OVERNIGHT ENERGY: Keystone battle animates launch of highway bill talks

Baucus is facing competing pressures because he supports the pipeline but has also said he doesn’t want the battle over Keystone to derail the broader package, a signal that Baucus won’t insist on it.

He offered few hints about his strategic thinking Tuesday. “I am for jobs. I am for the result, the bill, that creates and maintains the most jobs,” he told E2 outside the formal conference meeting.

ADVERTISEMENT
“There are lots of different permutations and ways to skin a cat, I am looking for the solution that gets the most jobs,” he said.

With Senate Democrats outnumbering Senate Republicans on the negotiating team eight to six and Baucus declining to make Keystone make-or-break, backers of the pipeline face big hurdles.

Baucus said through an aide last month that he won’t put transportation jobs at risk unless he’s sure that a Keystone provision can pass Congress, win President Obama’s signature and pass legal muster.

The House passed its bill in April despite a White House threat to veto the measure over Keystone, a project the Obama administration says needs more review. Developer TransCanada Corp. last week reapplied for a federal cross-border permit.

But while Keystone backers appear to face an uphill battle, Sen. James Inhofe (R-Okla.) told reporters outside the meeting that the conventional wisdom is wrong.

“We will just have to wait and see how many of them see that as a deal-killer, and is that the end of the world for anyone other than Barbara Boxer, and I think not,” he said, referring to Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.).

Inhofe offered a rather intricate view about why Democrats might be willing to swallow Keystone in a final bill to reach a deal.

“The XL language takes a lot of people off the hook because it gives [Democrats] an excuse to go ahead and move on that when they know for a fact that it is going to move anyway, so why not just go ahead and do it now. Why wait?” he told reporters about the pipeline.

“I think it will [make the final package] because ... a lot of Democrats don’t want to vote in favor of that so they would not want it on there, but on the other hand they know it is the right thing to do and this gives them an excuse to do the right thing,” he said.

Inside the opening session of the conference committee, which consisted only of speeches, a number of lawmakers spoke in favor of and against including the pipeline, signaling that it could be a major issue in the bicameral talks.

The current extension of transportation programs expires June 30.

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) joined a number of other Republicans in arguing that approval of the pipeline should be in the final bill.

“The Keystone XL pipeline is the ultimate jobs and infrastructure project,” Upton said, and argued that the proposal has undergone robust review.

Rep. Henry Waxman (Calif.), the top Democrat on the Energy Committee, derided the House Keystone provision as a “legislative earmark” and noted that Obama has already threatened a veto over it.

“Instead of Congress rejecting the normal administrative review process, Keystone should be treated like any other project, and the decision should be made on the merits of the proposal, once the reviews are completed,” Waxman said.

Similarly, Sen. Dick Durbin (D-Ill.) said the provision adds “baggage to this train.”


NEWS BITES:

Report: Investigator denied access to details of drilling report

The New Orleans Times-Picayune reports: “A senior federal investigator says he was denied access to a White House official and full email records as he tried to determine whether a BP oil spill report was intentionally edited to erroneously suggest outside experts supported the Obama administration's deepwater drilling moratorium. The experts, in fact, did not endorse the moratorium the administration ordered after the 2010 spill. The White House and Department of Interior later said the mistake was inadvertent, a result of an early-morning edit that moved some material from the body of the report to the executive summary.”

Read more about the back-and-forth on the report, which has resulted in a subpoena to the Interior Department from House Republicans, here.

Interior official to testify before House committee

Tommy Beaudreau, head of the Interior Department's Bureau of Ocean Energy Management, will testify at 10 a.m. Wednesday at a House Natural Resources Committee hearing titled, “Evaluating President Obama's Offshore Drilling Plan and Impacts on Our Future."

House panel to examine reliability, environmental rules

A House Energy and Commerce Committee panel will examine potential conflicts between environmental regulations and electric grid reliability Wednesday at 9 a.m. Gina McCarthy, assistant administrator for the Environmental Protection Agency’s Office of Air and Radiation, and Patricia Hoffman, assistant energy secretary for the Energy Department’s Office of Electricity Delivery and Energy Reliability, will testify at the hearing.

House lawmakers to hear from business owners struggling with high gas prices

The House Small Business Committee will hold a hearing on the effect of gasoline prices on small businesses Wednesday at 1 p.m. Several small-business owners will testify.

Maryland lawmakers to speak at clean-energy event

Reps. Roscoe Bartlett (R-Md.) and Chris Van Hollen (D-Md.) will speak at an event hosted by the Business Council for Sustainable Energy Wednesday at 2:30 p.m. The event is titled, “Clean Energy Markets: Investment and Policy Trends.” More here.

Military green-energy programs in focus

On Wednesday the American Council on Renewable Energy will hold its second U.S. Military and Renewable Energy Industry Forum. Speakers include Sen. Mark Udall (D-Colo.) and Tom Hicks, the Navy’s deputy assistant secretary for energy. More here.

US-China relations in focus

Also Wednesday: The Woodrow Wilson Center for International Scholars will hear from a senior Commerce Department official and other experts at an event titled “Cooperation or Conflict? Contradictions in U.S.-China Clean Energy Relations.” More here.


IN CASE YOU MISSED IT...

Here's a quick roundup of Tuesday's E2 stories:

- Obama re-nominates Republican nuclear official
- Energy walks back $4 gas prediction
- GOP seeks to undercut White House on gas well approvals
- Obama presses Congress to extend energy tax incentives
- Warren Buffett backs Keystone pipeline
- Report: US oil boom won’t end price shocks, military commitment

Please send tips and comments to Ben Geman, ben.geman@thehill.com, and Andrew Restuccia, arestuccia@thehill.com.

Follow us on Twitter: @E2Wire, @AndrewRestuccia, @Ben_Geman