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POWER PLAY

Keystone Quandary

Messaging against the Canada-to-U.S. oil pipeline gets dicey when it morphs into legislation.

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Keystone cop: Wyden wants export ban.(AP Photo/Charles Dharapak)

Environmentalists and their advocates in Congress are walking a fine line by pushing a measure that would ban exports of oil shipped through the proposed Keystone XL pipeline.

They want to call out Republicans for what they say is a flawed argument made for the project: that the 1,700-mile, $7 billion pipeline carrying oil from Canada’s tar sands to Gulf Coast refineries would strengthen America’s energy independence and possibly even reduce U.S. gasoline prices.

 

But by suggesting they could support the pipeline with a guarantee that oil shipped through it stays in the country, Senate Democrats are opening the door to a compromise with Republicans that would enable Congress to override President Obama’s rejection of a permit for the controversial project last month.

To environmentalists, the notion that the Keystone pipeline would ship oil bound for export was just one in a long list of arguments for why the project should never be built, along with threatening ecosystems along its route and aggravating climate change by spurring oil production from the carbon-rich tar sands.

Now, liberal Sen. Ron Wyden, D-Ore., has drafted a bill to ban exports of both Keystone-shipped oil and refined petroleum products made from that oil. The effort by Wyden, in line to chair the Energy and Natural Resources Committee next year if Democrats hold the Senate, makes environmentalists nervous, because it could conceivably get enough Democratic support to move a bill mandating approval of the pipeline out of the Senate. Such a measure would be certain to pass in the Republican-controlled House.

 

In fact, Senate Majority Leader Harry Reid, D-Nev., said late last month that he may support the pipeline if the oil stayed here. His staff has been in contact with Wyden’s office on the export-ban proposal.

Wyden’s involvement has thus elevated an environmental talking point to a seeming legislative possibility. Realizing this, lobbyists on both sides of the issue are mobilizing: American Petroleum Institute President Jack Gerard sent an e-mail to congressional staffers last week bashing any efforts to tie an export ban to Keystone legislation.

“Banning exports would not only go against President Obama’s call for doubling exports to generate jobs, it would also do nothing to help consumers,” Gerard said in the e-mail, obtained by National Journal Daily.

Environmental groups such as the Sierra Club and 350.org finished on Tuesday a 24-hour grassroots drive urging Congress to oppose the pipeline outright.
When asked about Wyden’s efforts, Sierra Club Executive Director Michael Brune said this week: “We can understand why the senator would put forth this amendment, because it punctures a myth that this oil coming into the United States is for use in the United States.”

 

He quickly added: “We need every member of Congress to vote against this pipeline and not craft any legislative remedies that would attempt to address just one weakness in the pipeline.”

The chances that Wyden and Republicans can find agreement on an export ban are slim. Wyden wants to ban both oil and refined products; Republicans want a ban only on crude oil. A crude-oil ban wouldn’t make much difference, because very little crude is exported from the Gulf of Mexico, where the pipeline would terminate. But exports of refined petroleum products are increasing from the region, so that type of ban could have a major impact.

Wyden refuses to say whether he would support the pipeline if a bill mandating its approval included his proposed export ban on both crude oil and refined products. That indicates he could likely be using his measure to score political points without really trying to craft a compromise. In a gridlocked Congress during an election year, that would be hardly surprising.

In fact, a stalemate over the export-ban issue would probably be the best political outcome for both sides. Democrats could argue Republicans are hypocritical in not supporting a bill to keep any Keystone oil in the United States; Republicans could continue to hammer Democrats for refusing to approve a pipeline that creates jobs and reduces our dependence on Middle East oil.

Votes on both the export ban and the pipeline itself could come up as amendments to the transportation bill pending on the Senate floor this week.
Failure to pass an export ban may be the best economic outcome, too. Many lawmakers agree with industry experts who say restrictions on free trade for any product are bad policy.

“That oil is going down to the Gulf, it’s going to get refined in these tax-free zones, and some of it is going to leave the country,” Rep. Mike Doyle, D-Pa., said last week. “That’s the way it works. There’s nothing wrong with it.”

A similar debate is under way in the House led by Natural Resources Committee ranking member Edward Markey, D-Mass., who has been pushing an export-ban measure since last summer.

The political lines are more clearly defined in the House debate: Democrats know they don’t have a chance to pass an export ban as long as Republicans control the chamber. As a result, Markey’s bill is more like calling a bluff than risking a real result.

 

This article appears in the February 15, 2012 edition of NJ Daily.

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