12/20/11 11:29am

Article By: Ecopolitology

As news trickled out of Capitol Hill on Sunday that House Republicans would likely reject a Senate bill extending the payroll tax cut and unemployment benefits for two months—a plan that included a provision requiring President Obama to rule on the Keystone XL pipeline within 60 days—many Washington insiders began to publicly speculate that the move could actually spell the end for the controversial oil pipeline.

Just as some critics immediately began jumping on Obama for again caving to the demands of House Republicans, other observers had the more nuanced interpretation that the decision to put the Keystone XL provision in the Senate version of the payroll tax cut extension may ultimately be a political stroke of genius.

How so?

Citing a recent State Department comment that the 60-day window set by both the House and Senate bills would leave it "unable to make a determination to issue a permit for this project," White House economic adviser Gene Sperling said:

"[A two-month deadline] to do the serious environmental and safety and health reviews ... would make it almost certainly impossible for [State] to extend that permit" to TransCanada 1,700-mile, $7-billion link between the oil sands of northern Alberta and refineries on the U.S. Gulf Coast.

Others soon piled on the notion that the 60-day mandate could work against Republicans including Florida congresswoman Debbie Wasserman Schultz, chair of the Democratic National Committee, who said that by forcing the Obama administration to complete the review of the pipeline in two months rather than twelve:

"The Republicans have probably killed the Keystone pipeline."

But it wasn't just politicos who echoed the White House, environmentalists also took the opportunity to pile on.  National Wildlife Federation (NWF) Vice President Jeremy Symons said:

"This may be the final chapter for the Keystone XL tar sands pipeline, now that Republicans are forcing the president's hand prematurely."

Appearing on NBC Sunday morning, House Speaker John Boehner (R-OH) shot back at the White House comments as "nonsense." Speaker Boehner said:

"Now the only issue here is that the president doesn't want to have to make this decision until after his election," the Ohioan said, citing "20,000 direct jobs, 100,000 indirect jobs, to build a pipeline from Canada down to the Gulf that would help our energy security."

Despite posturing from environmentalists and House GOP leaders alike, what will happen next is not at all clear. With Boehner pushing for a House-Senate conference to hammer out differences, Senate Majority Leader Harry Reid said the Senate will not renegotiate a bill extending payroll tax cuts and unemployment benefits unless the House first approves the short-term bipartisan version.

Because the proposed pipeline would cross a national boundary, the approval of the pipeline ultimately rests with the State Department, not Congress. And if the State Department is not ready to rule on the pipeline, it will be faced with the decision to either not act, thereby allowing construction of the pipeline to move forward, or, declare the pipeline as not in the national interest, thereby stopping it dead in its tracks.

Photo credit: Some rights reserved by Loozrboy at flickr

This is a cross-post from Ecopolitology.org.

Ecopolitology explores energy and environmental politics with straightforward, thought-provoking and occasionally snark-laden news and analysis.

Original Post: http://ecopolitology.org/2011/12/19/payroll-tax-standoff-gop-pipeline-end-around-could-backfire/