Senate may ban Keystone oil exports while backing pipeline

We just want the pipe; keep the oil

March 8 (Bloomberg) -- TransCanada Corp.’s Keystone XL oil pipeline would be approved under a Republican plan being considered in the U.S. Senate, while a Democratic proposal would bar export of Canadian crude transported through the line.

The measures are among amendments to a transportation spending bill being debated today in the Senate. President Barack Obama is calling senators today, urging opposition to the Keystone measure. Other proposals seek to open the eastern Gulf of Mexico, and areas off the Pacific and Atlantic coasts to offshore drilling, and repeal tax credits for alternative fuels, plug-in electric vehicles and biodiesel fuel.

Obama rejected a permit for the Keystone XL project in January, saying a deadline imposed by Congress didn’t allow enough time to complete an environmental review. Republicans, including presidential contenders Mitt Romney and Newt Gingrich, said the denial would cost U.S. construction jobs and lead to higher energy prices.

“We’ve got an opportunity to create jobs, we can do that with these amendments,” Senate Minority Leader Mitch McConnell, a Kentucky Republican, said as debate began, referring to Keystone XL. “That’s a private-sector project that will create 20,000 jobs almost immediately.”

An amendment by Senator John Hoeven, a Republican from North Dakota, would authorize construction of the 1,661-mile (2,673-kilometer) pipeline from Hardisty, Alberta, to the U.S. Gulf Coast. Environmental reviews required by law prior to construction would be deemed satisfied.

Wavering Democrats

Environmental groups and some labor unions that have supported Obama in the past oppose the pipeline. Seeking to head off an election-year showdown over energy policy, Obama has been calling wavering Senate Democrats, including members from Midwestern states where the pipeline will create construction jobs, to lobby against the Hoeven amendment, according to a Democratic aide.

“President Obama already failed America’s workers by rejecting the Keystone XL pipeline, and now, reportedly, he is trying to kill our bipartisan efforts to succeed where he failed,” Senator Richard Lugar, an Indiana Republican, said in a statement.

The project would create about 20,000 temporary construction jobs, according to TransCanada. The number of employees needed to operate and maintain the pipeline may be as few as 20, according to the U.S. State Department, or as many as a few hundred, according to TransCanada.

Export Bar Proposed

To maximize the benefits of the project for U.S. consumers, Senator Ron Wyden, an Oregon Democrat, said his amendment would bar the export of crude oil or refined oil products from Canada unless the president issues a waiver. The measure would also require that to the extent possible, iron and steel needed to build the pipeline be American-made.

Senators reached a deal last night to allow a final vote on a two-year, $109 billion transportation plan sponsored by Senator Barbara Boxer, a California Democrat. The House passed legislation forcing Keystone pipeline approval and opening new areas to offshore drilling last month.

The Senate will start voting today on 30 amendments to the transportation bill, some of which deal with such unrelated topics as the Keystone XL pipeline and offshore exploration. Boxer said lawmakers may vote on 10 amendments before wrapping up work for the day.

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