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KEYSTONE XL:

It's déjà vu all over again for oil sands politics

The Obama administration's halt in its review of Keystone XL, announced late Friday to a capital half-emptied for a holiday weekend, locks in both sides of the contentious debate for months or even years to come -- all but enshrining heavy Canadian oil sands crude development as a top-tier U.S. environmental issue on par with hydraulic fracturing and offshore drilling.

The fallout from the latest KXL delay recalled the spirit of a 1960s classic lyric: Meet the new pipeline politics, same as the old pipeline politics.

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About this report

With the heft to carry half a million barrels of oil daily, the $7 billion Keystone XL pipeline is a huge proposal. But behind the furor over it lies an even bigger question: How should America approach the massive fuel reserves that its northern neighbor is working overtime to tap?

Setting the Stage

OIL SANDS:

With emotions high and evidence low, pipeline corrosion questions hound Keystone XL

OUTSIDE FORT McMURRAY, Alberta -- Hold a vial of pumped and processed oil to the light here, just before it enters the pipeline that one executive jokingly calls "the cash register," and you can see a layer of watery sediment settled at the bottom. Environmental and safety groups warn that this diluted bitumen poses a greater risk of pipeline corrosion and spills than conventional fuel or the synthetic crude also produced from the Canadian oil sands.

OIL AND GAS:

Protest makes Keystone XL newest front in climate clash

In the year since a cap-and-trade climate bill failed on Capitol Hill, a funny thing happened -- gradually but unmistakably -- to the U.S.-Canada pipeline project known as Keystone XL: It became the global warming fight's new guise. Keystone XL's ascension from little-known commodity to fodder for a marquee bout between industry groups and environmentalists is set to start its last leg tomorrow, as green advocates converge on the White House for a two-week demonstration against the $7 billion proposal.

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