House panel clears Keystone XL bill, setting up showdown

A GOP-controlled House committee easily cleared a bill Tuesday that would approve the Keystone XL oil pipeline, sending it to the House floor where Republicans will try to wrap it into other legislation.

The House Energy and Commerce Committee approved the bill 33 to 20, with all but one Republican supporting it and three Democrats joining them. The controversial legislation from Rep. Lee Terry, R-Neb., would strip State Department powers over the border-crossing pipeline and instead require the Federal Energy Regulatory Commission to approve the pipeline.

The passage of Terry’s bill came as part of aggressive Republican-fronted efforts to circumvent the Obama administration’s denial of a permit on Jan. 18 for Keystone XL, TransCanada Corp.’s proposed tar-sands oil pipeline from Canada to Gulf Coast refineries. GOP leaders are considering multiple bills where they could insert Terry’s bill, including legislation extending the payroll tax cut through the end of the year and the House’s five-year bill reauthorizing surface-transportation programs.

On the Senate side, Sen. Orrin Hatch, R-Utah, had planned to offer a Keystone XL approval amendment to the Senate’s two-year surface-transportation bill during a Senate Finance Committee meeting today. But he withdrew it after Chairman Max Baucus, D-Mont., a Keystone XL backer, said the amendment wasn’t germane to the committee’s work and it would “take down” the bill if included.

“But it isn’t going away,” said Hatch, ranking member on the Senate Finance Committee. “We’re going to have to vote on this sooner or later, in ways that hopefully will bring us together and get us doing what’s in the best interest of our country.”

Ongoing resistance among Democrats to the GOP legislation underscores the ongoing challenge Republicans face in trying to win Keystone XL’s approval without bringing down key legislation. Some Democratic Keystone XL backers, including Reps. Gene Green of Houston and Charlie Gonzalez of San Antonio, voted against Terry’s bill.

“When the president is opposing it, it’s not going to be easy,” Sen. John Cornyn, R-Texas, told reporters in the Capitol. “But I think the public has said they want the jobs and they want the safe and secure supply of energy that, if we don’t buy it, will be sold to China.”

The State Department has said it didn’t reject the permit on the project’s merits, and TransCanada has said it will reapply. Rather, the department has said a Feb. 21 decision deadline, included by Republicans in December’s payroll-tax law, didn’t allow time to study a new route — which Nebraska has yet to even propose — around environmentally sensitive areas in that state.

Democrats said Tuesday President Obama made the right decision in saying more time was needed for due diligence. Republicans said Terry’s bill would remove the White House from exerting what they characterize as undue political influence over the decision process.

“This bill takes the opposite approach,” Rep. Henry Waxman, D-Calif., top Democrat on the Energy and Commerce Committee, said in prepared remarks attacking Terry’s bill. “It gives the pipeline an unprecedented regulatory earmark.”

Democrats also have called the bill a power grab, saying FERC doesn’t have the experience or authority siting oil pipelines. They have seized on congressional testimony from officials with the Army Corps of Engineers and Bureau of Land Management, who said last week the bill would strip their agencies of their oversight powers concerning waters and federal lands where Keystone XL would run.

Republicans tweaked Terry’s bill in seeking to address the BLM and Army Corps’ concerns. Democrats nonetheless kept attacking other aspects of the bill.

The energy security aspect of Keystone XL came center-stage on Tuesday as Rep. Ed Markey, D-Mass., top Democrat on the House Natural Resources Committee, tried to amend Terry’s bill with Democratic legislation to require the oil and refined products from Keystone XL to stay in the United States.

The amendment was defeated on a party-line vote, as were a series of other Democratic amendments, some of which would have watered down Terry’s proposal.

Democratic and environmentalist pipeline opponents have long argued that Keystone XL not only wouldn’t boost oil imports from Canada but also would reroute already-imported Canadian oil in the Midwest to the Gulf Coast for possible export.

“This argument is nothing more than red herring,” Rep. Ed Whitfield, R-Ky., chairman of the Energy and Power Subcommittee, said Tuesday in prepared remarks.

The American Petroleum Institute, an oil-and-gas lobbying group, has likened Markey’s bill to “a North Korean-style model of economics” and said that most of the Keystone XL oil will be used domestically but market forces should determine where any excess goes.

But the export issue nonetheless stands to complicate GOP efforts to win Keystone XL in any deal with the Senate. Majority Leader Harry Reid, D-Nev., has repeatedly said he wouldn’t consider supporting Keystone XL-approval legislation unless it has language requiring the oil stay here in the U.S.

Republicans seized on Canadian Prime Minister Stephen Harper’s visit to China on Tuesday to continue arguing their case for the pipeline, contending that the Chinese would try to ask the Canadians to sell them the oil from the tar sands in Alberta.

Sen. John Barrasso, R-Wyo., made that argument in signaling that the GOP would still push Keystone XL in negotiations on legislation to extend the payroll tax cut through the end of the year. “There’s lots of opportunities here for energy, for jobs and for a solution to the things we’re facing in the conference committee,” Barrasso told reporters in the Capitol.

This post was last updated at 7:24 p.m.