The politically charged showdown over the Keystone XL oil pipeline took a dramatic turn yesterday, as the company behind the $7 billion Canada-to-U.S. link shifted its previous position and agreed to route it away from an ecologically sensitive area that had drawn high-level GOP criticism.

The compromise from Alberta-based TransCanada Corp., which until last week had opposed a push to reroute its 1,700-mile project away from the Nebraska Sandhills, was not directly billed as a bid to force the Obama administration's hand after officials announced Thursday that they would put off a final decision on the pipeline until after the 2012 election.

But House Republicans are already preparing to push President Obama on a Keystone XL delay they slam as motivated by pure politics, teeing up a second pro-pipeline bill that could come to the floor with the project's environmentalist foes sorely missing the bipartisan cover they found themselves with in Nebraska.

"The way it was going, I thought the whole pipeline was in jeopardy," Rep. Lee Terry (R-Neb.), author of a House-passed bill that would have forced Obama to rule on Keystone XL, said last night as he praised TransCanada and Nebraska legislative Speaker Mike Flood (R) for striking "a good agreement."

That pact, announced by Flood on the floor of the state Senate, would commit the pipeline company to moving Keystone XL away from the delicate soil of the Sandhills, which lie atop the aquifer that provides most Nebraskans' water. The company would receive an exemption from pending state legislation that would give Nebraskan officials greater power to determine pipeline siting, and the state also would pay for a new environmental review of the revised XL route.

Nebraska's Department of Environmental Quality affirmed yesterday that a fresh review of the pipeline would take between six and nine months or about half the time that the State Department estimated last week for a federal environmental assessment of potential new Nebraska routes (E&ENews PM, Nov. 10).

But State Department spokesman Mark Toner said late yesterday that the Nebraska deal is not anticipated to move that timeline -- which allows Obama to avoid alienating green groups or Keystone XL backers during his hard-fought re-election run.

"Nothing has changed in the process since last Thursday's announcement as any new proposed routes will be subject to the thorough, rigorous and transparent review process we have undertaken throughout," Toner said in a statement. "The process requires a supplemental Environmental Impact Statement for the new proposed route. Given the process, we cannot provide a specific end-date, other than to say that based on the total mileage of potential alternative routes that would need to be reviewed, we anticipate the evaluation could conclude as early as first quarter of 2013."

TransCanada Vice President Robert Jones yesterday declined to describe the Cornhusker compromise as driven in part by a desire to speed up State's routing review. However, he suggested that given the anticipated collaboration between environmental regulators in Nebraska and Washington -- and Obama aides' invocation of the Sandhills as a driving concern behind the delay -- a faster timeframe for ruling on Keystone XL would be reasonable.

State projected Thursday that "starting from scratch" an environmental review would take 12 to 15 months, Jones told E&E Daily yesterday. "But we're not starting from scratch."

"The state of Nebraska, they're going to be part of the process," Jones said. "They're going to be part of selecting the pipeline route and making sure that development of the Keystone XL pipeline occurs in the state. The goal would be to maximize use of the existing route and minimize impact on the Sandhills."

If TransCanada's cooperative approach with Nebraskans does not help win it a faster Obama administration review, House Republicans are already gearing up for a second legislative push in six months to bring Keystone XL to fruition.

Terry said last night that he spoke on the House floor with GOP leadership aides and Energy and Commerce Chairman Fred Upton (R-Mich.) about pushing forward on a measure to speed up State's extra review.

While such a bill may not be necessary, Terry said, "we are concerned about the timeline slipping even more ... it seems to me that this [agreement makes for] a quicker timeline that what was spelled out by the State Department last week."

Moving a new Keystone XL bill could give House Republicans a chance to cut the legs out from under environmentalists in the middle of their restrained but palpable victory dance after Obama backed a delay in the pipeline (E&E Daily, Nov. 14).

Daniel Kessler, spokesman for the Tar Sands Action alliance of greens that had organized two White House sit-ins against the pipeline, acknowledged yesterday that a resolution of the Nebraska impasse would leave his group short of valuable political support.

"Having people in Nebraska stand with unconventional bedfellows obviously makes for a great media story and strengthens our coalition," Kessler said.

But he vowed that greens would continue to marshal grass-roots opposition to the pipeline: "Nebraska is a true battleground, but the president is going to have to decide if this pipeline is in the national interest." By reversing its position on a route around the Sandhills, Kessler added, TransCanada "has shown to the people of Nebraska and all around the country that they can't be trusted."

Poking POTUS, pleasing Nebraska

Seizing on the Nebraska news with a new bill also would give congressional Republicans a chance to prod Obama, who this month said he would personally engage in the final stages of a pipeline review typically steered by the State Department.

"This project has been deemed environmentally sound, and while deferring it until after the election might make for good campaign rhetoric, it does nothing for Americans still asking the question, 'Where are the jobs?'" Speaker John Boehner (R-Ohio) said last night after meeting with the premier of Alberta, where the XL link would begin shipping oil sands crude to U.S. refineries.

Rep. John Shimkus (R-Ill.), a senior member of the Energy and Commerce Committee, echoed that sentiment yesterday. "Politically, the president, what's he saying" by punting a decision until 2013? Shimkus asked.

"Both constituencies, stay with me through 2012, and then I'm going to rule against one of you? ... If you're going to make a tough decision, make it."

The pro-XL constituency -- led by the oil industry, business lobbies such as the U.S. Chamber of Commerce and several major labor unions -- hails the pipeline as a job creator and valuable substitute for fuel imports from the politically unstable Middle East. The anti-XL constituency -- led by greens, liberal groups and, until yesterday, Nebraska landowners -- lambastes the project for the high-emissions Canadian oil sands crude that it would carry and the high safety risks of a spill.

In Nebraska, members of both parties who had opposed the pipeline's route but not the project celebrated a deal they said would ease local concerns.

"This is a win for Nebraskans," Sen. Ben Nelson (D) said in a statement that praised state legislators for locking down stronger regulation of future pipelines and predicted a win for XL backers. "The pipeline will be built, bringing jobs to Nebraska."

Sen. Mike Johanns (R-Neb.) said in a statement that "it certainly appears to me common sense has prevailed," adding a note of more cautious hope for "responsible completion of the pipeline, so we can begin transporting more energy from a friendly ally and decrease our dependence on countries which may not share our values."

Reporter Manuel Quinones contributed.