Obama welcomes TransCanada plan for new pipeline

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By MATTHEW DALY, Associated Press

WASHINGTON (AP) — The White House on Monday welcomed a Canadian company's plan to build an oil pipeline from Oklahoma to Texas after President Barack Obama blocked the larger Keystone XL pipeline from Canada.

The new proposal by Calgary-based TransCanada does not require presidential approval because it does not cross a U.S. border. The 485-mile pipeline is expected to cost about $2.3 billion and be completed next year, pending approval by federal, state and local governments.

The Obama administration had suggested development of an Oklahoma-to-Texas line to alleviate an oil bottleneck at a Cushing, Okla., storage hub.

Obama rejected the Keystone XL pipeline last month, citing uncertainty over a route that avoids the environmentally sensitive Sandhills region in Nebraska. He said there was not enough time for a fair review before a looming deadline forced on him by Republicans. The action did not kill the project but, for the second time in three months, put off a tough choice on the pipeline project, which has become the focus of a heated political fight.

Pipeline supporters — including congressional Republicans and many business and labor leaders— call it an important job creator, while opponents say it would transport "dirty oil" from tar sands that requires huge amounts of energy to extract. They also worry about a possible spill.

White House press secretary Jay Carney said Monday that Obama was pleased with TransCanada's latest announcement.

"Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production," Carney said in a statement. "We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary federal permits."

TransCanada said Monday it still hopes to build the full 1,700-mile Keystone XL pipeline, which would carry oil derived from tar sands in Alberta, Canada to refineries along the Texas Gulf Coast. The proposed $7 billion pipeline would run through Montana, South Dakota, Nebraska and Kansas before reaching Oklahoma.

The company said it is working with Nebraska officials to find a route that avoids the Sandhills region.

Carney said Obama's Jan. 18 decision to delay the pipeline "in no way prejudged future applications" by TransCanada for the full, 1,700-mile project.

"We will ensure any project receives the important assessment it deserves, and will base a decision to provide a permit on the completion of that review," he said.

Russ Girling, TransCanada's president and CEO, said the Oklahoma-to-Texas pipeline will transport growing supplies of U.S. crude oil to meet refinery demands in Texas.

"Gulf Coast refineries can then access lower-cost domestic production and avoid paying a premium to foreign oil producers," he said, adding that the project should reduce U.S. dependence on crude from outside North America.

House Speaker John Boehner, R-Ohio, called the White House comments puzzling.

"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," Boehner said, adding that Obama "can't have it both ways. If the president thinks this project is good for America, he knows how to make it happen right away. Until he does, he's just standing in the way of getting it done."

Sen. James Inhofe, R-Okla., called the announcement "great news" for his state. Inhofe said the pipeline could create more than 1,000 construction jobs in Oklahoma alone.

"Of course, this smaller pipeline would in no way replace the need for the larger Keystone XL project, but a pipeline from Cushing to the Gulf is a no-brainer," Inhofe said. "Even as President Obama squandered the best job-creating opportunity he has ever had by rejecting Keystone, he still made a commitment to 'partner' with the oil and gas industry to increase our energy security. In Oklahoma we are taking him at his word."

Susan Casey-Lefkowitz, international program director for the Natural Resources Defense Council, said the new, shorter pipeline was "a ploy" to avoid State Department review of the Keystone XL project, which she said would raise U.S. oil prices, send tar sands oil overseas, endanger U.S. homes and waters and contribute to worsening climate change.

"What part of "no" does TransCanada not understand?" she asked.

The Center for Biological Diversity, another environmental group, said the pipeline would still travel through wetlands and habitat for imperiled species such as the whooping crane, piping plover and a rare minnow known as the Arkansas River shiner.

"This isn't the time to be cutting corners on protecting our wildlife and environment," said Noah Greenwald, director of the group's endangered species program. "The Obama administration should be willing to take a hard look at this project and make sure it follows laws that protect clean water, wetlands and endangered species."

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