Crunch Time for Obama, Congress to Act on Keystone XL Pipeline

Congress needs to pass bipartisan legislation to move along the Keystone XL pipeline to secure our energy future.

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An oil feed pipeline at the BP Endicott field in Alasks, which is benefiting from oil revenues.

Pete Sepp is executive vice president of the National Taxpayers Union.

It's summertime in Washington, when many a politician's thoughts turn to Congress's August recess and the prospects of glad-handing constituents (not to mention sauntering on the re-election trail) back home. They will find that President Barack Obama has already trodden heavily on such a path, perhaps even in their own states. Yet, as much as they might prefer politicking to policymaking, officials at both ends of Pennsylvania Avenue can't afford to overlook energy-related developments that will sharply affect the future of taxpayers, consumers, and workers. One such development resurfaced just a few days ago.

As my previous column on the "silly season" in the nation's capital pointed out, Congress recently blew an opportunity to squeeze a few more drops of lemonade from a bushel of lemons, by passing a bloated transportation funding bill without a provision prompting action on constructing the job-creating Keystone XL pipeline. But there may be hope for a little lemonade after all, none too sweet and none too soon.

On Monday of this week Republican Rep. Lee Terry of Nebraska introduced legislation with a bipartisan contingent of 48 cosponsors to end the administration's foot-dragging on approval of the pipeline, which would bring a new oil supply from our neighbor to the north into the United States. Although President Obama has said that construction of the southern portion of Keystone XL is "a priority," and a review of an 88-mile "reroute" through Nebraska was already planned, the U.S. State Department announced last month that it wanted to conduct another exhaustive environmental assessment of Keystone's entire 1,700-plus mile route. This, after a previous three year, 10,000 page federal review (of everything but the 88 mile detour) that should have settled the matter. Nonetheless, Terry seeks to meet the president's hand halfway rather than slap it away: His legislation removes the presidential permitting requirement for the northern part of Keystone XL, which extends up to the U.S.-Canada border.

[ See a collection of political cartoons on energy policy.]

This is the "none-too-sweet" possibility, but what about the "none-too-soon" part? That would be the announcement this week that China National Offshore Oil Corporation is acquiring Nexen, a company with a key role in development of Canadian oil sands. As the Wall Street Journal reports:

It would give Cnooc a key role in technologies reshaping the energy landscape and open the door for it to operate in North American fields alongside such oil-and-gas giants as Exxon Mobil Corp. and Statoil ASA.

It's not as if the White House and its supporters could have been oblivious to the potential for China's power play. After all, Canadian officials put their efforts to court Chinese energy deals into higher gear earlier this year as the Obama administration dodged and weaved over whether Keystone XL would ever be sited in the United States.

State-owned firms like China National Offshore Oil Corporation actually control more of the world's reserves than United States-based "Big Oil," even as some federal politicians seek to take away from our oil and gas firms tax credits and deductions widely available to many industries.

[ Take the U.S. News Poll: Should Obama Make His Keystone XL Decision After the Election?]

Regular readers of this column know that my organization, National Taxpayers Union, supports equal tax treatment of all energy sources (and all other sectors) in a free-market environment where government avoids picking winners and losers. Furthermore, my colleagues and I oppose knee-jerk reactions that lead to restrictive trade schemes or foreign nation-bashing. Yet, is it too much to ask that our own government avoid policies that hamstring American business's ability to compete abroad and undermine economic dividends here at home? With taxes and regulations like ours, too many U.S. companies are stuck in the equivalent of mosh pits on the periphery of the global economic stage.

A House Energy and Commerce Committee news release announcing Terry's bill remarked that the lower chamber of Congress has voted six times to move forward with building Keystone XL. Would a seventh time prove to be the charm? Here's hoping it can, before the summer sun sets on another opportunity to boost a fragile economic recovery.