The fate of the multibillion-dollar pipeline that has become a proving ground for a political battle over climate change and energy independence today returned to the hands of the Obama administration.

TransCanada Corp. formally reapplied to the State Department for a permit to carry upward of 700,000 barrels per day of emissions-heavy Canadian oil sands crude across the nation's northern border, restarting the controversial review process for its Keystone XL project. The company's resubmission came before official approval of a new route through Nebraska that would veer around the delicate soil of that state's Sandhills -- a detail that could continue giving the White House political cover as it moves to put off a decision until after Election Day.

As it announced the reapplication, Alberta-based TransCanada affirmed today that "we still plan to begin construction of" the XL link in the first quarter of 2013, only months behind a newly split-off pipeline segment between Oklahoma and Texas that already has won the administration's approval.

That time frame relies on the company's ability to muscle past environmentalists and liberal lawmakers long arrayed against the pipeline due to concerns that more U.S. consumption of Canadian fuel would spur increased greenhouse gas emissions. In TransCanada's corner are a unified GOP, influential industry groups and a growing crop of red-state Democrats who hail the pipeline as a job creator.

TransCanada today offered a wide-ranging case for quick approval of Keystone XL -- now estimated to cost $5.3 billion, following the shorter section's rebranding as the Gulf Coast Project -- in a memo summarizing its application.

"Even with new technology, oil discoveries, alternative fuels and conservation efforts, the U.S. will remain dependent on imported energy for decades to come," the company wrote. "Growing production of conflict-free oil from Canada's oil sands and the Bakken formation [in Canada and the U.S.] can replace crude imported from countries that do not share American values, but additional pipeline capacity to refineries in the U.S. Midwest and Gulf Coast is required."

The State Department responded to the reapplication with a statement vowing to "conduct our review efficiently, using existing analysis as appropriate."

TransCanada and its backers point to the three-year-long review of the longer version of Keystone XL, which culminated in a January rejection that President Obama described as not based on the project's merits, in asking the administration not to drag out the latest analysis.

But the pipeline's uncertain route through Nebraska remains the leading rationale for the administration to adhere to its original plan and not rule on Keystone XL until after the election. State Department officials noted today that TransCanada's proposed shift around the Nebraska Sandhills is not set to win formal approval from environmental regulators for another six months at least.

However, Nebraska activists working to keep the pipeline away from the state's Ogallala Aquifer -- a water-rich region far larger than the Sandhills -- doubt that TransCanada will have to wait that long for a new route to supplement its filing with the Obama administration.

Jane Kleeb, chief of the Bold Nebraska nonprofit that leads local opponents of the pipeline, predicted in an interview this week that Nebraska's environmental review would amount to "a rubber-stamp approval of this route in two months, three months."

The state's Department of Environmental Quality "works for" its GOP governor, she added. "You don't need rocket science to know they're going to certify this route pretty fast."

Hill hiccups

House Speaker John Boehner (R-Ohio) hailed TransCanada's resubmission by reminding the White House that his party plans to push hard for a fast-tracking of the pipeline during talks over a long-term transportation bill that are scheduled to resume when Congress goes back into session next week (E&E Daily, April 24).

"Every state along the proposed route supports the pipeline, and its builder has jumped through every bureaucratic hoop," Boehner said in a statement today.

The Ohioan also reminded Obama that the Cornhusker State's governor is backing the project now that its route stands to shift: "If President Obama respected the judgment of the Nebraska government enough to block this project before, he should respect it enough now to allow this project to move forward."

Another flash point for the project could come before Nebraska even agrees on a route, as the State Department indicated today that it plans to begin looking for a third-party contractor to aid in the environmental review of the new application.

The previous contractor it chose, Cardno Entrix, carried ties to TransCanada that sparked an inspector general's investigation and handed political ammunition to critics of the project, from Sen. Bernie Sanders (I-Vt.) to top environmental groups (E&ENews PM, Feb. 9).