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Obama to issue memo to prioritize part of Keystone pipeline


WASHINGTON -- President Barack Obama will issue a memo on Thursday directing federal agencies to prioritize permitting of TransCanada's southern leg of the Keystone oil pipeline, a senior White House official said on Wednesday.

With his Republican opponents hammering away at the president over high gasoline prices, Obama will visit Cushing, Okla., on Thursday to promote his energy policies, which include support for the southern leg of the pipeline.

Anticipating the move, environmentalists planned to protest against Keystone at Ohio State University, where Obama plans to visit after his Cushing stop.

"The president is still lauding pipelines and drilling rigs alongside solar panels and advanced batteries, as if all forms of energy were equally benign" in terms of climate impact, said Bill McKibben, an environmental author and head of the climate action group 350.org. "We're going to have to go head on against that industry, and try to take away some of their special privileges."

The pipeline would drain a glut of crude in Cushing, the storage hub for U.S. crude oil traded on the futures market, easing deliveries to refineries along the Gulf Coast.

"More oil is flowing into Cushing than can flow out, creating a bottleneck that takes away the incentive for additional production, while also preventing oil from reaching refineries along the Gulf coast," the senior official told reporters in a conference call.

In January, Obama delayed a decision on the Canada-to-Texas Keystone XL pipeline because of concerns about an aquifer along the route in Nebraska. But he has thrown his support behind building the pipeline's southern leg from Oklahoma to Texas.

The memo to the agencies builds on an executive order Obama first announced during the State of the Union address in January to speed up and improve federal permitting and reviews of infrastructure projects.

But TransCanada has not yet applied to build the southern leg, so it remains uncertain exactly which agencies would need to grant permits. The Fish and Wildlife Service, the Environmental Protection Agency and the Army Corps of Engineers are some that would almost certainly would have to sign off.

TransCanada also would need permits from Oklahoma and Texas, which could slow the process.

The memo "directs federal agencies to name the Cushing pipeline as a top priority of the new executive orders' expedited permitting process," the official told reporters in a conference call. The memo will also push the agencies to prioritize other oil pipelines that would relieve bottlenecks getting petroleum to market.

Reuters contributed to this report.

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