Keystone XL Pipeline: Republicans Working On Contingency Plan Should Obama Say No

By Roberta Rampton and Richard Cowan

WASHINGTON--Congressional Republicans , who are urging President Barack Obama to give a permit to the Canada-to-Texas Keystone XL oil pipeline project, are working on a plan to take the reins of approval from the president should the White House say no.

Senator John Hoeven of North Dakota, a state counting on TransCanada Corp's pipeline to help move its newfound bounty of shale oil, is drafting contingency legislation that would see Congress green-light the project, an aide told Reuters.

After delaying the $7 billion project past the November 2012 election, Obama was compelled by Congress to decide by February 21 on whether to approve the pipeline that would sharply boost the flow of oil from Canada's oil sands.

Should Obama reject the pipeline, Senate Republicans would look at a bill that would force the go-ahead for work to begin, said Ryan Bernstein, an energy adviser to Hoeven, citing the powers given to Congress in the Constitution to regulate commerce with foreign nations.

"We believe that express authority in the Constitution gives Congress the ability to approve and move forward on such a project," Bernstein said in an interview.

The State Department, which has long held authority to oversee permits for cross-border pipelines, did not have immediate comment on the Republican plan on Wednesday.

There has been constitutional debate in the past over whether authority for border crossing permits rests with the executive branch or Congress, said Patrick Parenteau, an environmental law professor at Vermont Law School.

"Politically, it's an uphill battle, and legally, I would think the president would not acquiesce in such a move by Congress," Parenteau said in an interview.

"If we want to speculate, I guess there's going to have to be a constitutional show-down. The interesting question is: how would that come to the courts, who would bring an action and who would have standing?" he said.

POLITICAL VISE

The Keystone pipeline has put Obama in a political bind at the start of what is expected to be a difficult re-election campaign, and has become a useful tool for Republicans seeking to portray Obama as dithering on a project that they say would create 20,000 jobs.

Most labor unions support the project. But environmental groups, an important part of Obama's political base, have made defeating the pipeline a top priority. They are concerned about the carbon emissions that come from processing the oil sands, and they argue the project will create fewer than 5,000 jobs.

The White House in November delayed its decision on Keystone to find a new route around environmentally sensitive lands in the Nebraska portion of its route. This effectively punted the decision beyond the November U.S. presidential election.

Republicans struck back by inserting language in the December payroll tax cut bill that gave Obama 60 days to grant a permit, or explain why it was not in the national interest.

White House spokesman Josh Earnest told reporters aboard Air Force One on Wednesday that he did not have any updates on the timing of the decision. He reiterated comments made by the administration in December that the 60-day deadline was not long enough to evaluate a new Nebraska route.

Hoeven's draft bill would allow the Nebraska government to take the time it needs to study the route, Bernstein said. The White House did not specifically comment on Hoeven's potential legislation on Wednesday.

Hoeven is working on the new approach with other key Republicans, including Senate Minority Leader Mitch McConnell and Senators Richard Lugar, David Vitter, Lisa Murkowski and Mike Johanns.

"The jobs Keystone XL will create is reason alone to keep this project on track, and I think it'd be extremely difficult for President Obama to claim it's not in the nation's best interest," said Vitter of Louisiana.

POLITICAL BATTLE AHEAD

While new Keystone legislation likely could sail through the Republican-controlled House of Representatives, its prospects in the Democratic-controlled Senate were unclear.

Some Democratic senators have said they support the pipeline, but others say it needs more environmental review.

"Short-cutting U.S. review of an inherently dirty tar sands project is bad enough," said Democratic Senator Patrick Leahy of Vermont, responding to the Hoeven alternative.

"Smothering the review process altogether would compound the folly and divert us from better, cleaner, renewable energy solutions," Leahy said.

Senate Majority Leader Harry Reid likely would consult with the White House before making any pronouncements. A spokesman for Reid did not have immediate comment on Wednesday.

(Additional reporting by Timothy Gardner, Andrew Quinn and Jeff Mason; Editing by Mohammad Zargham and Paul Simao)

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