Obama administration delays decision on Keystone XL pipeline

Rep. Lee Terry (R-Neb.) calls for approval of the Keystone XL pipeline at a news conference in March on Capitol Hill. (Jim Watson / AFP/Getty Images / March 25, 2014)

WASHINGTON -- The Obama administration has delayed a decision on the controversial Keystone XL pipeline project, perhaps until after November’s midterm election.

A further delay in the evaluation of the pipeline, which already has lasted more than five years, is necessary because of a Nebraska state court decision in February that invalidated part of the project’s route, the State Department said in a statement.

Shortly after the court ruling, administration officials had said the Nebraska case would not have an impact on their deliberations. But in the new statement, the State Department said federal agencies could not evaluate the pipeline’s impact until the “uncertainty created by the ongoing litigation” is resolved.

That could take awhile. Nebraska officials have appealed the case to the state Supreme Court but have said they do not expect a ruling until late this year at the earliest.

In the meantime, the latest delay could get President Obama off a politically difficult hook in an election year. The White House has been pressed on one side by environmentalists who have turned opposition to the pipeline into a major cause and on the other by conservative Democrats from energy-producing states who support it.

Administration officials have differed on both the substance and the politics of a decision on Keystone, which would carry oil from the tar sands deposits underneath Canada’s western prairies to refineries in Texas and Oklahoma.

Opponents say the project would worsen global warming by opening up the tar sands to development. Supporters say it would reduce U.S. dependence on oil from the Middle East, Africa and other unstable parts of the world and that Canada will develop the tar sands whether the U.S. approves a pipeline or not.

Obama has said he would approve the project only if it could be proven not to worsen emissions of greenhouse gases that lead to global warming. His approval is needed because the pipeline crosses an international border.

Politically, Obama’s advisors have disagreed about the impact on a difficult election season in which Democrats face a strong prospect of losing control of the Senate.

Some advisors believe that a decision to kill the pipeline could boost enthusiasm among Democratic activists, which has been lagging. Others argue that since most of the key Senate races are taking place in red states, such as Louisiana, Alaska and Arkansas, a decision against the project could hurt Democratic prospects.

Those political calculations were on display as lawmakers and others reacted to the administration’s decision.

Sen. Mary Landrieu (D-La.), who has campaigned for reelection by stressing her independence from Obama, lambasted the delay as “irresponsible, unnecessary and unacceptable” and vowed to use her position as head of the Senate Energy Committee to win approval for the pipeline.

“Today’s decision by the administration amounts to nothing short of an indefinite delay of the Keystone pipeline,” she said, warning that it sends “a signal that the small minority who oppose the pipeline can tie up the process in court forever.”

Another conservative Democrat, Heidi Heitkamp (D-N.D.), said the move “leaves everyone waiting in limbo.”

“It hurts all of us when no decisions are made,” she said in a statement.

Republicans and the oil industry quickly denounced the decision.

“At a time of high unemployment in the Obama economy, it’s a shame,” said Senate Republican leader Mitch McConnell of Kentucky.

“It’s a sad day for America’s workers when politics trumps job-creating policy at the White House,” American Petroleum Institute President Jack Gerard said in a statement.

Russ Girling, chief executive of TransCanada, which is proposing to build the pipeline, said in a statement that the company was “extremely disappointed and frustrated with yet another delay.”

Environmental groups were thrilled. The League of Conservation Voters hailed the delay as “great news” that “makes us even more confident that the harmful Keystone XL tar sands pipeline will ultimately be rejected.”

david.lauter@latimes.com

Twitter: @DavidLauter

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Congress delays budget fight until Monday (Reuters)

WASHINGTON (Reuters) – The Congress set the stage for another last-minute budget showdown as lawmakers delayed action on a broad spending bill until Monday, shortly before disaster relief funds will run out completely.

This time, the brinkmanship threatens to disrupt assistance to victims of floods, wildfires and other natural disasters in one of the most extreme years for weather in U.S. history.

That money could run out as soon as Tuesday, but Republicans and Democrats appeared no closer to a solution after a week of legislative maneuvering.

A billion-dollar dispute over an electric-vehicle program favored by Democrats is preventing Congress from passing a trillion-dollar bill that would replenish disaster funds and ensure the government keeps running past October 1, the start of the new fiscal year.

"Everyone, once in a while, needs a little cooling off," Senate Democratic Leader Harry Reid said. "We'll come here Monday and more reasonable heads will prevail."

Reid spoke after the Democratic-controlled Senate, by a vote of 59 to 36, rejected a version that had passed the Republican-led House of Representatives.

Lawmakers have tried to lower the temperature on Capitol Hill after a series of acrimonious budget battles rattled markets, spooked consumers and disgusted voters.

Still, the stark partisan divide over spending that has dominated Washington this year once again threatened Congress' ability to pass even the most basic legislation.

The bill in question would give the Federal Emergency Management Agency more disaster relief money and ensure that the government can continue operating while Congress debates a full 2012 budget.

Failure to act by then would force the government to suspend everything from space exploration to river dredging. It also would disrupt a flood-insurance program, delivering a further hammer blow to the troubled housing market.

ADDING TO UNCERTAINTY

Analysts and lawmakers said a government shutdown remains unlikely at this point as Congress now routinely resolves budget disputes at the last possible minute. But the wrangling adds further uncertainty to markets that are already on edge.

"Something like this is just a reminder of a lack of policy response by government, not only here in the U.S. but across the globe, in coming up with solutions to the financial and economic problems that we face," said Gary Pollack, managing director at Deutsche Bank Private Wealth Management.

Democrats and Republicans remained at odds over a $1.5 billion cut to an electric vehicle program championed by President Barack Obama.

Republicans proposed the cut to partially offset the added disaster costs to avoid adding to the nation's fiscal woes.

Democrats point out that Congress usually exempts disaster money from normal budget rules. They say the cut would threaten thousands of manufacturing jobs at a time when the country is struggling with 9.1 percent unemployment.

The Senate is scheduled to vote on Monday on a version of the bill that would restore the car loan program. The chamber's top Republican, Mitch McConnell, predicted it would fail.

The dispute throws into question lawmakers' ability to find common ground on the more painful choices they will have to confront in the coming months as a special bipartisan committee searches for trillions of dollars in budget savings.

"Any delay that occurs because of inaction in the Senate will only imperil needed disaster relief for these thousands of families all across our country," House Speaker John Boehner, the top Republican in Congress, said at a news conference.

Boehner has so far declined to give ground to Democrats as he seeks to control a rebellion from his party's conservative Tea Party faction, which is pressing for deeper spending cuts.

Democrats have shown an increased reluctance to compromise after a year of bruising budget battles has left their liberal supporters feeling like they have already given away too much.

Budget fights in Congress earlier this year pushed the government to the brink of a shutdown in April and the edge of default in August, leading to a cut in the country's top-notch AAA credit rating.

(Additional reporting by Donna Smith, Susan Cornwell and Thomas Ferraro in Washington and Karen Brettell, Rodrigo Campos and Richard Leong in New York; editing by Ross Colvin and Eric Walsh)

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