The Obama administration put off until after the 2012 election a politically charged decision on whether to approve the controversial Keystone XL oil pipeline, easing one problem for President Obama but opening another with the missed opportunity to boost job growth.
With the State Department announcement Thursday that it would study alternate routes for the $7-billion pipeline, the administration sought to calm the environmentalist movement that has mobilized against the proposal — no small matter for Obama given activists' threats that they might abandon his reelection campaign.
But the delay is a decision itself, one that favored environmentalists who assert that the pipeline's route across the Midwest would endanger sensitive lands and drinking water supplies. One leading environmental group declared the pipeline dead. A chorus of labor and business leaders complained about the failure to create jobs for thousands of construction workers.
The decision also exposed the Democratic administration to the same criticism the White House has leveled at congressional Republicans regarding deficit reduction: delaying a tough call in hopes that the politics will be better after next November's election.
House Speaker John A. Boehner (R-Ohio) quickly branded the announcement an attempt by Obama to placate his political base in the run-up to the election.
"By punting on this project," Boehner said, "the president has made clear that campaign politics are driving U.S. policy decisions at the expense of American jobs."
The State Department said it would wait until the first quarter of 2013 before rendering a decision on the application from TransCanada, which needs the agency's approval because the pipeline would cross a national border.
Activists embraced the delay as a battle won, if not total victory.
The delay would "effectively kill" the project, said Sierra Club Executive Director Michael Brune. "The carrying costs are too high, and there's no certainty that at the end of 18 months the pipeline would be approved at all."
TransCanada wants to build the 1,700-mile pipeline to carry oil extracted from Canadian oil sands to U.S. refineries. With Canadian government officials rallying to its side, the company pledged Thursday to work with the U.S. to win approval.
"This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed," said TransCanada President Russ Girling.
The State Department's announcement marked a surprising turnaround on a project that Secretary of State Hillary Rodham Clinton once planned to approve.
Opposition to the pipeline has been persistent — celebrities, scientists and high-profile activists have been arrested in protests — and that drive gained momentum after allegations that officials involved in the Keystone permitting process had improper ties to the project's sponsors.
Officials in Nebraska also expressed concern over whether the potential damage to the environment, in particular aquifers that supply drinking water, had been thoroughly reviewed. U.S. officials said they'd use the additional time to examine such issues, especially the proposed pathway through that state's Sand Hills ecosystem.
The State Department's inspector general also announced Monday that he would look into charges of improper political influence and conflicts of interest related to the Keystone environmental impact statement.
Critics of the delay focused on the loss of new jobs. The U.S. Chamber of Commerce said the decision would "immediately cost more than 20,000 Americans an opportunity to get a job."
State Department estimates that about 6,000 workers would be needed for two years, but officials did not cite jobs as their primary defense of the pipeline. Administration officials have said the project would enhance the nation's energy security.
Though some U.S. unions support the project, the labor movement is divided on the issue. Building trade unions generally endorse the pipeline, but two large transit unions oppose it. The AFL-CIO took no position.
Activist Jane Kleeb, who as founder of Bold Nebraska led protests in the state, suggested that environmentalists would show their appreciation to the president as he gears up his campaign.
"The bottom line is, when President Obama stands up to big oil, we stand with him," Kleeb said.
Administration officials said that had nothing to do with their considerations. Kerri-Ann Jones, an assistant secretary of State, said the decision to study alternate routes was not a political decision, but a "reaction to a groundswell of concern," especially in Nebraska.
Times staff writer Kim Murphy in Seattle contributed to this report.