President Obama rejects Keystone oil pipeline

Photo caption: Demonstrators carry a giant mock pipeline while calling for the cancellation of the Keystone XL pipeline during a rally in Washington on November 6, 2011.

NBC News reports: President Barack Obama yesterday rejected a Canadian company's plan to build a U.S.-spanning, 1,700-mile pipeline to carry oil across six U.S. states to Texas refineries, raising the stakes on a bitter election year fight with Republicans.

Though the project promises thousands of temporary jobs for the recovering U.S. economy, Obama said a February deadline set by Congress would not allow for a proper review of potential harm from the $7 billion Keystone XL project.

"As the State Department made clear last month, the rushed and arbitrary deadline insisted on by congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment," Obama said.

The plan proposed by Calgary-based TransCanada would carry oil from tar sands in western Canada to Texas.

The State Department said the decision was made "without prejudice," meaning TransCanada can submit a new application once a route through environmentally sensitive areas of Nebraska is established.

Russ Girling, TransCanada's president and chief executive officer, said the company plans to do exactly that. If approved, the pipeline could begin operation as soon as 2014, Girling said.

Predictably, Republicans assailed Obama's decision as a job-killer and said the fight was not over.

The Republican leader of the House, Speaker John Boehner, said Obama was breaking his promise to create jobs.

"This is not the end of this fight," said Boehner. He called the pipeline good for the U.S. economy and a major job creator.

The pipeline proposal has forced the White House to make a politically risky choice between two important Democratic constituencies. Many labor unions back the project because of the prospects of new jobs in a fragile economy. Environmental groups fear the pipeline could lead to an oil spill disaster.

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