Keystone XL Veto Threat: Does ‘No’ Really Mean No?

The White House announced Tuesday that President Barack Obama would veto a Senate bill aimed at greenlighting the controversial Keystone XL pipeline.

“If this bill passes this Congress, the president wouldn’t sign it,” said White House Press Secretary Josh Earnest. He spoke just a day after deferring comment on the pending legislation, which is the latest in a series of attempts in Congress to approve the project.

A veto would likely extend the already tortuous six-year path for the proposed pipeline, which would carry oil from Canada to refineries on the Gulf Coast. Senate Republicans are unlikely to muster enough votes to override it.

The current Senate bill to approve construction on Keystone’s 1,179-mile (1,897-kilometer) northern leg has 60-plus co-sponsors, and the House is expected to cast yet another vote on Keystone as early as Friday. (See related: Can Senate Force Approval of Keystone XL Pipeline?)

The real action will be in the Senate, where Republicans took control of the chamber Tuesday as they began a new two-year session. A key Senate committee plans to hold a hearing Wednesday on Keystone, and the full Senate is expected to begin debate next week on legislation that would allow it and cast a vote soon after President Obama’s State of the Union address on Jan. 20th.

The White House message Tuesday seemed to be aimed more at the process than the pipeline itself.  “The president has been pretty clear that he does not think circumventing a well-established process for evaluating these projects is the right thing for Congress to do,” said Earnest.

Indeed, the project could still be approved through the existing process via the State Department, which is involved because the project crosses the border with Canada. That process has been on hold since last April, when State indefinitely put off a decision, citing a large number of public comments to review and a pending Nebraska Supreme Court case on the legality of the route’s approval. (See related: “6 Questions About What’s Next for Keystone XL.”)

“Any veto of the proposed legislation would not necessarily foreclose on the White House eventually finding the project in the national interest,” said energy analyst Kevin Book of Clearview Energy Partners said in an email.

Despite the “increasingly critical tenor of the President’s recent comments regarding the pipeline,” Book said, “Our view is that the President appears to be criticizing proponents’ arguments that the pipeline would create jobs or add to energy security more than the concept of importing Canadian crude into the U.S.”

The American Petroleum Institute also expressed optimism that a veto would not kill the pipeline.

“We’re disappointed,” Jack Gerard, API’s president, told reporters Tuesday in response to the announcement. “It doesn’t bode well for relationships between Congress and the White House.”

But Gerard said that even if Congress could not override a presidential veto, he expected that Keystone’s bi-partisan support would ultimately lead to an approval deal, although he did not say how that would happen.

“It creates 42,000 American jobs…at a time we need them most,” Gerard said, referring to the State Department’s count of the number of direct and indirect temporary jobs the $8 billion project would create. Despite falling oil prices, he says there’s long-term growing global demand for energy, including  oil and natural gas. The project would carry 830,000 barrels per day of crude.

Keystone is “not a jobs creator,’ said Anthony Swift, a staff attorney at the Natural Resources Defense Council. Swift said the State Department’s environmental review of the project said it would lead to only 1,950 construction jobs over a two-year period and 35 permanent jobs.

Also, Swift said, that review concluded that Keystone would substantially increase oil sands production if oil prices fell below $75 per barrel, which they have. Obama said last year that he would not approve Keystone if it significantly boosts output of this viscous Canadian oil,  the production and burning of which emits more carbon dioxide per barrel than lighter crudes produced in the United States.

Contributing: Wendy Koch