Congress

Senate falls short on Keystone, battle looms with Obama next year

A warning sign at a TransCanada Keystone XL pipeline valve station in Direct, Texas.
A warning sign at a TransCanada Keystone XL pipeline valve station in Direct, Texas. Fort Worth Star-Telegram/MCT

The Senate failed to vote for construction of the Keystone XL pipeline Tuesday, rebuffing a Democratic senator fighting for her political career and setting up a confrontation between President Barack Obama and a Republican-controlled Congress over the pipeline next year.

Senators voted 59-41 for the pipeline, falling one vote short of the 60 needed to get past a threatened filibuster and pass the bill. Fourteen Democrats joined 45 Republicans in voting for the bill.

The vote was steeped in election politics. After refusing to allow a vote for months, Senate Majority Leader Harry Reid, D-Nev., cleared the way to help a fellow Democratic senator, Mary Landrieu, facing a tough runoff election in Louisiana, where the pipeline is popular.

Her opponent, Republican Rep. Bill Cassidy, sponsored similar pro-pipeline legislation, and it passed the House of Representatives last week.

Reid and Senate Democratic leaders allowed the vote in hopes of boosting Landrieu’s prospects against Cassidy back home. They still opposed the bill themselves and did not use the party machinery to formally push for or against the bill, leaving her and other Keystone supporters scurrying for yes votes.

“We usually know the outcome of the vote before we take it because the deals are all cut,” Landrieu said on the Senate floor. “I brought this bill to the floor knowing in my heart that we have 60 votes.”

Democratic foes, who say the pipeline would harm the environment and contribute to global warming, were supportive of Landrieu’s political plight but staunch in their opposition against her bill. In one breath, Sen. Barbara Boxer, D-Calif., ensured that Landrieu got credit for the bill by reminding senators that they were voting on Landrieu’s, not Cassidy’s, measure. In the next, she blasted Landrieu’s bill, saying the “XL” in the pipeline’s name stands for “X-tra Lethal.”

“I believe it’s one more capitulation to our fossil fuel habit, one more accelerant to global warming that threatens our children’s future,” added retiring Sen. Tom Harkin, D-Iowa. “Every dollar we spend today on developing and using more fossil fuels is another dollar spent in digging the graves of our grandchildren.”

Republicans, the oil industry and labor unions, have touted the pipeline as a job creator that would help the United States lower the amount of oil it uses from the Middle East.

“The Keystone XL pipeline really is, if there is such a thing, a win-win,” said Sen. John Thune, R-S.D.

Tuesday’s vote doesn’t the end of the Keystone debate. Republicans vowed to approve the 1,700-mile pipeline that would bring crude oil from the Canadian oil sands in Alberta to American refineries on the Gulf Coast when they control both the House and Senate next year.

“Once the 114th Congress convenes, the Senate will act again on this important legislation, and I look forward to the new Republican majority taking up and passing the Keystone jobs bill early in the new year,” said Sen. Mitch McConnell, R-Ky., who’ll be the Senate majority leader next year.

If Congress passes a Keystone bill, Obama would have to decide whether or not to veto it. His aides signaled they don’t think Congress has a say.

White House Press Secretary Josh Earnest on Tuesday called the bill “a piece of legislation that the president doesn’t support because the president believes that this is something that should be determined through the State Department and the regular process that is in place to evaluate projects like this.”

The State Department, which determined in its first review that the pipeline would not have a significant impact on climate change, is now assessing whether the project is in the U.S. national interest. In addition, the administration is also waiting for a ruling from a lawsuit in Nebraska that could change the route of the pipeline.

The State Department in January said an average of 42,100 jobs a year would be created during construction of the pipeline, with wages totaling $2 billion.

However, once the pipeline became operational, it would only require an estimated 50 employees – 35 permanent workers and 15 temporary contractors, according to the State Department.

If the Canadian crude, some 830,000 barrels per day, were processed in the United States and not exported in its raw form, it would add business across the energy chain, from U.S. refiners turning oil into products to those who distribute, wholesale and deliver gasoline to stations nationwide.

That’s not how it’s being sold by politicians for and against, however. They mostly suggest the crude oil would transit U.S. territory for export out of the Gulf Coast seaports.

“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else,” Obama said Friday. “It doesn’t have an impact on U.S. gasoline prices.”

The comments didn’t sit well with energy experts.

“That’s sort of a facile political phrase. It’s a route to supply crude oil that will enable refined products to be exported,” said Kevin Book, who heads research for ClearView Energy, a policy advisory group.

There’s a good likelihood that the Canadian oil actually would go to U.S. refiners.

Canadian crude oil is of a heavier grade, and it competes with imported oil from Mexico and Venezuela. The Keystone XL pipeline could force those two countries to discount their oil to compete with the Canadian product, and that’s likely to boost profit margins of U.S. refiners. That doesn’t necessarily mean fuel prices would be lower. That’s because gasoline prices take their cue from the price of Brent crude coming out of Europe, which more reflects the international price of oil.

“It doesn’t necessarily lower gasoline prices, but it surely won’t raise them,” Book said, noting that it has the potential to “send a signal to producers in China that there is a market . . . to be captured.”

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