November 13, 2014 / 4:28 PM / 3 years ago

UPDATE 3-U.S. House set to vote on Keystone oil pipeline on Friday

(Adds Boxer, Carper, Hoeven comments)

By Richard Cowan and Emily Stephenson

WASHINGTON, Nov 13 (Reuters) - The Republican-led U.S. House of Representatives prepared to vote on Friday to approve the Keystone XL oil pipeline that will help transport oil from Canada to the U.S. Gulf of Mexico, but the bill still faces hurdles to final passage.

The House planned to begin debating the bill, which is expected to pass that chamber, on Thursday. The legislation would circumvent the need for approval of TransCanada Corp's $8 billion project by the Obama administration, which has been pending for more than six years.

Final approval of the pipeline would bring to an end years of grappling between supporters, who tout its job-creating potential, and environmentalists, who oppose encouraging Canada's extraction of so-called dirty fuels.

It would also be a blow to President Barack Obama if members of his Democratic Party joined Republicans to approve the pipeline. It was not yet clear if Obama would use his veto, but he has threatened to veto Keystone legislation in the past.

The Senate could take up the bill next week, possibly on Tuesday. Energy and Natural Resources Committee Chairman Mary Landrieu, a Louisiana Democrat, led the effort to approve the bill in the Senate, but it appeared on Thursday that she did not yet have enough votes to be sure of passage.

The abrupt move to vote on the pipeline follows midterm elections last week that were disastrous for Democrats. Republicans maintained control of the House and will take over the majority in the Senate when the new Congress convenes in early 2015.

Landrieu herself faces a runoff election on Dec. 6. The House bill was introduced by Louisiana Republican Bill Cassidy, who is seeking to unseat her. The fact they both pushed the issue in Congress illustrates the importance of the pipeline in a state whose economy is highly dependent on drilling, shipping and refining oil.

The portion of the project at issue requires presidential approval because it crosses an international border, but that approval has been delayed for years. Obama has raised doubts about how many jobs the pipeline would create and said he does not want to interfere with a State Department review.

PATH UNCLEAR

Two Senate aides said Landrieu is one to two votes short of the 60 in the 100-seat chamber that are needed to withstand a potential filibuster, a procedure that effectively blocks passage of a bill.

Many Democrats side with environmentalists, particularly after pipeline spills in places such as Michigan.

"For me the issue has always been the disastrous impacts to the health of the people," said Senator Barbara Boxer, a California Democrat who opposes the bill.

Other Democrats joined Landrieu. Senator Tom Carper of Delaware said he thought the issue had dragged on too long and it was time to "clear the decks" and move onto other problems.

If the bill passed, it would set up a showdown with the White House.

Senior White House adviser Valerie Jarrett declined on Thursday to say whether Obama would sign a bill. "We've always taken a dim view of the legislative approach," she said in an interview with MSNBC, echoing earlier White House comments. She said the White House had not seen the proposed bills.

Obama has vetoed only two bills during his presidency, far fewer than his predecessors. If he vetoed a Keystone bill, Congress could try to override him.

"If he does veto it, however, we aren't finished," said Senator John Hoeven, a North Dakota Republican who introduced the Keystone bill with Landrieu earlier this year.

"We'll pass it as either part of broader energy legislation or as an amendment to another must-pass bill," he said, adding that it could happen in 2015 if lawmakers do not pass the bill before the current congressional session ends.

The pipeline also faces a court challenge in Nebraska over its route. A ruling on that case is possible within the next few weeks.

Additional reporting by Timothy Gardner, David Lawder, Susan Heavey and Steve Holland in Washington; editing by Doina Chiacu, Matthew Lewis and Frances Kerry

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