Canadian Company To Build Pipeline From Oklahoma To Texas

A Canadian company says it will build an oil pipeline from Oklahoma to Texas after President Barack Obama blocked the larger Keystone XL pipeline from Canada.

Calgary-based TransCanada says the new project does not require presidential approval, since it does not cross a U.S. border. The shorter pipeline is expected to cost about $2.3 billion and be completed next year.

The Obama administration had suggested development of an Oklahoma-to-Texas line to alleviate an oil glut at a Cushing, Oklahoma, storage hub.

1/18/2012 Related Story: Governor Fallin Reacts To President's Decision To Reject Oil Pipeline

TransCanada says it still hopes to build the full 1,700-mile Keystone XL pipeline, which would carry oil derived from tar sands in Alberta, Canada to refineries along the Texas Gulf Coast.

The company is working with Nebraska officials to find a route that avoids the environmentally sensitive Sandhills region.

Oklahoma Governor Mary Fallin said she was pleased the smaller, southern leg of the Keystone XL Pipeline project would go forward.

"Connecting Cushing to oil markets in the Gulf Coast will provide both an immediate economic jolt to the state of Oklahoma as well as a long term boost to our energy sector," Fallin said.

"Construction of the pipeline alone will create 1,200 jobs, while increasing access to the important markets along the coast will help energy producers for many years to come. This is an important, positive step forward for Oklahoma."

The President's press secretary, Jay Carney, released a statement Monday morning, saying the President welcomes the news and that moving oil from Cushing to the world-class, state-of-the-art refineries on the Gulf Coast will modernize infrastructure, create jobs and encourage American energy production.

According to the statement, the Obama Administration will work with TransCanada to ensure that the project it is built in a safe, responsible and timely manner, and will take every step possible to expedite the necessary federal permits.

Separately, TransCanada gave the State Department advance notice of its intention to submit a new application for the cross-border segment of the Keystone XL pipeline, from Canada to Steele City, Nebraska, once a route through Nebraska has been identified, the statement said.

Obama rejected the company's earlier application in January, citing insufficient time for review or the identification of a complete pipeline route.

Monday's statement from Carney said the President's decision in January in no way prejudged future applications, and Obama will ensure any project receives the assessment it deserves.

9/1/2011 Related Story: Oklahoma Family Claims Victory In Pipeline Battle

The Associated Press contributed to this story.