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Keystone XL Pipeline Gets Another Chance With New Congress


One of the first pieces of legislation on the calendar for the new Congress would give a green light to the Keystone XL oil pipeline. It's been held up by court challenges and a regulatory review for more than six years. Backers hope to change that through legislation, but the White House is threatening a veto, as NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: When we left off last year, the Keystone pipeline was one vote shy of the 60 needed to escape a filibuster. But today the Senate swore in a new Republican majority. And North Dakota Senator John Hoeven, who's sponsoring the pro-Keystone bill, says that 60 vote threshold is no longer a problem.


SENATOR JOHN HOEVEN: We already have 60 sponsors of the bill. We've got about 63 that have indicated they support it. Obviously, we're continuing to work to get more support for the legislation.

HORSLEY: The new Senate's wasting no time taking up the Keystone measure. Andy Black says that's as it should be. Black runs an association of oil pipeline owners, and he says Keystone's building permit is long overdue.

ANDY BLACK: Just as a majority of the American people have supported the project, now a majority in Congress have supported the project. And I could understand if they think it's beyond time for a decision. So I'm glad that they're taking action.

HORSLEY: Black says for all the political symbolism that's been attached to Keystone over the last half decade, the basic issue is really straightforward. Should the federal government allow a pipeline to cross the U.S. border with Canada?

BLACK: This Canadian crude will go to market somewhere. The question is - is it in the United States? And does it come to us on the best transportation mode?

HORSLEY: The State Department came to much the same conclusion a year ago, issuing an environmental report that said the Canadian tar sands would likely be developed with or without the pipeline. Even Keystone critics, like Greg Dotson of the Center for American Progress, concede oil producers will find a way to get their product to market if the price is high enough.

GREG DOTSON: They will take it by train. They will take it by truck. They will take it by pipeline if they have the capacity.

HORSLEY: But, while the political winds have shifted in Keystone's favor, the economic breeze is blowing the opposite way. When the State Department issued its report last year, oil was trading at nearly $100 a barrel. Today, it's about half that. And with the market awash in cheap oil, it may no longer be worth it for the tar sand's producers to spend the extra money it would take to ship their product by rail or truck. Dotson says that means there's a lot more riding on whether the pipeline gets built.

DOTSON: This pipeline will make or break many tar sands development plays up in Canada.

HORSLEY: And that raises the stakes for President Obama, who's promised to give serious weight to the tar sand's potential carbon pollution in deciding whether the pipeline gets built.


PRESIDENT BARACK OBAMA: I want to make sure that, if in fact this project goes forward, that it's not adding to the problem of climate change, which I think is very serious and does impose serious costs on the American people.

HORSLEY: Today the White House made clear Obama will veto any congressional effort to short-circuit that review. And despite Republican majorities in both the House and Senate, Keystone backers don't appear to have the votes needed to override a veto. Politically, it's easier for Obama to reject the popular pipeline when gasoline is selling for less than $2.20 a gallon on average. But Senator Hoeven, whose home state is in the midst of a shale oil boom, says today's low prices simply underscore the benefits of promoting North American energy production.


HOEVEN: Gas prices aren't lower at the pump because OPEC decided to give us a Christmas present or because Russia decided they wanted to help out. We're producing more gas and oil in this country and working with Canada as well.

HORSLEY: Hoeven says if the president makes good on his veto threat, backers may try attaching the Keystone measure to a government spending bill or some other must-pass legislation. And that would raise the stakes still further if the standoff with Obama continues. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
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