Bloomberg News

Keystone, Coal Ash Dropped From Highway Bill, Inhofe Says

June 27, 2012

Language requiring approval of the Keystone XL pipeline and barring Environmental Protection Agency regulation of coal-ash waste were dropped from a highway spending bill being negotiated by U.S. lawmakers, Republican Senator James Inhofe said.

The deal removes two obstacles preventing agreement on a compromise package paying for bridge and road construction and transit programs. Legislation drafted by a Senate-House committee may be filed tonight, Inhofe, chief Republican negotiator for the Senate on the package, said today.

“There are a few more things we need to do and then we’ll be ready very soon,” he said in an interview.

In opposing the Keystone and coal-ash provisions, Democrats were supported by environmental groups that said the proposals threatened environment and public-health protections. Republicans said Keystone will create U.S. jobs and the coal-ash regulations would kill them.

The Keystone language backed by House Republican negotiators would have required the Federal Energy Regulatory Commission to approve the pipeline within 30 days of receiving an application from Calgary-based TransCanada Corp. (TRP)

Republicans said the project, which would carry crude from Alberta’s oil sands to Gulf Coast refiners, would create thousands of jobs and lower U.S. dependence on overseas oil.

‘Good Sense’

The Republican-backed plan to include Keystone had made “good sense for our economy and our energy future,” Thomas Pyle, president of the American Energy Alliance, a Washington- based group that backs free-market energy policies, said in an e-mail.

Obama rejected the permit application in January after officials in Nebraska complained the pipeline route threatened the Ogallala water aquifer in the porous Sand Hills region.

Congressional Republicans have sought to force U.S. approval by attaching language to various unrelated bills, including the transportation package, all without success.

Republicans also have sought to prohibit the EPA from regulating coal ash as a hazardous waste, which they said could hurt the economy.

The EPA in 2010 proposed classifying coal ash, a byproduct of burning the fuel, as hazardous waste, which gives regulators authority over permits and enforcement, and requiring liners for coal-ash sludge ponds; or establishing standards that the states would enforce, a step the industry prefers.

The administration has said the rule could cost industry more than $1 billion. The Edison Electric Institute, a Washington-based group that represents utilities, has estimated annual costs from $1.7 billion to $5 billion over 20 years.

Industry lobbyists have warned Congress that classifying coal-ash as hazardous would prevent companies from recycling the waste in concrete, roofing and wallboard.

Melinda Pierce, a lobbyist for the Sierra Club, said the coal-ash provision would have weakened public health protections.

“We’re delighted it’s out,” Pierce said in an interview.

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net; Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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