Keystone supporters use tensions with Iran to pressure Obama on pipeline

Industry groups are using growing tensions with Iran over oil to pressure President Obama to approve the Keystone XL pipeline, which would carry Canadian crude into the United States.

More than 100 industry and business groups sent Obama a letter Wednesday, arguing that the pipeline would make the United States less reliant on unstable nations that control much of the world’s oil.

The letter — which was signed by the American Petroleum Institute, the U.S. Chamber of Commerce and others — highlights Iran’s threat to block the Strait of Hormuz, a major oil route, amid plans by Western nations to impose additional economic sanctions on the country. While the United States doesn’t get oil from Iran, closing the Strait of Hormuz would affect other nation’s oil exports.

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“The Keystone XL pipeline will also greatly enhance America’s energy security,” the groups wrote in their letter. “With the current situation in the Middle East, and tensions in the Strait of Hormuz continuing to rise, approving this pipeline is the right energy and national security policy for America.”

The letter is the latest attempt by Keystone supporters to ramp up political pressure on Obama to approve the project, which would carry oil sands crude from Alberta, Canada, to refineries on the Gulf Coast.

Sen. Richard Lugar (Ind.), ranking Republican on the Senate Foreign Relations Committee, cited the tensions with Iran in a Tuesday letter in which he pressed Obama to green-light the pipeline.

Supporters of the project argue that it will boost the ailing economy and create jobs — assertions that opponents said are overblown. 

“Mr. President, the significant job creation, economic growth, energy security and national security benefits of this project make clear it is in the national interest,” the groups wrote. “We strongly urge you to act swiftly to approve the Keystone XL pipeline.”

Republicans secured inclusion of a measure in a broad payroll-tax-cut package that requires Obama to make a decision within 60 days on the project, which has been under federal review for years.

Obama had sought to delay a final decision on the project until after the 2012 election while the administration reviews alternative pipeline routes. But the payroll-tax-cut package forces Obama to weigh in on the pipeline by Feb. 21. 

The president faces a politically thorny decision on the pipeline. Keystone divides his supporters, with environmentalists vehemently opposed to the project and major labor unions in support of it.

As the February deadline for making a decision approaches, stakeholders — including the oil industry and environmental groups — have launched an aggressive lobbying battle to sway the Keystone verdict.

White House and administration officials have said they will have little choice but to reject the pipeline under the 60-day timeframe.