House sends Keystone XL bill to Obama

WASHINGTON _ TransCanada Corp. is bracing for another delay in its six-year quest to build Keystone XL, even as Congress sends legislation authorizing the pipeline to President Barack Obama.

The House’s 270-152 vote to pass the bill Wednesday afternoon sets the stage for Obama’s first veto of the Republican-led Congress — and only his third since taking office.

The threatened veto also means the State Department is set to continue vetting whether the proposed pipeline is in the “national interest” — a review that could involve new market studies analyzing the project in light of low oil prices.

White House spokesmen say Obama plans to veto the measure because it would do an end run around that ongoing State Department review.

Keystone’s backers on Capitol Hill lack the House and Senate votes to override Obama’s veto. But Republicans who made the issue a priority of the new Congress insisted Wednesday it is important to put Obama on record on TransCanada’s pipeline, first proposed six and a half years ago.

“To me this is a pretty simple choice between job creation and greater energy security on one hand or more of the status quo on the other,” said Sen. Lisa Murkowski, R-Alaska.

Republicans say a veto will provide potent political fodder — allowing them to cast Obama as siding with environmentalists over American workers. Although the pipeline is expected to create just a few dozen permanent jobs, TransCanada says thousands of construction workers will be involved in building it.

Rep. Bill Flores, R-Texas, previewed the GOP’s pipeline messaging Wednesday: “President Obama is now faced with a decision to either put the needs and priorities of hardworking American families first or to put Washington insiders and special interests groups ahead of those needs.”

Twenty-nine House Democrats ultimately joined 241 Republicans in voting for the legislation. All Houston-area representatives voted for the bill.

One of them, Houston Democrat Gene Green, conceded the measure was not “perfect.”

“But we need cross-border pipelines, whether it’s Canada to the United States, Texas to Mexico or back,” he said. “We have five refineries in my area alone who will use that Keystone crude oil. There are huge tanks in Channelview, Texas that are ready to get that oil and distribute it to our refineries.”

The House’s action Wednesday came on a bill that passed the Senate last month on a 62-36 vote.

Beyond authorizing Keystone XL, the legislation included Senate-added energy efficiency provisions and an assertion that “climate change is real and not a hoax.”

The measure also included a sense of Congress that diluted bitumen — the product that Keystone XL would ferry out of Alberta — should be subject to an 8-cent per barrel excise tax that feeds into a trust fund that can be tapped to pay for oil spills.

Environmentalists said Keystone XL will unleash oil sands development in Alberta, Canada — and the greenhouse gas emissions tied to it.

In a low oil-price environment, the proposed pipeline is vital to that activity, said Rep. Frank Pallone, D-N.J., echoing concerns raised by the Environmental Protection Agency earlier this month.

“A decision to approve the pipeline could be a significant factor in increased tar sands production and greenhouse gas emissions,” Pallone said. “The Keystone pipeline will create a dependence on Canadian tar sands crude.”

The Environmental Protection Agency last week suggested that plummeting crude prices could boost the importance of Keystone XL to Canadian oil sands developers that face higher costs to ship by rail.

It is not clear whether the State Department will heed the EPA’s advice and spend more time analyzing low oil prices and other market conditions as part of its Keystone XL review.

TransCanada CEO Russ Girling moved to preempt the question Tuesday, sending a letter to the State Department that asserted that the pace of Canadian oil sands development won’t be dictated by a single infrastructure project.

Read more: TransCanada fights EPA’s Keystone claims

And he insisted that the Canadian crude that would flow along with light U.S. oil through Keystone XL emits similar greenhouse gas emissions as the imported Venezuelan and Mexican crudes it is expected to displace in Gulf Coast refineries.

“When you look at the carbon emissions from Canadian crude relative to those competitive crudes that are coming into the U.S. every day, they are very similar, and in some cases, those crudes that are coming from those offshore locations actually have a higher GHG intensity,” Girling said. “So if you’re thinking about it from an incremental perspective, if we’re moving crude into the marketplace that has a similar GHG emissions profile as what we are displacing, there are no incremental emissions generated from that.”

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