With Congress now in session the big issues are starting to heat up.  

Senate Majority Leader Mitch McConnell (R-KY) followed through on his promise and made the first item on his to-do list in the new Congress creating legislation authorizing the Keystone XL Pipeline.

The Keystone Pipeline is a proposed oil pipeline that will travel from Alberta, Canada through Montana, South Dakota and Nebraska. There it will connect with an existing pipeline that continues through Kansas, Oklahoma and Texas. The pipeline will bring crude oil extracted from the tar sands of Canada to oil refineries in the Midwest and Texas Gulf Coast.  When the pipeline is completed, it will have the capacity to transport 830,000 barrels of oil per day to the Gulf Coast and Midwest refineries.

Because the pipeline crosses the U.S. - Canadian border, current law states that the pipeline must have a presidential permit to be built. TransCanada Corp originally applied for a permit to build the pipeline in September of 2008. When the Obama Administration failed to act on the request for the permit in December 2011, both the House and Senate unanimously approved a bill requiring the President to decide on the permit within 60 days.  On January 18, 2012, President Obama rejected the permit and asked TransCanada to make some adjustments and reapply, which they did in May of that year. Because of the delays from the Obama Administration, Congress is now debating legislation that will allow the pipeline to be built with congressional authority, bypassing the presidential permit process.

The Keystone Pipeline issue is a classic example of how politics can make strange bedfellows.  Proponents of the pipeline include business interests who believe that it will support the growth of crude oil production in the U.S., and will reduce American dependence on foreign oil.  However, pipeline supporters also include labor unions, which point to the job growth prospects that will result from the building and ongoing maintenance costs of the pipeline. 

Opponents of the pipeline include environmentalists who are concerned about the country’s dependence on fossil fuels and the safety of groundwater around the pipeline.  They also argue the pipeline will result in greater pollution than traditional oil exploration since it will open the market for tar sands products.  The extraction process for oil from tar sands requires much more processing than traditional drilling, which results in much higher pollution, thus contributing to climate change, opponents say.

The house has passed legislation to authorize the pipeline 10 times since 2011, most recently in early January, when the bill passed 266-153.  The Senate previously considered the bill on November 18, with Mary Landrieu’s attempt to get congressional approval for the pipeline. At the time, Landrieu (D-LA) was the chair of the Senate Committee on Energy and Natural Resources, and was in the midst of campaigning in a run-off election to retain her Senate seat. The bill was one vote shy of the 60 votes needed, and both the bill and later, Landrieu’s reelection attempt, failed.

Interestingly, with the new Republican majority in the Senate, it seems that there will be enough votes to past the bill, but probably not with a veto-proof super-majority.  The Senate took a test vote on the bill recently, when Senators voted 63-32 to begin debate.  In the past, President Obama has stated that he will veto the bill if it passes, and he reiterated that threat recently.

The debate over the Keystone Pipeline is shaping up to be a proxy over how McConnell will run the Senate in the 114th Congress.  He has stated that he would allow opportunity for amendments as the bill is considered in the Senate.  He also has said that he would like to return the Senate to “regular order,” meaning that bills will go through the typical process of committee hearings rather than being actively managed by majority leadership.  However, restoring regular order and allowing amendments to bills results in a weakening of the power of leadership and it could end up slowing down or even derailing the bill altogether.  Amendments can also result in changes to the overall policy objectives of legislation.  Amendments may define the Republican’s energy wish-list for the next two years, but could erode the bi-partisan support the proposal has enjoyed in the past.

If faced with the prospect of his very first legislative priority struggling in his body, Senator McConnell may decide to start leaning away from regular order in favor of active management and more surety in accomplishing his objectives. 

Whether or not Congress is able to pass legislation, this is going to be a challenging decision for President Obama as well.  His veto threat is more about Congressional overstepping than his position on whether to build the pipeline.  His support base is split on whether to approve the pipeline.  There is no safe path on this for the President.