Bloomberg News

U.S. Agencies Cast Doubt on Republican Bill to Push Keystone XL

January 27, 2012

Jan. 25 (Bloomberg) -- A Republican-backed bill to advance TransCanada Corp.’s proposed Keystone XL pipeline, which was delayed by the Obama administration, poses jurisdictional and legal issues, representatives of two U.S. agencies said.

The bill requiring the Federal Energy Regulatory Commission, an independent agency, to issue a permit raises “serious questions,” Kerri-Ann Jones, assistant secretary in the State Department’s Bureau of Oceans and International Environmental and Scientific Affairs, said today at a House Energy and Commerce Committee panel hearing in Washington.

FERC, which oversees interstate transport of electricity, oil and natural gas, lacks authority to locate oil pipelines, Jeffrey Wright, the agency’s director of the Office of Energy Projects, said today at the hearing. The bill doesn’t give FERC enough time to adequately assess the project, Wright said.

Republicans are pressing to start work on the $7 billion pipeline, which was delayed by President Barack Obama in November to consider an alternate route. Last year, lawmakers set Feb. 21 to issue a permit, leading Obama to deny the request, citing a lack of time for a review.

Representative Lee Terry, a Nebraska Republican who backs the pipeline, proposed the legislation requiring FERC to issue a permit for the 1,661 mile (2,673 kilometer) pipeline within 30 days after receiving the application, provided the project is deemed safe.

Representative Henry Waxman, a California Democrat, said Terry’s legislation “is an earmark that benefits just one project” and exempts the pipeline “from every federal and state permitting requirement.”

Gulf Refineries

The proposed pipeline requires the State Department’s approval because it would cross the U.S. border with Canada, bringing crude from the oil sands of Alberta to refineries on the Gulf of Mexico. Obama has invited Calgary-based TransCanada to reapply, which the company said it would accept.

Terry’s bill “appears to override foreign-policy and national-security considerations,” of a cross-border permit, Jones said.

Supporters, including some labor unions, have said the pipeline will create as many as 20,000 jobs. Environmental groups say the pipeline will taint water supplies.

Differences over the pipeline were evident among lawmakers today, as Representative Ed Whitfield, a Kentucky Republican and chairman of the Subcommittee on Energy and Power, halted the hearing for 10 minutes after Waxman asked the committee to call additional witnesses.

Partisan Disputes

“Are you calling the Koch brothers during the recess?” asked Waxman, who questioned whether closely held Koch Industries Inc. of Wichita, Kansas, may benefit from the Keystone XL pipeline. The Koch brothers helped to start Americans for Prosperity, a group that has backed Republicans and helped promote Tea Party rallies last year.

“The Koch brothers have nothing to do with this project,” Whitman said earlier in the exchange.

Republicans criticized the State Department for taking 3 1/2 years to review the project. “In the private sector, firms would be fired for taking that long” Representative David McKinley, a West Virginia Republican, said.

The pipeline will cause the U.S. to become a “middleman” in the transport of oil, which will originate in Canada and be shipped abroad, Representative Edward Markey, a Massachusetts Democrat, said.

Nebraska Governor Dave Heineman said yesterday he will urge Obama to reverse the decision and let pipeline construction start in U.S. border states. This would give Nebraska time to conduct an environmental review without stalling the project. The Obama administration has said Heineman’s request for a revised route required a new review, and a delay until early 2013.

“It is no surprise that so many Americans consider this decision to be a no-brainer, especially since the environmental impacts of the project have been extensively studied for years” and found to be minimal, Representative Fred Upton, a Michigan Republican and chairman of the House Energy and Commerce Committee, said at the hearing.

The bill is H.R. 3548

--With assistance from Alison Vekshin in San Francisco and Jim Snyder in Washington. Editors: Steve Geimann, Jon Morgan

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Steve Geimann at sgeimann@bloomberg.net


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus