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U.S. House to try again to advance Keystone pipeline

By Roberta Rampton and David Lawder

WASHINGTON (Reuters) - U.S. House Speaker John Boehner will make a new attempt to force approval of the stalled Keystone XL oil pipeline as part of legislation for another 90-day extension of federal road, bridge and transit construction funding, Republican aides said on Friday.

By seeking a second short-term funding extension, the plan aims to put the Canada-to-Texas pipeline and expanded drilling rights back at the top of the House agenda without the struggles that the House has endured in trying to pass a longer-term, more expensive transport bill.

A House vote could come as early as next week.

Boehner has made the Keystone pipeline, designed to carry crude from the northern Alberta oil sands, and the transportation funding bill centerpieces of his jobs agenda.

But he could not win the support of fiscally conservative Republicans for a full-blown, five-year $260 billion measure. So he resorted to an initial 90-day extension that was enacted at the end of March.

The new proposal will face certain opposition in the Democratic-controlled Senate but allows Republicans to portray themselves to voters as supporting expansion of North American energy production in the face of rising gasoline prices.

President Barack Obama earlier this year put a hold on TransCanada's $7 billion project because he said it needed further environmental review. A southern leg of the pipeline has since been approved.

"American families and small businesses are struggling with high gas prices, and President Obama's policies are only making things worse," a House Republican leadership aide said.

"This bill will pave the way for a House-Senate conference to discuss both reforming how taxpayer dollars are spent on federal infrastructure programs, and also meaningful solutions that would address high gas prices and create jobs by permanently removing government barriers to American energy production."

Congress approved a last-minute, 90-day extension of transportation construction funding before it left on a two-week break at the end of March and after Boehner refused to consider a two-year, $109 billion funding measure passed by the Senate.

It was anticipated that the House would resume work on a longer-term bill when Congress returns next week, but another 90-day extension, lasting through September, could allow the energy provisions to come more quickly to a negotiation with the Senate to iron out differences.

If a longer-term option is not available when the current extension runs out in June, lawmakers are unlikely to cut off funds to transportation construction projects as the economy struggles to maintain job growth just months ahead of the November general election.

And not all Senate Democrats are opposed to Keystone. Last month, Republicans in the Senate tried to attach approval for the pipeline to the Senate's two-year transport bill. The bid failed on a vote of 56-42, four short of the 60 needed to pass in the Democratic-controlled chamber. Eleven Democrats voted with the Republicans.

"As Congress now prepares to extend transportation programs and negotiate a longer-term package, the House will insist that the Keystone XL legislation be included as part of the package," the House Energy and Commerce Committee Republicans said on their website on Friday.

The House has already passed legislation opposed by Obama that would transfer authority for approving the pipeline to the Federal Energy Regulatory Commission, and would require the regulator to quickly issue permits.

(Editing by Vicki Allen and Mohammad Zargham)

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