Obama rejects Keystone pipeline from Canada to Texas

WASHINGTON -- President Obama's rejection Wednesday of rapid approval of the Keystone XL pipeline from Canada to Texas triggered Republican and business community objections but also signs from Obama and the pipeline company that the issue was far from over.

Russ Girling, president of TransCanada, the pipeline's builder, said the company would reapply for permitting and asked for the application to be processed in time to get the pipeline online by 2014.

Obama said House Republicans forced his decision by including a provision in last month's legislation for a short-term extension to the payroll tax cut that required him to either issue a permit to allow the 1,700-mile pipeline to be built or explain why it was not in the national interest by Feb. 21.

"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people," Obama said in a statement. "I'm disappointed that Republicans in Congress forced this decision, but it does not change my administration's commitment to American-made energy that creates jobs and reduces our dependence on oil."

Obama said he rejected the permit application now based on the State Department's recommendation, which concluded there wasn't enough time to vet alternate pipeline routes.

Obama was putting politics ahead of jobs and the nation's energy security by rejecting the pipeline now, Republicans and oil industry leaders said. The president faced fierce pressure from environmentalists who said they would be less likely to campaign for him in November if he didn't block the project to move carbon-heavy oil from the tar sands of northwest Canada.

The State Department announced in November that it would explore a new route for the pipeline and pushed a final decision on the controversial project past the 2012 election.

Business leaders and Republicans say approving the project now would create as many as 20,000 jobs for an ailing U.S. economy and lessen dependence on foreign oil.

"This political decision offers hard evidence that creating jobs is not a high priority for this administration," said Tom Donohue, the president of the U.S. Chamber of Commerce.

However, TransCanada told the State Department the pipeline would create just 4,650 temporary direct construction jobs for two years, according to a study by the Cornell University Global Labor Institute. Domestic oil production was up in the United States in 2011, while imports of foreign oil are down, according to the Energy Information Administration.

Republicans are determined to keep the Keystone pipeline in the national debate. Energy and Commerce Committee Chairman Fred Upton, R-Mich., said he called on Secretary of State Hillary Rodham Clinton to face his panel next week on the decision to reject the permit.

House Speaker John Boehner said Republicans would continue to look for other legislative vehicles for the pipeline in 2012, but with White House opposition it is unlikely the project will move forward this year, if at all. Still, Republicans made clear that they would make this an election-year issue.

"This is not the end of the fight," Boehner said.