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Sunday, April 20, 2014

Pipeline dispute moves to House

BY MATTHEW DALY
Associated Press

A dispute over a plan to send oil from western Canada to the Texas Gulf Coast moved to Capitol Hill on Monday, where a House panel debated whether to speed a decision by the Obama administration.

Republicans on the House Energy and Commerce Committee are backing a bill that would set a Nov. 1 deadline for the State Department to decide on the $7 billion project. A Canadian company wants to build a 1,900-mile pipeline to carry crude oil extracted from tar sands in Alberta, Canada, to refineries in Texas.

Rep. Fred Upton, R-Mich., who chairs the energy panel, said it makes sense to pursue reliable and affordable energy in North America. The proposed Keystone XL pipeline would create thousands of jobs and help cut $4-a-gallon prices at the pump, Upton said.

"We need to act soon as China is very interested in pursuing the same resources," Upton said. "If we don't say yes soon, China will lock it up."

But environmental groups say the pipeline would bring "dirty oil" that requires huge amounts of energy to extract and could cause an ecological disaster in the event of a spill.

The pipeline planned by Calgary-based TransCanada would travel through five U.S. states — Montana, South Dakota, Nebraska, Kansas and Oklahoma — before reaching refineries in Houston and Port Arthur, Texas.

The project would double the capacity of an existing pipeline from Canada, and supporters say it could significantly reduce U.S. dependence on Middle Eastern oil.

The State Department said last month that a new environmental study on the pipeline revealed no new issues since a similar report was issued last year. The State Department has authority over the pipeline because it crosses an international boundary. Officials have pledged to decide on the project by the end of the year.

Environmental groups said the State Department report glossed over crucial issues such as pipeline safety and the risks posed by the proposed route over the massive Ogallala Aquifer, which supplies drinking water to people in eight U.S. states.

The environmental group Friends of the Earth filed suit against the State Department last week, seeking details of any communications between a TransCanada lobbyist and the Obama administration. The lobbyist, Paul Elliott, was a top aide in the 2008 presidential campaign of Secretary of State Hillary Rodham Clinton.

Friends of the Earth said it wants to learn whether Elliott's role in the project has resulted in a possible conflict of interest at the State Department.

Democrats on the energy panel, meanwhile, questioned whether Koch Industries could profit from the pipeline's approval. The Wichita-based company has said it has no financial interest in the pipeline.

But Reps. Henry Waxman of California and Bobby Rush of Illinois said news reports indicate that the company is developing projects to refine oil produced from the pipeline and would be a potential buyer for crude shipped through the pipeline.

"There is no mention of Koch Industries in the proposed Keystone Pipeline project bill," Philip Ellender, Koch Cos. Public Sector's president of government and public affairs, said in an e-mailed statement. "As we explained to Representative Waxman's staff last Thursday, Koch neither supports nor opposes the Keystone Pipeline project, and, as we made clear to the Congressman's staff, we have no financial interest in the project. Given these facts, we are confused about why Koch is being singled out and inserted into these discussions."

Liberal groups have targeted Charles and David Koch because of their prominent support of conservative political causes.

Republicans called Democratic claims about the Koch brothers a sideshow.

"This is not about personalities," said Rep. Ed Whitfield, R-Ky., chairman of the energy and power subcommittee. "This is about the project and its benefit or lack of benefit to the American people."

Waxman said Congress should not pass a law merely to satisfy a foreign company. An executive for TransCanada responded that the company had no role in the legislation and did have an opinion on it.

A State Department spokesman did not return messages from the Associated Press.

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