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Southern leg of Keystone pipeline a "priority," Obama says

Obama, Keystone, Cushing, TransCanada
President Barack Obama waves as he arrives at the TransCanada Stillwater Pipe Yard in Cushing, Okla., Thursday, March, 22, 2012. AP Photo/Pablo Martinez Monsivais

Updated at 12:10 p.m. ET

(CBS News) Amid criticism he isn't doing enough to beat back rising gas prices, President Obama Thursday said he is calling on his administration "to cut through red tape, break through bureaucratic hurdles," and make the Southern leg of the controversial Keystone pipeline "a priority."

"Producing more oil and gas here at home has been, and will continue to be, a critical part of our all-of-the-above strategy," Mr. Obama said from Cushing, Oklahoma, the site where the Southern portion of the pipeline will begin construction.

Mr. Obama's stop in Cushing was part of a four-state, two-day tour in which the president touted his energy policies. Standing next to the giant TransCanada pipes that will make up the Southern leg of the Keystone pipeline, Mr. Obama sought to remind voters that he's not opposed to domestic oil drilling.

In fact, "we're drilling all over the place right now," the president said, citing his administration's directive to open up millions of acres for oil and gas exploration in 23 states. Under his watch, Mr. Obama said, the number of operating oil rigs has reached a record high, he said, and the U.S. has added enough new oil and gas pipeline to "circle the Earth and then some."

The Southern leg of the Keystone pipeline should be a priority, he said, to free up the "bottleneck" of oil heading to refineries. "If we could, it would help us increase our oil supplies at a time where we need as much as possible," he said.

Cushing is a major trading hub for crude oil, but the industry says a bottleneck in pipeline there has backed up its use. TransCanada Corporation plans to lay pipe through Cushing as part of its Keystone project. The Keystone pipeline is ultimately planned to link the tar sands fields of northern Alberta to oil refineries on the Texas Gulf Coast.

TransCanada announced last month it will proceed with the construction of pipeline from Cushing to the U.S. Gulf Coast -- a portion of the Keystone project that the company says has its own independent value. In the meantime, the company is waiting for executive approval for the Northern portion.

Mr. Obama rejected an attempt from Congress late last year to expedite the construction of the full pipeline, citing the need for more time to study the environmental and safety risks.

The president acknowledged today the issue has "generated a lot of controversy and a lot of politics," but he attributed to the controversy specifically to concerns about its original route through a critical Nebraska aquifer.

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"Nebraskans of all political stripes, including the Republican governor there, raised some concerns about the wisdom of that route," he said. While TransCanada has said it will re-route the pipeline, Mr. Obama maintained, "The Northern portion of [the pipeline], we're going to have to review appropriately to protect the health and safety of the American people."

Republicans have lambasted the president for holding up the project and are citing a new Gallup poll showing public support for the pipeline.

"People recognize his blocking of the Keystone pipeline is hurting our gas prices, it is making us more dependent on foreign energy," Sen. John Thune, R-S.D., said Thursday.

The Associated Press this week produced a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production, showing no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.

Anyone who says drilling alone will bring down gas prices, Mr. Obama said today, is either "not paying attention" or "not playing it straight."

Mr. Obama maintained his commitment to clean energy development, pointing out that the production of wind power has nearly tripled in Oklahoma over the past three years.

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