Obama touts faster southern Keystone; GOP calls it a political ploy

President Obama on Thursday unveiled new a permitting process he said would speed up the construction of the Keystone XL pipeline’s southern leg as he sought to tamp down GOP attacks amid rising gasoline prices.

In the pipeline hub of Cushing, Okla., where the southern part of Keystone XL would start, Obama said he issued an executive order outlining new processes for expediting pipelines, roads, transmission lines and other projects. With the order he also issued a memo directing U.S. agencies to speed up approval of federal permits for the southern leg from Cushing to the Gulf Coast refineries.

“I’m directing my administration to cut through the red tape, break through the bureaucratic hurdles and make this project a priority,” Obama said.

Calgary, Canada-based TransCanada Corp. seeks to build the southern leg while it reapplies for a presidential permit for the border-crossing northern portion that would bring oil-sands crude from Alberta. The company split the project in two after the Obama administration rejected a cross-border permit in January.

TransCanada spokesman Shawn Howard said in an email the president’s action “is a step forward in allowing us to construct the Gulf Coast Project.” Even with Obama’s executive order, he said TransCanada expects the southern segment to come online by mid- to late 2013, similar to the company’s original timeline.

But the southern portion wouldn’t need the presidential cross-border permit. TransCanada said it would need to obtain federal Army Corps of Engineers permits for crossing bodies of water.

In Washington, Republicans noted that presidential permit approval wasn’t needed for the southern leg in calling Obama’s Cushing speech a political ploy meant to take credit for a pipeline segment he doesn’t control. They argue he’s blocking the pipeline segment that actually would bring 700,000 barrels a day from Canada and 100,000 or more barrels from North Dakota to the Gulf.

“Somehow he calls that expediting energy production in this country,” said Sen. John Hoeven, R-N.D.

Rep. Lee Terry, R-Neb., noted that TransCanada planned to build the southern part anyway if the cross-border permit was rejected. “The fact that the president says, ‘I approve,’ he had nothing to approve,” he said in an interview.

White House spokesman Jay Carney responded that Republicans were trying “to find some other reason to criticize [Obama].” Carney said he believed Obama’s executive order “will have an impact” by reducing bureaucratic red tape with the non-presidential federal permits.

The White House also notes the southern segment would help relieve Cushing’s pipeline bottleneck that has created a supply glut and caused Midwestern crude to trade at a discount.

Republicans have bashed Obama for his administration’s rejection of the cross-border permit, especially as gasoline prices have risen. Obama has responded that no “short-term silver bullets” exist for gasoline prices and has called for and “all-of-the-above” strategy.

Analysts say there’s little lawmakers and presidents of either party can do in the short term to control prices at the pump, which are set mostly by crude-oil prices on global markets.

Republicans vowed to keep pushing legislation to authorize the pipeline, circumventing any presidential role. They touted a new Gallup poll showing 57 percent of Americans support building Keystone XL, underscoring the political pressure on Obama.

But many environmentalists, who make up a big Democratic Party voting group, oppose building the pipeline at all, saying it poses a pollution threat and carries a dirty form of oil.

“This wrongheaded decision will do nothing to lower gas prices and only helps the richest oil companies get richer,” Michael Brune, executive director of the Sierra Club, said in a statement.

Obama and the State Department, which handles the presidential cross-border permit under a 2004 executive order, insist the cross-border permit wasn’t rejected on the merits. Obama blamed the GOP for inserting a Feb. 21 decision deadline into the December payroll-tax law, not allowing enough time to study new routes avoiding environmentally sensitive areas of Nebraska.

While Republicans claim their measure carved out a separate timetable allowing Nebraska to find its new route, Democrats say it’s wrong to issue a permit before the route is known.

“The northern portion of it we’re going to have to review properly to make sure that the health and the safety of the American people are protected,” said Obama, who has welcomed TransCanada to reapply for the cross-border permit

TransCanada’s Howard said Nebraska still hasn’t finalized the new route and will have to take legislative and administrative actions to do so. He said the new route “does avoid the Nebraska Sandhills,” the fragile area in the original route and close to the water table of an giant aquifer.

Republicans said they planned to insert legislation from Terry that approves Keystone XL into transportation legislation in the House. The House already has passed a series of provisions tying expanded oil and gas production and Keystone XL’s approval to a transportation bill, but that legislation is dead on arrival in the Senate and Republicans have decided to rework it.

A bipartisan transportation bill has already passed in the Senate. The body narrowly voted down an effort by Hoeven and other Republicans to amend that chamber’s legislation with Keystone XL language. But Republicans were enraged that Obama personally called Democratic senators to ask them to vote against it, saying his lobbying may have made the difference in the final vote.

Terry said in the Wednesday interview he was in talks with leadership to insert his Keystone XL language into the House GOP’s new transportation bill. Because Congress faces a March 31 deadline to pass a transportation bill into law, the House GOP is considering a three-month stopgap to provide time to rework the legislation.

The GOP could use the stopgap for the Keystone legislation, Terry said.

“We plan on sending it back to the Senate with Keystone in it,” Terry said.

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About The Author

Puneet Kollipara covers politics and the energy business from the Washington, D.C., bureau of the Houston Chronicle and Hearst. He holds a bachelor's degree in economics and physics from Washington University in St. Louis. Follow him on Twitter: @pkollipara