By Richard Cowan
BALTIMORE (Reuters) - Republicans in Congress are considering using upcoming payroll tax cut or highway construction bills in order to force quick approval of the Keystone XL oil pipeline but have not yet settled on a strategy, lawmakers said on Friday.
Having failed so far to get President Barack Obama to approve TransCanada Corp's application for the $7 billion Canada-to-Texas pipeline, Republicans who control the House of Representatives are discussing Keystone during a three-day retreat in Baltimore that focuses on the 2012 legislative agenda and their prospects in the November elections.
Renewed efforts to force a decision on Keystone, which is strongly opposed by environmentalists, could result in another showdown with the White House if the pipeline is inserted in the payroll tax bill once again.
Republican leaders have been signaling they want to get the tax issue off the agenda quickly this time, following a public relations disaster last month when they were viewed as standing in the way a temporary tax cut extension that ultimately was enacted.
Earlier this week, Obama rebuffed Republicans when the White House announced that a 60-day fast-track approval imposed by Congress was inadequate for weighing the environmental impact of the proposed pipeline route. As a result, the administration turned down the application but said new requests to build the project would be considered.
Republicans see Keystone as a pivotal campaign issue to use against Democrats in November's presidential and congressional elections, arguing that the pipeline will create thousands of much-needed jobs while helping secure the country's energy future.
"We are committed to keeping it on the front-burner," said Representative Fred Upton, who chairs a House committee that oversees U.S. energy policy.
Upton also holds another important position as a negotiator on payroll tax cut legislation that is expected to move through Congress in coming weeks. In December, Republicans successfully attached the 60-day Keystone approval clock to a two-month extension of Obama's payroll tax cut.
Congress has until February 29 to either continue a two percentage point cut in payroll taxes for 160 million workers or be blamed for raising taxes during an election year.
At a press conference, Upton expressed his desire to again try to force the construction of Keystone by attaching legislation to the next payroll tax cut bill. With fellow Republican Greg Walden, another payroll tax bill negotiator, standing with him, Upton said, "I've got to believe that at least two of us will be pushing for that."
But Upton would not say whether House Speaker John Boehner, who will have a say in the final deal on the payroll tax cut legislation, also wants Keystone included in the tax bill again. Earlier this week, Boehner said many options were possible.
Representative Lee Terry, whose home state of Nebraska would host part of the pipeline, told reporters that a highway construction funding bill Congress is likely to consider this year is one of the other measures that Republicans are thinking of using to target for Keystone.
Terry has drafted legislation to shift the Keystone decision-making process from the Obama administration to the independent Federal Energy Regulatory Commission, which regulates pipelines in the United States.
The House Energy and Commerce Committee will hold a hearing on Wednesday about Terry's bill and other Keystone measures. Members had asked Secretary of State Hillary Clinton to testify, but Kerri-Ann Jones, the State Department official in charge of the Keystone permit, will appear instead.
The Obama administration says more time is needed to explore alternate pipeline routes through Nebraska and its environmental impact. The study would take months, which would push any approval beyond the November presidential and congressional elections.
Republicans counter that there has been plenty of time to study the project and Obama simply wants to put it past the election, at the expense of job creation now, to avoid having to pick between two key Democratic constituencies. They are labor unions that back Keystone and environmentalists who do not.
(Reporting By Richard Cowan; Editing by Bill Trott)