State Department warns that GOP plan could scuttle Keystone pipeline

The State Department is warning Republicans that forcing a decision on the proposed Keystone XL oil sands pipeline within two months won’t bring the project approval they're seeking.

House Republicans are including a provision in payroll tax cut legislation that would require State to issue a permit for the proposed Alberta-to-Texas pipeline within 60 days, unless the president determines that it’s not in the national interest. Senate GOP leaders are also pushing the Keystone provision.

But a State spokesman said Monday that the 60-day time frame would leave the administration unable to issue the permit for TransCanada Corp.’s proposed $7 billion pipeline.

“Should Congress impose an arbitrary deadline for the permit decision, its actions would not only compromise the process, it would prohibit the Department from acting consistently with National Environmental Policy Act requirements by not allowing sufficient time for the development of this information,” the spokesman said.

“In the absence of properly completing the process, the Department would be unable to make a determination to issue a permit for this project,” State added.

The Obama administration recently extended the pipeline review into 2013 as it analyzes route changes that would bring it away from the ecologically sensitive Sand Hills region of Nebraska.

President Obama has said the final decision will come after weighing various environmental, economic and health issues.

“The State Department has led a rigorous, thorough, and transparent process that must run its course to obtain the necessary information to make an informed decision on behalf of the national interest,” the department said.

But Republicans say the White House delayed the pipeline for political reasons, and are pushing for quick approval of the project.

House Speaker John Boehner (R-Ohio) defended Republicans' decision to include the Keystone XL measure in the payroll tax package Monday, criticizing the the State Department for calling the 60-day time period for issuing a final verdict on the pipeline "arbitrary."

"The only thing arbitrary about this decision is the decision by the president to say, 'Well, let’s wait until after the next election,' " Boehner told reporters in the Capitol Monday evening.

A suite of industry groups and unions — including the powerful U.S. Chamber of Commerce and the American Petroleum Institute — are pushing for approval of the pipeline, claiming it will boost energy security and create scores of “shovel ready” jobs.

But environmentalists bitterly oppose the project due to greenhouse gas emissions and forest damage from Alberta’s massive oil sands projects, concerns over spills along the route and other issues.

—Andrew Restuccia contributed

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