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Energy and Resources Keystone XL pipeline future remains uncertain after White House race

The Keystone pipeline, shown here under construction

On Sept. 19, 2008, TransCanada Corp. formally applied to build its Keystone XL pipeline, a ribbon of buried steel that would connect Canada's oil sands with the huge refinery complex at the U.S. Gulf Coast.

Now, more than four years after that application stirred a contentious debate on the continent's energy and environmental future, its future remains uncertain after a tight election left control of the White House hanging in the balance late Tuesday night.

The pipeline, backed by Calgary-based TransCanada Corp., garnered some election attention after Mitt Romney raised it in speeches, debates and policy documents, with his campaign pledging to approve it on his first day in office. If Mr. Romney prevails, the pipeline's construction is virtually assured.

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Barack Obama, however, has given few glimpses of his views, as Keystone XL faces scrutiny from the U.S. State Department and environmental regulators in the state of Nebraska. The State Department has said it expects to complete its deliberation in early 2013, and the energy industry believes the pipeline, which will create an important oil corridor down the centre of the continent, will be built no matter who takes the presidency.

"I expect Keystone XL to be approved in 2013, regardless of whether the President is re-elected or the governor is elected," said Andrew Black, president of the Association of Oil Pipe Lines in Washington.

Still, questions hang over how the project could be treated by another Obama administration, whose White House turned down the first incarnation of the 1,897-kilometre pipeline last year. Conversely, Mr. Obama sped approval of the southern leg of the pipeline, which is already under construction to carry oil south from the massive, and bottlenecked, oil hub at Cushing, Okla.

"That's a little bit of an indication of disposition, if you will, on the entire project," said Gordon Giffin, a Democrat and former U.S. ambassador to Canada who has worked for TransCanada. He believes the president will hand the decision to the State Department, which will give its blessing sometime early in 2013. "We will see this operational, I believe, in the foreseeable future."

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