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Some 15,000 pieces of pipe for TransCanada Corp.'s Keystone XL pipeline lie in a field in North Dakota on April 23, 2013. (The Globe and Mail)
Some 15,000 pieces of pipe for TransCanada Corp.'s Keystone XL pipeline lie in a field in North Dakota on April 23, 2013. (The Globe and Mail)

Keystone XL clears key hurdles but Obama stands firm Add to ...

Backers of Keystone XL won battles on two fronts Friday – in Congress and Nebraska’s top court – but the controversial pipeline to move Alberta oil sands crude across the United States may be no closer to getting President Barack Obama’s approval.

Rather, the stark political reality is that Republicans in Congress lack sufficient clout to override a presidential veto, while further litigation is likely to enmesh Keystone XL in Nebraska and elsewhere. And most importantly, Mr. Obama has been sounding increasingly negative about the $8-billion (U.S.) project, saying it brings little if any benefit to Americans.

Nevertheless, Friday was a good day for Keystone XL advocates who reject the claims of environmentalists that it would spur development of some of the planet’s filthiest fossil fuel in Alberta’s vast landlocked reserves by providing a cost-effective outlet to world markets.

Canada’s Conservative government, Keystone XL owner TransCanada Corp. and Republicans hailed the victories.

“President Obama is now out of excuses for blocking the Keystone pipeline,” said Speaker John Boehner, an Ohio Republican.

Hours later, Republican-dominated House of Representatives passed – for the 10th time – legislation approving the pipeline. The vote, 266-153, included 28 Democrats.

Earlier, in a split-decision, Nebraska’s Supreme Court ruled that TransCanada’s contested route across the state was lawful, clearing away one excuse used by Mr. Obama for delaying deciding on the project.

Although four of seven judges sided with pipeline opponents who claimed special legislation giving the governor authority to approve the route was unconstitutional, that fell short of the “supermajority“ of five needed.

“Clearly, there’s another case that can be brought,” said Brian Jorde, a lawyer with Domina Law Group, which represented landowners challenging the legality of the route. “For TransCanada this could be the worst decision, one that allows for further review.”

Russ Girling, TransCanada’s chief executive officer, sounded an optimistic tone. The Nebraska court ruling “removes what we believe is the stated reason for the delay in the presidential permit decision process,” he said.

Only last week, the White House was fingering the uncertainty over whether the Nebraska route was lawful as the reason for delay. “We’re going to make sure we know what the route of the pipeline is before we render judgment,” said Mr. Obama’s spokesman Josh Earnest.

Within hours of the decision Friday, the White House had a new reason to justify vetoing expected Republican-backed legislation wresting control of the decision from the President.

The Republican effort in Congress to pass legislation in an attempt to force the President to approve Keystone XL “conflicts with long-standing executive branch procedures regarding the authority of the President,” White House spokesman Eric Schultz said.

“If presented to the President, he will veto the bill,” Mr. Schultz added.

Mr. Obama’s public pronouncements about Keystone XL have shifted dramatically in recent weeks – from studied neutrality to decidedly negative, echoing the claims of the pipeline’s opponents that it does nothing for American consumers, creates few permanent jobs, and gives Canada an export outlet.

“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else,” said Mr. Obama soon after the mid-term election when there was no longer any political reason to prop up Democratic senators fighting for their political lives by claiming they could help the project.

Mr. Obama has said he will reject Keystone XL unless it can be shown not to exacerbate greenhouse gas emissions by helping develop Alberta’s reserves.

Alberta Premier Jim Prentice echoed Ottawa’s call for Mr. Obama to approve Keystone XL. “It will create jobs. It’s an environmentally defensible project that’s supported by the American people and has overwhelming support, and increasingly bipartisan support in Congress,” said the premier, who will travel to Washington D.C. early next month to pitch Keystone XL.

Prime Minister Stephen Harper, a slew of cabinet ministers and successive Alberta premiers, have all lobbied incessantly on TransCanada’s behalf. Mr. Harper once opined that a Keystone XL approval was so obvious as to be a “no brainer,” while Foreign Minister John Baird fumed that even a ‘no’ decision was better than no decision.

With U.S. domestic production soaring, a huge glut of supply on the world market and unemployment at its lowest level in six years, the pro-Keystone claims that Canadian oil sands crude is better than oil from supposedly unreliable and unfriendly suppliers seem tired.

“It makes environmental, economic and geopolitical sense,” Mr. Girling contends. “That was true when the price of oil was less than $40 when we introduced the project six years ago, over $100 last year, or $50 today.”

That view retains considerable support among some in Congress. “We have an opportunity to build on our reputation as an energy superpower that respects its neighbours, trades with its allies and builds necessary infrastructure such as the Keystone XL pipeline,” said Senator Lisa Murkowski, the Alaska Republican who now chairs the Senate energy committee.

“President Obama has no more excuses left to delay or deny the Keystone XL pipeline,” said Jack Gerard, President of the American Petroleum Institute.

In Ottawa, Canadian government officials remained hopeful. “We believe the project should be approved,” said Chris McCluskey, spokesman for Natural Resources Minister Greg Rickford.

But Bold Nebraska – the advocacy group that has led local opposition – said the fight is not over, and urged Mr. Obama to veto any congressional effort to force it through.

“Obviously we have a bloody nose this morning,” Ms. Kleeb said after the court ruling was announced, adding her coalition of landowners, Indian groups and environmentalists backs “President Obama in his skepticism of the export pipeline and encourage him to reject Keystone XL.”

Opponents were girding for the next round. “The only folks who think the first major act of Congress should be to force approval of the Keystone XL tar sands pipeline are those in the pocket of oil and gas billionaires,” said Michael Brune, Executive Director of the Sierra Club. “This House vote was nothing but a waste of time. The president has made it clear he will reject these attacks on his authority and repeatedly stated that he will reject the tar sands pipeline if it contributes to the climate crisis,… and we are confident that he will.”

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