Danny Ruthenberg-Marshall, left, with 350 DC, and Lindsey Halvorson, a student at American University, gather up their signs after attending a celebration with other opponents of Keystone XL oil pipeline, February 24, 2015.AP Photo/Jacquelyn Martin

This article is from the archive of our partner National Journal

President Obama rejected the Keystone XL pipeline on Friday, a clear signal of the president’s priorities as he races to cement an environmental legacy and bolster international support for a strong climate deal in Paris.  

The State Department determined that construction of the pipeline would not be in America's national interest, Obama said in a speech delivered from the White House, adding that he agreed with that decision.

In announcing the decision, Obama emphasized his belief that debate over the pipeline has been overblown, while seeking to reassure that the rejection will not sour diplomatic ties between the United States and Canada.

The president said that he informed newly elected Canadian Prime Minister Justin Trudeau of the decision that morning, saying that while Trudeau was disappointed, “we both agreed that our close friendship … should provide the basis for even closer coordination between our countries going forward.”  

The rejection caps a string of major climate-change initiatives orchestrated by the administration and arrives ahead of make-or-break United Nations climate-change talks in Paris that will start at the end of the month and that are aimed at finalizing an international accord to cut carbon emissions.

Domestically, it stands as a major victory for environmentalists and a blow to the oil and gas industry. The decision follows years of speculation over whether the White House would greenlight the controversial project and became tangled up in a fierce debate over global warming and U.S. energy.

Yet, for all the intensity of that debate, Obama was quick to say that the pipeline has taken on "an overinflated role in our political discourse,” adding that “this pipeline would neither be a silver bullet for the economy … nor the express lane to climate disaster proclaimed by others.”

The president said that the State Department denied a permit for the pipeline because it would “not make a meaningful long-term contribution to our economy,” calling instead on Congress to create jobs by passing an infrastructure bill. He added that the pipeline would not lower gas prices at the pump or "increase America's energy security." 

The multibillion-dollar pipeline, if built, would bring oil from the Canadian oil sands to Gulf Coast refineries. Environmentalists have long argued that the pipeline would worsen global warming by serving as a catalyst for a major expansion of carbon-intensive oil-sands production. The environmental movement has made blocking the project a top priority, especially after sweeping climate-change legislation collapsed in 2010. But Republicans, the oil and gas industry, and major business groups have fought hard for its construction, arguing that the pipeline would create jobs and help America cut reliance on foreign oil reserves controlled by unstable or hostile governments.

TransCanada, the company seeking to build the pipeline, expressed disappointment over the rejection, but said that it would consider all of its options, including the potential for filing a new application for a presidential permit. 

Obama’s decision drew immediate criticism from Republicans and industry groups with Senate Majority Leader Mitch McConnell vowing to keep up the fight to approve the pipeline. 

"Given this project’s importance to North American energy independence, the question still remains not if but when Keystone will be built. Republicans have no intention of giving up on common-sense jobs ideas like Keystone," McConnell said in a statement. 

Sen. John Hoeven, a North Dakota Republican who has led the GOP attempt to force approval of Keystone in Congress, accused the administration of making it tougher to build needed energy infrastructure more broadly because companies are “denied the certainty they need to make the billions of dollars of investment.”

Hoeven indicated that there was more potential intervention, and even ahead of the expected rejection the pipeline’s supports had been plotting their next steps. In an interview Thursday, Sen. Heidi Heitkamp of North Dakota said that many of her colleagues didn’t “want to decide about interventions until the president’s made a decision.”

“Once the decision is out, there is room for Congress to act,” she added. “There’s an opportunity.”

Environmentalists, meanwhile, cheered. League of Conservation Voters President Gene Karpinski called the decision “huge!” in a statement. “The president is showing the world that our country is committed to a clean energy future that will limit carbon pollution and protect the health of our kids and future generations,” he said.

Bill McKibben, the founder of grassroots environmental group 350.org, called Friday "a day of celebration," saying that the decision marked "the first time in history a world leader has turned down a major infrastructure project because of its impact on the climate." 

The pipeline has been under review by the administration for years as officials have sought to determine whether approving a cross-border permit to build Keystone XL would be in the national interest.

During that time, players on both sides have criticized the president for failing to make a decision.

The pipeline has also loomed large over the 2016 race, especially on the Democratic side. Sen. Bernie Sanders touted his long-time opposition to the project from the start of the race as proof that his environmental record was stronger than Hillary Clinton’s, who had declined to take a stand on the project. In September, however, Clinton reversed course and announced her opposition, a decision met with cheers from environmentalists and progressives.

On the Republican side, all candidates have said they support the project, with some even promising they’d act to approve it on day one in the White House. Multiple GOP White House hopefuls attacked the rejection; Jeb Bush called it a “self-inflicted attack on the U.S. economy and jobs.”

The pipeline decision stands out as one of the last major environment and climate announcements to arrive during a second term where Obama has made climate change a major focus. The White House has rolled out an aggressive environmental agenda during the president’s second term, releasing a litany of regulations designed to curb greenhouse-gas emissions from everything from trucks to power plants.

In recent months, speculation has intensified that the president would reject the project. Obama had previously pledged that he would not greenlight the pipeline if it worsened global warming. The State Department concluded that Keystone XL would have minimal environmental impact. But Obama called oil-sands extraction “extraordinarily dirty” in March of last year and has downplayed the potential for the pipeline to create jobs and give the economy a lift.

“It’s not going to be a huge benefit to U.S. consumers. It’s not even going to be a nominal benefit for U.S. consumers,” Obama told reporters at the White House in December 2014.

Still, Obama has also faced intense pressure from some labor unions, a key Democratic constituency, to approve the pipeline as a result of the pipeline’s job-creating potential. Those competing pressures have pulled the president in different directions and transformed Keystone into a politically contentious issue for the White House, and one which, for years, it seemed that the president would rather avoid. 

Keystone XL has been under review at the State Department since 2008. 

Republicans overwhelmingly back Keystone and moved to approve the project after taking over control of Congress. The pipeline was approved by a Republican majority in the House and the Senate, but Congress did not have enough votes to override president Obama’s veto, which Obama delivered after saying he did not take kindly to legislatively attempts to interfere with the administration’s final decision.

Congressional Republicans have long vowed to keep fighting for Keystone even if the president stands in their way.

This article is from the archive of our partner National Journal.

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