KEYSTONE PIPE OUTLOOK NO BRIGHTER AFTER SENATE VOTE

 
 Keystone XL Pipeline fight intensifies

By Timothy Gardner / December 18, 2011

(Reuters) - Senate Republicans claimed victory on Saturday for a bill that may force President Barack Obama to make a speedier decision on a Canada to Texas oil pipeline, but a White House official indicated quick approval of the project is not likely.

The two-month payroll tax break extension bill passed by the Senate on Saturday included language that would make Obama decide within 60 days whether TransCanada Corp's 700,000 barrel-a-day Keystone XL oil sands pipeline is in the country's national interest.

But the U.S. State Department, which must approve the cross-border project, has said it will not be rushed into a decision before it has time to consider the environmental impact of alternative routes. That could leave Obama room to approve the project in principle but still keep construction at bay.

"This bill will stop President Obama's delaying tactics," said Senator Richard Lugar, who had introduced the measure to speed up a decision on the pipeline. "This is a tremendous victory for our security and for creating jobs."

The State Department in November delayed a decision on the line until after the 2012 presidential election, citing the need to study alternative routes in Nebraska where the proposed route would cross one of the country's largest aquifers.

An Obama administration official who briefed reporters said the State Department would "almost certainly" have to turn down an approval because there would not be enough time to complete its review of alternate pipeline routes through Nebraska's fragile Sand Hills region.

An energy policy analyst said the State Department's November ruling could be a large factor in Obama's decision.

"The foundation for plausible deniability has been laid already," said Kevin Book, an analyst at ClearView Energy Partners in Washington.

"The Obama administration has already said they won't be rushed, but they don't have to rush to say no, either."

Even if Obama ended up approving the line, it would not survive the court process, Daniel Weiss, of the Center for American Progress, said on Friday.

If Obama decides against the line before the election, he could face criticism from Republicans in the campaign that he gave up an opportunity to provide thousands of jobs.

And if the price of oil is high next summer, he could also face criticism that he did not do enough to fight energy prices. But environmentalists are part of Obama's political base and activists say oil sands petroleum emits more greenhouse gases than average crude oils.

Russ Girling, TransCanada's president and chief executive, said on Saturday his company would do whatever is necessary if the bill is passed and the 60-day deadline comes into effect to make sure the project is approved. The Republican-led House of Representatives is expected to vote on the bill early next week.

"We will continue to focus our efforts on collaborating with Nebraska's Department of Environmental Quality, the state and the federal State Department on an alternative route that avoids Nebraska's Sand Hills," Girling said in a release.

Environmentalists also geared up for a battle. "We're of course ready to fight like heck," Bill McKibben, who led protests at the White House in November, said in a note to supporters on Saturday.

(Editing by Todd Eastham)

GOP RAMS PAYROLL TAX CUTS EXTENSION, KEYSTONE XL PIPELINE THROUGH HOUSE

Published December 13, 2011

| Associated Press

December 13, 2011: House Speaker John Boehner of Ohio, 
center, accompanied by fellow Republican leaders, meets with 
reporters on Capitol Hill in Washington. (AP)
 

WASHINGTON –  Defiant Republicans pushed legislation through the House Tuesday night that would keep alive Social Security payroll tax cuts for some 160 million Americans at President Barack Obama's request -- but also would require construction of a Canada-to-Texas oil pipeline that has sparked a White House veto threat.

Passage, on a largely party-line vote of 234-193, sent the measure toward its certain demise in the Democratic-controlled Senate, triggering the final partisan showdown of a remarkably quarrelsome year of divided government.

The legislation "extends the payroll tax relief, extends and reforms unemployment insurance and protects Social Security -- without job-killing tax hikes," Republican House Speaker John Boehner declared after the measure had cleared.

Referring to the controversy over the Keystone XL pipeline, he added, "Our bill includes sensible, bipartisan measures to help the private sector create jobs."

On a long day of finger pointing, however, House Democrats accused Republicans of protecting "millionaires and billionaires, `' and Senate Majority Leader Harry Reid, D-Nev., derided the GOP-backed pipeline provision as "ideological candy" for the tea party-set.

After the House vote, the White House urged Congress on in finishing work on extending the tax cuts and jobless aid. Press Secretary Jay Carney issued a statement that didn't mention the pipeline but renewed Obama's insistence that the legislation be paid for, at least in part, by "asking the wealthiest Americans to pay their fair share" in higher tax levies.

Lawmakers "cannot go on vacation before agreeing to prevent a tax hike on 160 million Americans and extending unemployment insurance," he said.
 

Republicans mocked Obama's objections to their version of the bill.

"Mr. President, we can't wait," said House Majority Leader Eric Cantor of Virginia, employing a refrain the White House often uses to criticize Republicans for failing to take steps to improve an economy struggling to recover from the worst recession in decades.

Voting in favor of the legislation were 224 Republicans and 10 Democrats, while 179 Democrats and 14 Republicans opposed it.

At its core, the measure did include key parts of the jobs program that Obama asked Congress to approve in September.

The Social Security payroll tax cuts approved a year ago to help stimulate the economy would be extended through 2012, avoiding a loss of take-home income for wage-earners. An expiring program of unemployment benefits for the long-term jobless would remain in place, although at reduced levels that the administration said would cut off aid for 3.3 million.

A third major component would avert a threatened 27 percent cut in payments to doctors who treat Medicare patients, a provision Republicans added to appeal to conservatives but one that the White House and Democrats embrace, too.

While the tax and unemployment provisions were less generous than Obama sought, he and Republicans clashed principally over steps to cover the estimated $180 billion cost of the measure, and on the proposed 1,700-mile Keystone XL oil pipeline from Canada through environmentally sensitive terrain in Nebraska to the Texas Gulf Coast.

Obama recently delayed a decision on granting a permit for the pipeline until after the 2012 election.

The payroll tax legislation was one of three major bills that Congress was struggling to finish before adjourning for the year, and by far the most contentious.

A measure covering Pentagon spending was ready for passage, and, separately, negotiators said they were close to a deal on a $1 trillion measure to fund most government agencies through the end of the budget year.

That deal was in limbo, though, with Obama and congressional Democrats using it as leverage to keep House Republicans at the table negotiating a final compromise on the tax and unemployment measure.

It was the final showdown of a year that once brought the government to the brink of a shutdown and also pushed the Treasury to the cusp of a first-ever default.

Those confrontations produced last-minute compromises.This time, leaders in both parties stressed a desire to renew the unemployment tax cuts and jobless benefits that are at the core of Obama's jobs program.

Obama and most Democrats favor an income surtax on million-dollar earners to pay for extending the Social Security tax cut, but Republicans oppose that, saying it is a violation of their pledge not to raise taxes.

Republicans drew attention at every turn to the pipeline, which is backed by some lawmakers in the president's party as well as by the blue-collar unions representing plumbers, pipefitters, electricians, carpenters and construction workers.

Estimates of the jobs that would be produced by pipeline construction vary widely but are in the thousands in a time of high national unemployment. The State Department estimated the total at about 6,000; project manager TransCanada put it at 20,000 directly, and Rep. Dave Camp, R-Mich., said in debate on the House floor it was more than 100,000.

Rep. Eliot Engel, a New York Democrat, said he had an open mind about the pipeline but also said it had no legitimate role in the payroll tax bill. Republicans argued otherwise.
Rep. Fred Upton of Michigan, the chairman of the House Energy and Commerce Committee, said the pipeline's construction would allow Canada to send one million barrels of oil a day into the United States, lessening domestic reliance on imports.

He said Canadian development of a pipeline is a certainty, and lawmakers needed to decide whether they wanted it to end up in the United States or "someplace like China."