A depot used to store pipes for Transcanada's planned Keystone XL oil pipeline in North Dakota

Keystone oil pipeline bill fails by just one vote

An attempt to force approval of the Keystone XL oil pipeline through the Senate fell one vote short of the 60 needed to push the bill through.

All 45 Republicans supported the bill to push through TransCanada's $8bn (£5bn) project designed to link Canada's oil sands with refineries in Texas, but the final tally was 59 to 41.

Republican Senator Mitch McConnell, who will become Senate Majority Leader in January after his party made big gains in this month's mid-term elections, said after the vote that consideration of a Keystone bill would be "very early up" in the next congress.

Construction workers, unions and energy companies say the pipeline, which would transport more than 800,000 barrels of oil a day from Alberta to Nebraska en route to the Gulf of Mexico, would create thousands of jobs.

But the project has galvanised environmentalists who say developing Canada's oil sands would spike carbon emissions linked to climate change and that much of the oil would be sold abroad.

President Barack Obama has opposed the Keystone bill and wants the State Department to finish its review of the pipeline before a decision is made. He has said he would not approve the pipeline if it significantly raised greenhouse gas emissions.

If the bill had passed, Obama was widely expected to veto it, a power he has used only three times during his six years in office. Obama raised new questions about the project during a trip to Asia late last week, saying it would not lower gas prices for US drivers but would allow Canada to "pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else".

Republican Senator John Hoeven of North Dakota, who co-sponsored the Keystone bill with Democratic Senator Mary Landrieu of Louisiana, has pledged to keep trying to force approval of the project that the administration has kept under review for more than six years.

Hoeven may introduce a new bill in January or February, or he could attach a Keystone measure to a broader bill that Obama would find difficult to veto.

The Senate will have 63 'yes' votes for Keystone next year and is "starting to coast" to the 67 that would be needed to overturn an Obama veto, Hoeven predicted. "Getting to that magic number is a possibility," he said.

TransCanada, which has already built a pipeline from the Gulf Coast that would connect with Keystone XL in Nebraska, says the new link would take two years to complete once approved. As oil prices have fallen more than 25 per cent since the summer, the pipeline could be an increasingly important piece of the puzzle for development of the oil sands.

Russ Girling, the chief executive of TransCanada, said his company will not give up: "We will continue to push for reason over gridlock, common sense over symbolism and solid science over rhetoric to approve Keystone XL and unlock its benefits."

The State Department has delayed a final decision on Keystone pending a legal decision in Nebraska over the pipeline's route that is expected in coming weeks. The department has said in previous reviews that Keystone would not significantly boost greenhouse gas emissions.

Tom Steyer, the billionaire ex-hedge-fund manager who raised millions of dollars to support environmentally-minded candidates in the mid-term elections, said the Senate "decided to stand on the right side of history".

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