The U.S. State Department is considering a plan that would reroute the Keystone XL oil pipeline proposed by Calgary-based TransCanada Corp. away from environmentally sensitive areas of Nebraska, The Associated Press reports.

AP quoted a U.S. official on Wednesday, saying the official had asked not to be identified because no decision has been made.

Consideration of the issue of rerouting the $7-billion pipeline, which would carry bitumen from the Alberta oilsands to upgraders and refineries in Texas, could delay a final decision on the project until after the 2012 election.

As it stands, a portion of the pipeline would pass through Nebraska's Sandhills region and the massive Ogallala aquifer, which supplies water to eight states.

State politicians in Nebraska have begun debating whether to order the route changed, although it is not clear whether they have jurisdiction over a project that already comes under State Department responsibility because it crosses through several states.

Last week, TransCanada CEO Russ Girling warned that a delay could cause oil companies to back out of commitments to use the pipeline.

"They're with us to the extent that we can get through this process in a reasonable time frame," he said.  "But, if the administration delays the project long enough that it becomes a low probability that they will ever get it through in a time frame that meets their needs, they are not going to support us any more."

With files from The Associated Press