Keystone XL pipeline plan is back

The Trans Alaska Pipeline System runs oil from Alaska's northern fields to the port city of Valdez, Alaska, where it is shipped south for refining. (rickz/Flickr)

In November, we thought the Keystone XL pipeline plan had been put to bed for a nice, long nap. Now, it seems as if the controversial project is sleepwalking and may even be close to waking up for good.

The U.S. House yesterday passed a bill that links the plan’s approval to an extension in the Social Security payroll tax. The tax cut, which is favored by President Obama and many Democrats, is set to expire on Jan. 1.

Previously, Obama had angered Keystone supporters by announcing that he was shelving a decision on the pipeline until after the 2012 presidential election. The pipeline would carry oil from Canada’s tar sands – called extremely dirty by environmentalists – through the Heartland to oil processing facilities on the gulf coast.

The House bill would renew the tax cut and extend unemployment insurance, but Republicans added in the unrelated pipeline proposal, which would give the Obama administration 60 days to decide whether to approve the Keystone pipeline.

Senate Democrats have called the House bill dead on arrival and the White House issued a formal veto threat.

Obama and many Democrats are pushing hard for an extension of the tax cut, which some estimate saved middle class Americans about $1,000 this year. Many Republicans have urged Obama to OK the pipeline, saying it will create vital jobs.

Is there compromise in the pipeline?