01/08/2015 12:55 EST | Updated 03/10/2015 05:59 EDT

Keystone XL Bill Passes Senate Hurdle, Despite Obama's Veto Threat

WASHINGTON - A bill to approve the Canada-U.S. Keystone XL oil pipeline cleared a key Senate committee Thursday, setting up a fight next week pitting newly empowered Republicans against President Barack Obama and Senate Democrats.

The Energy and Natural Resources committee moved the bill closer to the Senate floor by a 13-9 vote. Sen Joe Manchin, one of six Democrats sponsoring the bill, was the only Democrat to support it in committee.

The House of Representatives will vote on its version of the bill Friday and is expected to pass it easily.

The move assures that the first piece of legislation in the new Republican-controlled Senate is on a collision course with the White House, and neither side appeared to be giving any ground Thursday.

New energy committee chairman Lisa Murkowski, a Republican, urged colleagues not to be deterred by the veto threat, reminding them the bill fell just one vote shy of passing the Senate when Democrats controlled the chamber last year.

The bill this time around already has enough support to overcome a filibuster — 54 Republicans and six Democrats are sponsors. But supporters acknowledge they are still short of what would be needed to overcome a veto threat, and were already discussing other means to get the pipeline approved.

Calgary-based TransCanada Corp. (TSX:TRP) has been waiting for more than six years for a U.S. permit to build the $8-billion pipeline, which has become a major irritant in Canada-U.S. relations.

The pipeline would connect to an existing TransCanada system, enabling some 830,000 barrels of crude per day, mostly from Alberta, to more directly reach the lucrative Gulf Coast market by cutting diagonally from the Saskatchewan-Montana border to Steele City, Neb.

Prior to the Senate committee's vote Thursday, Majority Leader Mitch McConnell called on Obama to rescind his veto threat.

"So for a president who has said he'd like to see more bipartisan co-operation, this is a perfect opportunity," McConnell said in a statement.

Supporters say the pipeline project would ease American dependence on Middle East oil. Critics argue that the drilling itself is environmentally harmful and that much of the Canadian crude would be exported with little or no impact on America's drive to reduce oil imports.

But while the $5.4 billion project has become a political lightning rod, it will have minimal impact on the two issues that the two sides care most about, which for Republicans is jobs and for liberal Democrats, their concern about worsening climate change.

The State Department in its evaluation of the pipeline, now on hold until a Nebraska court rules on its route, said the oiilsands would be developed regardless of whether the pipeline was built.

The same review said that during the two-year construction period about 42,000 jobs would be created, but only 3,900 would be directly related to the pipeline.

--With Files from The Canadian Press


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