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Obama to push U.S. agencies on south Keystone line

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U.S. President Barack Obama will send a memo to federal agencies on Thursday directing them to prioritize permitting for TransCanada's southern leg of the Keystone oil pipeline, a senior White House official said on Wednesday.

Facing a barrage of Republican criticism over high gasoline prices during the election year, Obama will visit Cushing, Oklahoma, on Thursday to promote his energy policies, which include support for the southern leg of the pipeline.

The pipeline would drain a glut of crude in Cushing, the storage hub for U.S. crude oil traded on the futures market, easing deliveries to refineries along the GulfCoast.

"More oil is flowing into Cushing than can flow out, creating a bottleneck that takes away the incentive for additional production, while also preventing oil from reaching refineries along the Gulf coast," the senior official told reporters in a conference call.

In January, Obama delayed a decision on a Canada-to-Texas Keystone XL pipeline until after the Nov. 6 election due to concerns about an aquifer along the route in Nebraska. But he has thrown his support behind TransCanada's building of the pipeline's southern leg from Oklahoma to Texas.

The memo to the agencies builds on an executive order Obama first announced during the State of the Union address in January to speed up and improve federal permits and reviews of infrastructure projects.

But TransCanada has not yet applied to build the southern leg, so it remains uncertain exactly which agencies would need to grant permits. Fish and Wildlife, the Environmental Protection Agency and the Army Corps of Engineers are some that would almost certainly would have to sign off.

Doug Garman, a spokesman for the U.S. Army Corp of Engineers, said TransCanada would need a permit from the agency if its pipeline work involves any waters under the Corps' jurisdiction outlined by U.S. clean water laws.

Garman said TransCanada has met with three district offices of the Army Corps in recent weeks, but he declined to offer any possible timelines for permitting, saying it would depend on what the company proposes. He also declined to comment on what impact the White House memo would have on permitting.

TransCanada will also need permits from Oklahoma and Texas, which could slow the process.

The memo "directs federal agencies to name the Cushing pipeline as a top priority of the new executive orders' expedited permitting process," the official told reporters in a conference call. The memo will also push the agencies to prioritize other oil pipelines that would relieve bottlenecks getting petroleum to market.

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