President Obama said Tuesday that he will decide whether to approve or deny a permit for a controversial 1,700-mile Canadian oil pipeline, rather than delegating the decision to the State Department.

The proposal by the firm TransCanada to ship crude extracted from a region in Alberta called the “oil sands” to Gulf Coast refineries has become a charged political issue for the White House. Labor unions and business groups argue that it would create thousands of jobs in the midst of an economic downturn. Environmentalists — who plan to ring the White House in a protest on Sunday — say the extraction of the oil will accelerate global warming and the pipeline itself could spill, polluting waterways and causing severe environmental harm.

In an interview with the Omaha television station KETV, the president said he would weigh the Keystone XL pipeline’s potential economic benefits against its possible environmental consequences. The Nebraska legislature convened Tuesday in a special session, called by Gov. Dave Heineman (R), to consider whether it should adopt any measures that would block the pipeline.

Referring to the State Department, Obama told KETV, “They’ll be giving me a report over the next several months and, you know, my general attitude is: What is best for the American people? What’s best for our economy both short term and long term? But also: What’s best for the health of the American people?”

“We don’t want, for example, aquifers” to be adversely affected, he said, adding, “folks in Nebraska obviously would be directly impacted, and so we want to make sure we’re taking the long view on these issues.”

“We need to encourage domestic oil and natural gas production,” Obama continued. “We need to make sure that we have energy security and aren’t just relying on Middle East sources. But there’s a way of doing that and still making sure that the health and safety of the American people and folks in Nebraska are protected, and that’s how I’ll be measuring these recommendations when they come to me.”

Under federal law, the State Department is responsible for making permit decisions for international pipelines, and the agency has been reviewing the matter for three years. But it has come under criticism over whether it subjected the project to sufficient environmental scrutiny. Opponents also question whether State Department officials have experienced a conflict of interest because one of TransCanada’s lobbyists was a top aide to Hillary Rodham Clinton, who is now secretary of state, during her 2008 presidential bid, and the private contractor overseeing the review, Cardno Entrix, counted TransCanada as one of its major clients.

Tiernan Sittenfeld, senior vice president for government affairs for the League of Conservation Voters, said in an interview that she is “encouraged” by Obama’s decision to make the final call on Keystone XL, which is an extension of an existing pipeline running from Hardisty, Alberta, to Cushing, Okla. She noted that extracting oil from that region of Canada was much more energy intensive, and therefore released greater greenhouse gases than other forms of crude.

“The comments from the president show that the White House, and the president himself, are now taking this decision seriously. They have heard loud and clear the many concerns that have been raised about just how bad this pipeline would be for our energy future,” said Sittenfeld, who testified publicly against the project.

Sabrina Fang, a spokeswoman for the American Petroleum Institute, said she and others remain hopeful that Obama will approve the permit. A decision could come by the end of the year.

“We still believe this is the biggest shovel-ready project out there,” she said of the $7 billion project. “I know the president has been talking about creating jobs. This a way to do that.”