Is the Political Fight Over Keystone XL Over?

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By Daniel J. Graeber for Oilprice.com

A bill passed in a House energy committee aims to amend the rules for cross-border energy projects, suggesting the political fight over Keystone XL is over.

The House Energy and Commerce Committee approved resolution 3301, the so-called North American Energy Infrastructure Act. Authored by Reps. Fred Upton, R-Mich., and Gene Green, D-Texas, the bill aims to do away with the current processes for approving electrical, gas and oil infrastructure that would cross the U.S. border with Mexico or Canada.


"No one can rightfully argue that the current presidential permit process is not broken," Upton said in a May 8 statement.

A presidential permit is needed for cross-border projects and it's been more than five years since pipeline company TransCanada submitted its application for the Keystone XL pipeline. Since then, the company constructed and started service at its 485-mile Gulf Coast pipeline from Cushing, Okla., considered the U.S. leg of the pipeline.

Keystone XL itself would extend more than 1,100 miles from Alberta to Nebraska before it connected to existing links to Cushing. Designed to deliver oil sands, the pipeline has become the scapegoat not only for environmentalists, but for policymakers on both sides of the U.S. energy debate.

U.S. Sens. Mary Landrieu, chairwoman of the Senate Energy Committee, drafted a bill with Sen. John Hoeven, R-N.D., that would advance Keystone XL. Landrieu said May 1 it's time to stop debating the project and move ahead with construction.

"This pipeline is clearly in our national interest, and I urge all senators to join Sen. Hoeven and me to support this bill," she said.

Bipartisan bickering over procedural voting issues, however, left the bill dead on the Senate floor.

In April, the U.S. State Department said the federal agencies in charge of the permitting process needed more time because of legal issues related to the route through Nebraska. A state court is hearing challenges to legislation that gave Gov. Dave Heineman authority over the route and, while the consultation process isn't starting over, the State Department said route uncertainty was slowing federal decisions.

Upton said the legislation he helped write with his counterpart Green would get around such delays. With North American energy production on the rise, U.S. policymakers can make it easier to take full advantage of the boom by building more cross-border projects.

"This approach is a sincere effort to focus on a targeted solution to the lessons learned from the Keystone pipeline," he said.

The lesson learned after five years of waiting may be that the fight, at least in political terms, is over for Keystone XL.

This article was originally published on Oilprice.com.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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