Republicans weigh linking pipeline to payroll tax cut

12 02, 2011 by Houston Chronicle

House Republicans Friday were considering tying a plan to speed up approval of the Keystone XL pipeline to a broader measure that would extend the payroll tax break that expires Dec. 31.

GOP leaders mulling that approach were hoping the popularity of the proposed 1,700-mile Keystone XL pipeline among Republican lawmakers would help lure fiscal conservatives to support the payroll tax cut.

The tactic also could give a boost to the pipeline measure, which aims to short-circuit the Obama administration's decision to delay a final verdict on whether to issue a permit for the project until early 2013.

That bill, introduced by Rep. Lee Terry, R-Neb., on Friday, would strip President Barack Obama and the State Department of the power to permit or reject the project and instead put that decision in the hands of the Federal Energy Regulatory Commission.

The measure would give the independent agency 30 days to issue an initial permit for TransCanada's proposed pipeline, except in some limited instances.

FERC also would have 30 days to approve any new pipeline route designed by TransCanada Corp. and Nebraska policymakers to navigate around environmentally sensitive areas in the state once the agency concludes an environmental review of the alternative path.

The State Department announced last month it would delay a final verdict on whether the $7 billion project is in the national interest in order to conduct an environmental analysis of any alternative route. The delay would push a final decision until after the 2012 presidential election, giving Obama some breathing room on a quandary that pits environmentalists who oppose the project against some labor unions that say it would create much-needed jobs.

"This latest delay has nothing to do with pipeline safety, oil sands production or even the state of Nebraska," Rep. Ed Whitfield, R-Ky., said during a House pipeline hearing Friday. "Instead, it has everything to do with appeasing a small, vocal group of opponents of this project."

The Keystone XL pipeline would link oil sands development in Alberta, Canada, with a key pipeline terminal at Cushing, Okla. From there, it would run to Gulf Coast refineries.

Pipeline backers say it would enable the U.S. to get more of the oil it needs from a North American ally instead of the Middle East, while simultaneously providing new transportation opportunities for oil produced in western states.

Rep. Gene Green, D-Houston, noted that about 25,000 barrels per day of crude taken from the Bakken formation in North Dakota and Montana have to be delivered to refineries by trucks and trains. That carries its own environmental risks, Green said.

"Everything I've heard is that it's so much safer to be in a pipeline than it is in a tanker truck on the road or a tanker car on a train," Green said.

TransCanada has estimated up to 20,000 jobs could be tied to construction and operation of its pipeline.