Opinions are split on whether TransCanada's revised proposal to build the Keystone XL crude-oil pipeline from Alberta to the Gulf of Mexico will pass muster with the Obama administration. Representatives of organized labor and energy industry groups, which have long backed the $7.6-billion project, say the new plan must move forward. But environmental organizations contend the latest proposal is still not in the U.S. national interest and thus unlikely to be approved.

The decision is in the hands of the State Dept., which on May 4 received the new proposal from Calgary-based TransCanada. In January, the department had rejected the company's original proposal, filed in 2008, saying the administration could not complete an environmental review before a congressionally mandated February deadline.

The new proposal has one major change from the 2008 plan: it has a new route through Nebraska to avoid the environmentally sensitive Sand Hills region. TransCanada has not yet specified that new Nebraska alignment but, on April 18, proposed some alternative routes to the state's Dept. of Environmental Quality (DEQ).

As the federal evaluation begins, Nebraska DEQ plans four public hearings on the alternative routes within its borders. DEQ Director Mike Linder says the agency and its contractor, Omaha-based HDR, will review the TransCanada proposal and "will have discussions with TransCanada about our initial reactions to their route corridor report." TransCanada then will submit a "more refined" plan for state review. Once a route is finalized, the company will incorporate it into its application with the State Dept.

The State Dept. said on May 4 that it was committed to a "rigorous, transparent and thorough review" of TransCanada's new application. The State Dept. also says it plans to hire an independent contractor to review the environmental impact statement from the earlier Keystone XL pipeline review process and identify and assist with new analysis. A State Dept. decision could come early next year.

Labor unions and industry groups continue to back the project, arguing it would create jobs and bolster the U.S. economy. They say the plan has wide public and bipartisan backing in Congress and is supported by presumptive Republican presidential nominee Mitt Romney.

Marty Durbin, American Petroleum Institute executive vice president, says the Obama administration completed an exhaustive review following the first application for the project. Durbin argues the project should move forward. The oil-and-gas industry already has spent billions of dollars on refinery upgrades and other infrastructure to prepare for the expected influx of crude bitumen from the pipeline.

But the new routes haven't changed the minds of project critics. Anthony Swift, an attorney with the Natural Resources Defense Council, says, "Our sense is that if the review is done in a way that it is objective, it will be difficult to make a determination that the Keystone XL is in the national interest."

Swift says an analysis would show that crude oil from the tar sands is one of the "dirtiest" of fossil fuels and that a potential oil spill could be environmentally devastating. He cites a 2010 spill in the Kalamazoo River in Michigan that has proven particularly difficult to clean up.

TransCanada is moving ahead with the southern portion of the project, from Cushing, Okla., to Nederland, Texas. That section does not need a U.S. presidential permit because it does not cross an international border. Work on the $2.3-billion segment is expected to begin this summer, and it is expected to be operational by mid- to late 2013.

If the pipeline gets a green light from the State Dept., TransCanada says it plans to begin construction during the first quarter of 2013 and complete it in late 2014 or early 2015.