Obama calls for southern Keystone XL approval

President Obama: "Today I am directing my administration... to make this project a priority"

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US President Barack Obama has pledged to speed approval for the southern leg of the stalled Keystone XL pipeline.

Speaking in the oil hub of Cushing, Oklahoma, he ordered officials to "cut through the red tape" and make fast-tracking a federal review a "priority".

Mr Obama's speech comes on day two of an energy tour spanning four US states, including Nevada and New Mexico.

Analysts say he is politically vulnerable to rising fuel prices during an election year.

The entire Keystone XL pipeline would run from the oil sands of western Canada to refineries in Texas, but has become a controversial issue amid ongoing debate over its potential environmental impact.

In January, the White House put the plan on hold, saying more time was needed to assess the environmental impact of the $7bn (£4.4bn) plan.

But the following month the Obama administration approved construction for the southern leg of the pipeline.

The environmental concerns focus on a section of the route planned to cut through a Nebraska aquifer, and do not apply to the southern section.

'Fun politics'

Speaking in Cushing, Mr Obama boasted of his record in opening up domestic oil resources and defended his administration's handling of the Keystone XL pipeline.

Calling oil production a "critical part" of his energy strategy, the president said: "We are drilling all over the place, right now.

Start Quote

"We expect to receive the permits in time to begin construction in 2012 and be operational in 2013”

End Quote Terry Cunha TransCanada spokesman

"We're producing so much oil and gas in places like North Dakota and Colorado that we don't have enough pipeline capacity to transport all of it."

Mr Obama said the approval of the southern part of the pipeline route would help ease the crude oil "bottleneck" in towns like Cushing.

But he said that his administration's decision not to approve the pipeline's northern leg was held up because "Congress decided they wanted their own timeline", turning the Keystone XL approval process into a "fun political issue".

However, Mr Obama's announcement is not expected to alter the current timeline for construction of the pipeline, which could start as early as June.

Republican critics of the president say his energy tour is little more than a series of photo opportunities and an attempt to regain the political initiative on the issue even as fuel prices continue to rise.

In an email to Bloomberg news, a spokesman from TransCanada, the company implementing the project, said only one permission from the US Army Corps of Engineers was outstanding.

"We expect to receive the permits in time to begin construction in 2012 and be operational in 2013," spokesman Terry Cunha said.

The president will move on to the final stop of his energy tour in Columbus, Ohio.

'Flat earth society'

On Wednesday, the president visited a solar energy facility in Nevada and an oil field in New Mexico to highlight what he has termed his "all of the above" energy policy.

Mr Obama spoke out against the "flat-Earth society in Congress" for protecting subsidies and tax breaks for the oil and gas industry.

"Every time you fill up at the pump, they're making money," he said.

In recent weeks Mr Obama has been fending off criticism of his energy policy, which some argue has suppressed domestic production while fuel prices have climbed to $3.86 (£2.44) per gallon.

The Keystone XL pipeline has been a focal point for critics, who say Mr Obama denied approval of a project that would create jobs and reduce US reliance on foreign oil.

Administration officials have said they will review the remaining parts of the pipeline once a new route has been identified.

A map of the original proposed pipeline

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