US President Barack Obama has postponed a decision on the trans-Canadian pipeline extension.
With the Presidential elections less than a year away, it would appear that the controversy surrounding the Keystone XL Pipeline has proved too significant for the Obama administration to make an immediate decision. The US State Department claims it needs additional information before clearing the way for the pipeline, a position supported by the White House.
The decision, or lack of it, has been badly received by the Canadian government and the country is now exploring alternative plans to export the oil. The Alberta oil sand field output, that would have been carried to the US via the pipeline, may now be sold to other customers - in particular China. This is despite earlier indications that the Obama administration had approved the pipeline in principle.
Canada's Natural Resource Minister, Joe Oliver, has apparently already been in high-level negotiations with Chinese officials, although he subsequently stated that this was not intended as a "threat in any way " to the US. The country's Prime Minister, Stephen Harper, stated that he was hopeful the XL project would eventually be approved in order to optimise the economic and job-related benefits the project would bring to both Canada and the US.
With a decision unlikely before the US elections in November 2012, Canada is already exploring alternatives for moving the oil through an alternative pipeline - the twin-pipe Northern Gateway Project - which would keep the route on the Canadian side of the border via British Colombia to the port of Kitimat. The crude could then be shipped directly to Asia.