UPDATE 1-Keystone pipeline backer again seeks US Congress approval

Mon Jul 23, 2012 3:02pm EDT

* CNOOC-Nexen deal could add momentum for Keystone bill

* Terry-"If we don't use this, China will"

* Strategy, timing unclear for bill to pass Congress

By Roberta Rampton

WASHINGTON, July 23 (Reuters) - A Republican lawmaker who has tried several times to marshal congressional support to speed approval of the Keystone XL crude oil pipeline is taking another crack at it with a new bill, but said the strategy for moving the plan forward was not yet clear.

Lee Terry said Monday's announcement that China's state oil company CNOOC plans to buy Nexen Inc, a player in Canada's massive oil sands resource could give political momentum to his latest push.

He said the $15.1 billion deal backs Republican arguments that China will dominate Canada's oil resources if the United States stalls the Keystone pipeline, designed to ship oil from Albertan oil sands to Texas refineries.

"If we don't use this, China will. Now this is even further evidence, unarguable, that China will use all of this if we let them," Terry told reporters.

President Barack Obama put a hold on the Canada-to-Texas pipeline in January, saying it needed more environmental review because of a change in routing to avoid an ecologically sensitive region of Nebraska.

The delay angered the Canadian government, which has said it would pursue markets for its oil in China, and gave a political weapon to Republicans ahead of the November presidential election.

Terry's proposal would allow construction to begin on all but the portion of TransCanada Corp's pipeline that goes through his home state of Nebraska.

Nebraska's state government is currently studying a new proposed route for the portion of the pipeline running through the state. In the meantime, Terry said the rest of the project should move forward.

TIMING UNCLEAR

TransCanada has said it plans to build the southern portion of the Keystone pipeline running to Texas refineries from Cushing, Oklahoma - a portion that does not require presidential approval because it does not cross the U.S. border.

The company has applied to the State Department for approval for the rest of the line.

Terry's bill would simply approve the northern portion of the line running from the Canadian border to Nebraska, a route that has been studied for several years.

"We want that northern route to be treated like the southern route," Terry said.

While there is extensive support in Congress for the pipeline because of the construction jobs it would create, several previous efforts to approve the pipeline have not made it through the Democrat-controlled U.S. Senate.

The White House also has said Obama would veto bills that override his pipeline approval power.

Terry said he did not expect his bill to move before Congress takes its August break, but said he would work with House Speaker John Boehner to find an appropriate vehicle to advance the plan.

A September vote to extend government spending -- known as a continuing resolution -- is thought to be the last piece of must-pass legislation before the November elections.

"It could be attached to several things I assume," Terry said. "The (continuing resolution) would be a good place for it, but the Speaker's office has not offered that up, I will be clear."