U.S. President Barack Obama will veto Republican attempts to seize control of the Keystone XL decision, the White House said Tuesday as a showdown loomed over the long-delayed scheme to funnel Canadian oil-sands crude across the United States to the Texas Gulf Coast.
Environmentalists hailed the veto threat – as though Mr. Obama had decided to reject the $8-billion (U.S.) project entirely rather than simply refuse to bow to Republican demands that he approve Keystone XL immediately.
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In Canada, opposition Liberals blamed Prime Minister Stephen Harper for failing to convince Mr. Obama of Keystone XL's merits while government spokesmen accused the Liberals of misleading Canadians and suggested the President was out of step with a majority of Americans.
"This is not a debate between Canada and the U.S., it's a debate between the President and the American people, who are overwhelmingly supportive of the project," said Chris McCluskey, a spokesman for Natural Resources Minister Greg Rickford. As for the threatened veto, "We're not going to comment on the American political process," he added.
On Capitol Hill, the new Congress was barely sworn in Tuesday before the Keystone furor erupted anew.
Firmly in control of both houses of Congress for the first time in eight years, Republicans moved swiftly to introduce a bill that would force approval of the long-delayed pipeline. But even before it was tabled, White House spokesman Josh Earnest said Mr. Obama would veto it, not as a final rejection of the pipeline but rather to prevent Republicans hijacking the decision-making process.
"There's an important principle at stake here," Mr. Earnest said. "There is a well-established process for evaluation of transportation infrastructure projects like this that cross international borders to determine whether the completion of those projects is in the clear best interests of the United States."
Still, Mr. Obama has voiced serious doubts that Keystone XL brings any benefits to American consumers and mainly profits Canadian oil companies seeking higher prices and export markets for Alberta's vast oil sands. Tuesday's veto threat will be regarded by many as a harbinger of eventual rejection.
Keystone XL advocates in both Canada and the United States accused the President of confrontation rather than compromise.
"It's just wrong. It's just not the way you do business," said Senator Joe Manchin, a West Virginia Democrat and co-sponsor of the Keystone XL authorization bill. The veto threat seemingly ends talk of any bipartisan deal.
Senator Joe Hoeven, a North Dakota Republican, admitted: "We may not have enough to overcome a veto, so it may be a two-step process."
While the new Republican majority, along with at least nine Democratic senators who back Keystone XL, will easily deliver the 60 votes needed to end debate and pass the bill, a two-thirds majority of 67 is needed in the 100-seat Senate to override a presidential veto. The pro-Keystone XL bloc is several votes short.
That leaves Mr. Obama still holding the trump card on any Keystone XL decision, although Mr. Hoeven's "two-step" plan likely involves inserting approval into "must-pass" spending authorization later this spring and daring the President to veto it.
Meanwhile, Nebraska's Supreme Court has yet to rule on a challenge to the legality of the Keystone XL route application by TransCanada Corp., the Canadian pipeline giant.
Only then, said Mr. Earnest, can the ongoing State Department assessment of Keystone XL resume. Once it is complete, Mr. Obama will make a decision.
"We're going to make sure we know what the route of the pipeline is before we render judgment," Mr. Earnest said.
Anti-Keystone XL activists hailed the veto threat.
Danielle Droitsch, Canada Project director at the Natural Resources Defense Council, said: "The President made the right call. What's needed now is for him to kill the dirty tar sands pipeline outright."
Tiernan Sittenfeld, a spokesman for the League of Conservation Voters, said: "President Obama continues to show real climate leadership by pledging to veto attempts by Congress to circumvent the process and we're more confident than ever that he will reject this dirty, dangerous pipeline once and for all."
For TransCanada, which first proposed the pipeline six years ago, the new delay – this time in the form of a threatened presidential veto – represents the latest in a changing set of hurdles. President and chief executive officer Russ Girling said: "The bar continues to move again and again."
Keystone XL, has been turned – by both advocates and opponents – into a symbol of the future of U.S. energy policy and Mr. Obama's avowed commitment to cut greenhouse gas emissions.
Mr. Girling insisted: "To be clear this is just a pipeline … not the first, not the last – just a safe and reliable pipeline that delivers energy Americans need. It's time to make a decision."
In Ottawa, Liberal Natural Resources critic Geoff Regan blamed Mr. Harper – who once called the Keystone XL decision a "no brainer" – for failing to find export markets for Alberta's vast oil sands.
"One of the Prime Minister's fundamental responsibilities is to open up new markets abroad for Canadian resources, and to help create responsible and sustainable ways to get those resources to those markets," Mr. Regan said. "When you look at this standard, Mr. Harper has failed miserably."
Mr. McCluskey shot back. "We're disappointed the Liberals would attempt to mislead the public," he said. "Since 2005, exports of Canadian crude to the United States have increased 59 per cent and are at historic highs."
Yet despite relentless lobbying by Mr. Harper, federal ministers, provincial premiers and Canadian diplomats, the Keystone XL decision has been repeatedly delayed by Mr. Obama.
In recent weeks, the President has shifted from studied neutrality to sounding decidedly negative about the project which opponents claim would spur development of Canadian oil sands and thus add significantly to greenhouse gas emissions responsible for global warming.
"It's very good for Canadian oil companies and it's good for the Canadian oil industry, but it's not going to be a huge benefit to U.S. consumer," Mr. Obama said, adding: "It would save Canadian oil companies and the Canadian oil industry an enormous amount of money if they could simply pipe it through the United States and all the way down to the Gulf [where] it would be sold all around the world."
Meanwhile, Republican in-fighting on Tuesday marred what was supposed to be a triumphal control of both houses of Congress for the first time in eight years, following big gains in last November's midterm elections.
In the House of Representatives, John Boehner, an Ohio Republican who faced a surprisingly strong revolt by Tea Party insurgents, only narrowly won a third term as Speaker after more than two dozen disaffected right-wingers voted against him.
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