Republicans hope for yes on Keystone, prepare for no WASHINGTON (Reuters) - Congressional Republicans who are urging President Barack Obama to approve the Canada-to-Texas Keystone XL oil pipeline have signaled they will not give up on the issue if the White House says no. After delaying the project, Obama has been compelled by Congress to decide by February 21 on whether to approve the project that would sharply boost the flow of oil from Canada'a oil sands. Early work has begun on legislation that could make Obama take yet another look at the stalled pipeline should the project be rejected in February, Republican aides told Reuters. The language could be included in legislation that will be needed to extend a payroll tax cut that expires on February 29. TransCanada Corp's oil sands pipeline has put Obama in a political bind at the start of what is expected to be a difficult re-election campaign, and has become a useful tool for Republicans seeking to portray Obama as dithering on a project that they believe would create 20,000 jobs. Environmental groups, an important part of Obama's political base, have made defeating the line a top priority. They are concerned about the carbon emissions that come from processing the oil sands, and they argue the project will create fewer than 5,000 jobs. The White House in November delayed its decision on Keystone to find a new route around environmentally sensitive lands in the Nebraska portion of its route. This effectively punted the decision beyond the November U.S. presidential election. Republicans struck back by inserting language in the December payroll tax cut bill that gave Obama 60 days to grant a permit for the project or explain why it was not in the national interest. Republicans hope that rising gasoline prices will increase pressure on the White House as the United States pushes for more sanctions on Iran to discourage countries from buying its oil. Richard Lugar, top Republican on the Senate Foreign Affairs committee and lead sponsor of the Keystone bill, said it does not make sense to slow an oil pipeline from a reliable supplier such as Canada. "Even if in the future we do not ourselves consume all the Canadian oil imported, having that crude in the U.S. system would give us tremendous flexibility to deal with supply shortages caused by conflict, political manipulation, terrorism, or natural disaster," Lugar said in a January 6 letter to Obama. North Dakota Senator John Hoeven, a Republican who helped draft the Keystone language in the current bill, is already working on new legislation in the event the president turns down the pipeline, said an aide, Ryan Bernstein. A Senate Republican leadership aide said that if Obama refuses to certify the Keystone project by the February 21 deadline, Republicans likely would insist on a new extension, possibly another 60-day deadline. That would leave a decision on the job-creating project at Obama's doorstep in late April, just as his presidential re-election bid intensifies. "I suspect we'll want some level of clarity on which way they're (the Obama administration) leaning" on Keystone in the upcoming payroll tax negotiations, another senior Senate Republican aide said. But the aide said it was too early to say what mechanism might be used to ratchet up the pressure on Obama if he does not fully grant the permit during this 60-day period. A spokesman for House of Representatives Speaker John Boehner did not want to comment on whether House Republicans would seek to include a new Keystone deadline in the next payroll tax cut bill. The White House and State Department have laid some ground for saying no, said Lee Terry, a Republican congressman from Nebraska who is a prominent advocate for Keystone on the House Energy and Commerce Committee. In December, the administration said imposing the 60-day deadline could violate environmental laws, effectively ruling out a permit. A majority of voters support the pipeline, Rasmussen poll results from late December show, and most labor unions support it too. Saying "no" to the pipeline could turn it into an election issue, Terry said in an interview. Obama could try to appease both sides by agreeing to the line conditionally, declaring the project is in the national interest, but making a permit contingent on further study of routes through Nebraska. But Terry said he believes Republicans will consider "any and all legislative options" if the pipeline is delayed further, including but not limited to making it part of the next payroll tax package. "Right now, I think everything is on the table," he said. Editing by Vicki Allen