3. OIL AND GAS:

Congressional Dems seek answers from State Dept. on pipeline as protester confronts Obama

Published:

The Keystone XL oil pipeline today continued edging closer to President Obama's lap, as he assured a protester that "we will address" frustrations over it and 14 Democratic lawmakers pressed him to delay a final ruling until the completion of a State Department inspector general probe of bias charges related to the $7 billion project.

The Canada-to-U.S. pipeline is coming to haunt the White House with a hard-fought re-election campaign around the corner, thanks in part to environmentalists who have showed up at presidential visits to urge a rejection of the XL link. When a protester today interrupted an Obama appearance in Denver to hoist a banner reading "Stop the Keystone Pipeline Project," the president said his team "will address" opponents' "deep concern," according to reports from the scene.

The encounter came soon after 14 members of the House and Senate Democratic caucuses, led by Sen. Bernie Sanders (I-Vt.) and Reps. Peter Welch (D-Vt.) and Steve Cohen (D-Tenn.), asked the State Department IG's office to investigate alleged conflicts of interest in the departmental evaluation of the 1,700-mile pipeline. Their request advances a web of questions over State's ability to conduct a neutral review of Keystone XL -- a dearly sought priority of the Canadian government, the GOP and the oil industry -- woven and expanded by environmental groups for months (E&E Daily, Oct. 3).

The IG request covered multiple facets of the pipeline foes' case against giving State authority over the XL line, from its selection of an environmental contractor with ties to pipeline sponsor TransCanada Corp. to its officials' friendly email exchanges with lobbyists for that Alberta-based company.

The IG should examine any contacts with pipeline supporters, "which were in any way improper or which indicate any deviation from the State Department's obligation under federal law to provide objective analysis of the pipeline and its potential risks," the Democrats wrote today to acting State IG Harold Geisel.

In a separate letter, the Democrats personally urged the administration to "hold off on any final decision" on a permit for the pipeline until the IG probe is complete. That power to approve the XL link, which would significantly increase U.S. imports of Canadian oil sands crude, currently rests with State but could move to the White House if an ongoing governmental review results in concerns from U.S. EPA or other agencies.

Should such an escalation of the pipeline's federal review occur, the prospects of a final decision emerging before 2012 -- a deadline that State officials have long hoped to meet -- would grow dimmer.

This afternoon, Republicans on the House Energy and Commerce Committee sought to pressure the administration to approve the project quickly, issue a news release with the subject line, "Keystone Kops: Will Obama Administration EVER Make a Decision on Major Job-Creation, Energy-Security Project?" The release outlined the arguments in favor of the pipeline and noted that the House had voted earlier this year to demand administration action on the project by Nov. 1.

Click here to read the Democrats' letter to the State inspector general.

Click here to read the accompanying letter to President Obama.