Republicans fume as Keystone oil pipeline rejected

Wed Jan 18, 2012 11:37pm EST
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By Jeff Mason and Jeffrey Jones

WASHINGTON/CALGARY, Alberta (Reuters) - The Obama Administration rejected the Keystone oil pipeline on Wednesday, a move that Republicans decried for sacrificing jobs and energy security in order to shore up the president's environmental base before elections.

President Barack Obama said the administration denied TransCanada's application for the $7 billion Canada-to-Texas oil sands pipeline because there was not enough time to review an alternate route that would avoid a sensitive aquifer in Nebraska -- within a 60-day window set by Congress.

The Canadian firm quickly said it would re-apply for the permit, which it first sought in 2008. But U.S. officials said it would still take more than a year for the State Department to complete a new environmental review -- pushing any final decision on the line well beyond November's elections.

Even so, Keystone seems certain to become a key issue for the coming presidential campaign, with Republicans accusing Obama imperiling U.S. energy security and environmentalists cheering the White House for standing up to big oil.

Canada has said the uncertainty will cause it to intensify efforts to sell more crude to China.

The administration rejected the attacks, arguing Republicans inserted an unrealistic deadline in legislation in December that was designed to force Obama's hand by the end of February. That measure came after the State Department in November moved to delay a decision in order to study a route that would avoid part of the Ogallala Acquifer, a major source of fresh water.

"I'm disappointed that Republicans in Congress forced this decision," Obama said.

Mitt Romney, front runner for the Republican presidential nomination, blasted Obama on the announcement, saying he demonstrated a "lack of seriousness" in tackling high unemployment.   Continued...