Keystone Bill Heads to Obama for Veto

The Hardisty tank farm, which includes the TransCanada Corp. Hardisty Terminal 1, stands in Hardisty, Alberta, Canada.

Photographer: Brett Gundlock/Bloomberg

Congressional Republicans achieved an elusive legislative goal Wednesday, sending a bill to approve the Keystone XL pipeline to President Barack Obama.

Yet after three years of effort, the victory is somewhat hollow as falling oil prices and an improving job market conspire to weaken any practical or political payoffs.

The U.S. House passed the measure 270-152, with 29 Democrats joining all but one Republican to support the bill. Obama has vowed to veto the measure and Wednesday’s vote was short of the two-thirds super majority needed to override the president’s rejection. The Senate passed the bill last month.

Obama said he opposes the bill because it would circumvent his administration’s review of the $8 billion pipeline.

“This allegedly important policy issue has become almost nothing but politics, save for those who build and operate it, on both sides,” said Burdett Loomis, a political science professor at the University of Kansas who tracks energy issues. “It’s policy significance comes close to nil, especially in our current oil environment.”

TransCanada Corp., a Calgary-based pipeline company, applied to build Keystone XL in September 2008. While a southern section is up and running, the northern leg needs a presidential permit because it crosses the U.S.-Canada border.

Federal Review

The project, in limbo during a State Department review, has galvanized environmental advocates and led to massive rallies around the White House urging Obama to reject the pipeline as a threat to the climate.

Supporters say it will create thousands of jobs and improve U.S. energy security.

“We continue to urge the president to reconsider his veto threat, support the will of the people and prove that Washington can govern and enact meaningful energy policy,” Jack Gerard, president and chief executive officer of the American Petroleum Institute, a Washington lobbying group whose members include ExxonMobil Corp., said in a statement.

Representative Fred Upton of Michigan, chairman of the House Energy and Commerce Committee, said during debate that he hoped Obama would reconsider his expected veto on this bill.

“Let’s deal with the issue,” Upton said. “And let’s get it done.”

11th Vote

The House vote was the chamber’s 11th on Keystone legislation in four years, and the second this year. House lawmakers had to take up the bill again after the Senate, which is now also led by Republicans, amended an earlier version.

House Speaker John Boehner is planning a signing ceremony on Friday, said Michael Steel, his spokesman. Republican Senator Orrin Hatch of Utah, as president pro tempore, will also sign. How soon the bill will be sent to the White House hadn’t been decided as of Wednesday, Steel said.

The Constitution provides 10 days, excluding Sundays, for a president to sign a bill. A veto occurs when a president returns the unsigned legislation within 10 days to the chamber in which it originated, typically with a message explaining why.

While Obama pledged to veto the Keystone bill on process grounds, he hasn’t indicated what his decision will be on the project itself.

He must choose between angering his allies in the environmental movement or the Canadian government, which is looking to Keystone to support oil sands producers in Alberta.

‘Radical’ Environmentalists

Representative Joe Barton, a Texas Republican and a member of the energy committee, backed the vote on Keystone.

“It’s good public policy,” even if Obama is going to reject the bill, Barton said in a phone interview before the vote. “It shows how rigidly he’s in the clutches of radical environmental groups that he keeps opposing it.”

The dynamics of the debate have shifted considerably since July 2011 when the House first voted to advance Keystone.

Back then, oil traded about $100 a barrel and Obama faced a tough re-election in an economy yet to fully shake the effects of a deep recession.

Now oil is half that cost, about $50 a barrel, and Obama is two years into his second term. Unemployment fell to 5.7 percent in January from 9.1 percent in July 2011.

Polls show Americans supporting the pipeline outnumber those who oppose it, though the political payoff for Republicans in backing it probably is small.

Public Support

A Washington Post/ABC News poll last month found 34 percent of respondents wanted the pipeline built now, while 61 percent said the review should continue. A Wall Street Journal/NBC News poll found 41 percent favored the project.

More than a third -- 37 percent -- said they didn’t know enough to have an opinion.

Obama has said he won’t approve the project if he believes it would “significantly exacerbate the problem of carbon pollution.”

He also criticized Republican arguments that the pipeline would provide much economic benefits to Americans, arguing the oil would likely be sold overseas after reaching refiners in the U.S.

Republicans have once before advanced to Obama’s desk legislation on Keystone.

Late in 2011, when the Keystone review was in its third year, as part of a broader tax bill they set a 60-day deadline for Obama to make a decision. In January 2012, he rejected the project saying the administration couldn’t adequately weigh its merits by the Congress-imposed deadline.

He also encouraged TransCanada to reapply, which it did in splitting the project and shifting a route further east in Nebraska in an effort to resolve concerns about Keystone’s potential threat to a sensitive habitat.

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