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Obama to push agencies on Keystone permit

WASHINGTON (Reuters) - President Barack Obama will issue a memo on Thursday directing federal agencies to prioritize permitting of TransCanada's southern leg of the Keystone oil pipeline, a senior White House official said on Wednesday.

With his Republican opponents hammering away at the president over high gasoline prices, Obama will visit Cushing, Oklahoma on Thursday to promote his energy policies, which include support for the southern leg of the pipeline.

The pipeline would drain a glut of crude in Cushing, the storage hub for U.S. crude oil traded on the futures market, easing deliveries to refineries along the Gulf Coast.

"More oil is flowing into Cushing than can flow out, creating a bottleneck that takes away the incentive for additional production, while also preventing oil from reaching refineries along the Gulf coast," the senior official told reporters in a conference call.

In January, Obama delayed a decision on the Canada-to-Texas Keystone XL pipeline due to concerns about an aquifer along the route in Nebraska. But he has thrown his support behind building the pipeline's southern leg from Oklahoma to Texas.

The memo to the agencies builds on an executive order Obama first announced during the State of the Union address in January to speed up and improve federal permitting and reviews of infrastructure projects.

But TransCanada has not yet applied to build the southern leg, so it remains uncertain exactly which agencies would need to grant permits. Fish and Wildlife, the Environmental Protection Agency and the Army Corps of Engineers are some that would almost certainly would have to sign off.

TransCanada will also need permits from Oklahoma and Texas which could slow the process.

The memo "directs federal agencies to name the Cushing pipeline as a top priority of the new executive orders' expedited permitting process," the official told reporters in a conference call. The memo will also push the agencies to prioritize other oil pipelines that would relieve bottlenecks getting petroleum to market.

(Reporting By Timothy Gardner, Jeff Mason and Alister Bull; editing by Jackie Frank and David Gregorio)

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