Keystone XL oil pipeline plan 'to be rejected'

Many activists view the pipeline issue as a crucial test of President Barack Obama's green credentials

The Obama administration will formally reject a controversial oil pipeline project later, US media report.

The state department is expected to make an announcement on the 1,600-mile (2,700km) Keystone XL pipeline on Wednesday afternoon.

The plan has been delayed amid objections by environmental groups and the US state of Nebraska.

At the end of 2011, Republicans forced a final decision on the plan within 60 days during a legislative standoff.

The crude oil pipeline would run from western Canada to oil refineries on the Texas coast.

Carbon emissions

Speaking at a news briefing, White House Press Secretary Jay Carney would not say a decision had been made but suggested one could be imminent.

"I'm not going to get ahead of the administration or the secretary of state or the president," he told reporters. "We may have more information for you later in the day."

The Obama administration is tipped to allow developers the option of submitting for consideration a new route, which would be expected to entail significant delays.

Keystone XL has been approved by Canada and is supported by Republicans who said it would create much-needed jobs and improve prospects for US energy independence.

The oil industry has estimated the project would create 20,000 jobs, although the state department and some independent studies suggest a lower figure of 6,000 jobs.

Environmental groups and the US state of Nebraska expressed concerns that the pipeline could could contaminate a major aquifer on its route.

There are also concerns about carbon emissions from oil sands production in Alberta, a western Canadian province.

The legislature of Nebraska passed a measure requiring state approval of any route before TransCanada could start construction.

The White House had tried to postpone a final decision on the project until after the 2012 presidential election.

But during a congressional impasse on payroll tax in December, Republicans forced the Obama administration to agree to make a decision on the pipeline within two months.

The US state department, however, said this would not be enough time to carry out the legally required environmental studies needed to approve the project.