3. POLITICS:

Fate of pipeline measure up in the air with House, Senate at impasse over payroll tax

Published:

A successful GOP bid to tie the Keystone XL oil pipeline to President Obama's prized payroll tax cut remains in limbo today, as House Republicans and Senate Democrats continue to squabble over the resolution to a year of bitter legislative stalemates.

Speaker John Boehner (R-Ohio) told reporters that he expects the House, in a test vote set for tonight, to reject a Senate-approved stopgap extension of the tax cut that forces the Obama administration to rule on the Canada-to-U.S. XL line within 60 days. That outcome could leave Congress without an agreement before 2012 -- which, in turn, leaves backers of the $7 billion pipeline vulnerable to losing their grip on a victory they celebrated less than three days ago.

American Petroleum Institute (API) Vice President Marty Durbin, whose group has long led pro-Keystone XL lobbying efforts, today described himself as "confident" but not "supremely confident that it's in the bag."

API is not whipping House members on the Senate payroll tax bill, Durbin added in an interview, but is reaching out to lower chamber lawmakers "to make clear how important this [pipeline] provision is."

The fine line that oil industry players must walk on the Keystone XL provision in the Senate bill, which passed Saturday in an overwhelming 89-10 vote, stems in part from the quandary facing Boehner. A public push from pipeline supporters to pass the short-term payroll tax extension could undercut Boehner's attempts to force Senate Majority Leader Harry Reid (D-Nev.) back to the negotiating table in the waning days of the year for talks on a yearlong version of the bill.

Environmentalists who lambasted Democrats' concession on the 60-day deadline for a ruling on the pipeline, which they oppose as an emissions-heavy spur for dependence on Canadian oil sands crude, also do not appear ready to mount any fresh round of pressure to try to push Keystone XL back out of a final deal.

"We want Democratic leaders to keep it out of the bill," said Daniel Kessler, spokesman for the Tar Sands Action coalition of anti-pipeline greens, in an interview. "But if it has to be in the bill, then the president has to deny the permit."

The inclusion of the Keystone XL provision in the Senate-passed tax-cut bill came after Obama "swallowed hard and told us, 'put the pipeline in,'" the third-ranked Senate Democratic leader, Charles Schumer of New York, told MSNBC today.

In response, conservationists who cheered Obama's delay last month in deciding on the project urged the White House to stand by its plans to reject the pipeline on a shortened timeframe. Republicans' strategy, greens warned, would backfire (E&E Daily, Dec. 19).

But Kessler acknowledged that Obama himself has not reiterated that the 60-day deadline for a decision would kill the pipeline, saying that his group "will definitely be looking for that kind of presidential leadership" in the coming days.

Such an unequivocal White House gesture may not be necessary, however, if Boehner and Reid remain at odds on the payroll tax bill this week. The Senate Democratic leader released a statement today vowing that he would "not re-open negotiations" on the tax cut until the House passes the stopgap measure cleared by his chamber Saturday.