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RENEE MONTAGNE, HOST:

It's MORNING EDITION, from NPR News. Good morning. I'm Renee Montagne.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep.

This next story involves energy, jobs and politics. Think through the political maneuvers over the Keystone XL Pipeline, which is meant to carry oil made from Canadian tar sands across the United States.

MONTAGNE: Last year, President Obama put off approving that controversial pipeline until after the election. He said it needed more study.

INSKEEP: Congress than passed a provision forcing the president to decide before the election.

MONTAGNE: So the president rejected the pipeline yesterday and welcomed the builders to reapply. The White House says they might get a yes next time, after more study.

INSKEEP: Many people gained political benefits from all of this. Environmentalists get to celebrate.

MONTAGNE: Republicans get to say the president rejected an important project.

INSKEEP: And the president gets to be the decider, while defying an unpopular Congress.

Here's NPR's Jeff Brady.

JEFF BRADY, BYLINE: Just minutes after President Obama issued a statement denying a permit for the Keystone XL Pipeline, Republican members of Congress lined up before cameras.

(SOUNDBITE OF PRESS CONFERENCE)

REPRESENTATIVE LEE TERRY: And I'm deeply, deeply disappointed that our president decided to put his politics above the nation in job creation...

BRADY: That's Nebraska Republican Congressman Lee Terry. The Canadian pipeline would travel through his state. He repeated the two selling points advocates often mention: thousands of new construction jobs and oil flowing into the U.S. from a friendly neighbor. With eight-and-a-half-percent unemployment, Terry said there's no good reason for the president to reject the pipeline now.

(SOUNDBITE OF PRESS CONFERENCE)

TERRY: To me, it's pretty obvious it's all about election-year politics.

BRADY: As if to ensure the pipeline will become an election year issue, the American Petroleum Institute has been running television ads.

(SOUNDBITE OF AN AMERICAN PETROLEUM INSTITUTE ADVERTISEMENT)

UNIDENTIFIED WOMAN: He promised...

PRESIDENT BARACK OBAMA: I will do whatever it takes to put this economy back on track.

UNIDENTIFIED WOMAN: Now is his chance. The Keystone XL Pipeline is ready to be built, bringing energy...

BRADY: The oil industry and its allies are furious over the president's decision to block the pipeline. But those who oppose the project are celebrating.

JANE KLEEB: We actually are going to have a party. And we're trying to decide if we do it in the Sandhills or Lincoln, or both cities.

BRADY: Jane Kleeb heads the liberal group Bold Nebraska. She echoes the praise environmental groups are lavishing on President Obama for rejecting the Keystone XL. Many environmentalists see the pipeline as an important test of the president's commitment to their issues.

Environmentalists don't like tar sands oil, which starts out as a gunky substance that requires a lot of energy to turn into usable oil. That creates more pollution than traditional oil production. Thanks in large part to the tar sands, Canada is the number one supplier of foreign oil to the U.S.

Here's Canada's Minister of Natural Resources Joe Oliver, responding to the pipeline decision.

(SOUNDBITE OF PRESS CONFERENCE)

JOE OLIVER: We're very disappointed, and the prime minister made that very clear to the president in his conversation with him on the phone, when the president called to tell him.

BRADY: Back in the U.S., the president's decision also upset organized labor, like environmentalists - a traditional Democratic ally.

JIM SPELLANE: Well, our members would be doing the electrical work in the pumping stations.

BRADY: Jim Spellane, with the International Brotherhood of Electrical Workers, says his union needs the kind of work that comes with a big pipeline construction project. Already, his members have been waiting three years for the approval process to finish.

SPELLANE: It would help a number of our locals in the industrial Midwest especially, but in other places, too, that have been hit particularly hard during the recession.

BRADY: Spellane says the IBEW considers this a temporary setback, one that he blames on political gamesmanship in Washington.

Meanwhile, TransCanada says it's still committed to finishing its pipeline. The company says it will once again apply for a permit from the U.S. government, and hopes to complete construction by 2014.

Over at the Natural Resources Defense Council, Susan Casey-Lefkowitz says she and other opponents are ready.

SUSAN CASEY-LEFKOWITZ: We'll tackle those as they come and fight, frankly, every tar sands pipeline proposal that gets raised.

BRADY: The next round over the Keystone XL Pipeline begins in a week on Capitol Hill. House Republicans plan to hold a hearing. They've invited Secretary of State Hillary Clinton to testify.

Jeff Brady, NPR News.

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