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Senators turn up pressure on Obama to approve Keystone pipeline

By Roberta Rampton

WASHINGTON (Reuters) - A bipartisan group of senators on Friday urged President Barack Obama to quickly issue a permit for the northern leg of the Keystone XL pipeline, a project environmental groups have vowed to keep fighting.

The senators - nine Democrats and nine Republicans - asked Obama to approve the pipeline because it will create jobs and reduce the need for oil from the Middle East. They were led by Max Baucus, a Montana Democrat and powerful chair of the Senate Finance Committee, and John Hoeven, a North Dakota Republican. Both senators represent the booming Bakken oil region.

The pipeline is designed to carry oil from Canada and the Bakken formation and last year, Obama put it on hold citing environmental concerns with a portion of the route in Nebraska. The TransCanada Corp project needs a presidential permit because it would cross an international border.

Nebraska's state government could wrap up its work examining a new route by the end of the year. The State Department is working on a review that the senators hope will affirm the project is in the national interest.

The senators urged Obama to issue a permit for the project "immediately afterward."

"Setting politics aside: nothing has changed about the thousands of jobs that Keystone XL will create," the senators said in a letter to be sent on Friday.

"Nothing has changed about the security to be gained from using more fuel produced at home and by a close and stable ally. And nothing has changed about the need for America to remain a place where businesses can still build things," they said.

The pipeline was designed to extend 1,661 miles to the Port Arthur, Texas, area from Hardisty, Alberta, moving 830,000 barrels of oil per day.

The southern leg of the line - from Cushing, Oklahoma to Texas refineries - did not need a special permit and work has already begun on that part.

SUNDAY: WHITE HOUSE PROTEST

The senators' letter comes just ahead of a large protest against the pipeline planned for the White House on Sunday by environmental groups.

Last year, similar protests drew thousands of people, and some 1,200 opponents were arrested. The protests were credited with slowing the State Department's review of what once was thought to be a routine regulatory approval.

"Keystone XL is still a crazy idea, a giant straw into the second biggest pool of carbon," said a coalition including 350.org, the Sierra Club, Greenpeace US, and Friends of the Earth, urging its members to attend.

"No one needs to get arrested this time — though that may come as the winter wears on. For now we simply need to let the president know we haven't forgotten, and that our conviction hasn't cooled," the groups said.

The timing and design of the senators' letter is aimed at reminding Obama of public support for the project, Hoeven said in an interview.

"We're concerned that the last time opponents demonstrated around the White House, at a time when it looked like State was ready to approve the project, the administration deferred it," Hoeven said.

LONG POLITICAL BATTLE

Congress has repeatedly pushed Obama to approve the project. Last December, Republicans inserted language in a payroll tax cut bill giving Obama a 60-day deadline to make a decision.

In January, he ruled the administration needed more time to evaluate a change in the route through Nebraska, aimed at avoiding a sensitive environmental region.

Republicans accused him of playing to the environmental movement ahead of the election. In Congress, proponents pushed to override Obama's call and approve the pipeline themselves, but a vote in the Senate fell four votes short of passage.

Republican presidential candidate Mitt Romney raised the issue as gasoline prices surged, pledging he would approve the pipeline on his first day in office.

Obama has said he supports the jobs created by the U.S. boom in oil production, and backed the southern leg of the project earlier this year. But he has also pledged to address climate change, which environmental groups argue would be accelerated by more development of Canada's oil sands.

Both green groups and the oil industry see Obama's pipeline decision as a test of his political priorities.

"I really feel if he doesn't approve it, that would just create more momentum in the Congress for us to approve it ourselves," said Hoeven, who championed last year's close vote in the Senate to fast-track the pipeline.

MORE PUBLIC COMMENT

Analysts have said they think Obama eventually will approve the pipeline but the timing of the decision is in question.

"Approval will not be quick," Moody's credit rating agency said in an outlook for investors earlier this week.

Republican Representative Lee Terry also wrote Obama on Friday, saying he is worried additional delays by the State Department could lead Canada to look for other oil buyers.

"Will the United States be a partner and recipient or will the vast majority of the resource be sold to China or some other country," said Terry, a Nebraskan who led efforts in the House of Representatives to fast-track the pipeline.

Nebraska's Department of Environmental Quality is wrapping up its review with a public meeting on December 4. Governor Dave Heineman must then approve the project, something oil industry groups said expect by early January.

Meanwhile, the U.S. State Department, which oversees the administration's review, is preparing a supplemental environmental impact statement (SEIS).

"When the SEIS is completed in draft form, we will release it for public comment consistent with NEPA," the National Environmental Policy Act, said a State Department official, who did not say how long the comment period would be.

The report will help the State Department determine whether the project is in the national interest, a decision it makes in consultation with other administration officials, considering issues such as climate change concerns and jobs.

The State Department has said it does not anticipate concluding its work before the first quarter of 2013.

(Reporting by Roberta Rampton; Editing by Prudence Crowther and Bill Trott)

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