Keystone pipeline's fate to be decided during Obama's term

President Barack Obama plans to decide before leaving office whether to approve the controversial Keystone XL pipeline that would send Canadian crude oil to US refineries.

Eric Schultz, a White House spokesman, said Wednesday that the issue will be resolved before January 2017.

"That approval process is being handled on the merits," he told reporters.

The 1,179-mile (1,900-kilometer) TransCanada-built pipeline would transport crude from oil sands in energy-rich Alberta province to a network of pipelines that reach across the United States to the shores of the Gulf of Mexico.

Because the project crosses a border, the US State Department must give its approval first, but the case is still being studied nearly seven years after TransCanada made its first request.

Obama has the ultimate authority on the pipeline, and he is facing pressure from environmentalists who stress his past vows on climate change.

But Canadian Prime Minister Stephen Harper was doubtful, saying the repeated delays in approval were "not a hopeful sign."

"I believe that whether this project goes ahead or not under this administration, it will ultimately go ahead under a subsequent administration," Harper told Bloomberg.

"A positive decision has not been rendered for a very long time, that's obviously not a hopeful sign.

"I think there's very peculiar politics of this particular administration."

Republicans argue the Keystone project would create 42,000 construction jobs, but many critics, mainly Democrats, have warned it has potential oil spill risks and would actually create very few permanent jobs.

Environmentalists say extracting the heavy petroleum from oil sands will exacerbate climate change.

TransCanada has vowed to keep fighting to get Keystone over the line.

Obama had vetoed a bill approving construction of the pipeline, and Congress failed to override the veto.

But Republican Senator John Hoeven said a presidential decision could come soon.

"Sources tell me that after almost seven years, President Obama is going to turn down the Keystone Pipeline project," he said Tuesday on the Senate floor.

Hoeven speculated that Obama would make his move during the summer recess while Congress is not in session, to have "less pushback, less criticism, of his decision if he makes it under the radar."

The North Dakota senator accused Obama of "making a political decision rather than a decision based on the merits."