Business groups, Republicans launch onslaught on president over Keystone

The nation’s most powerful business groups are dialing up the political pressure on the White House to approve the Keystone XL pipeline.

December’s payroll-tax-cut deal gives the administration 60 days to approve or reject TransCanada Corp.’s pipeline to bring oil from Alberta’s tar sands projects to Gulf Coast refineries.

{mosads}U.S. Chamber of Commerce President Tom Donohue plans to highlight the pipeline in his closely watched annual speech Thursday on the state of American business.

“Keystone — and energy as a whole — will be a major element of Tom’s speech tomorrow,” a spokesman for the business group said Wednesday.

Separately, Business Roundtable President John Engler, a former GOP governor of Michigan, will hold a news conference Thursday touting what advocates call the jobs and energy security benefits of the project.

This week’s actions are part of a wider GOP and industry blitz in favor of Keystone. Republicans are using the pipeline as an election-season political weapon against President Obama, arguing he can create jobs and help the economy by approving it. 

The powerful American Petroleum Institute has launched an ad campaign in favor of the project, and API President Jack Gerard last week issued a blunt warning to Obama: Approve the pipeline or face “huge political consequences.”

The pipeline is tricky political terrain for the White House.

Environmentalists strongly oppose the project due to greenhouse gas emissions and other concerns, while a number of labor unions — another key part of Obama’s base — back the project as a job creator.

Republicans are unlikely to let Obama off the hook if he rejects the project in February. They signaled Wednesday that they could seek to add new Keystone provisions to the yearlong payroll-tax-cut package that lawmakers plan to negotiate once they return from recess.

Asked whether Republicans would seek to insert Keystone provisions into the next payroll-tax-cut package, House Speaker John Boehner’s (R-Ohio) spokesman Michael Steel replied: “We’ll take a look at our options.

“We hope, of course, that he will do the right thing and approve the project as soon as possible.”

Senate Republicans might insist on a new extension for Keystone if the administration doesn’t approve the project by the Feb. 21 deadline set by the December payroll-tax deal.

A Senate GOP aide said Republicans hope Obama does the “right thing” and approves the project, but added: “It’s prudent that we consider all eventualities and have a response prepared.”

In an attempt to parry the pro-Keystone onslaught, green groups are working to provide the White House with political cover.

Jeremy Symons, a senior official with the National Wildlife Federation, slammed the Chamber in a Wednesday conference call with reporters.

“In our view, the national Chamber of Commerce’s support for the Keystone pipeline scam demonstrates once again that the Chamber is a pay-to-play operation that has been taken over by big oil companies,” he said Wednesday.

More broadly, environmentalists who staged high-profile demonstrations against Keystone at the White House last year are planning to renew their efforts.

“Our activists are planning demonstrations in districts across the country, key swing states and back in Washington, D.C.,” said Jamie Henn, a spokesman for 350.org, the climate advocacy group that has organized anti-Keystone efforts.

Henn vowed, “Over the coming weeks, we’re going to be hammering members of Congress on the campaign contributions they’ve received from Big Oil and their subsequent support for Keystone XL.”

Business groups and Republicans are increasingly arguing that the pipeline is a key way to counter the influence of China and Iran.

On Wednesday, API, the Chamber and roughly 100 other business groups wrote Obama a letter citing Iran’s threats to block the Strait of Hormuz — a major oil-shipping lane — as reason to approve the pipeline and diversify the nation’s energy portfolio.

Republicans are also warning that rejection of the project will benefit China at the expense of the United States.

Boehner this week seized on the beginning of public hearings in Canada about Enbridge Inc.’s proposed pipeline to carry oil sands to a marine terminal in British Columbia for export to Asian markets.

“President Obama says ‘we can’t wait’ for action on jobs,” Boehner said. “Well, Canada isn’t waiting. One way or another, a new energy pipeline will be built. The question the president and Democrats in Washington need to answer is: Would Democrats rather American workers get these Keystone jobs? Or China?”

The payroll-tax deal forces a decision the White House had hoped to avoid until after the 2012 election.

Last November, the administration, citing the need for more State Department review, announced it was postponing a decision until early 2013 at the earliest, and vowed the final decision would be based on an array of economic, environmental and other factors.

The State Department said it was reviewing alternative routes to avoid the ecologically sensitive Sand Hills region of Nebraska.

After initially balking at linking the payroll-tax-cut extension to the pipeline, the White House in December accepted the provision as a concession in a deal with lawmakers on Capitol Hill.

White House officials have warned, however, that tying the administration’s hands with the 60-day timeframe will leave Obama with little choice but to reject the project.

Sen. Richard Lugar (R-Ind.), the author of the Keystone provision in the tax deal, and other pipeline advocates have pushed back against the White House claims, arguing the bill is written to allow ample time to alter the Nebraska route even after the overall project is permitted and construction begins.

A looming question as the clock ticks down toward the 60-day deadline is whether the White House could somehow find a way to follow the law without making a clear-cut decision on the pipeline.

It’s wiggle room that environmentalists pushing for rejection of the project say the administration doesn’t have.

The State Department, which is heading the years-long federal review of the project, is keeping its cards close to the vest.

“That law gives the secretary of State 60 days from Dec. 23 to either grant a permit for the proposed Keystone XL pipeline or to justify why a permit is not being granted,” State Department spokeswoman Victoria Nuland said in early January. “So we are using our 60 days and we are analyzing the Keystone provisions, and we will make an appropriate decision consistent with relevant law.”

—Andrew Restuccia contributed.

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