The company behind the Keystone XL oil pipeline today declined to forecast a death knell for the project if its U.S. approval is pushed back into 2012, giving the Obama administration a dose of political cover on the incendiary issue.

Executives at Alberta-based TransCanada Corp., which has enlisted the oil and gas industry's lobbying muscle to help surmount environmentalist push-back against XL, walked a fine line on the fate of the pipeline during a third-quarter earnings call. As they reiterated earlier expectations of a State Department decision on the Canada-to-U.S. oil link by year's end, the TransCanada officials noted that whether a further delay would scotch the project depends on commitments with shippers.

While there are sunset clauses in those shipping contracts for Keystone XL, TransCanada pipelines President Alex Pourbaix said today, "As long as we receive our approval ... we do not expect our shippers to rely on those sunset provisions any time in the near future."

At the moment, TransCanada executives noted, their customers lack an alternative method to ship Canadian oil sands crude that approaches the scale of the $7 billion XL link. But "if the administration delays the project long enough," Pourbaix posited, those shippers "are not going to support us anymore."

Today's more nuanced response from TransCanada to a delay in approving the XL link -- balanced by entreaties to State to keep aiming for a pre-2012 decision -- follows warnings from pro-pipeline Republicans that if the administration did not OK the project by year's end, the fuel that it was pitched to carry likely would head to China (E&E Daily, May 26).

It also comes as President Obama faces mounting political heat over the pipeline. Green activists fired back late yesterday after White House spokesman Jay Carney deposited the issue at State's doorstep rather than Obama's, and at least one Democratic-aligned senator today agreed that the president should take ownership of the pipeline controversy (E&ENews PM, Oct. 31).

"The president over the years has been talking about a leadership role in reversing global warming," Sen. Bernie Sanders (I-Vt.) told reporters, urging Obama to make a personal call on the 1,700-mile pipeline. "And to allow this project to go forward flies right in the face of everything he's been saying."

Sanders also ratcheted up pressure on State, which faces bias charges from Keystone XL opponents stemming from its decision to hire a contractor with TransCanada ties and its cozy communications with a lobbyist for the company. The Vermonter released a State response to a missive from earlier this month that cast cold water on those conflict-of-interest allegations even as the department acknowledged that TransCanada was paying the contractor used by the administration.

In response to that admission, Sanders released a new letter describing himself as "deeply troubled" by the environmental review of Keystone XL and seeking a broad array of documents related to that process and its contractors.

Sanders, environmentalists and other critics of the pipeline view it as a proving ground for the White House's commitment to tackling climate change, given the larger greenhouse gas footprint of the oil sands crude to be carried in the XL link. On the other side of the debate, the oil and gas industry is joined by Republicans, conservative Democrats and several labor unions in touting the project's job creation and energy-security benefits.

Pourbaix did define today what the company would consider an untenable delay for Keystone XL, simultaneously casting doubt on and warning against Nebraska's potential passage of state legislation forcing a route change in the pipeline. Such a state-level bill shifting XL's passage, Pourbaix said, would require TransCanada to amend its federal environmental filings and "would add a two- to more likely three-year delay to the approval process," he said.

Click here to read State's response to Sanders.

Click here to read Sanders' new letter to State.

Reporter Jeremy P. Jacobs contributed.