POLITICS: PennAve

Insiders see Keystone XL movement despite State of the Union silence

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As expected, President Obama didn't mention the Keystone XL oil sands pipeline Tuesday night in his State of the Union address. But movement may come soon, as many believe the State Department is close to finishing an environmental review of the controversial Canada-to-Texas project.

American Petroleum Institute CEO Jack Gerard told Reuters that he expects the State Department to finalize the report as early as Thursday, citing administration sources. Russ Girling, chief executive for Keystone XL builder TransCanada Corp., told Politico he has received fewer questions from State. And Sen. John Hoeven, R-N.D., told reporters earlier this month that he anticipates the report coming in February.

For his part, White House press secretary Jay Carney said Monday that the State Department is still finishing the review. Once completed, that review will be used to determine whether building Keystone XL is in the national interest.

Given the divisive nature of the project, few went into Tuesday's speech expecting to hear anything about the project.

But Republicans, business groups and Canadian officials — including a Washington visit from Canadian Foreign Minister John Baird — have stepped up pressure on Obama to approve the pipeline this month.

"Early in 2013, President Obama met with Senate Republicans. He told us that we'd have an answer about the pipeline by the end of the year. That was 2013. The year's come, gone, the Keystone XL pipeline approval is still sitting on the president's desk," Sen. John Barrasso, R-Wyo., who led a letter last week signed by all 45 GOP senators urging Obama to OK the pipeline, said Tuesday on the Senate floor.

That has come as debate about the project has intensified after a handful of rail car tankers shipping crude derailed in the past month.

Keystone XL proponents have portrayed the pipeline as a safer alternative to rail. The incidents have shone a light on some of the safety risks associated with transporting a growing amount of crude via rail. When making safety recommendations last week, the National Transportation Safety Board noted worries of a "major loss of life" in an accident from such shipments, which have jumped 400 percent since 2005.

Obama in the past, however, has said he would approve or reject Keystone XL based on its climate change impact. He said in a June speech that he would reject Keystone XL if it "significantly exacerbates" carbon emissions, and he has questioned the impact the project would have on jobs.

A draft environmental impact statement released in March 2012 said Keystone XL would not significantly exacerbate carbon emissions, as it said demand would draw oil sands to market through rail or other pipelines. It also said the project would add 42,100 direct and indirect jobs during the one- or two-year construction phase, though it would support just 35 permanent positions.

Green groups have criticized that draft review, and they say Keystone XL would facilitate oil sands growth and, in turn, boost emissions. They have noted that the outside contractor who conducted the draft review for the State Department had previously done work for TransCanada. That led to a probe from State's internal watchdog to assess potential conflict of interest, which has yet to conclude.

Keystone XL opponents were visible Tuesday as well.

Billionaire activist Tom Steyer's Super PAC ran an advertisement on MSNBC denouncing the pipeline before and after the State of the Union. And activists paraded an inflatable black "pipeline" inscribed with the message, "Pipeline president or climate champion?" in white paint in front of the Capitol.

“If President Obama aspires to be a climate champion, it's long overdue for him to ditch his 'all of the above' energy approach, starting by rejecting Keystone XL,” said Whit Jones, campaign director of Energy Action Coalition, a coalition of youth climate groups.

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