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.
Republican amendments include expanding offshore drilling, proposed by Senator David Vitter of Louisiana, and repeal of tax credits for alternative fuels, plug-in electric vehicles and biodiesel, proposed by Senator Jim DeMint of South Carolina.
“Let’s say yes to good, reliable U.S. energy,” Vitter said during debate. “Let’s say yes to increasing energy independence. Let’s do something about the rise of the price at the pump.”
The DeMint amendment doesn’t touch many of the tax breaks for oil and gas companies that Obama has sought to repeal. Obama has targeted breaks for extraction of oil and gas to qualify as domestic manufacturing.
“We don’t need any more giveaways to big oil,” Boxer said during debate. “You can’t drill your way out of this mess.”
Maine Republican Senator Susan Collins is pushing a measure that would halt pending environmental-pollution standards for boilers used in paper plants and refineries, and delay implementing new rules for at least five years.
EPA Boiler Rule
The EPA’s efforts to cut pollution from boilers have been opposed by paper processors such as International Paper Co. and Weyerhaeuser Co., as well as refiners, manufacturers and some universities and hospitals. The rule, which may be finalized in the coming months, will cost $1.5 billion a year, making it one of the most expensive proposed by the EPA.
Wyden said EPA administrator Lisa Jackson had gone to “substantial lengths” to address companies’ concerns that they wouldn’t have enough time to meet the new air-pollution requirements. Boxer said the rules would ensure Americans breathe cleaner air.
An amendment from Senators Robert Menendez, a New Jersey Democrat, and Richard Burr, a North Carolina Republican, would provide tax credits to promote the purchase of vehicles powered by natural gas. The provision, known as the Nat Gas Act, is supported by T. Boone Pickens, founder and chairman of Dallas- based BP Capital LLC, who says he has spent more than $100 million promoting national policies to reduce oil imports.
‘Winners, Losers’
Pickens is the leading investor in Clean Energy Fuels Corp., a Seal Beach, California, maker of natural-gas fueling stations.
“Detractors and special interests argue that government shouldn’t pick winners and losers, and that we should let the free market work,” Pickens wrote this week in an opinion column in the Orlando Sentinel. “I say it’s time to pick America over OPEC.”
Pickens’ lobbying has set him against fellow billionaire Charles Koch, chief executive officer of Wichita, Kansas-based Koch Industries Inc., who opposes the provision.
“Pickens ‘needs’ the Nat Gas Act because he won’t make even more billions from his natural gas-related investments unless Congress, via tax preferences, ramps up demand for natural gas vehicles and infrastructure,” the Koch-backed Americans for Prosperity, of Arlington, Virginia, and other groups that support smaller government and lower taxes said in a letter yesterday to senators.
