U.S. President Barack Obama has signalled he will make a decision about the long-delayed Keystone XL pipeline before summer, allaying concerns that the administration would punt the controversial decision until after mid-term congressional elections in November.

After a meeting between the President and several governors at the White House on Monday, Oklahoma Governor Mary Fallin said Mr. Obama indicated a decision would be forthcoming once departments have had a chance to comment on the State Department’s environmental assessment that was released in late January.

“He did come back and say that he anticipates an answer one way or the other in a couple months,” Ms. Fallin said after the governors met with Mr. Obama.

TransCanada Corp., the Calgary pipeline operator that is planning to build Keystone XL, said the U.S. President’s timeline for making the decision is “positive news.”

“If we are able to bring this process to a conclusion in the near term, that’s positive for us, and it’s positive for our shippers that want to get their product to market on the Gulf Coast,” TransCanada spokesman James Millar said Monday.

The federal government has been urging the Obama administration to move quickly on the decision, believing the State Department’s assessment supports an approval of the pipeline. The department said Keystone XL would not contribute to higher greenhouse gas emissions because the oil sands will be developed with or without the pipeline.

Canada’s oil sands industry is counting on Keystone XL to provide greater access to U.S. markets and alleviate frequent backups of supply that weigh on prices for Alberta oil.

Mr. Obama’s plan to make a decision before summer shows he aims to make a tough choice on a controversial measure ahead of elections, even at the risk of angering environmental-minded Democrats.

In 2011, former secretary of state Hillary Clinton promised that a decision was imminent but the process was derailed when Nebraska insisted the pipeline be re-routed around the ecologically sensitive Sand Hills.

Environmental activists are urging Mr. Obama and his Secretary of State John Kerry to reject the pipeline on the grounds that it would impose risks to local aquifers and would lead to an expansion of the oil sands that they say emit greenhouse gases into the atmosphere, causing climate change.

TransCanada has run into another problem in Nebraska, where a judge ruled last week that legislation that enabled the Governor to approve a re-routed pipeline was in violation of the state’s constitution. Nebraska Attorney-General Jon Bruning immediately appealed that decision, a move that TransCanada says leaves the Governor’s decision intact until an appeal court can rule.

TransCanada said Monday that it does not consider the court ruling to be a roadblock. “This latest development concerning Keystone XL is a solvable problem and we are undeterred,” it said in a statement.

A State Department spokeswoman said Monday that the review of TransCanada’s permit application was continuing. “We are monitoring the ongoing litigation in Nebraska,” she said in an e-mailed statement.

Nebraska activist Jane Kleeb said TransCanada’s playing down of the court ruling was further testament to the company’s arrogance.

“Attorney-General Bruning and TransCanada may not like the fact that they have no legal route in Nebraska and no power of eminent domain, but their latest move is a slap in the face to landowners, citizens and our state constitution,” she said. Several farmers opposed to the pipeline complain the company intends to force them to sell right-of-way through a process known as eminent domain.

Ms. Kleeb said a quick decision on the application could only mean President Obama is prepared to turn it down because the lower court ruling invalidated Nebraska’s approval of the route, so there is no state-approved route on which the federal government can rule.

OTTAWA — The Globe and Mail
Published Monday, Feb. 24 2014, 1:40 PM EST
Last updated Tuesday, Feb. 25 2014, 6:35 AM EST