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Senators introduce bill to approve Keystone XL pipeline

Sen. Max Baucus, (D-MT) is questioned by media at the U.S. Capitol in Washington December 31, 2012. REUTERS/Mary F. Calvert
Sen. Max Baucus, (D-MT) is questioned by media at the U.S. Capitol in Washington December 31, 2012. REUTERS/Mary F. Calvert

By Timothy Gardner

WASHINGTON (Reuters) - A bipartisan bill introduced in the U.S. Senate on Thursday would give Congress the power to approve TransCanada Corp's Keystone XL pipeline project to link Canada's oil sands with refineries and ports in Texas.

The measure, unveiled by John Hoeven, a North Dakota Republican, and Max Baucus, a Montana Democrat, would take approval of the more than 800,000-barrels-per-day pipeline out of the hands of the Obama administration.

White House spokesman Jay Carney told reporters after the bill was introduced that the approval process for pipelines crossing international borders belongs with the State Department.

The $5.3 billion pipeline has become a symbol of oil sands development for both its opponents and supporters. Environmentalists say it would open up access to the oil sands which are carbon-intensive to produce.

The pipeline's proponents say the pipeline would bolster North American energy security and usher in thousands of new jobs, and pour capital into the economy.

The State Department this month issued an environmental assessment of the project that said it would not cause environmental harm. After the report is finalized, President Barack Obama is expected to make a final decision on Keystone, around August or later.

But Hoeven, who along with other Republicans in the Senate met with Obama on Thursday, said the decision could not wait. "We don't know if Obama will approve it or provide a new regulatory barrier," Hoeven said in an interview.

The senator called the project, approval of which has been pending for more than 4-1/2 years, "perhaps the most thoroughly studied and long-delayed project of its kind in U.S. history."

The State Department report said it would create 35 to 50 permanent jobs, and support about 42,100 temporary jobs throughout the country, not all of them directly.

Keystone XL would carry crude from Alberta's oil sands and from the central United States, helping to relieve a glut building up as a result of the drilling boom in North Dakota and Montana. The southern leg of the line, which does not need a presidential permit handled by the State Department, is more than halfway built.

HOEVEN NOT WORRIED ABOUT VETO

The bill, which had 16 co-sponsors including eight Democrats and was gaining more, is likely to face a tough battle.

Congress has tried several times to push Obama to approve Keystone. In late 2011 Republicans inserted language in a payroll tax cut bill giving Obama a 60-day deadline to make a decision.

Obama ruled in early 2012 the administration needed more time to evaluate a revised route through Nebraska submitted by TransCanada to avoid sensitive ecological areas.

Keystone backers in Congress pushed to override Obama's call and approve the line themselves, but a vote last year in the Senate fell four votes short of passage.

Hoeven said this time the bill should pass because the previous vote was held before Nebraska Governor Dave Heineman approved TransCanada's revised path of the pipeline. Hoeven also said he believed he has enough votes to overturn an Obama veto should it reach that point.

"I think so because we have knocked down all of the excuses for not doing it ... and it's something the American people want," Hoeven said.

Carney said the State Department decision process, which involves input from entities including federal agencies, companies, and state governments, helps to separate the decision from politics.

(Additional reporting by Roberta Rampton and Steve Holland; Editing by Eric Beech, Xavier Briand and Mohammad Zargham)

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