The company behind Keystone XL can pursue construction of a shorter section of the oil link between Oklahoma and Texas without getting advance approval from the federal pipeline regulators who helped negotiate stronger-than-average safety standards for the longer version of the stalled $7 billion project.

The Pipeline and Hazardous Materials Safety Administration (PHMSA), which crafted 57 conditions beyond current regulatory boundaries for Keystone XL, confirmed yesterday that operator TransCanada Corp. would be expected to comply with all existing federal safety rules but would not need to apply to begin building a shorter leg of its now-denied Canada-to-U.S. pipeline.

In the wake of the Obama administration's denial of its application to cross the northern border, Alberta-based TransCanada said yesterday that it would pursue a version of the XL line that connects oil terminals in Cushing, Okla., with Gulf Coast refineries. TransCanada added that it expects the Army Corps of Engineers to OK those plans (Greenwire, Jan. 19).

Even as the company proceeds with a smaller-scale bid to unlock the glut of Canadian oil-sands crude said to exist at Cushing, Republicans and Democrats continued their political wrangling over President Obama's rejection of Keystone XL earlier in the week.

Obama's re-election campaign launched an online petition aimed at stoking support for his move to turn back TransCanada's application, citing the "irresponsible and arbitrary" 60-day deadline set by Republicans in last month's payroll tax-cut extension deal.

The GOP, for its part, continued to signal that it would look for legislative vehicles -- whether a fresh payroll tax-cut bill or other measures -- to override Obama's denial of a pipeline it touts as a massive job creator. Sen. John Cornyn (R-Texas) aimed a spotlight on the pipeline's potential economic benefits today, hosting a roundtable with local and industry officials at Valero Corp.'s refinery in Port Arthur, Texas.

The Port Arthur facility is one of several in the Gulf that would have processed emissions-intensive oil-sands crude if the XL line had proceeded. Obama's denial of the pipeline permit bid came after an intense lobbying battle between industry and green groups over the merits of permitting Keystone XL's importing 700,000-plus daily barrels of the thick Canadian fuel into U.S. markets.

The Obama camp appealed in its petition today for grass-roots and fundraising support from greens and liberals who pressed the president for a rejection of the XL line, citing the health and safety risks of more oil-sands crude development. "The Obama administration did the right thing by refusing to green-light a project before experts could determine the consequences," the petition states.

House Energy and Commerce Chairman Fred Upton (R-Mich.), whose committee is set to deliver tough questions on the pipeline rejection to Assistant Secretary of State Kerri Ann-Jones on Wednesday, vowed today at a GOP retreat in Baltimore to keep Keystone XL's benefits "on the front burner."

Rep. Lee Terry (R-Neb.), author of legislation that would deem the pipeline approved under the jurisdiction of the independent Federal Energy Regulatory Commission rather than the State Department, touted his bill during that appearance in Baltimore.

"It makes more sense that we let the experts on pipelines make the decision ... as opposed to a political entity worried about the November elections," Terry said, referring to State.

Some Democrats keep their distance

While the president and Republicans continued to trade political volleys over the XL link, North Dakota Democratic Senate candidate Heidi Heitkamp called today for the Obama administration to reverse its decision on the pipeline, deriding its rejection as political gamesmanship.

"What's always interesting to me is people in Washington talk a big game about creating energy jobs ... [but] our leaders in Washington today continue to play political games and get in partisan squabbles on getting the job done," Heitkamp said in a conference call with reporters this morning.

Heitkamp, who is competing in an open-seat election, went on to praise the Republican she hopes to join in the Senate, Sen. John Hoeven, for supporting the pipeline -- although she did not reference legislation the North Dakota senator sponsored that would empower construction to start without going through the Federal Energy Regulatory Commission.

In a letter Heitkamp addressed to the Obama administration, which had a less combative tone, the former North Dakota attorney general highlighted the project's potential for creating jobs and reducing traffic in the state.

"Right now, we're having a very difficult time ... moving our oil out of our state," Heitkamp told reporters, referring to the Bakken oil shale formation.

Heitkamp will face Rep. Rick Berg (R), who was first elected to the House in 2010 and is now quickly looking to move up to the Senate. Republicans need to pick up four seats to win control of the Senate next year -- three if Obama is defeated -- and North Dakota figures heavily in their plans.

In the meantime, the National Republican Congressional Committee continued to strike at vulnerable House Democrats on the pipeline.

In a news release issued to more than 30 districts, the NRCC accused Democrats of kowtowing to campaign donors opposed to the project.

"Thousands of jobs are headed for China and a prime opportunity for energy independence has been lost just because [North Carolina Rep. Heath] Shuler and Obama needed to appease wealthy anti-energy donors who think nothing of destroying opportunities for working families," NRCC Communications Director Paul Lindsay said in the release. "As we mark the end of the first three years of the Obama Presidency, it is clear that Shuler and his Democrat colleagues are committed to another four years of the same job destroying policies that have failed hardworking taxpayers across America."

Similar news releases were issued in the districts of Reps. Sanford Bishop (Ga.), Tim Bishop (N.Y.), Russ Carnahan (Mo.), Kathy Castor (Fla.), Ben Chandler (Ky.), David Cicilline (R.I.), Gerry Connolly (Va.), Jim Cooper (Tenn.), Peter DeFazio (Ore.), John Garamendi (Calif.), Raúl Grijalva (Ariz.), Brian Higgins (N.Y.), Jim Himes (Conn.), Ruben Hinojosa (Texas), Kathy Hochul (N.Y.), Tim Holden (Pa.), Rush Holt (N.J.), Steve Israel (N.Y.), Bill Keating (Mass.), Ron Kind (Wis.), Larry Kissell (N.C.), Rick Larsen (Wash.), Carolyn McCarthy (N.Y.), Mike McIntyre (N.C.), Jerry McNerney (Calif.), Michael Michaud (Maine), Brad Miller (N.C.), Frank Pallone (N.J.), Ed Perlmutter (Colo.), Gary Peters (Mich.), Collin Peterson (Minn.), Chellie Pingree (Maine), David Price (N.C.), Nick Rahall (W.Va.), Loretta Sanchez (Calif.), Kurt Schrader (Ore.), Adam Smith (Wash.), Betty Sutton (Ohio), John Tierney (Mass.), Paul Tonko (N.Y.), Niki Tsongas (Mass.), Pete Visclosky (Ind.) and John Yarmuth (Ky.).