Obama Keystone Veto Threat Spurs Democrat’s Plea for Deal

(Bloomberg) — President Barack Obama would veto a Senate

bill introduced today that would approve the Keystone XL oil

pipeline, his spokesman said, as a top Democratic supporter

urged the administration to seek a compromise.

A bill to sidestep a federal agency review was the first

legislation Republicans introduced as they took control of both

the House and Senate for the first time since 2007. The measure

has enough sponsors to pass but not enough to override a veto.

“My office has reached out to the White House today,”

Senator Joe Manchin, a West Virginia Democrat and a bill co-sponsor, told reporters Tuesday in Washington. “We’re looking

at ways that we can work together to find out if there are some

areas that they might, on content, object to that we can work

with.”

Given widespread public and industry support for the

Keystone pipeline, Manchin said he was optimistic that Obama,

who has expressed doubts about the project’s benefits, can be

persuaded not to veto the measure.

At the White House today, Press Secretary Josh Earnest said

that if the Keystone bill passes Congress, the president

wouldn’t sign it. Earnest said the introduced measure is “not

altogether different from legislation that was introduced in the

last Congress” and was opposed by Obama, he said.

House Vote

Republicans hold 54 of the Senate’s 100 seats, and many —

if not all — nine Democrats who backed a Keystone bill in

November are again likely to support the measure, giving it

enough votes to pass.

“Fringe extremists in the president’s party are the only

ones who oppose Keystone, but the president has chosen to side

with them instead of the American people and the government’s

own scientific evidence that this project is safe for the

environment,” House Speaker John Boehner, an Ohio Republican,

said in a statement.

A hearing set for Wednesday by the Senate energy committee

was canceled after Democratic leaders objected because

committees haven’t been formally established. Robert Dillon, a

spokesman for Senator Lisa Murkowski, an Alaska Republican and

the new panel chairman, said the bill can advance without a

committee hearing. The House will vote on a similar Keystone

bill Friday.

63 Votes

Senator John Hoeven, a North Dakota Republican and the

bill’s chief sponsor, said 60 senators are backing his measure

and three others have said they probably would support it.

That’s four votes shy of the 67 needed to override a

presidential veto.

Should Obama issue a veto, supporters may seek to attach it

to another piece of legislation that must pass, such as a

government funding bill, Hoeven said.

“We’ll see what he does, but I think it really raises the

question: Is the president going to work with Congress?” he

said.

Government agencies are funded through the end of the

fiscal year on Sept. 30, except for the Department of Homeland

Security, which lapses at the end of February.

TransCanada Corp. proposed Keystone in 2008 to carry oil

sands from Alberta across Montana, South Dakota and Nebraska

toward U.S. refineries along the Gulf of Mexico coast. It’s been

held up in a political feud over jobs, climate change and energy

prices. A State Department review is in limbo, pending

resolution of a legal dispute over the route in Nebraska.

‘Greatly Encouraged’

“TransCanada is greatly encouraged by the introduction of

bipartisan legislation in the new U.S. Congress and the support

of lawmakers who continue to make Keystone XL a legislative

priority,” Chief Executive Officer Russ Girling said in a

statement.

Democratic Senate leaders opposed to circumventing the

review are planing to offer amendments that would ban the export

of any crude oil transported through the U.S. over the pipeline,

and require that American-made iron, steel and manufactured

goods be used in the pipeline’s construction and maintenance.

Barry Kennedy, president of the Nebraska Chamber of

Commerce & Industry in Lincoln, said he would be disappointed if

Obama vetoed the legislation. “But he’s dragged it out this

long. I can’t say that I’m really surprised,” Kennedy said.

Louisiana Governor Bobby Jindal, a pipeline supporter, said

the project will create thousands of jobs.

‘Radical Left’

“Opposition to Keystone is not based on science or reason

and it’s holding our country back,” Jindal said. “It is a

shame the president is bowing to the radical left and ignoring

his own administration that has said the pipeline is safe.”

The Republican-controlled House has the votes to easily

pass its Keystone bill this week. The question is whether

Congress could muster the two-thirds votes to override a veto if

Obama rejected the measure.

“The bill will pass and any veto will be sustained,”

David Goldston, director of government affairs at the Natural

Resources Defense Council told reporters. “We don’t foresee

anything changing that.”

A statement from the environmental group said Obama “made

the right call” and it urged him to reject a permit for the

cross-border pipeline that would carry “the dirtiest oil on the

planet through the breadbasket of America.”

Colorado Governor John Hickenlooper, after meeting with

other governors at the White House, said oil prices that have

tumbled more than than 50 percent June had made Keystone less

important.

Falling Prices

“With the price of oil down as far as it is, I don’t think

the Keystone pipeline makes sense” right now. Keystone didn’t

come up in the governors’ discussions with Obama, he said.

Hoeven said an initial procedural vote on his measure would

take place Jan. 12, and that the chamber would spend “several

weeks” on the bill considering a range of amendments.

“Instead of a veto threat, the president should be joining

with Congress on a bipartisan basis,” Hoeven said.

New Senate Majority Leader Mitch McConnell, a Kentucky

Republican and staunch Keystone supporter, has pledged to allow

both parties wide latitude to offer amendments to bills,

including the pipeline measure.

Obama has criticized arguments that Keystone is an economic

boon. At a year-end news conference Dec. 19, he said Keystone

will be “very good for Canadian oil companies, and it’s good

for the Canadian oil industry, but it’s not going to be a huge

benefit to U.S. consumers. It’s not even going to be a nominal

benefit to U.S. consumers.”

To contact the reporter on this story:

Kathleen Hunter in Washington at

khunter9@bloomberg.net

To contact the editors responsible for this story:

Jon Morgan at

jmorgan97@bloomberg.net;

Jodi Schneider at

jschneider50@bloomberg.net

Steve Geimann

About Bloomberg New Energy Finance

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