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U.S. Senate kills Keystone XL bill - for now

By Jessica Murphy, Senior Washington Correspondent

WASHINGTON - In the end, the effort fell short by just one vote.

A bipartisan attempt to shortcut the approval process for the Keystone XL pipeline was shot down by the U.S. Senate on Tuesday after six hours of debate on the floor of the upper chamber.

The vote on a bill to approve construction of the pipeline turned into a down-to-the-wire nail-biter as supporters scrambled to find the 15 Democrat votes necessary to send the bipartisan bill to the White House.

A minimum of 60 votes was needed to advance the bill; the final tally was 59 in favour, 41 against.

And that means the controversial project isn't heading to the White House - at least for now.

Louisiana Democrat Mary Landrieu brought the bill to the floor of the Democrat-controlled Senate last week.

Her rival, Rep. Bill Cassidy, sponsored the same bill in the Republican-controlled House, where it easily passed last Friday.

Environmentalists who fiercely oppose the project ramped up anti-Keystone efforts in the run-up to Tuesday's vote, staging an early morning demonstration in front of Landrieu's D.C. home on Monday.

President Barack Obama had hinted strongly that he planned to veto the measure, saying he preferred to let the current lengthy approval process play out.

The pipeline has been a political football for six years.

TransCanada, the company behind the Alberta-to-Texas project, first tabled its Keystone request in 2008. It's been under review at the State Department since.

The pipeline needs State Department and White House approval because it crosses the Canada-U.S. border. Polls have repeatedly shown a majority of Americans support the pipeline project.

Canadian officials and politicians have been increasingly vocal about their frustration at the long delays.

"We are disappointed that U.S. politics continue to delay a decision on Keystone XL," a spokesman for Natural Resources Minister Greg Rickford said in a statement.

Still, the project's latest setback might last just a matter of weeks.

Republicans are promising to force Obama's hand on the $8-billion project when they take control of the Senate in January - that's when they say they'll have the 60 votes necessary to advance it after winning a Senate majority in the Nov. 4 midterm elections.

Alberta Premier Jim Prentice said he's "reasonably optimistic" the new U.S. Congress will be more supportive.

"I'm certain the process will carry on at that point in a senate that's more clearly dominated by Republicans," he said Tuesday.

Prentice said he will travel to Washington in January. Prentice will also meet with New Jersey Governor Chris Christie, who he called a "significant player" in Canada's relationship with the U.S.

But another more significant hurdle looms for the long-delayed Keystone XL pipeline.

The State Department has placed the federal permitting process on hold until the Nebraska Supreme Court rules on a challenge to the way the pipeline's route through the state was approved. A decision is expected by January.

If Nebraska loses its appeal, TransCanada will have to re-apply for state approval through the state's Public Service Commission, further delaying possible construction.

--With files from Matt Dykstra

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