As promised, U.S. President Barack Obama vetoed Keystone XL approval legislation Tuesday, escalating the confrontation with Congress over the controversial Canadian project to ship Alberta oil sands crude cross the United States to the Texas Gulf Coast.

Republicans and the pipeline's Democratic allies in Congress vowed to fight on. The Canadian government insisted the pipeline will eventually be built anyway. The White House said Mr. Obama hadn't made up his mind about whether Keystone XL was in the U.S. national interest, but opponents said it was another nail in the project's coffin.

Wielding his veto pen for only the third time in his presidency, Mr. Obama rejected the Congressional effort to wrest control of the long-delayed approval process. The White House, however, went to some lengths to make clear that the veto wasn't a harbinger of any final decision on TransCanada Corp.'s $8-billion (U.S.) project to funnel upward of a million barrels of oil a day across the American heartland.

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"Through this bill, the United States Congress attempts to circumvent long-standing and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest," the President said in a letter to the Senate. "Because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest – including our security, safety and environment – it has earned my veto."

Anti-Keystone XL groups hailed the veto. "After four years of rallies, marches, sit-ins and civil disobedience, we're thrilled to see President Obama take an important first step," said May Boeve, executive director of 350.org. "Now it's time for the President to show he's serious about his climate legacy by moving on to step two: rejecting this pipeline," that, she said, "would worsen climate change, threaten the safety of farmers and landowners in America's heartland, and create essentially no long-term jobs – all so a Canadian oil company gets to ship dirty tar sands to the rest of the world."

The Canadian government, which has backed TransCanada's pipeline, said Mr. Obama was out of step with Americans.

Keystone XL is "a debate between the President and the American people, who are supportive of the project," said Greg Rickford, Canada's Minister of Natural Resources, adding that he was certain the pipeline would eventually be built. "It is not a question of if this project will be approved; it is a matter of when."

Alberta Premier Jim Prentice said he was "disappointed but not surprised that President Obama chose to veto bipartisan legislation that would have approved the Keystone XL pipeline."

TransCanada's President Russ Girling issued a statement asserting "Keystone XL is in the national interest of the United States and should be approved and constructed."

Mr. Obama has been decidedly less than enthusiastic about Keystone XL in recent public statements, suggesting the project might be good for the Canadian oil patch and government tax coffers but adding that he saw no obvious benefits to U.S. consumers.

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"Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn't have an impact on U.S. gas prices," Mr. Obama said shortly after Republicans trounced Democrats in the midterm elections and the President no longer needed to try and save pro-Keystone Democratic senators from defeat.

Despite Mr. Obama's publicly voiced doubts about Keystone XL's value to Americans, the White House insisted he was still undecided.

"The President will keep an open mind as the State Department considers the wide range of impacts that this pipeline could have on the country, both positive and negative," White House spokesman Josh Earnest said, adding Mr. Obama will eventually rule on whether allowing Keystone XL to be built serves the interests of the United States after the State Department finishes its review process. "It certainly is possible that the President will" approve Keystone XL, Mr. Earnest said.

Anti-Keystone XL protestors quickly gathered outside the White House gates to celebrate the project's latest setback.

Rhea Suh, president of the Natural Resources Defense Council, another of the groups opposed to Keystone XL, said, "the President got it exactly right by vetoing it. Congress should stop wasting any more time pushing dirty energy projects that would worsen climate change." She urged Mr. Obama to "move quickly to reject the proposed tar sands pipeline once and for all. It is simply not in the national interest."

Keystone XL backers in Congress vowed to fight back.

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Republican leaders accused the President of pandering to powerful green groups who claim Keystone XL will trigger massive expansion of Alberta's carbon-heavy reserves and thus worsen greenhouse gas emissions driving climate change.

"The allure of appeasing environmental extremists may be too powerful for the President to ignore," said the top two Republicans in Congress in a jointly penned article for USA Today. "But the President is sadly mistaken if he thinks vetoing this bill will end this fight," vowed Senate Majority Leader Mitch McConnell, a Kentucky Republican, and House of Representatives Speaker John Boehner.

It's not yet clear whether the Republicans – along with Democrat backers of the pipeline, will attempt to round up the necessary two-thirds majorities needed in both the Senate and the House of Representatives to override a presidential veto.

The prospects look grim.

Although 63 senators backed the Keystone XL approval bill – essentially an attempt to wrest control of the decision from Mr. Obama, who has repeatedly delayed deciding on the project for years – that's short of the 67 needed to override a veto. And while nine Democrats joined the 54 Republicans who, in the wake of last November's midterm gains, now hold a majority in the Senate, chances of finding another four votes seem slim.

In the House, where the Keystone XL approval bill passed 270-152, finding the 288 votes to override Mr. Obama would be even harder.

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That won't end the showdown.

"Keystone is a no-brainer in every way," Mr. Boehner and Mr. McConnell said, echoing the phrase used by Mr. Harper, who has lobbied relentlessly on behalf of TransCanada over the contentious pipeline that has soured bilateral relations.

Republicans and Democratic backers of Keystone XL claim Mr. Obama is at odds with the majority of Americans and bipartisan support of the project in Congress. "This White House refuses to listen and look for common ground. It's the same kind of top-down, tone-deaf leadership we've come to expect and we were elected to stop," Mr. Boehner and Mr. McConnell said.