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Keystone Pipeline Bill To Be Voted On By U.S. Lawmakers Tuesday

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AP

WASHINGTON - Lawmakers in the Republican-controlled House of Representatives are slated to vote Tuesday on a bill that would force U.S. President Barack Obama to make a decision on TransCanada's Keystone XL pipeline by Nov. 1.

The U.S. State Department is reviewing the US$7 billion pipeline proposal, with a preliminary environmental assessment expected by mid-August.

The pipeline would transport Alberta oilsands crude through the American heartland to refineries on the Gulf Coast. The State Department's final decision on the project is expected by the end of the year.

For that reason, the White House has been critical of the House bill, saying it's unnecessary given State Department officials will decide on the fate of the pipeline within weeks of the Nov. 1 deadline imposed by the legislation.

The bill would also intrude upon the Obama administration's review of the pipeline, the White House said in a statement.

The bill "conflicts with long-standing executive branch procedures regarding the authority of the president and the secretary of state, and could prevent the thorough consideration of complex issues which could have serious security, safety, environmental, and other ramifications," the statement read.

Nonetheless, the bill is expected to pass the House, given Republican legislators are almost uniformly in favour of embracing Alberta's oilsands amid soaring prices at the pumps and a desire to end American dependence on Middle East oil.

It faces a far more uncertain future in the U.S. Senate, which is still controlled by Democrats, some of them vehemently opposed to the pipeline.

North of the border, the delay in approving the pipeline has caused consternation about the future prospects for Canadian energy south of the border.

Last week, Alberta Energy Minister Ron Liepert reiterated his view that Canada must find more markets for its crude oil if it hopes to become a global energy superpower.

He called for a more streamlined regulatory process that would make it less likely that delays would hamper major projects like Enbridge Inc.'s (TSX:ENB) Northern Gateway pipeline to the West Coast and TransCanada's (TSX:TRP) Keystone pipeline.

"Currently we really only have one customer and that's south, and you're not going to be a global energy superpower with one customer," he said.

Oil industry lobbyists in the U.S., nonetheless, have been pressing for quick approval of the pipeline.

The American Petroleum Institute has been citing a recent study by the Canadian Energy Research Institute that says delays in approving the project have cost much-needed jobs in the U.S., where 14 million Americans are unemployed amid a lingering recession.

Some estimates suggest the Keystone pipeline could create 118,000 jobs and generate US$585 million in state and local taxes.

The Keystone XL project came up in a conference call Tuesday with Calgary-based Cenovus, one of the major oilsands producers. Chief executive officer Brian Ferguson said the company continues to plan "on the basis that it will get approved before the end of this year ... So we're not planning on any other scenario other than Keystone XL getting approved in a fairly timely way."

Environmental groups, meantime, have maligned the proposed pipeline, citing the high levels of greenhouse gas emissions associated with Alberta's oilsands.

They also point to devastating oil spills like the one in rural Michigan last summer along another Canadian pipeline _ this one operated by Enbridge Inc. _ that also carried diluted bitumen, which environmentalists say is more corrosive than regular crude and poses extra risks to pipelines.

Some recent pipeline spills, including one in Wyoming, have involved diluted bitumen.

Tuesday marked the anniversary of the Enbridge spill along part of the Kalamazoo River.

"The river is still closed due to continuing contamination," Ryan Salmon of the National Wildlife Federation said Tuesday in an interview, during which he slammed the House vote.

"We anticipate proponents of the pipeline will be eager to overstate its significance once again ... this House is the same House that is routinely doing favours for Big Oil," he said.

"It will also be difficult for some representatives to vote against it because there are labour groups supporting it based on the questionable claim that it will create jobs. TransCanada's own original application, however, predicted a peak workforce of less than four per cent of what it's forecasting now."

A recent independent study by a University of Nebraska water resources engineer suggested that Calgary-based TransCanada has underestimated the number and volume of leaks that could occur along the pipeline and had not fully assessed the impact of spills on water supplies in the U.S. heartland.

Lee-Anne Goodman, The Canadian Press

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