Highway vote keeps Keystone fight alive in Senate

Reuters News
Posted: Mar 06, 2012 3:43 PM
Highway vote keeps Keystone fight alive in Senate

WASHINGTON (Reuters) - Senate Republicans' push for a vote on approval of the delayed $7 billion Keystone XL oil pipeline project gained momentum on Tuesday after Democrats failed to end debate on a major transportation bill.

Fifty-two senators, most of them Democrats, voted to move forward on the $160 billion highway bill without a proposed Republican amendment to authorize construction of the Canada-to-Texas pipeline, eight votes short of the 60 needed to end debate.

The defeat gave Republicans a new opening to attack President Barack Obama for rejecting TransCanada Corp's project, as soaring gasoline prices become a top issue for voters ahead of the November presidential election.

A vote on Keystone faces an uphill battle in the Senate but would likely turn the highway bill into a battle over gasoline prices and job creation.

Senate Majority leader Harry Reid now must negotiate further with Republicans on a deal to hold a stand-alone vote on the controversial project and potentially dozens of other amendments ranging from clean air and water air standards to extension of green energy-related tax breaks.

"I don't know why everything we do has to be a fight. Not a disagreement, a fight," Reid said before the vote.

Senate Republican leader Mitch McConnell, speaking before the vote, argued to keep debate open and said that a deal on amendments including the Keystone project was near.

Republican senators last week used the "must-pass" legislation to try unsuccessfully to push through an amendment that would have reversed Obama's policy requiring health insurance coverage for contraceptives and other services by allowing employers to opt out for religious or moral reasons.


Environmental groups have fought the Keystone project, which would connect Canada's oil sands to U.S. Gulf Coast refineries, because of the pollution produced by the heavy oil sands crude.

Some Democrats support the project. But there are currently 47 Republicans in the Senate, meaning at least 13 Democrats would have to agree to move it forward.

Obama threw the project into limbo in January because he said his administration needed more time to evaluate the environmental impact of the pipeline's route through Nebraska.

In the meantime, TransCanada has said it will split the project in two and build the southern leg between the Cushing, Oklahoma storage hub and Texas refineries.

The Senate amendment - which would require Obama's signature to become law - would bypass Obama and see Congress approve the project. A study by the nonpartisan Congressional Research Service said Congress has the constitutional right to legislate permits for cross-border pipelines.

The Republican-controlled U.S. House of Representatives has passed an energy bill that would see an independent energy regulator give the project a permit.

Obama has said he would veto that bill because of the Keystone measure as well as other provisions that would expand oil drilling in sensitive areas.

The $109 billion Senate transport bill would fund highway and mass-transit construction projects for two years. The current legislation expires March 31, and if no action is taken by then, road project funding and collection of federal gasoline taxes would be halted.

The House has yet to pass its version of the transport legislation, which currently is much larger, at $260 billion, and more complex.

(Reporting By David Lawder and Roberta Rampton; Editing by Paul Simao)