The move follows months of widespread expectations that President Obama would kill the pipeline. Obama rejects Keystone XL pipeline The long-awaited decision is a huge loss for the oil industry, the Canadian government and Republicans in Congress.

President Barack Obama rejected a permit for the Keystone XL oil pipeline on Friday, handing a major victory to green activists in the defining environmental controversy of his tenure, arguing that approving the project would undercut the United States' status as a leader in fighting climate change.

The pipeline “would not make a meaningful contribution to our economy,” Obama said, dismissing claims that the pipeline would boost job creation. If Congress is serious about creating jobs, lawmakers should pass a bipartisan infrastructure plan “that in the short term could create more than 30 times as many jobs per year as the pipeline would,” Obama said.


Obama also said Keystone would not lower gas prices for American consumers, since the average price of gas has fallen about 77 cents over a year ago, or ensure future energy supplies.

"Shipping dirtier crude oil into our country would not increase America’s energy security,'' Obama said. "What has increased America’s energy security is our strategy over the past several years to reduce our reliance on dirty fossil fuels from unstable parts of the world.”

“America is now a global leader when it comes to taking serious action to fight climate change,” Obama said. “And frankly, approving this project would have undercut that global leadership.”

The long-awaited decision is a huge loss for the oil industry, the Canadian government and Republicans in Congress, although GOP lawmakers have vowed to continue trying to force approval of Keystone using must-pass legislation. Obama acted just days after his administration rejected developer TransCanada's request for a pause in its review of the project, a move that could have pushed the decision into the next presidency.

In a statement, newly elected Canadian Prime Minister Justin Trudeau said his government was disappointed by the rejection, though he played down the dispute that had soured the cross-border relationship under his predecessor, Stephen Harper.

“The Canada-U.S. relationship is much bigger than any one project and I look forward to a fresh start with President Obama to strengthen our remarkable ties in a spirit of friendship and co-operation," he said.

Obama's decision promises to put new pressure on Democratic front-runner Hillary Clinton . Her long-delayed declaration just two months ago that she too opposes the $8 billion, 1,179-mile project has inspired her more left-leaning primary opponents to accuse her of flip-flopping.

The Republican presidential candidates quickly pounced on Obama’s announcement. Sen. Marco Rubio denounced it at a “huge mistake,” while former Florida Gov. Jeb Bush described it as a ”self-inflicted attack on the U.S. economy and jobs." Louisiana Gov. Bobby Jindal accused Obama of “bowing to radical environmentalists and snubbing thousands of high quality, high paying energy sector jobs,” and former Arkansas Gov. Mike Huckabee said the president “has lost his mind.”

Whether Keystone remains a political albatross on Capitol Hill depends partly on factors outside Obama's control, including the historic plunge in global oil prices that has diminished the U.S. oil industry's appetite for Canadian crude. The seven-plus years it has taken for the administration to weigh the fate of the project succeeded in shunting the pipeline's day of reckoning past a series of political landmines, including Obama’s reelection, last fall’s midterms and last month's electoral defeat of Canada's Harper.

Still, the verdict from Obama puts to rest years of tea-leaf-reading and dropped hints about the president’s leanings on the Canada-to-Texas pipeline. It arrived nine months after Obama vetoed a GOP-backed bill that would have approved the pipeline by congressional fiat, and followed repeated comments in which he scoffed at supporters’ predictions that the pipeline would be a major job-creator.

Even the timing of the administration’s verdict remained a mystery this summer and fall as the State Department became consumed by a historic nuclear pact with Iran. That deal's sensitivity suggested to Keystone’s friends and foes alike that Obama would wait to decide on the pipeline until later in the year, when Clinton’s White House run would be in full swing.

Both sides in the prolonged pipeline battle have vowed to press their case in court if they fell short, but the legal jockeying over the Keystone decision may prove short-lived. The 2004 executive order that gives the White House ultimate sway over cross-border energy projects like Keystone allows Obama significant discretion to determine whether any project is in the “national interest,” a test that includes the pipeline’s economic and geopolitical ramifications as well as environmental effects.

Yet it is Keystone’s climate impact that propelled the once-obscure pipeline to international prominence as environmental activists turned the Canadian oil sands into an emblem of “dirty” energy unfit for a president determined to craft a global deal on global warming this December.

The nuances of Keystone’s climate symbolism have put every Democrat involved into a political bind at one point or another — from Obama to Kerry to Clinton to billionaire donor Tom Steyer, who opposes the pipeline but has sometimes steered money to Democratic candidates who refused to take a stand.

Steyer praised Obama's move, telling POLITICO that he thought "the president, always, in his heart was here."

And Bill McKibben, the 350.org co-founder who led climate activists' fight against the pipeline, said the Keystone rejection gives Obama "new stature as an environmental leader."

Greens are "well aware that the next president could undo all this, but this is a day of celebration," he added in a statement.

Republicans face their own conundrum in the wake of the decision: how to keep using Keystone as a pressure point against a president whom they have long accused of exaggerating his support for oil and natural gas — and, by extension, against Clinton's bid to succeed him. Now that Obama is set to kill the pipeline, the GOP must decide whether to return Keystone to a central role in Republican energy messaging or spend its political capital on other high-stakes debates, such as offshore drilling or fossil-fuel exports.

Senate Majority Leader Mitch McConnell suggested that the GOP could again take up the pro-Keystone XL banner in the wake of Obama's rejection of the pipeline.

"Given this project’s importance to North American energy independence, the question still remains not if but when Keystone will be built," McConnell said in a statement.

The administration’s rejection is likely to inspire at least some Republicans to reinvigorate their legislative push to force the pipeline through anyway, but few in the party have any appetite to revert to previous internal debates over tying Keystone to government funding or an increase in the debt limit. And last month's bipartisan budget deal took those weapons off the table anyway.

At the height of Republicans’ frustration over the delays, they often noted that the pipeline’s federal review had lasted longer than American involvement in World War II. Advocacy and influence spending by both sides of the Keystone debate reached into tens of millions of dollars even before Obama made Congress’ latest Keystone bill the subject of only the third veto of his presidency.

Pipeline supporter Sen. John Hoeven (R-N.D.) harkened back to the measure that defeat earlier this year, and he called on "four more of our colleagues in the Senate to join the 63 that already support the Keystone so that we can override the president’s veto and approve the project congressionally."

Keystone also generated a steady stream of dramatic gestures from environmentalists seeking to win public attention for their seemingly long-shot cause, including last year’s horseback-mounted protest on the National Mall and the 2011 White House sit-ins that launched the anti-pipeline campaign with more than 1,000 arrests. The industry’s advocacy for the pipeline has been no less fervent despite its more straitlaced style. During the peak of Keystone battling in 2012, groups from the Quakers to tractor manufacturers to pro-pipeline labor unions were spending to push Washington on the pipeline.

And Friday’s decision may yet do little to cool that fire. If Republicans renew their campaign to make Keystone a reality despite Obama’s denial, oil and gas interests are poised to lend their firepower to the effort.

“Obama has put extreme ideology over American opportunity,” American Petroleum Institute President Jack Gerard said. “We’re going to continue to raise our voices on this extreme position that was solely based on politics and not sound science.”

North America’s Building Trades Unions President Sean McGarvey echoed that sentiment, saying there is “disappointment … frustration [and] confusion” over the rejection. “We just do not quite understand why it took seven years to come to this decision,” he said.

Similar pressure from the left preceded Clinton's rejection of Keystone this fall, following years of pressure from industry and activists, with the stakes particularly high among liberal voters attracted to longtime Keystone opponent Sen. Bernie Sanders (I-Vt.). After taking heat for telling reporters that she would not "second-guess" Obama, Clinton's campaign openly acknowledged that the decision-making process on the pipeline had taken so long that she felt compelled to speak out.

Keystone is "a distraction from important work we have to do on climate change," Clinton said during a September campaign stop in Iowa. All of her prospective GOP rivals support the pipeline, setting the stage for a fresh argument over the pipeline's economic impact as November 2016 approaches.

For now, however, lawmakers, aides, lobbyists and activists who have worked in Keystone’s shadow for more than seven years are also taking the time to mark the conclusion of a debate that at times felt never-ending.

Darren Goode contributd to this report.

