2. OIL AND GAS:

Democrats want Koch to testify on KXL financial ties

Published:

Two senior House Democrats today returned to a favorite, politically explosive charge by suggesting that energy conglomerate Koch Industries -- run by the conservative brothers of the same name -- has masked the true extent of its financial interest in the Keystone XL oil pipeline.

The Democratic charge comes two days before a House Energy and Commerce Committee hearing on a Republican plan to override President Obama's rejection of the pipeline and ratchets up a long-running push within their party to cast Koch's founders as pro-oil opponents of the Obama clean-energy agenda. In a letter to Rep. Ed Whitfield (R-Ky.), chairman of the Energy and Commerce subpanel holding Wednesday's hearing, Democratic Reps. Henry Waxman of California and Bobby Rush of Illinois asked that a Koch representative be called as a witness.

Waxman and Rush, respectively, the senior Democrats on the full committee and subpanel, reiterated their previous warnings that Koch sought to downplay the potential financial benefit it could reap from construction of the $7 billion Canada-to-U.S. project. "We believe the growing questions about the impact of the Keystone XL pipeline on Koch should be resolved before any votes are taken on legislation to promote the construction of the pipeline," the duo wrote.

Koch has repeatedly denied having a financial interest in the link between Alberta's oil sands and Gulf Coast refineries, stating last year that it "neither supports nor opposes" the pipeline and noting that environmentalists as well as other businesses joined it in seeking "intervener status" on Keystone XL's Canadian regulatory application (E&ENews PM, Oct. 18, 2011; E&E Daily, May 23, 2011).

Representatives for Koch and Americans for Prosperity, a conservative advocacy group founded by David Koch that has received financial backing from the company, did not immediately return requests for comment on the Democratic charges.

A spokeswoman for House Energy and Commerce Republicans slammed the Democratic letter as “clearly an attempt to distract from the pipeline’s unquestionable benefits and undermine the committee's efforts to move the Keystone XL project forward,” adding that “our efforts to assure this pipeline’s construction are driven by the need to create jobs in a time of record sustained unemployment and improve the nation’s energy security while our enemies threaten to block oil supplies in the Middle East.”

House Republicans announced earlier today that representatives from the Federal Energy Regulatory Commission -- which would be empowered to approve the pipeline under legislation likely to advance through the chamber -- and the Nebraska Department of Environmental Quality are also scheduled to testify in the Energy and Commerce Committee on Wednesday.

Payroll tax fight

The firing of rhetorical shots over Keystone XL comes as House GOP leaders weigh whether to push for a reversal of Obama's pipeline denial during negotiations over a long-term extension of White House-backed payroll tax relief.

Speaker John Boehner (R-Ohio) told Fox News yesterday that "we may" make a green light for the 1,700-mile pipeline -- a top priority of oil, gas and other business interests -- a condition for approving longer-term payroll tax cuts. But both he and Majority Leader Eric Cantor (R-Va.) left room for their XL legislation to advance on a separate track, underscoring the delicate political calculus that surrounds the payroll tax measure.

Cantor declined to weigh in today on whether Keystone XL should be tied to the issue when asked by Fox. "I don't want to make their job more difficult," Cantor said, referring to his party's negotiators with the Senate on a final version of the payroll tax-cut plan.

Click here to read the Democrats' letter to Whitfield.