Meanwhile, TransCanada, which proposed the pipeline, said it will not only file a new permit application but also might pursue a truncated system within U.S. borders that would not require State Department approval. Such a pipeline could serve the growing output from the Bakken shale oil fields in Montana, ease the bottleneck of crude oil at the major terminal in Cushing, Okla., and later hook up with cross-border lines.
“We think that the Keystone pipeline will get built,” said Jamie Webster, a senior manager at the Washington consulting firm PFC Energy. “The caveat is that it might not be called the Keystone pipeline. The point is that there will be a way for these barrels to find a way to the United States.”
Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, said in an interview Thursday that “we’re going to look for every opportunity to pass legislation” to ease the way for the pipeline’s construction. He said he supports a measure introduced by Rep. Lee Terry (R-Neb.) that would take the permit decision “out of the hands of the State Department” and give it to the Federal Energy Regulatory Commission.
Upton said it would be possible to again attach a Keystone provision to an extension of the payroll tax reduction, which expires in late February, though he said the GOP leadership was “just getting organized in terms of priorities we’re going to pursue.”
Other energy experts said, however, it is unlikely that the Terry bill could pass the Senate (it failed to last year) or that the Republican congressional leadership will risk a showdown over a payroll tax cut rather than simply make political use of Obama’s decision.
“There are some Republican members who really wanted to get the pipeline approved this year and thought this legislative strategy would work and they are dismayed,” said Robert McNally, an energy consultant who served on President George W. Bush’s National Economic Council. But he said there are others “who believe that the defeat on Keystone will pay dividends in the election this year.”
TransCanada and the province of Alberta took a pragmatic stance.
“There is a regulatory process in place, and we have to respect that process,” Alberta Premier Alison Redford said. “The good news is that the president said he wasn’t making a decision on the merits of the project. It does allow for reapplication.”
“There are a lot of options that are being looked at right now,” TransCanada spokesman Terry Cunha said. “At the end of the day, we’re interested in building a pipeline that will move additional crude oil into the U.S. Gulf Coast.”