TransCanada Corp. has applied for a presidential permit for the Keystone XL pipeline.
The original pipeline route, which aims to double the amount of Canadian oil that can be transported from Hardisty, Alta., to the U.S. Gulf Coast, was rejected by U.S. legislators in 2011.
The new application announced Friday includes the already reviewed route in Montana and South Dakota, but a section leading to Steele City, Neb., that goes through the Sand Hills region is still in question.
In its application Friday, TransCanada said a route for the contentious Nebraska section will be submitted as part of the application once a new route is finalized.
"Our application for a presidential permit builds on more than three years of environmental review already conducted for Keystone XL," TransCanada CEO Russ Girling said in a release.
Federal Natural Resources Minister Joe Oliver said the development is an encouraging sign the project will be approved.
"I've been cautiously optimistic, I'm a little less cautious now," Oliver said at a news conference Friday.
Though "pleased" to see the pipeline proposal progress, the government will continue to seek new markets for Canadian oil, with a particular eye on the Asia-Pacific region, he added. A separate pipeline, known as the Northern Gateway, is currently planned, which will move Canadian oil to export markets in Asia.
"We want that to happen at the same time," Oliver said.
The company is already pushing ahead with construction on the section leading from the oil hub of Cushing, Okla., to refineries on the U.S. Gulf Coast, because those sections do not require presidential approval. Inventory levels at Cushing recently hit 43 million barrels — a 22-year high that underscores the industry's desire for more pipelines to move that oil to refineries further south.
But the section north of Steele City, Neb., has long been the most controversial section because of the sensitive ecosystem of the Sand Hills region and because the original pipeline route would have passed directly over the Ogallala Acquifer that supplies drinking water to eight U.S. states.
The U.S. State Department has authority over the pipeline as a whole because it crosses the Canada/U.S. border.
America currently consumes about 15 million barrels of oil a day, of which up to nine million barrels come from Canada. The Keystone pipeline would see that ratio increase significantly.
TransCanada expects to begin construction in early 2013, with oil flowing in late 2014 or early 2015.
The massive project has been a lightning rod of controversy for the project's critics, who worry it is an environmental disaster waiting to happen.
"The multibillion dollar Keystone XL pipeline project will reduce the United States' dependence on foreign oil and support job growth by putting thousands of Americans to work," Girling said.