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US delays Keystone XL pipeline until after 2012

11.10.2011  | 

President Barack Obama called Thursday for further study of the controversial Keystone XL Pipeline, putting off a final decision until after the 2012 elections and triggering both praise and criticism on Capitol Hill. TransCanada Chief Executive Russ Girling said the company remains confident the pipeline will be approved.

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By STEVE GELSI

President Barack Obama called Thursday for further study of the controversial Keystone XL Pipeline, putting off a final decision until after the 2012 elections and triggering both praise and criticism on Capitol Hill.

The $7 billion project proposed by TransCanada (TRP) to move crude oil from the oil sands of Alberta to the Gulf Coast of Texas requires a final OK from the State Department, which had expected to reach a decision by the end of 2011.

Now the State Department says any new route for the 1,700-mile pipeline should avoid the Sand Hills in Nebraska, an important aquifer in the region.

"We should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood," Obama said.

The State Department requested a supplement to the Keystone XL pipeline's environmental impact study, with a fresh round of public hearings planned in coming months.

The pipeline has drawn protests in Washington and in Nebraska, where lawmakers have expressed concern about protecting groundwater supplies near the proposed path of the pipeline.

TransCanada Chief Executive Russ Girling said the company remains confident the pipeline will be approved.

"This was by far the most exhaustive and detailed review ever conducted of a crude oil pipeline in the United States," Girling said.

Of the 14 routes studied for Keystone XL, an alternative path would have avoided Nebraska's Sand Hills region and the Ogallala aquifer; six other routes would have reduced pipeline mileage across the Sand Hills or the aquifer, TransCanada said.

"TransCanada hopes this work will serve as a starting point for the additional review and help expedite the review process," the company said.

TransCanada said the U.S. consumes 15 million barrels of oil a day and imports 10 million to 11 million barrels. That pattern is expected to continue for the next two or three decades.

House Speaker John Boehner (R, Ohio) argued that delaying the pipeline could cost 20,000 jobs.

"By punting on this project, the president has made clear that campaign politics are driving U.S. policy decisions -- at the expense of American jobs," Boehner said.

But Steve Cohen (D, Tenn.), who attended a protest rally about the project outside the White House over the weekend, praised the decision.

"For more than a year, I have been working to convince the State Department that their environmental review for the proposed Keystone XL pipeline is flawed, insufficient, and dangerous to the well-being of the American people," he said.

Dow Jones Newswires



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