For the first time since President Obama issued a controversial order halting its progress, the proposed Keystone XL Pipeline is once again on track for bureaucratic review after TransCanada submitted a new route through Nebraska designed to avoid environmentally sensitive areas.
The new plan, which TransCanada submitted to the Nebraska Department of Environmental Quality on Wednesday, takes the Keystone project out of the deep freeze that began in January when Obama agreed with the recommendation of the State Department to reject the initial pipeline application.
This new development, first reported by Fox News, allows Nebraska officials to review the impact of the pipeline's adjusted route. It also opens the door for the pipeline's builder, TransCanada, to submit a new complete proposal covering the entire length of the pipeline to the State Department for its review.
That federal approval is necessary because the pipeline, which will originate in Alberta, Canada, must cross the border for oil to reach gulf coast refineries.
Environmentalists, already disposed to fight oil production, focused on concerns that the pipeline would harm Nebraska's sensitive Sand Hills region. The formal effort by TransCanada and Nebraska officials to find a new route officially stopped with the president's January announcement. This past week, state lawmakers in Nebraska approved legislation allowing for the review process to resume.
"Nebraska will move forward on the review process of the proposed Keystone XL pipeline and any future pipelines that will create jobs and reduce U.S. dependence on Middle Eastern oil," Republican Gov. Dave Heineman said in a statement Tuesday after signing the bill. "The review process is a top priority for Nebraska."
That review will be conducted by the Nebraska Department of Environmental Quality and is expected to take several months. Heineman has told reporters in recent weeks that he fully expects to get an approved proposal before the Obama administration before November's election. A draft report will be open to public review before a final environmental impact assessment is determined.
The political fight over the pipeline's construction has been a major issue in Washington and on the campaign trail. Republicans have blasted away at the president for what they see is intransigence over keeping the pipeline bottled up.
The most recent effort by GOP lawmakers to force the president's hand by attaching a Keystone provision to a pending transportation bill was met by a veto threat from Obama. Presumptive Republican presidential nominee Mitt Romney has said he'll pass an executive order on "day one" to allow construction.
Pipeline supporters point to Keystone’s expected economic benefits, including thousands of construction jobs as sufficient reason to approve the project and feel further study is unwarranted.
"They've had three years of an environmental assessment that they've looked at this full route,” American Petroleum Institute’s Cindy Schild said in an interview. “So they should have a pretty good handle on the environmental impacts.”
TransCanada officials are optimistic that the pipeline will be green-lighted and project a construction start date for early next year with oil flowing in 2015, but the resistance in Washington has caused political leaders in Canada to reassess their position in the global energy market.
During a recent visit to China, Prime Minister Stephen Harper told businessmen, "we want to sell our energy to people who want to buy our energy. It's that simple."
Huge containment vats at TransCanada's terminal in Hardisty, Alberta, are already under construction. They're supposed to be used for the Keystone pipeline, but plans also could shift to skip the U.S. altogether.
In an interview with Fox News in January, TransCanada CEO Russ Girling noted that demand for Canadian oil will all but guarantee that the pipeline is built -- if not south into the United States, then likely west towards the Pacific Ocean with access to Asia.
"We're going to need a lot of facilities to move that crude oil to whatever market is going to exist," Girling said. "So I'm pretty confident that under any scenario we'll be using these (Keystone XL) facilities."
What’s not immediately clear with Wednesday’s submission is when TransCanada will send the State Department its new permit application. Since most of the route hasn’t changed, the pipeline’s proponents hope the federal review will be swift, or at the very least not take the three years that preceded the January rejection.
Assistant Secretary Kerri-Ann Jones told reporters several months ago that officials will make use of all available information but, “if TransCanada comes in with a new application, it will trigger a new review process, a completely new review process.” There is already in place a memorandum of understanding between federal and state officials to work cooperatively and eliminate redundancies.
In a letter obtained by Fox News, State Department officials told members of Congress that a 2013 approval decision is still feasible, noting that the reason for the original denial was “not based on the merits of the project.” A senior Republican staffer on Capitol Hill tells Fox News that declaration means that if Nebraska signs off on the pipeline, then there is no legitimate reason for the Obama administration to reject the project.
Fox News' William LaJeunesse contributed to this report.