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Lower oil cuts both ways for Keystone pipeline

The recent slide in oil prices to four-year lows is throwing another question mark into the six-year saga surrounding the Keystone XL pipeline, with arguments being made on both sides as the Republican-controlled House approved the project again in a vote on Friday.

For the first time ever, the Democrat-controlled Senate has relented and also plans to vote on the proposed line running from Alberta, Canada, to Nebraska next week.

Kevin Book, head of research at Washington, D.C.-based ClearView Energy Partners, told CNBC on Friday the pipeline is needed more than ever to support the growth in U.S. oil production in the Bakken region of Montana and North Dakota. ClearView provides energy policy insights to institutional investors and corporate strategists.

"As you get lower and lower on crude, you have a bigger differential from transportation costs," Book said in a "Squawk Box" interview. "At $90 a barrel, taking a train to the Gulf of Mexico [was] not such a big deal. At $75 a barrel, plus the quality differential for oil sands downward, suddenly you want that pipeline."

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Meanwhile, Jared Bernstein, former chief economist to Vice President Joe Biden, told CNBC on Friday he believes the economics have shifted. "The in-the-money strike price for developing tar sands is a barrel of oil that costs something like north of $90," he argued. "As long as oil remains below that, and new forecasts suggest it will for a while, I think the economics here may have gotten ahead of the politics."

Book countered that argument. "Over the long haul, the price of oil tends to converge around between 2½ and 3½ times the cost of finding and development. Right now, those are about $25 a barrel on a global average. So you're talking about somewhere between $75 and $90 as a real price of oil." Crude was trading at the low end of that range on Friday.

The legislation under consideration on Capitol Hill would bypass the federal review process, which is currently being held up by a pending Nebraska Supreme Court decision on a lower court ruling that invalidated the governor's decision to allow the Keystone XL pipeline to pass through the state.

The southern Oklahoma-to-Texas section of TransCanada's vision opened in January.

The northern leg was put on the front burner again as both sides in the runoff Louisiana Senate race—incumbent Democrat Sen. Mary Landrieu and Republican challenger Rep. Bill Cassidy—sought advantage from being seen to support a project that backers believe would create more jobs in America's burgeoning energy boom.

Bernstein was dubious about the impact the issue could have on the race. "The idea that someone is going to go to the polls and change their vote because of this strikes me as extremely fanciful."

Sara Fagen, former George W. Bush White House political director, disagreed. "Good policy is good politics and that's why it's going to be voted on." She added: "I don't think too many people think [oil] is going to stay low long term. So this is still good policy."

While overseas Friday, President Barack Obama said the federal Keystone XL review should continue. But he also questioned the job-creating benefits from the project.

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