The oil industry continues to expect President Obama to approve the controversial Keystone XL pipeline early next year, a senior lobbyist said today.

"Clearly, it is in the national interest, and I think that is what's going to overwhelm the decision at the end of the day," Marty Durbin, executive vice president of the American Petroleum Institute, said on a conference call this morning.

Durbin said approving the pipeline would mesh with Obama's call for job creation and an "all of the above" energy strategy that includes continued use of natural gas.

Environmentalists and local activists are keeping up the fight against Keystone XL, which is being reviewed by regulators in Nebraska and the State Department after TransCanada agreed to reroute the line around Nebraska's sand hills region. Obama rejected the Alberta-to-Texas pipeline earlier this year over concerns about an earlier route through Nebraska, but he subsequently backed construction of its southern leg.

Landowners in Nebraska continue to raise concerns even about the new route's effect on the local environment, and climate activists say approving Keystone and continuing to extract crude from Alberta's oil sands would cripple efforts to reverse global warming. Environmental groups plan to protest at the White House on Sunday to urge Obama to reject the pipeline.

Industry and environmental groups have long said Obama's verdict on Keystone will be among the most important early decisions of his second term and will signal how his administration is likely to approach other energy and environmental issues over the next four years.

The activist group Bold Nebraska, which has been organizing local opposition to the pipeline, questioned API's optimism about the president's decision. In a statement, the group pointed to statements from TransCanada and other pipeline supporters dating back to July 2010 predicting imminent approval of Keystone.

"It looks like TransCanada and its allies are betting that they get it right one of these times. Our take on the matter? They'll continue to do and say anything to try and push their pipeline through," Bold Nebraska's statement said.

Durbin said API polled voters in the wake of the elections and found strong majorities in favor of increased domestic production of oil and natural gas and approving the pipeline. He also noted that legislation that would force approval of Keystone won bipartisan support in both the House and Senate this year.

Nebraska is expected to complete its review of the pipeline by the end of this year, with the Obama administration expected to issue its decision by the end of the first quarter of 2013.