The U.S. State Department is ordering the developer of a pipeline that would carry oil from western Canada to Texas to reroute it around environmentally sensitive areas of Nebraska.
That means possibly delaying a final U.S. decision until after the 2012 election.
The decision to order Calgary-based TransCanada Corp. to figure out a way around an area that supplies water to eight states will require an environmental review of the new section. That review probably will take at least a year.
The decision will be closely watched by some of the Obama administration's supporters: Organized labor wants the jobs associated with building the pipeline, while environmentalists fear the damage from deeper reliance on oil from the Canadian tar sands.
White House spokesman Jay Carney acknowledged it's a complicated decision, but he insisted the administration is not simply trying to push it off until after next year's election.
"I can tell you the president made clear what the criteria are," he said. "They all have to be considered. And none of those criteria are political."
Calgary-based TransCanada Corp. is seeking to build the $7 billion pipeline to carry oil derived from tar sands in Alberta to refineries on the Texas Gulf Coast.
Part of the 1,700-mile pipeline as designed now would pass through Nebraska's Sandhills region and the massive Ogallala aquifer.
NPR's Scott Horsley contributed to this report, which includes material from The Associated Press