President Obama arrives at the TransCanada Stillwater Pipe Yard in Cushing, Okla., in March 2012. At the start of a second term, Obama faces mounting pressure on a decision he had put off during his re-election campaign: whether to approve the $7 billion proposed Keystone XL oil pipeline between the U.S. and Canada.
Nebraska Gov. Dave Heineman notified President Obama on Tuesday that he has approved the controversial Keystone XL Pipeline to traverse his state, a crucial step toward reviving the project one year after it was delayed by the Obama administration.
The Republican governor wrote in a letter to Obama and Secretary of State Hillary Rodham Clinton that he has approved a revised route for the Canada-to-Texas pipeline, which his office said would avoid the environmentally sensitive Sandhills region, but will cut through the High Plains Aquifer.
The move puts the onus back on the Obama administration - the project must be approved by the State Department to move forward - to decide the fate of the 1,700-mile pipeline that has pitted GOP lawmakers against environmentalists.
Heineman says the Nebraska segment of the project would result in a $418 million positive impact on the state's economy.
"Impacts on aquifers ... should be localized, and Keystone would be responsible for any cleanup," wrote Heineman, whose decision follows Nebraska Department of Environmental Quality which concluded the project would have "minimal impact" on the environment.
In addition to concerns that a potential leak would have on aquifers, environmental groups have also argued that the project, which develops carbon-heavy oil from the tar sands of northwest Canada, would lead to toxic chemicals being released into the air when it is refined.
Last January, Obama blocked a quick approval of the Keystone XL pipeline from Canada to Texas, triggering outrage from Republicans and objections from the business community.
At the time, Obama said the House GOP forced his decision by including a provision in the legislation in December 2011 for a short-term extension to the payroll tax cut that required him to issue a permit to allow the 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 at the time. "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."
TransCanada, the developer of the pipeline, has since broken the project into two parts. It received federal approval last year to begin construction of the 485-mile, $2.3 billion southern leg of the project from Cushing, Okla. to the Gulf Coast. Obama's pending decision involves the 1,179-mile, $5.3 billion northern leg from Alberta to Steele City, Nebraska.
TransCanada president Russ Girling said Heineman's decision "moves us one step closer to Americans receiving the benefits of Keystone XL - the enhanced energy security it will provide and the thousands of jobs it will create.
After Heineman's announcement, House Speaker John Boehner called on Obama to quickly approve the project.
"Nebraska's approval of a new Keystone XL pipeline route means there is no bureaucratic excuse, hurdle, or catch President Obama can use to delay this project any further," Boehner said.
The State Department announced in November 2011 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 thousands of jobs and lessen dependence on foreign oil. Environmentalists say the project is risky for the environment and public health and runs counter to Obama's call during his initial run for the White House to work to end the "tyranny of oil."
The issue could come up at a nomination hearing on Thursday for Sen. John Kerry, whom Obama has tapped to be his next secretary of State. Kerry has spoken passionately through much of his Senate career about his concerns about climate change.
White House press secretary Jay Carney said Tuesday that the State Department was still reviewing the issue.
"I don't want to get ahead of that process," Carney said.
State Department spokeswoman Victoria Nuland said on Tuesday that the review would most likely not be completed before the end of March.
The decision by Heineman, who opposed the original route, was criticized by environmentalists. Jane Kleeb, executive director of BOLD Nebraska, said she was pinning her hopes on Obama to stop the project. During his inaugural address on Monday, Obama vowed action on climate change.
"President Obama is Nebraska's only hope now as our governor and legislature have failed," Kleeb said." It is clear given what President Obama said about climate change yesterday that Heineman did not want to be on the same side as Obama."
Contributing: Wendy Koch