White House may reject oil pipeline, Feb. deadline 'purely political'

The White House tried to make its case Wednesday for rejecting a Canadian company's plan to build an oil pipeline from Canada to Texas, saying a February deadline set by Congress was "purely political" and did not allow for a proper review of the project.

White House spokesman Jay Carney stopped short of saying a decision on the Keystone XL pipeline had been made. But amid a flurry of reports that President Barack Obama would reject the project, Carney suggested an announcement could be imminent.

"I'm not going to get ahead of the administration or the secretary of state or the president," Carney said. "We may have more information for you later in the day."

Under a Republican-written provision Obama signed into law just before Christmas as part of a tax bill, the president faces a Feb. 21 deadline to decide whether the pipeline is in the national interest. The State Department has said that deadline doesn't leave it enough time for necessary reviews and Carney also took that stand.

"Imposing an arbitrary 60-day deadline on this process would make it virtually impossible for an adequate review to take place," he said.

Administration officials say that looming deadline has cut short the time needed to conduct required environmental reviews after the State Department ordered the project developer, TransCanada, to find an alternate route that avoids environmentally sensitive areas of Nebraska.

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

The GOP has pounded Obama over the issue, saying it's a question of whether he wants to create jobs and import energy from an ally, or lose jobs and see Canadian oil go to Asia instead.

The $7 billion pipeline would run through six states and carry oil from Canada to Texas Gulf Coast refineries.

The pipeline proposal has forced the White House to make a politically risky choice between two important Democratic constituencies. Many unions back the project because of the prospects of new jobs in a down economy. Environmental groups fear the pipeline could lead to an oil spill disaster.

Some liberal donors 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.