Keystone XL bill gets 44 senators on board

A group of demonstrators rally against the controversial Keystone XL oil pipeline outside President Obama's fundraiser at the W Hotel in San Francisco, October 25, 2011.

WASHINGTON (Reuters) - A group of 44 senators, all but one Republican, have signed on to proposed legislation that would authorize the Canada-to-Texas Keystone XL oil pipeline despite the refusal of President Barack Obama to advance the project.

Republican Senator John Hoeven is set to introduce the bill on Monday that, if passed into law, would allow work to begin immediately on all but the sensitive Nebraska portion of TransCanada's $7 billion controversial project.

It's not yet clear how the bill will advance in the Democratic-controlled Senate. Senator Joe Manchin of West Virginia was the lone Democrat to sign on as a co-sponsor of the bill, but other Democratic senators have in the past expressed support for the project.

Obama put the pipeline on the backburner earlier in January, saying the administration needed more time to review the environmental impact in Nebraska, where the state government is evaluating a new route after rejecting an initial plan that sent the line through a sensitive aquifer region.

The bill, led by Hoeven, Richard Lugar and David Vitter, incorporates an environmental review done by the U.S. State Department, and allows Nebraska time to find a new route.

"It will create thousands of jobs, help control fuel prices at the pump and reduce our reliance on Middle East oil," Hoeven said in a statement.

Environmentalists pushed for Obama to block the pipeline because they believe oil sands crude is a bigger polluter than other grades of oil. They have also accused TransCanada and its supporters of inflating job creation numbers from the project.

Obama has not rejected the project altogether, and TransCanada has said it plans to apply for another presidential permit. But that process would stretch beyond the 2012 election.

The new Senate bill -- which would require Obama's signature to become law -- would bypass Obama and let instead Congress approve the project. A study by the nonpartisan Congressional Research Service said Congress has the constitutional right to legislate permits for cross-border pipelines.

The State Department has said authority for the pipeline should stay with the administration because of the foreign policy, economic, environmental and safety issues involved.

Lawmakers in the Republican-controlled House of Representatives also are considering legislation to advance the project.

House Speaker John Boehner said on Sunday that Keystone legislation could be included in a highway and infrastructure bill that Congress will consider in February.

(Editing by Sandra Maler)