The State Department said Thursday it would postpone until after the 2012 election a decision on an oil pipeline that had raised a furor among environmental groups, a delay that angered the oil industry and unions that have pushed for the project.
The department, in a statement, said it would examine alternate routes for TransCanada Corp.'s Keystone XL pipeline to avoid an environmentally sensitive portion of Nebraska.
That would require an assessment of the new route's environmental impact, which "could be completed as early as the first quarter of 2013," the department said.
The delay is a temporary victory for environmental groups, which have pressed the administration to deny the request by TransCanada to construct a pipeline from Alberta to Texas.
The oil and gas industry as well as unions have urged the administration to approve the project this year, arguing that it will create thousands of jobs and reduce U.S. dependence on oil imports from the Middle East. The government of Canada also supports the project.
"The president is putting politics ahead of American jobs," said a spokeswoman for the American Petroleum Institute. "The project has been under review for three years. This delay would be another year and a half. I don't know what would happen after that."
The very moderate and non-partisan UCSD economist James Hamilton discusses the economic importance of the pipeline here.