Assistant Secretary of State Kerri-Ann Jones told Congress that the bill "imposes narrow time constraints and creates automatic mandates that prevent an informed decision" on the $7 billion Keystone XL pipeline.
The bill, sponsored by Rep. Lee Terry, a Nebraska Republican, would transfer authority over the 1,700-mile (2,700 kilometre) pipeline to the Federal Energy Regulatory Commission.
Obama blocked the $7 billion pipeline last week, saying officials did not have enough time to review an alternate route that avoided environmentally sensitive areas of Nebraska.
The plan by Calgary-based TransCanada Corp. would carry bitumen from Canada's oilsands in Alberta through six states to refineries on the Texas Gulf Coast.
Jones said Obama's Jan. 18 decision to reject the pipeline was not based on the merits of the project, but on the fact that officials did not have enough time to review the project before a deadline imposed by Congress.
"We fought in World War II in less time than it has taken to decide on this project," shot back Rep. Joe Barton, a Republican. "In all due respect, it is an insult to the American people to say you need more time."
TransCanada first applied to build the pipeline in 2008, under the Bush administration.
Obama had delayed a decision on the pipeline in November, saying his administration needed time to review an alternate route that avoided environmentally sensitive areas of Nebraska — a route that still has not been proposed. But in an unrelated tax deal he cut with congressional Republicans, Obama had been boxed into making a decision by Feb. 21.
The deal required that the project would go forward unless Obama declared by that date that it was not in the national interest. The president did just that last week.
Republicans said after the president's Jan. 18 announcement that the battle over Keystone was not over.
Terry, the bill's sponsor, said transferring authority for the project to FERC was "simply moving authority to an agency that understands pipelines. This legislation means that Keystone will progress in a timely manner and that our country gets the much-needed jobs and energy security that it will bring."
Jeffrey Wright, director of FERC's Office of Energy Projects, said the agency has no authority or experience in determining where oil pipelines are located. FERC regulates interstate transmission of electricity, natural gas and oil. It also reviews proposals to build liquefied natural gas terminals and interstate natural gas pipelines.
Wright said the GOP bill does not give FERC enough time to adequately assess the Keystone XL project and does not provide clear direction for how the agency would modify the yet-to-be-determined route through Nebraska.
Rep. Henry Waxman of California, the senior Democrat on the House energy panel, called the legislation "an earmark that benefits just one project" and would exempt the pipeline "from every federal and state permitting requirement."
Obama "was right to reject this project until he has all of the necessary information in front of him to make an informed decision," Waxman said. "We should reject this bill and allow the agencies enough time to do their jobs."
Project supporters say U.S. rejection of the pipeline will not stop one from being built. Canadian Prime Minister Stephen Harper has said Canada is serious about building a pipeline to its West Coast, where oil could be shipped to China and other Asian markets.
TransCanada has said it will submit a new application once an alternative route for the pipeline is established. Company chief Russ Girling said a proposed route could be made public in a few weeks.
TransCanada says the pipeline could create as many as 20,000 jobs, a figure opponents say is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction
The pipeline is a dicey proposition for Obama, who enjoyed strong support from both organized labour and environmentalists in his 2008 campaign for the White House.
Environmental advocates have made it clear that approval of the pipeline would dampen their enthusiasm for Obama in November. Some liberal donors even threatened to cut off funds to Obama's re-election campaign to protest the project, which opponents say would transport "dirty oil" that requires huge amounts of energy to extract and contributes to greenhouse gas emissions blamed for global warming.
By rejecting the pipeline, Obama also risks losing support from organized labour, a key part of the Democratic base, for thwarting thousands of jobs.
Matthew Daly can be followed on Twitter: (at)MatthewDalyWDC
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