Keystone XL Fight Revs Up In Congress, But A Veto Seems Inevitable -- And Sustainable

U.S. lawmakers this week are advancing a pair of new bills aimed at pressuring President Barack Obama to greenlight the controversial Keystone XL oil pipeline. The measures are expected to easily pass the Republican-controlled House and Senate, though the president has vowed to reject any legislation that lands on his desk.

Sens. John Hoeven, R-N.D., and Joe Manchin, D-W.V., introduced a bill Tuesday to approve the $8 billion project. The Senate Energy and Natural Resources Committee will hold a hearing on the measure Wednesday and vote the next day. The House is set to hold a floor vote Friday on a similar pipeline approval bill.

“We have everything to gain by building this pipeline, especially since it would help create thousands of jobs right here at home and limit our dependence on foreign oil,” Manchin said at a Tuesday press conference.

The legislative moves come less than two months after a similar bill narrowly failed in the Senate, which was then controlled by Democrats. Yet while politicians wrangle over the pipeline in Washington, the necessity of the Keystone XL for average Americans continues to be undermined by the surge in U.S. shale oil production and plummeting global crude prices, which together have pushed down U.S. gasoline prices and bolstered consumer spending.

"The relevance of the Keystone XL pipeline to U.S. consumers is pretty minimal," Sandy Fielden, director of energy analytics at RBN Energy in Austin, Texas, said.

The Keystone XL would haul some 830,000 barrels of crude oil a day from Canada’s oil sands region to Nebraska, where the pipeline would connect with existing lines to refineries on the Texas Gulf Coast. When completed, it would span 1,700 miles and cross through six U.S. states and two Canadian provinces.

The Obama administration has been reviewing TransCanada Corp.’s Keystone XL proposal for more than six years. Because the project crosses an international border, the U.S. State Department must determine if the project serves America’s interests. The permitting process has been repeatedly delayed, in part because of concerns that the pipeline would jeopardize large aquifers and farmlands if any of the viscous heavy Canadian crude leaked or spilled.

Environmental groups have sought to block the project because they say it would spark a boom in Canadian oil sands development and unleash millions of tons of greenhouse gas emissions as a result. Proponents argue that the pipeline would create quality construction jobs, bolster local governments' tax revenues and increase U.S. access to Canadian oil, supplanting America’s need to import expensive crude from the Middle East.

But with rising U.S. crude production and oil prices plummeting below $50 a barrel, the energy landscape has shifted dramatically since TransCanada first proposed the project. American oil production was up by more than 70 percent in 2014 compared to 2008, thanks to advanced drilling technologies such as fracking. As a result, the U.S. imported roughly 20 percent less foreign crude oil in 2013 versus six years ago, and rising efficiency in cars and trucks is slowly chipping away at the nation's energy demand growth.

"American consumers in this whole discussion have never really had much of a stake in the game," Kenneth Medlock, the senior director of the Center for Energy Studies at Rice University's Baker Institute in Houston, said about the Keystone XL.

The pipeline, rather, is primarily intended to serve Canadian oil sands producers, who have been shipping their crude by expensive railcars in the absence of more efficient pipeline infrastructure. For those companies, the Keystone XL "still makes a lot of sense. If you build the pipeline, you actually improve the economics for Canadian oil sands production," he said.

The latest pro-Keystone measures in the House and Senate wouldn’t guarantee that the project gets built. Instead, the bills will raise political pressure on Obama and force him to confront the issue.

A White House spokesman indicated that Obama would veto the new legislation if it reached his office. “I can confirm that the president would not sign this bill,” Josh Earnest told reporters at a Tuesday press briefing in response to questions about the latest proposals. “We indicated that the President would veto similar legislation considered by the previous Congress, and our position on this hasn’t changed.”

The House vote on Friday will mark the 10th time since 2011 that the chamber has passed a measure to approve the Keystone XL. House Speaker John Boehner, R-Ohio, accused Obama of being "hopelessly out of touch" after the administration indicated its veto plans, The Hill reported. "This is simply another sign that President Obama ... has no plans to listen to the American people or champion their priorities."

Hoeven, the Senate bill’s sponsor, acknowledged that the Keystone bills will likely fall short of the 67 senator votes needed to override a presidential veto. But he said proponents in the Senate have a backup plan if Obama rejects the first measure. “It may be a two-step process,” Hoeven told Reuters Tuesday. He said lawmakers could attach a pro-Keystone component to broader legislation that Obama might find harder to reject, such as a long-awaited bipartisan energy efficiency law or a spending bill.

Earnest, the White House spokesman, said the State Department’s “well-established” review process for the pipeline should not be undermined by legislation. The review has been delayed again over questions about the pipeline’s route through Nebraska. The state Supreme Court is considering litigation that, if upheld, would block the project’s path and send TransCanada back to the drawing board.

Obama has also said repeatedly that he would only approve the project if it “does not significantly exacerbate” global greenhouse gas emissions. “I want to make sure that if in fact this project goes forward, that it’s not adding to the problem of climate change, which I think is very serious and does impose serious costs on the American people,” the president said at a December press conference. During a taped interview early last month, he said the pipeline could have a “disastrous” impact on climate change.