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As the new Congress comes to session, one of the first items on the agenda is the Keystone XL Pipeline

Obama Veto to Follow Passage: White House

Incoming Energy and Commerce Committee member Rep. Kevin Cramer (R-ND) has authored legislation to authorize construction of the Keystone XL Pipeline that will go before the U.S. House of Representatives Friday for a vote. This vote will be the tenth time legislation has come before the House regarding the construction of Keystone.

Most recently, legislation to authorize the construction of the pipeline passed the House by a vote of 252-161, but failed to pass in the Senate by one vote. The Senate, which became majority Republican after the 2014 midterms, is expected to begin consideration of a similar bill on Wednesday with a hearing in the Energy and Natural Resources Committee, reports The Wall Street Journal.

In an interview Monday, House Majority Leader Kevin McCarthy (R-CA), predicted that President Obama wouldn’t veto the legislation should it pass both chambers of Congress, as it is expected to do, according to the Wall Street Journal.

President Obama initially said that his main concern with passing legislation authorizing the pipeline was whether or not it would adversely affect the environment. Even though the State Department released its final statement saying the cumulative effects of the project would be negligible, and both the House and Senate are likely to pass the legislation, it seems likely that the president will veto the bill.

Sen. Charles Schumer (D-NY) said that he thought that Mr. Obama would veto it and that the Senate would not have the 67 votes needed to override his decision. Gov. John Hickenlooper (D-CO) also said this afternoon that the administration is doing the right thing by vetoing, reports the Denver Post.

The White House press secretary Josh Earnest confirmed that President Obama would veto a pro-Keystone XL measure. In a press conference earlier today, Earnest said, “I can confirm for you that if this bill passes this Congress, the president wouldn’t sign it either.” Earnest said the White House was worried Congress was trying to circumvent the State Department while the department waited for the decision regarding a lawsuit over the pipeline in Nebraska.

The U.S. portion of the pipeline is expected to be a 1,084 mile long, 30-inch diameter pipeline with a capacity from 435 MBOPD to 591 MBOPD, according to TransCanada (ticker: TRP).

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Analyst Commentary

From Raymond James Energy Research Group

White House makes explicit threat to veto Keystone XL. As readers of our research know, we have long held the view that the intensity of political focus on the Keystone XL pipeline has reached bizarrely excessive proportions. On both sides of the debate, the arguments (It will fix unemployment! It will cause the glaciers to melt!) are almost cartoonishly exaggerated. But, in any case, the question has remained: Would Congress override the Obama administration's current policy of letting the regulatory approval process drag out? In the new congressional session that began yesterday, both House and Senate leaders are vowing to hold a vote on a bill to approve Keystone XL, as early as this week, and it seems abundantly clear that both chambers will pass the bill. However, it has been unclear whether President Obama would veto the bill - his rhetoric up to this point has contained a degree of ambiguity. That changed yesterday, as the White House for the first time made an explicit veto threat, stating that the regulatory approval process needs to be maintained. As things stand, it appears that the Senate has 63 votes in favor of the bill - four short of what's needed to overturn a veto. Thus, both the project's supporters and opponents will presumably turn their attention back to the regulatory agencies rather than Congress.  


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.