Obama, Congress begin 2012 in oil pipeline dispute

MATTHEW DALY Associated Press Published:

WASHINGTON (AP) -- President Barack Obama and Congress are starting the new year locked in a politically charged dispute over a proposed 1,700-mile oil pipeline from Canada to Texas.

Republicans and some unions say the Keystone XL pipeline will create thousands of jobs. Environmentalists fear it could lead to an oil spill disaster.

The pre-Christmas agreement between Obama and Congress temporarily extending the payroll tax cut included language compelling Obama to make a speedy decision on whether to build the pipeline. The administration says it would rather say "no" than rush a decision in an election year.

The $7 billion pipeline poses a political trap for Obama because it divides his supporters. Environmentalists oppose the project while most labor unions support it.

Republicans say Obama's stance shows he favors environmentalists over jobs.

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