Canadian firm presses Obama again to allow Keystone pipeline

TransCanada Corp. reapplied for a permit Friday to carry oil sands crude across the U.S. border as part of the Keystone XL pipeline project.

The company submitted the application nearly four months after President Obama rejected the same permit, setting off a political firestorm.

"Our application for a Presidential Permit builds on more than three years of environmental review already conducted for Keystone XL," TransCanada CEO Russ Girling said in a statement.

"It was the most comprehensive process ever for a cross-border pipeline and that work should allow our cross-border permit to be processed expeditiously and a decision made once a new route in Nebraska is determined."

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TransCanada said Friday it will provide the State Department, which is charged with reviewing the permit because the project crosses an international border, with an alternate route through Nebraska once it is approved by state officials. The application applies to the portion of the pipeline that stretches from Canada to Steele City, Neb.

Nebraska officials had previously raised concerns that the original pipeline route would threaten the state’s Sandhills, an environmentally sensitive region, and the Ogallala Aquifer.

TransCanada submitted an alternate route to state officials earlier this year that avoids the Sandhills, but still crosses part of the aquifer.

The Keystone pipeline would carry oil sands crude from Alberta, Canada, to refineries on the Gulf Coast. TransCanada said Friday it hopes to begin work on the pipeline in 2013, with construction wrapping up in 2014 or 2015. The company will begin construction on the southern leg of the pipeline this summer.

TransCanada’s decision to reapply for the permit was met with immediate opposition from environmental groups and others, which have long raised concerns about the project. They have warned of increased greenhouse gas emissions from oil sands production and oil spills along the pipeline route, among other things.

The State Department said Friday in a statement that it is “committed to conducting a rigorous, transparent and thorough review” of the project. The department said it would use existing analysis of the pipeline in order to ensure the application is reviewed “efficiently.”

The statement notes that Nebraska officials have said it will take six to nine months to review the new route through the state. The department estimated that it will make a final decision on the project in 2013, well after the upcoming election.

In addition, the department said it plans to hire an independent contractor to help review the permit application.

Obama has said his January decision to reject the Keystone permit was based not on the merits of the pipeline, but on a GOP-backed deadline to weigh in on the project included in legislation to extend the payroll tax cut.

In rejecting the permit, Obama welcomed Keystone developer TransCanada to reapply. The president has said his administration will re-evaluate the permit based on a full review of the project.

Obama threw his support behind the southern leg of the project — which would carry oil from Cushing, Okla., to Texas — earlier this year. But House Speaker John Boehner (R-Ohio) and other Republicans have said that’s not enough.

Republicans, who have sought to force Obama’s hand on Keystone with a series of bills, are hoping to approve the project with language included in legislation extending federal transportation funding. But the provision faces an uphill battle, amid opposition from Senate Democrats.

The first formal session of House-Senate talks on the transportation bill is set for Tuesday afternoon. The House version of the bill approves the pipeline, while the Senate’s plan omits the provision.

Keystone advocates on Capitol Hill, backed by an intense lobbying campaign from oil-industry and business groups, will push for the pipeline to make the final cut.

Boehner called for Keystone’s approval when responding Friday to new data showing that the rate of job growth again slowed in April.

“The House has passed a series of bills to address high energy prices through projects like Keystone XL, remove government barriers to job growth and stop Washington from spending money we don’t have,” he said in a statement.

But advocates face a tough climb getting Keystone in a final transportation bill. Democrats outnumber Republicans 8-6 among the Senate negotiators.

Among those Democrats, only Sen. Max Baucus (Mont.) has voted in favor of including Keystone in the bill, and Baucus has signaled through aides that he’s unlikely to insist on the provision.

This story was updated at 10:20 a.m.

Ben Geman contributed to this story.