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Obama, GOP back in tussle over oil pipeline

By Matthew Daly

Associated Press

Published: Thursday, Jan. 19 2012 12:45 a.m. MST

"We cannot state that anything will be expedited at this time," she said. "We would look to information that is out there to extent we can. It is a new permit application so the process would have to be started over again."

The proposed $7 billion pipeline would pass through Montana, South Dakota, Nebraska, Kansas and Oklahoma en route to Texas. It is a dicey proposition for Obama, who enjoyed strong support from both organized labor and environmentalists in his winning 2008 campaign for the White House.

Environmental advocates have made it clear that approval of the pipeline would dampen their enthusiasm for Obama in November. Some liberal donors even threatened to cut off funds to Obama's re-election campaign to protest the project, which opponents say would transport "dirty oil" that requires huge amounts of energy to extract.

But by rejecting the pipeline, Obama risks losing support from organized labor, a key part of the Democratic base, for thwarting thousands of jobs.

"The score is job-killers two, American workers zero," said Terry O'Sullivan, general president of the Laborers' International Union of North America. O'Sullivan called the decision "politics at its worst" and said, "Blue-collar construction workers across the U.S. will not forget this."

Yet some unions that back Obama oppose the pipeline, including the United Auto Workers, Service Employees International Union and Communications Workers of America.

TransCanada says the pipeline could create as many as 20,000 jobs, a figure opponents say is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction.

Obama appeared to have skirted what some dubbed the "Keystone conundrum" in November when the State Department announced it was postponing a decision on the pipeline until after this year's election. Officials said they needed extra time to study routes that avoid a 65-mile stretch through the Sandhills area, which supplies water to eight states.

The concerns were serious enough that the state's governor and senators opposed the project unless the pipeline was moved. Any new route would have to be approved by Nebraska environmental officials and the State Department, which has authority because the pipeline would cross an international border.

Obama said his decision does not "change my administration's commitment to American-made energy that creates jobs and reduces our dependence on oil."

To underscore the point, Obama signaled that he would not oppose development of an oil pipeline from Oklahoma to refineries along the Gulf of Mexico. TransCanada already operates a pipeline from Canada to Cushing, Oklahoma. Refineries in Houston and along the Texas Gulf Coast can handle heavy crude such as that extracted from Canadian tar sands — the type of oil that would flow through the Keystone XL pipeline.

Associated Press writers Ben Feller, Dina Cappiello, Laurie Kellman and Sam Hananel in Washington, Shannon McCaffrey in Warrenville, S.C., Ramit Plushnick-Masti in Houston and James MacPherson in Bismarck, N.D., contributed to this story.

Follow Matthew Daly on Twitter: (at)MatthewDalyWDC.

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