Energy Policy, Legislative Updates, Oil, U.S. House, U.S. Senate, White House

The Keystone Pipeline Cleared Hurdles in Congress, But Was Tripped Up by Presidential Veto

iStock_000005911274Medium[1]This new year has been marked with a flurry of activity surrounding the approval of the Keystone XL Pipeline project.  Following the changing of the guard in a new Republican-led Congress, Alaskan Senator Lisa Murkowski led the Congressional charge for legislative approval of the pipeline project as Chair of the Senate Energy and Natural Resources Committee.  On February 11, 2015, those hoping for a legislative solution to push pipeline project forward moved one step closer to the finish line as the U.S. House of Representatives voted to pass the bi-partisan Keystone XL Pipeline Approval Act (S.1), which was passed by the Senate on January 29th.  But today, the Act was met by a Presidential veto, despite previous appeals from members of Congress for the President to reconsider vetoing the Act given the attendant benefits to the American people and economy.

The Act was expected to face opposition in the White House, given the early January reports of the President’s intention to veto such a bill to approve the pipeline and the Statement of Administration Policy issued by the White House stating that advisors would recommend a veto of a similar bill then under consideration in Congress.  The White House’s problem with a legislative approval – it would circumvent administrative procedure and the State Department’s review of the project, which has been ongoing for six years.  The White House maintained that such legislation “prevents the thorough consideration of complex issues that could bear on U.S. national interests (including serious security, safety, environmental, and other ramifications).”  As discussed in our previous posts, one of the factors holding up a final decision from the administration was resolution of a Nebraska state court challenge to the pipeline’s approved route through the state.  Last month, the Nebraska Supreme Court issued its ruling, which upheld the state law and Governor’s decision under which the Keystone XL pipeline had been approved. In Senator Murkowski’s view, the Nebraska court’s decision “wipe[d] out President Obama’s last excuse” to delay approval of the pipeline.  Nonetheless, the White House is not willing to give Congress the power to bypass Executive approval of the pipeline.  Interestingly, another constitutional challenge to the Nebraska route of the Keystone Pipeline recently was initiated by landowners subject to condemnation proceedings, putting a temporary halt to the seizure of some land needed to build the pipeline.

The President’s veto of the Keystone XL Pipeline Approval Act came with the following Veto Message to the Senate:

I am returning herewith without my approval S. 1, the “Keystone XL Pipeline Approval Act.” Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.

The Presidential power to veto legislation is one I take seriously. But I also take seriously my responsibility to the American people. And because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest — including our security, safety, and environment — it has earned my veto.

Congressional leaders, however, question whether the interests of the American people have been adequately considered in the President’s decision to veto the bi-partisan Act.  Senator Upton, House Energy and Commerce Committee Chairman, issued a statement calling the President’s veto a “[d]isappointing but not surprising” result:

Disappointing but not surprising for the president to give the thumbs down to American workers, consumers, and our Canadian friends. Keystone XL is an economic win-win that would create tens of thousands of shovel-ready jobs and strengthen our energy partnership with our North American neighbor, helping insulate us against future turmoil in the Middle East and elsewhere that could cause price hikes. We should not be closing off our borders to affordable energy, and Congress will work to fix this terribly broken process.

Senator Murkowski, Chairman of the Senate Energy and Natural Resources Committee, similarly expressed disappointment in the President’s decision in the following statement:

“Today, President Obama said no to job creation, no to new energy infrastructure, no to affordable energy, and no to greater North American energy security. With his veto of the Keystone XL pipeline, President Obama turned his back on hard-working Americans, hard-working families, and the businesses that grow our nation’s economy. ” Murkowski said. “This veto was a short-sighted, politically-driven mistake. It is a failure of leadership because America needs energy and infrastructure.”

Senator Murkowski’s statement can be found on the Committee’s website here.  Congress reportedly will attempt to overturn the Presidential veto by March 3rd.

Brian Heslin

About Brian Heslin

Brian Heslin represents energy companies in regulatory proceedings at the state and federal level. In addition, he provides advice on busines and strategic planning, upstream natural gas supply and capacity negotiation, compliance and other related services.

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The landscape of the energy industry is rapidly changing, with a focus on the development of clean, domestic energy sources and a secure, reliable energy infrastructure driving significant changes in the interdependency of energy industry segments and an increase in government regulation. Continued growth in the domestic production of oil and natural gas has positioned the U.S. to be an energy exporter in the global market and will have a marked impact on the course of the industry’s development.

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