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U.S. government begins second review of Keystone XL oil pipeline

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CALGARY - A new review into TransCanada Corp.'s politically-charged Keystone XL oil pipeline has begun.

In a notice posted to its website Friday, the U.S. State Department said the new environmental assessment will consider a different route through Nebraska to avoid the ecologically-sensitive Sandhills region.

Agencies, organizations and members of the public have until the end of July to comment on possible environmental issues, ways to lessen those impacts and the scope of the study.

The Obama administration rejected the full Alberta-to-Texas stretch of Keystone XL in January, saying Republican maneuverings to force a quick decision didn't allow enough time to rework the Nebraska route.

TransCanada (TSX:TRP) has since broken up the project into two parts, pressing ahead with the Oklahoma-to-Gulf-Coast leg first. That part does not need a federal sign-off because it crosses no international borders.

Meanwhile, the company filed a new application for the northern part between the Canada-U.S.. border and Steele City, Neb. last month. Canadian approval has been in-hand for years.

Backers of Keystone XL say the US$7.6-billion project will create jobs and reduce U.S. reliance on crude imports from unfriendly countries. Opponents have attacked the proposed pipeline for the "dirty" oilsands crude it would carry and for the harm a possible spill could do to farmland and water sources.

TransCanada said Friday's announcement signals the State Department remains on track for an early-2013 decision on the revamped Keystone XL proposal.

"The fact that the Department of State has reaffirmed its timeline for making a decision on a Presidential Permit for Keystone XL early next year is an important development and we look forward to the detailed schedule of the steps needed to meet that Q1 2013 timeframe," CEO Russ Girling said in a release.

"It is important to recognize that by the time a final decision on this critical piece of North American energy infrastructure is made, Keystone XL will be well into its fifth year of exhaustive and detailed studies, the most extensive review for a cross-border pipeline ever."

The final review, which will be a supplement to one completed last August, should only focus on the changes in Nebraska, added Girling.

"The rest of the Keystone XL route remains the same. The geology of the route remains the same. The environmental conditions remain the same. Nothing else has changed since the (final environmental impact statement) was approved."

Environmental group the Sierra Club said the last environmental review of the pipeline was "highly flawed and incomplete."

"The State Department must now undertake an unbiased scientific review of the entire (2,735-kilometre) U.S. route for the tar sands pipeline keeping in mind that the Ogallala Aquifer remains at risk, as well as more than a thousand water crossings and the drinking water for millions of Americans."

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