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The State Department said yesterday it will study an alternative route to avoid environmentally sensitive areas in Nebraska. Nebraskan farmers, officials in the state and some members of Congress argue the proposed route across the Sandhills area risks contaminating the Ogallala aquifer that supplies water to 1.5 million people.

Flaherty, who travels to China this week, called the State Department’s move “disappointing,” noting that unions and business groups appeared to back Keystone.

“This project would have provided thousands and thousands of jobs in the United States, a lot of unionized, well-paying jobs,” he said. “The delay, we hope, doesn’t doom the project. We hope it will still happen.”

Hollywood Opposition

The project was also opposed by environmentalists who, backed by Hollywood celebrities such as Daryl Hannah and Julia Louis-Dreyfus, said the crude it would deliver from the Alberta oil sands to Gulf Coast refineries produces more greenhouse-gas emissions than conventional oil.

“The whole thing was kind of mishandled by not understanding the local resistance to it,” said Andy Hira, a professor of political science at Simon Fraser University in Vancouver who studies energy policy. Harper and TransCanada need to be more flexible about the route for the project to be approved, he said.

Harper has promoted his country as an “energy superpower,” pointing to its political stability compared with other suppliers. Canada is already the biggest foreign supplier of oil to the U.S. and provides the country with almost a quarter of its crude imports, twice what Saudi Arabia does.