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U.S. rejects TransCanada request to suspend Keystone review

In this Feb. 1, 2012 file photo, miles of pipe for the stalled Canada-to-Texas Keystone XL pipeline are stacked in a field near Ripley, Okla.

Sue Ogrocki/AP

The U.S. State Department rejected TransCanada Corp.'s request to pause the government's evaluation of the proposed Keystone XL pipeline.

"We've told TransCanada that the review process will continue," State Department spokesman John Kirby told reporters in Washington Wednesday, a day after U.S. officials said they were formulating a response to the Canadian company's request. He said Secretary of State John Kerry wanted to finish work on the review after "all that has gone into it."

TransCanada asked the State Department to put its review process on hold in a letter Monday, saying there was no need for the review to continue while it seeks approval from Nebraska authorities for the pipeline's route through that state. The request was seen by some analysts as an attempt to circumvent a possible rejection of the pipeline project by President Barack Obama by delaying a final decision until his successor takes office in 2017. The company has rejected that view.

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White House press secretary Josh Earnest said Tuesday that the administration would examine what's motivating TransCanada's request.

"Given how long it's taken, it's -- it seems unusual to me to suggest that somehow it should be paused yet again," Mr. Earnest said. Reaching a final decision on the project by the end of Mr. Obama's second term remains "the current plan," he said.

TransCanada Chief Executive Officer Russ Girling, on a Tuesday earnings conference call, said the company's request to Mr. Kerry had nothing to do with politics. It was meant to let the outcome of a regulatory assessment of the pipeline in Nebraska be considered in the State Department's review, he said.

"We've tried to stay out of the politics of this situation and focus on the things that we're capable of doing and can control and that's the regulatory process," Mr. Girling said.

Supporters of the $8-billion pipeline from the oil sands near Alberta have argued the project would create construction jobs and drive down oil prices, which are already down 42 per cent over the last 12 months amid a glut of crude. Environmental activists, including top Democratic donors, have spent heavily in hopes of defeating the project, which they say would drastically increase emissions blamed for global warming.

While Republican presidential candidates have said they support the Keystone pipeline, the Democratic candidates said they oppose it.

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