UPDATE 3-Keystone clears hurdles, stage set for Washington showdown

Fri Jan 9, 2015 3:43pm EST
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(Adds background on Senate)

By Patrick Rucker and Timothy Gardner

WASHINGTON Jan 9 (Reuters) - The Keystone XL oil pipeline cleared two hurdles on Friday, setting up a showdown between Congress and President Barack Obama who has raised new questions about the project after more than six years of review.

Following months of deliberation, the Nebraska Supreme Court allowed a route for the pipeline to cross the state, shifting the debate over TransCanada Corp's project fully to Washington, where Republicans now in control of Congress are seeking to force its final approval.

Hours later, the House of Representatives passed a bill 266 to 153, with 28 Democrats in support of the project. The Senate will debate a Keystone bill next week, but White House officials said Obama would reject the legislation.

"If presented to the president, he will veto," spokesman Eric Schultz said in a statement.

Obama has criticized the pipeline recently saying it would do little to cut prices for U.S. consumers and that it would mainly benefit the company as the petroleum would eventually be shipped abroad.

In Nebraska, the legal question narrowly focused on whether former Governor Dave Heineman had a right to bless the route of the pipeline in his state. The pipeline would carry up to 830,000 barrels of oil per day mostly from Canada's oil sands to Nebraska, en route to Gulf Coast refineries.

But the court was deadlocked, which amounted to ruling in the company's favor.   Continued...