OIL AND GAS:

House GOP offers bill to spur approval of oil sands pipeline

House Republicans are ramping up their push for a $7 billion U.S.-Canada oil pipeline with a new measure that prods the Obama administration to quickly approve the controversial project.

A discussion draft of legislation set for a hearing Monday in Energy and Commerce Committee would require the secretary of Energy to corral the other agencies in charge of issuing a final decision on Keystone XL, a 1,700-mile pipeline strongly opposed by liberals and green groups. The goal would be "a final order granting or denying" the pipeline a permit no later than Nov. 1, according to the draft bill.

The movement at Energy and Commerce opens a new front of battle between its chairman, Rep. Fred Upton (R-Mich.), and environmentalists. Greens have slammed Upton since 2011 began for pressing ahead with oil-centric projects such as Keystone XL while moving more slowly on pipeline safety despite a July rupture that sent an estimated 800,000 gallons of crude into a waterway running through his district (E&E Daily, Jan. 25).

"Chairman Upton needs to get his facts straight," Kate Colarulli, associate director of the Sierra Club's Beyond Oil campaign, said of the committee's new pipeline bill. "Less than one year ago, his constituents experienced the worst pipeline spill in Midwest history, spewing nearly one million gallons of dirty tar sands into the Kalamazoo River and endangering Lake Michigan. His push for the Keystone XL pipeline is reckless and irresponsible."

The politics of the Keystone XL fight are similar in many ways to those driving Upton's still-active bid to block U.S. EPA greenhouse gas emissions limits. The crop of centrist Democrats backing the pipeline's construction -- including Sens. Mary Landrieu (La.) and Max Baucus (Mont.) and Reps. Dan Boren (Okla.) and Nick Rahall (W.Va.) -- features many of the same lawmakers that joined Republicans in pressing to stop or slow-walk EPA emissions action.

But in line with Secretary of State Hillary Rodham Clinton's October remarks last fall indicating openness to the project are other, more liberal Democrats who have not embraced green groups' calculus for rejecting the project. In that camp last month were Reps. Eliot Engel (D-N.Y.) and Albio Sires (D-N.J.), both of whom appeared open to supporting Keystone XL at a House Foreign Relations Committee hearing.

Sires said then that he "was concerned, I must admit at first, by the environmental impact" of the pipeline, which would nearly double U.S. imports of crude from the western Canadian oil sands if it wins State Department approval. After examining the economic case for the line, however, the New Jersey representative deemed that "this is something good for Canada and good for the United States" (E&E Daily, April 1).

Environmentalists' case against Keystone XL involves several issues, from the larger greenhouse gas footprint of oil sands crude to the line's potential safety risk to wildlife and local residents in case of a leak. The project sponsor, Calgary, Alberta-based TransCanada Corp., and its backers in industry and Congress tout the pipeline's job-creation value and its ability to displace Middle Eastern oil imports with Canadian product.

The discussion draft unveiled by Energy and Commerce, in addition to tapping the Energy Department leader to steer interagency talks over Keystone XL's permit bid, contains a lengthy series of findings that outline arguments in favor of approving the pipeline.

One section of the draft bill deems that "the development and delivery of oil and gas from Canada to the United States is in the national interest" in order to mitigate the need for "increases in other foreign supplies, notably from the Middle East." The draft also echoes talking points in favor of the pipeline by depicting a choice before "Canadian oil exporters" between routing set-to-rise amounts of oil sands crude to "the United States or Asia, led by China."

Click here to read a copy of the panel's Keystone XL discussion draft.

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