion bid to nearly double U.S. import capacity for Canadian oil sands crude remains short of an official new route in Nebraska and shy of the 60-vote Senate majority that could give the House a leg up in pushing for the pipeline to stay attached to the transportation measure.

Asked if the House proposal to shift jurisdiction over Keystone XL to the Federal Energy Regulatory Commission could add a new wrinkle to its work on a route that skirts the Nebraska Sandhills -- a key hurdle to clear before the State Department can reconsider the pipeline -- a spokesman for project sponsor TransCanada Corp. distanced the company from the congressional action.

"There is a political process that's unfolding, but we're an energy infrastructure company," Shawn Howard of TransCanada said yesterday. "We're not partisan on the other process going on right now."

TransCanada is focused on constructing the Oklahoma-to-Texas leg of Keystone XL that is backed by President Obama and on readying an application for a new Nebraska route based on the multiple options submitted to state environmental regulators yesterday, Howard added.

While Speaker John Boehner (R-Ohio) referred to "a new route submitted" in the Cornhusker State, Howard clarified that the Alberta-based company has yet to decide which of the potential Nebraska paths it plans to submit for final approval.

On Capitol Hill, environmentalist critics of the pipeline's promised boom in emissions-heavy oil sands crude saw little to fear in the 69 Democrats who backed the House's transportation bill.

"Everyone knows this was a placeholder" to move the two chambers into conference talks on transportation, National Wildlife Federation Senior Vice President Jeremy Symons said of the vote. "We have not seen signs of a single member of Congress changing their position on the Keystone XL pipeline. Everyone who tells you different is just giving you political spin."

While yesterday's transportation-Keystone XL hybrid bill drew 22 more Democrats than a stand-alone plan to fast-track the pipeline did last year, the GOP's fourth bid in nine months to support Canadian oil also lost the votes of six House Democrats who backed it in 2011: Reps. John Dingell of Michigan; Charles Gonzalez, Ruben Hinojosa and Silvestre Reyes of Texas; Gary Ackerman of New York; and Pete Visclosky of Indiana.

Battleground Senate

But with House Republican negotiators on the transportation bill eager to support Keystone XL, the upper chamber is likely to become the more pivotal battleground for the pipeline's supporters heading into a fight all but assured of lasting throughout campaign season.

Eleven Senate Democrats last month joined Republicans in agreeing to override Obama's rejection of the pipeline, leaving the GOP as few as two votes away from a filibuster-proof majority and emboldening advocates for keeping Keystone XL in a final transportation agreement (E&ENews PM, March 8).

Neil Brown, a senior adviser to vocal pipeline backer Sen. Richard Lugar (R-Ind.), also pointed to vows from the White House and congressional Democrats that a 60-day deadline for Obama to rule on Keystone XL would not stay attached to a payroll tax-cut extension that kept Congress in session deep into December.

"The highway bill is also a must-pass bill," Brown observed in an interview, "so the Democratic leadership in Congress and the president could very well face a situation where they would have to cut funding that keeps our roads operational ... because they're so set against the energy security and jobs of Keystone."

Beyond the energy-security and job-creation cases that pipeline advocates cite in pressing for the XL line's speedy construction, the impact of new Canadian crude supply on record-high gasoline costs is frequently invoked by Republicans as a reason to speed up the project. Greens and Democratic critics, by contrast, warn that the pipeline risks driving up pump prices while posing an environmental threat.

In lauding the House vote yesterday, the American Petroleum Institute (API) suggested that Keystone XL supporters could begin dialing back rhetorical links between the pipeline's approval and a decrease in near-term gas prices. Given that existing capacity for Canadian oil sands crude is not expected to run out before 2015 at the earliest, the project is unlikely to have a significant effect on the current gas price spike.

"Approving the full Keystone XL pipeline would send a strong signal to the American people and to global markets that the U.S. is serious about providing reliable, secure supplies of energy that could help put downward pressure on fuel prices," API Executive Vice President Marty Durbin said in a statement yesterday. "Bringing more stable supplies of Canadian oil to the market via KXL makes absolute sense and in the long term may help consumers at the pump."