Building part of the Keystone XL pipeline is a priority for his administration, U.S. President Barack Obama said in a speech calling for a fast-tracked review process of the project.
In a speech Thursday in the oil hub of Cushing, Okla., Obama said building the southern portion of the pipeline was part of his administration's overall energy strategy.
"Today, I am directing my administration to cut through red tape, break through bureaucratic hurdles and make this project a priority," he said. "Producing more oil and gas here at home has been, and will continue to be, a critical part of our all-of-the-above strategy."
Creating jobs, lowering dependence on foreign oil and limiting the spikes in gasoline prices was his rationale for today's announcement, Obama said.
Normally, the approval process for a pipeline can stretch for as long as a year. However, Obama said he wants to see several months slashed from that timeline.
Cushing will serve as the starting point for the southernmost portion of the pipeline. When built, the portion will carry unrefined crude oil to refineries in Texas.
Currently, crude from oil-rich states such as North Dakota and Montana runs into what Obama called a "bottleneck" at Cushing because of a lack of pipeline capacity and a limited number of rail cars that can transport the oil south.
Natural Resources Minister Joe Oliver said he is pleased Obama is proceeding with that part of the pipeline, but it doesn't go far enough to help Canadian exports.
"It's indicative that the president sees the value of this development but it doesn't concretely deal with the Canadian need," he said. "This is only one particular pipeline. We have a critical strategic objective to diversify our markets, and that means the Asia-Pacific market in particular."
Obama didn't offer any details about the remainder of the Keystone project, but kept the door open for a new proposal at a later date.
"As long as I'm president, we're going to keep encouraging oil development and infrastructure in a way that protects the health and safety of the American people," he said.
TransCanada spokesman Shawn Howard called the announcement good news.
"It's an important step forward for the Gulf Coast project," Howard said. "There's a recognition that this is a critical piece of North American energy infrastructure."
He added the announcement suggests the Obama administration is favourable to the entire Keystone XL pipeline.
"Ultimately, there's a recognition that Gulf Coast refiners and refiners in the Midwest need increased supplies of both Canadian and American oil," he said.
"It's just a fact, and it's not going to change and by moving oil from Canada and from fields in the U.S. into those refineries, it helps displace foreign sources of crude that come from regions that are often hostile to U.S. interests."
Republicans were quick to mock Obama for the announcement.
"The only recent action the president has taken on energy involved lobbying senators personally and successfully to prevent construction of the Keystone pipeline," John Boehner, Speaker of the U.S. House of Representatives, told reporters on Capitol Hill.
"Yet today he's out in Oklahoma trying to take credit for a part of the pipeline that doesn't even require his approval .... It's already gotten its approvals. And this idea that the president is going to expedite this will have no impact on the construction of this pipeline."
Alberta Premier Alison Redford praised Obama, calling the announcement "good news for both Alberta and the U.S."
"The president's decision shows a pragmatic and practical approach to dealing with the long-term energy needs of the U.S.," she said in a statement.
"It is clear that the U.S. will need a variety of strategies to meet its energy needs — that approach must include increasing pipeline capacity to move growing supplies of domestic oil as well as oil from Alberta."
Environmentalist Bill McKibben, who led high-profile White House protests against Keystone XL last summer, expressed dismay about the announcement.
"No movie producer, 50 years from now, will be able to resist a scene that explains the depth of our addiction to oil: the president coming to the state that just recorded the hottest summer in American history, in the very week that the nation has seen the weirdest heat wave in its history, and promising not to slow down climate change but instead to speed up the building of pipelines," he said in a statement.
"It's clear that the power of the oil industry drives political decision-making in America."
Environmentalists have mounted an extensive campaign against Keystone XL, assailing the plan to transport millions of barrels a week of bitumen — an energy source they decry as "dirty oil" — to the Gulf Coast.
A proposal that would see a pipeline built to Cushing from Alberta was rejected in January. The U.S. State Department said it needed more time to conduct a thorough environmental review of a new route around an environmentally sensitive aquifer in Nebraska that supplies drinking water to millions of people, a decision endorsed by state legislators and the governor.
TransCanada has yet to reapply for approval for the remainder of the Keystone project. The company said earlier this month that a new proposal is just weeks away.
In another development, the Nebraska legislature is debating whether to restart a review of a new route for the pipeline that would bypass the environmentally sensitive Sand Hills region.
The announcement comes as Obama faces criticism over his handling of America's energy needs. The average price of gasoline continues to rise across the United States, fuelling fears that rising energy costs will hurt economic growth.
Obama defended his administration's policies, saying that the rising price of gasoline is due to Middle East tensions, not a lack of oil supply in America.
He also noted that during his tenure as president, the amount of crude the country is importing has fallen each year, production has increased and the number of operating rigs has quadrupled to an all-time high.
Obama's announcement only relates to the southern portion of the pipeline. The original Keystone pipeline proposal was rejected in January over environmental concerns.