Republicans turn Keystone XL pipeline into an election issue

A month ago, the Obama administration appeared to have defused a contentious debate over whether to approve a pipeline to transport Canadian oil to the Gulf Coast, but a political shift in Nebraska has given Republicans an opening to reignite the controversy.

Republicans are pushing to accelerate the timetable for the pipeline decision and make it a major election issue, emphasizing jobs and energy security. And environmentalists, who just weeks ago were savoring a political victory, are throwing themselves back into the fight both outside and inside the Beltway.

After Nebraska residents objected to the Keystone XL pipeline’s route through the state’s Sand Hills region, saying a spill there could imperil Nebraska’s primary aquifer, the State Department announced Nov. 10 it would conduct a supplemental environmental impact statement to reroute the pipeline. Reviewing that new route would probably take at least 15 months, delaying the final permit decision until 2013, officials said at the time.

But now some of the state’s key Republicans, who had sought to block approval of the project, including Gov. Dave Heineman — are open to granting it, as long as state officials have a chance to weigh in on an alternate Nebraska route.

“I certainly support expediting everything we’re doing with the Keystone XL project,” Heineman told reporters Monday.


For more than three years, the State Department — which is in charge of permits for pipelines that cross an international border — has been reviewing TransCanada’s plan to construct a 1,700-mile pipeline from Hardisty, Alberta, to Port Arthur, Tex. Pipeline proponents say the project will generate jobs and a secure energy supply, while its foes argue it promotes crude oil that harms the climate and could could spill in sensitive habitats.

Republicans are hammering away on the issue both in the halls of Congress and on the presidential campaign trail, trying to force President Obama to allow the rest of the project to move forward while Nebraska reassesses its part of the route.

On Tuesday, the House voted 234 to 193 to accelerate the permitting decision for the project as part of a broader extension of a payroll tax credit bill, with 10 Democrats joining 224 Republicans in supporting the measure. Obama has vowed to veto the bill which immediately stalled in the Senate on Wednesday.

Marty Durbin, executive vice president of the American Petroleum Institute, which represents the nation’s major oil firms, said the project could go ahead while Nebraska developed a new route within its own borders.

“It is my hope and my expectation that there will be a steady drumbeat so we can come to some sort of resolution and agreement now to move the project forward while respecting Nebraska’s desire to find an alternate route,” Durbin said.

Republicans intend to keep the pressure on. Sen. Richard G. Lugar (R-Ind.) has introduced legislation similar to the House measure. It would require the secretary of state to issue a permit within 60 days to allow pipeline construction, unless the president determines that it is not in the national interest. The Nebraska governor would get to approve a new route in his state with guaranteed federal approval unless the president intervened within 10 days.

Jane Kleeb, executive director of the environmental group Bold Nebraska, said she was surprised at how quickly some of the state’s Republicans have changed their stance. Sen. Mike Johanns (R-Neb.), who had lambasted the State Department’s permitting process, is a co-sponsor of Lugar’s bill.

In a statement, Johanns described Lugar’s bill as “the reasonable way forward because it allows Nebraska to carefully consider alternative routes — with absolutely no deadline — while allowing the process outside the state to move forward.”

“Folks are playing a little bit of catch-up,” Kleeb said, adding that many Nebraskans are “angry that [Nebraska Republicans] could be so bold-faced as to side, from our perspective, with Big Oil.” She suggested that backing the project could be a liability for some Nebraska Republicans: Rep. Lee Terry has already come under fire from both a GOP primary opponent and a possible Democratic rival.

Pipeline opponents also question the objectivity of the firm chosen to write Nebraska’s environmental impact statement. The firm, HDR, agreed in 2009 to do engineering, procurement and construction work on a Trans-Canada natural gas-fired power plant in Ontario, according to HDR’s Web site.

In reality — at least in Nebraska — the process may not move as fast as Republicans want. Trans-
Canada, while eager to get the project moving, said it will not submit a new route until State and the Nebraska Department of Environmental Quality agree on what sort of review is required under the special Nebraska law passedin mid-November. Previously, Nebraska did not require an environmental impact statement; state officials say the review will take six to nine months, but it could take longer.

Shawn Howard, a TransCanada spokesman, said the company needs to do more work on the details of an alternative route around the sensitive Sand Hills, where the Ogallala Aquifer runs close to the surface. He said that the company was doing “helicopter flyovers” and scouting new corridors on the ground. One thing that wasn’t on the maps, he said, was a new wind farm.

“Until we’re satisfied that the DEQ in Nebraska and governor are on [the same] side with the preferred route, we won’t be tabling a plan publicly,” said Howard.

“We’re some time away from being able to file a plan,” he said.

Refiling the plan could put political pressure on the administration before the 2012 presidential election, though State still has discretion as to when it makes a final decision.

On Tuesday, State Department officials said they will not be pressured, warning that the GOP strategy could backfire, forcing an early rejection of the project.

“At the end of the day, this permitting decision, one way or the other, has to be based on a full accounting of the interests of the American people, where it goes, as well as all of the agencies that have to weigh in, and we want to take the time to do it right,” said State Department spokeswoman Victoria Nuland.

Lou Pugliaresi, president of the oil industry-backed Energy Policy Research Foundation, said that the Keystone decision could have an impact in a swing state like Ohio, where crude oil production is rising.

“When you think that Obama did this for political reasons, he could end up with surging production out of Ohio. And then there would be an interesting discussion: Who do you want to turn to? The guys who shut down the Keystone or their opponent?” Pugliaresi said.

While delaying a pipeline decision until 2013 may have pleased foes of the Keystone XL, Pugliaresi said the message was muddled. He said, “what is the administration saying? That this is a technical glitch or that we don’t like oil sands or that we’ll not like it for one year and then we’ll be okay with it?”

Meanwhile, foes of the pipeline are not resting either. They are planning new fronts in their fight, looking beyond Nebraska to Texas, where the pipeline would run over the Carrizo-Wilcox Aquifer.

“I think we’ll see what happened in Nebraska happen in Texas,” said Kate Colarulli, associate director of the “Beyond Oil” campaign at the Sierra Club. The group is making common cause with some Tea Party leaders such as Debra Medina, who ran against Texas Gov. Rick Perry in the Republican primary in 2010 and who recently backed a group called Texans Against Tar Sands.

“Now with water and drought and wildfires, I think we’ll start to see some opposition, and from what I see very bipartisan,” Colarulli said. “I think we’re a couple of months away from this catching fire in Texas.”

Steven Mufson covers energy and other financial news.
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