White House threatens veto of highway bill over Keystone pipeline provision

The White House on Tuesday threatened to veto House legislation to extend transportation programs because it contains GOP language that mandates approval of the Keystone XL oil sands pipeline.

The House is slated to vote Wednesday on the bill that keeps the transportation programs funded through September, the end of the fiscal year.

It would take permitting of the proposed Alberta-to-Texas pipeline away from the State Department and task the Federal Energy Regulatory Commission with approving the project.

“Because this bill circumvents a longstanding and proven process for determining whether cross-border pipelines are in the national interest by mandating the permitting of the Keystone XL pipeline before a new route has been submitted and assessed, the president’s senior advisers would recommend that he veto this legislation,” the White House said in a formal “statement of administration policy” Tuesday afternoon.

The threat continues the political thrust-and-parry between the White House and Republicans over the controversial project that is increasingly at the center of election-year energy battles.

The White House in January rejected TransCanada Corp.’s permit for the pipeline, but stressed the decision was not on the “merits.”

Instead, the White House said that a permitting deadline the GOP demanded in late 2011 payroll tax legislation would short-circuit proper review of Keystone, including the route around ecologically sensitive regions of Nebraska.

The White House has invited TransCanada to reapply but does not plan to make a decision until 2013.

The statement issued Tuesday says the House bill wrongly demands approval of the project “despite the fact that the pipeline route has yet to be identified and there is no complete assessment of its potential impacts, including impacts on health and safety, the economy, foreign policy, energy security and the environment.”

Republicans and business groups have in recent months launched a political assault against the White House over the lack of a permit for Keystone, alleging Obama is missing a chance to boost U.S. energy security and create thousands of jobs. Some Democrats and major unions also back the project, although labor is not unanimous on the matter, and the AFL-CIO has not taken a position amid the divide.

Environmentalists and a number of Democrats strongly oppose Keystone because of greenhouse gas emissions from extracting and burning oil sands, forest damage from the massive projects and fear of spills along the pipeline route.

The Senate in March blocked an amendment to its multi-year transportation package that would have forced approval of the project using somewhat different language than the current House plan.

But 11 Democrats broke ranks with the White House even though President Obama personally lobbied against the GOP-led amendment.

Tuesday’s White House statement also criticizes other aspects of the House bill to extend transportation programs, noting the administration “strongly opposes” the bill.

“By simply extending current authority through the end of the fiscal year, this legislation would miss a critical opportunity to provide more certainty to states and localities as they undertake the long-term planning and execution of projects and programs that are essential to creating and keeping American workers in good paying jobs, improving the nation’s surface transportation infrastructure, and ensuring roadway safety,” the White House said.