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CQ TODAY ONLINE NEWS – ENERGY
Jan. 19, 2012 – 1:23 p.m.

For Obama, No Escape From Pipeline Rejection

By Geof Koss, CQ Staff

White House critics are making good on their promise to make President Obama pay a political price for rejecting the proposed Keystone XL pipeline, while GOP supporters of the project are laying the groundwork for a new legislative response.

Just one day after Obama said no to the $7 billion project, a political action committee affiliated with Speaker John A. Boehner, R-Ohio, unveiled an online petition condemning the denial.

“Despite strong support from Republicans, Democrats, businesses and labor unions, President Obama has decided to reject the job-creating Keystone pipeline project to appease his radical left-wing base,” states the petition, timed to coincide with Obama’s Thursday visit to Florida and running on an Orlando website and elsewhere.

The ad serves as a reminder that the proposal to build the 1,700-mile pipeline poses a political dilemma for the president. The project is strongly backed by some labor groups and bitterly opposed by environmentalists — both bedrock elements of the president’s Democratic base.

In denying the permit by project sponsor TransCanada, Obama blamed the process foisted on him by congressional Republicans in the payroll extension law (PL 112-78) that he signed last month.

The law required a decision by the project within 60 days, a timeline that the State Department said is insufficient to review a yet-to-be-determined alternate route around an environmentally sensitive region of Nebraska.

Boehner’s office on Thursday circulated remarks by Laborers’ International Union of North America General President Terry O’Sullivan condemning the decision.

“Once again the president has sided with environmentalists instead of blue-collar construction workers — even though environmental concerns were more than adequately addressed,” O’Sullivan said. “Blue-collar construction workers across the U.S. will not forget this.”

But the United Steel Workers, United Auto Workers and other labor groups joined the Sierra Club and Natural Resources Defense Council in dismissing the Republicans push. “Their job blackmail agenda is simply wedge politics,” the groups said in a joint statement.

Meanwhile, House Republicans signaled that they plan to move quickly on new legislative attempts to force approval of the project.

The House Energy and Commerce Subcommittee on Energy and Power will hold a hearing on Jan. 25 on a bill (HR 3548) that would shift approval for pipelines that cross international boundaries from the State Department to the Federal Energy Regulatory Commission, or FERC.

The bill, written last month by Rep. Lee Terry, R-Neb., would require FERC to rule on the project within 30 days of receiving a completed environmental review by the state of Nebraska. Committee Republicans have invited Secretary of State Hillary Rodham Clinton to testify at the hearing.

A Senate bill being drafted by North Dakota Republican John Hoeven would simply approve the permit legislatively, relying on Congress’s constitutional power to regulate foreign commerce.

For Obama, No Escape From Pipeline Rejection

White House critics have maintained that rejecting the pipeline would result in the export of Canada’s abundant oil sands petroleum to China; however, TransCanada said on Wednesday it would submit a new permit for the U.S. route,

“We will re-apply for a presidential permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014,” said TransCanada President and Chief Executive Officer Russ Girling.

State Department Assistant Secretary Kerri-Ann Jones of the Bureau of Oceans and International Environmental and Scientific Affairs said that although the department would be able to use some information from the previous application, an expedited process was not a given.

“If TransCanada comes in with a new application, it will trigger a new review process, a completely new review process,” she told reporters Wednesday. “We cannot state that anything would be expedited. . . . It would just have to go through all of the requirements that are needed for this kind of application review.”

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