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Jobs, Infrastructure and Investment: OK the Keystone Pipeline

Jan 12, 2015

After gratifying progress for the Keystone XL pipeline last week, the Senate is beginning debate on legislation to authorize construction of this important infrastructure project.

On the Senate floor is (a motion to proceed to cloture on) S. 1, which authorizes the TransCanada company  to construct, connect, operate and maintain the pipeline and facilities that cross the border from Canada to the United States.

Two major events last week give momentum to the project.

On Friday, the Nebraska Supreme Court reversed a lower court’s ruling that had slowed and could have potentially blocked the pipeline’s route in the state. (The Supreme Court opinion is here.) The Omaha World-Herald explained:

LINCOLN — The Nebraska Supreme Court removed a roadblock to the Keystone XL pipeline Friday when it rejected a challenge to the law used to route the project. In a 4-3 split, the Supreme Court allowed Nebraska’s pipeline routing law to stand “by default,” without making a binding decision on the merits of the legal challenge. The judges vacated a lower court decision striking down the pipeline law. … The highly anticipated decision took on national significance after the U.S. State Department halted its review of the pipeline to await the court’s ruling. Friday’s decision allows the State Department to resume its review so President Barack Obama can decide whether to grant the pipeline a construction permit.

In its veto threat, the White House specifically cited the ongoing Nebraska litigation as one reason to oppose House legislation authorizing the pipeline project.  That rationale no longer applies.

Accordingly, also on Friday, the U.S. House overwhelmingly passed its bill, H.R. 3 to authorize the project. The vote was 266-153, as 28 Democratic House members joined the Republicans to support the legislation.

During the floor debate, some critics attempted to discredit the project as a sop to Canada, a strange argument. Canada is an ally, and as Business Roundtable has long argued, energy security should be a continental priority in which the United States, Canada and Mexico all play a role. (See BRT’s materials on the issue.)

In addition, as the bill’s sponsor, Sen. John Hoeven (R-ND), noted when introducing S. 1, the project would also directly serve U.S. oil producers, transporting oil from Montana and North Dakota’s Bakken formation.

Building the pipeline would create thousands of construction jobs, and the ongoing operations of the pipeline would spur much-needed economic activity along its route. As Nick Akins, CEO of American Electric Power and chair of BRT’s Energy and Environment Committee, said last week, the project “will create jobs and economic opportunity without harming the environment.”

President Obama has cited infrastructure investment as a top priority for his administration. Well, here’s a project that represents the best possible kind of infrastructure investment, a private-sector project that puts people to work and binds together the North American energy market. The Senate should approve S. 1, and President Obama should reconsider his veto threat and authorize the too-long-delayed pipeline.

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