Obama can offset any potential increase in emissions from oil sands by encouraging more use of cleaner-burning natural gas in U.S. power plants instead of coal, said Kevin Book, managing director at ClearView Energy Partners, a Washington-based policy analysis company.
TransCanada's original permit request to build the $7.6 billion pipeline, planned to stretch from Alberta's oil sands to Gulf Coast refineries, was delayed and ultimately rejected last year by the State Department after Heineman and other Nebraska officials criticized the route.
The project should now get "the final green light," Sen. Mike Johanns, a Nebraska Republican who opposed TransCanada's original route, said in a statement. "I hope President Obama will swiftly approve the project so we can take a significant step forward in meeting our energy needs."
Jane Kleeb, executive director of Bold Nebraska, a group that opposes the project, said Heineman's approval was "one of the biggest flip-flops in Nebraska political history."
"He approved the pipeline route that crosses the aquifer after he asked Obama to deny the route that crossed the aquifer," she said in an email today.
After the initial proposal was rejected last year, TransCanada broke the project into two pieces, one running from Alberta to Steele City, Nebraska, and the other from Oklahoma to Texas refineries. Construction has begun on the southern portion of the pipeline, and environmental activists have been arrested in several areas of Texas after staging protests or chaining themselves to construction equipment.
The Nebraska decision now shifts the debate to larger economic and national security questions, Steven Paget, an analyst at FirstEnergy Capital Corp. in Calgary, said in a telephone interview.
"I always believe local opposition is usually the most powerful opposition," said Paget, who has a market perform rating on TransCanada and doesn't own any of its stock. The Obama administration must now decide, "does the U.S. want to source more oil from Canada, versus continuing to supply from other areas of the world?"