Reid draws line against Keystone

Senate Democrats will hold firm and reject House Republican demands to include approval of the Keystone oil pipeline in transportation funding legislation, their leader said Tuesday. 

Senate Majority Leader Harry Reid (D-Nev.) said he would not in any way help Republicans move Keystone approval across the finish line. 

“Personally, I’m not — I’m not one of the conferees — but personally I think Keystone is a program that we’re not going, that I am not going to help in any way I can,” Reid told reporters. “The president feels that way. I do, too.”

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Reid’s position creates more political uncertainty for popular transportation programs and sets Senate Democrats up for a collision with Speaker John Boehner (R-Ohio) and other Republicans insisting on the project as a price for a new highway bill.

Reid’s tough line on the Alberta-to-Texas pipeline was also reflected in the lawmakers he chose Tuesday to negotiate with the House. 

Senate leaders picked eight Democrats and six Republicans, and among the Democrats’ selections, only Sen. Max Baucus (Mont.) — who isn’t facing reelection until 2014 — has voted for requiring approval of the project to bring oil from Canadian oil sands to Gulf Coast refineries.

 The other seven Democrats include Majority Whip Dick Durbin (Ill.) and Sen. Charles Schumer (N.Y.), who heads messaging for the caucus, as well as prominent liberal Sens. Barbara Boxer (Calif.) and Robert Menendez (N.J.). 

Baucus, in a statement through his office, signaled Tuesday that he’s not inclined to insist on approval of the project in the transportation bill talks.

“No one is a bigger supporter of the Keystone pipeline than Sen. Baucus, and he is looking for every opportunity to help move the project forward. But Sen. Baucus will not put more than 1 million American jobs supported by the highway bill in jeopardy unless he’s sure whatever Keystone measure proposed has the legs to pass Congress, be signed into law and stand up to legal scrutiny, so we don’t end up delaying the project even further by getting it tied up in the courts,” his office said in a statement.

The pipeline has become a major issue in the presidential campaign, with presumptive GOP nominee Mitt Romney saying last week, “I will build that pipeline if I have to myself.”

Republicans have sought to use the issue to batter Obama on high gas prices. 

The administration in January rejected a permit for the pipeline. But the White House stressed that its decision was based not on the “merits” but instead because Republicans had demanded an “arbitrary” permit deadline in a late 2011 payroll tax cut bill. The administration has invited developer TransCanada Corp. to reapply for the cross-border permit, which the company intends to do.

It’s possible that Reid’s statement is a negotiating tactic. 

Indeed, some Democrats signaled that there could be room for a compromise that stops well short of GOP demands for almost immediate approval of a cross-border permit for Keystone. 

“It depends on what the Keystone pipeline measure is,” said Sen. Sheldon Whitehouse (D-R.I.). “If it is scheduling and things like that, it is one thing; if it is going to ram it down people’s throats without any review, that’s a different question,” said Whitehouse, who is not on the conference committee. “How it shakes out will be up to the conferees.”

Sen. John Kerry (D-Mass.), asked if he was confident that the final transportation bill would be free of Keystone, replied, “It depends what shape it were to be in.

“There may be a lot of people on our side who think [that], properly done, they may find that acceptable — I can’t tell you right now where it is at,” he said.

Kerry and Whitehouse opposed mandatory approval of the pipeline when the Senate voted last month to reject Sen. John Hoeven’s (R-N.D.) amendment to the highway bill that would have authorized construction. The amendment garnered 56 supporters when 60 were needed for passage.

Lawmakers have until the end of June before existing funding for highway projects expires. The two sides are working to merge the House bill, which is an extension through September that mandates the pipeline, with the Senate’s Keystone-free, two-year highway package.

The House approved its transportation package last week with 69 Democratic votes, a tally that Republicans quickly used to claim momentum for including Keystone in a final package.

The Keystone language, popular among Republicans, is politically helpful for Boehner, who has struggled to corral GOP support for the transportation bill.

Republicans in both chambers see the pipeline as a winning political issue.

They accuse the White House of passing up a chance to improve energy security and create jobs.

Sen. John Thune (R-S.D.) said he’s hopeful the final transportation package will include the pipeline and that Obama will have a “change of heart” about approving the project.

But he also sees an upside to letting it ride.

“From a political standpoint, if they want to fight on this issue all the way into the fall, that is a fight we welcome. This is a no-brainer for the American people; I think we are on the right side of this argument,” he told reporters Tuesday.

Environmentalists bitterly oppose the project due to greenhouse gases from oil sands extraction and use, among other concerns.

Major business groups such as the U.S. Chamber of Commerce and oil companies are pushing for the pipeline.

— Updated at 8:34 p.m.