The Keystone XL battle isn't over. The Canadian company behind the controversial pipeline announced Monday that it would proceed immediately with a shorter version of the project south of Oklahoma - even as it seeks a new permit for the segment through the northern U.S. Opponents immediately vowed to fight on both fronts.
"TransCanada is hell-bent on bringing tar sands, the world's dirtiest oil, through America to reach foreign markets. They can't wait for a fair, scientific environmental review they know their pipeline would fail," Sierra Club Executive Director Michael Brune said in a statement.
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The southern segment of the pipeline would extend from Cushing, Okla., which already has a glut of crude oil, to refineries on the Texas Gulf Coast; those refineries now import much of their oil from abroad.
The company will seek a new international permit for the stretch from the province of Alberta to Cushing.
President Obama had denied such a permit for the pipeline in January, but the White House on Monday signaled its attempt to strike a balance between environmental concerns and accusations that the administration's rejection of Keystone XL had forfeited thousands of new jobs and crucial new energy supplies.
"As the president made clear in January, we support the company's interest in proceeding with this project, which will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight-year high," White House Press Secretary Jay Carney said in a statement.
He emphasized that the president's rejection of the international permit for the full, 1,700-mile pipeline - originally proposed as a single project - was not based on the project's merits. Rather, he stressed, the rejection was based on concerns over the pipeline's potentially damaging route and on efforts by Republicans in Congress to speed approval of the permit without a thorough new review of the route.
The original route would have taken the pipeline through the Nebraska Sandhills atop the massive Ogallala aquifer.
"We simply hope that the process that that review would demand would be allowed to take place without, you know, more political gamesmanship by Republicans," Carney said.
But the GOP leadership in Congress made it clear it wasn't prepared to accept the administration's new statements of support without skepticism.
"The president is so far on the wrong side of the American people that he's now praising the company's decision to start going around him. But he can't have it both ways," House Speaker John A. Boehner (R-Ohio) said in a statement.
The Keystone XL project, a companion to the existing Keystone pipeline, always was envisioned as two segments.
While an international permit is needed for the northern segment because it crosses the U.S.-Canada border, TransCanada needs mainly state and local authorization to build the southern segment. With strong support in states along that section of the corridor, TransCanada officials said, they expect to have the southern segment operating by late 2013 at a cost of $2.3 billion.
At the same time, they said, the company's new application for the more problematic northern portion of Keystone XL would work through the issue of rerouting the pipeline away from the Nebraska Sandhills.
"Our application will include the already reviewed route in Montana and South Dakota," TransCanada President Russ Girling said in a statement. "The over-three-year environmental review for Keystone XL completed last summer was the most comprehensive process ever for a cross-border pipeline. Based on that work, we would expect our cross-border permit should be processed expeditiously and a decision made once a new route in Nebraska is determined."
Most of the environmental controversy has focused on the porous Sandhills and fears of a possible oil leak into one of the nation's most important agricultural aquifers, but there is growing opposition in Texas as well, particularly among eastern Texas landowners who say they too are fearful of leaks.
"Obama sold us out," said David Daniel, a landowner along the proposed route in Texas. He heads a grass-roots group opposing the project, Stop Tarsands Oil Pipelines.
Daniel said in an interview that Obama's rejection of the international permit application in January appeared to have made it easier for TransCanada to work on the project in segments, proceeding on two tracks without losing time.
"Obama made a decision to punt every time he could have made a true national interest determination, when we have plenty of evidence to show that the Keystone XL is not in the national interest. But he didn't do that," Daniel said.
Conservation groups made it clear they would zero in on potential effects of the pipeline's southern segment, including dangers to endangered species - already the focus of a lawsuit filed by the Center for Biological Diversity. They will also emphasize the possibility that air pollution could be worsened in already hard-hit refinery communities along the Gulf Coast.
"Any attempt to move forward with any segment of the pipeline will be met with the same fierce grass-roots opposition that stopped the pipeline the first time," Kim Huynh of Friends of the Earth said in a statement.
White House officials said there was a legitimate need to move additional oil from Cushing, where there is a glut, to retooled refineries in Texas that were eager for cheaper domestic supplies.
"We'll make sure that any federal permitting that is involved in the Cushing pipeline will be acted on very quickly," Carney said. "Everything will be done by the book."