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Keystone XL Bill Survives House Showdown, but Will it Last?

May 23, 2013

Congress today passed a bill aimed at cutting away red tape that would otherwise slow initial construction of the Keystone XL pipeline. Despite the bill's bipartisan backing, some Democrats and White House officials say it won't be long lived.

The Northern Route Approval Act, championed by Rep. Lee Terry (R-Neb.), removes a requirement for a cross-border permit by the White House to connect the Canadian and northern most U.S. portions of TransCanada's much-debated oil sands pipeline. It also shifts authority over the pipeline from the State Department to the Federal Energy Regulatory Commission.

Drafters of the bill took their idea from efforts to speed up the Trans-Alaska Pipeline in the 1970s, as well as legislation from 2004 that helped create a natural gas pipeline from Alaska to the lower 48 states.

The Republican-controlled House voted 241-175 in favor of H.R. 3, with 19 Democrats siding with the measure. Still, many Democrats fought to add and remove key provisions. Among them was an attempt to include an amendment requiring oil that passes through the pipeline and any refined product from it to remain in the U.S. Rep. Bobby Rush (D-Ill.) proposed cutting a section of the bill that places restrictions on court challenges to the pipeline.

Other opponents went further, questioning the constitutionality of the legislation. Rep. Alan Grayson (D-Fla.) took issue with the fact that the bill bypasses one layer of White House approval.

The only amendment that passed -- unanimously at that -- requires TransCanada to submit an oil spill response plan to the governors of those states where the pipeline will be laid.

On Tuesday, the National Association of Manufacturers (NAM) issued a statement calling for support of H.R. 3. Aric Newhouse, NAM's senior vice president of policy and government relations, said, "Keystone XL is an essential part of an 'all-of-the-above' energy strategy that will create thousands of jobs and enhance America's energy security. Manufacturers use one-third of our nation's energy supply, and Keystone XL will provide an affordable energy source to help manufacturers compete globally."

He added, "Manufacturers have waited long enough. It's time to approve this important job-creating energy project."

The pipeline has been a hot-button issue for five years, as we've reported in the past. Proponents of the pipeline point to the hundreds of thousands or even millions of jobs that the project would create, as well as improved energy security. Opponents are largely concerned with the environmental impact from the construction, as well as the processing and refining of the oil sands.

Forbes recently wrote that it is impossible to calculate exactly how many direct and indirect jobs would be created by the Keystone XL pipeline. The article compares the project with the Trans-Alaska pipeline in terms of size, cost, and predicted jobs. Forbes notes that most jobs would be short-lived and wouldn't be sustained beyond the completion of the pipeline.

Peter Bowe, president of Ellicott Dredges, a Baltimore, Md.-based manufacturer of pumps and dredges, testified two weeks ago before Congress on the employment-related benefits of the project. One such piece of pipeline equipment, he said, "would require us to spend an as much as $10 million on vendors located around the United States, like gear boxes from Ohio or upstate New York; electrical equipment from Illinois; or steel fabrications from Wisconsin, Kentucky, or South Carolina, or foundry parts from Pennsylvania, Alabama, Georgia; or Mississippi, or cranes from Kansas."

A week later, President Barack Obama visited Ellicott as part of a tour around Baltimore to discuss the issue of job creation and economic revival. Keystone XL did not come up during the trip, and Obama continues to offer no indication of whether or not he will approve the pipeline.

On Tuesday, as buzz about H.R. 3 increased, the White House offered a statement vowing to veto the measure. "Because H.R. 3 seeks to circumvent longstanding and proven processes for determining whether cross-border pipelines are in the national interest by removing the Presidential Permitting requirement for the Keystone XL pipeline project, if presented to the president, his senior advisors would recommend that he veto this bill," the White House said in a statement.

Given that, and the unlikelihood of it even passing the Democratic-controlled Senate, U.S. News and World Report claims that the bill is "largely symbolic," providing a "rallying point" for parties to weigh the pros and cons of the project.