4. OIL AND GAS:

Democratic split over Keystone XL deepens

Published:

Democratic division over a controversial Canada-to-U.S. oil pipeline today grew deeper, as 22 House members from President Obama's party urged him to OK the project while one of its critics in the Senate Democratic caucus prepared to meet with State Department officials on multiple questions surrounding the pipeline.

The contrast between the House-side letter, signed by several lawmakers whose seats could be in jeopardy in 2012, and the concerns raised by more liberal Democratic caucus members such as Sen. Bernie Sanders (I-Vt.) underscores the dilemma facing Obama as his administration enters the last lap of review for the Keystone XL pipeline. Approving the $7 billion project would infuriate greens and could depress election-year turnout by liberal voters but rejecting a permit for the XL link risks hurting U.S.-Canada relations and alienating potential allies in the GOP and the business world.

In their letter of support, the 22 House Democrats cited job-creation projections from the pipeline -- which would carry upward of 800,000 daily barrels of emissions-intensive Canadian oil-sands crude to Gulf Coast refineries, if approved -- that were generated by a consultant for Keystone XL's sponsor, Alberta-based TransCanada Corp.

"With job growth an ongoing struggle for our country, the proposed Keystone XL pipeline represents a true shovel-ready project that would directly create 20,000 high-quality domestic manufacturing and construction jobs for Americans who are desperately seeking employment," wrote the House Democrats, led by Rep. Gene Green of Texas.

Green, who represents the Houston area, is a reliable ally of the oil and gas industry and is not considered politically vulnerable next year. But several targeted Democrats did sign it, including Reps. Jason Altmire and Mark Critz of Pennsylvania, John Barrow of Georgia, Leonard Boswell of Iowa, Jim Costa of California, Jim Matheson of Utah, Bill Owens of New York and Collin Peterson of Minnesota.

Environmentalists opposed to the project have blasted the jobs estimates cited in the Democrats' letter as inflated by industry to bolster its case for the 1,700-mile XL link, a major priority for refiners as well as pipeline operators seeking to harness Canada's ample supply of oil sands fuel. The battle over job creation came to a head at a public meeting earlier this month hosted by State, where an assessment of the pipeline's broader effects is now under way following the August release of an environmental review (Greenwire, Oct. 7).

That environmental review, and some of State's public meetings on the pipeline, was conducted with the aid of a contractor chosen following input by TransCanada, lending new momentum to conservation groups' charges of a conflict of interest at the department (Greenwire, Oct. 10). Sanders led a letter echoing those partiality concerns, sent Friday and co-signed by Sens. Patrick Leahy (D-Vt.) and Ron Wyden (D-Ore.), but his sitdown today with State officials touched on issues beyond the TransCanada-linked contractor.

Sanders' meeting today with Kerri-Ann Jones, assistant secretary of State for oceans, environment and science, focused on the conflict-of-interest questions raised in last week's letter as well as other, broader concerns about the safety and environmental impact of the pipeline, according to his office.

Click here to read the House Democrats' letter.