U.S. President Barack Obama on Friday rejected the proposed Keystone XL oil pipeline from Canada in a victory for environmentalists who have campaigned against the project for more than seven years.
"The pipeline would not make a meaningful long-term contribution to our economy," Obama told a press conference. He said Keystone XL would not reduce gasoline prices for drivers, and that shipping "dirtier" crude from Canada would not increase U.S. energy security.
The denial of TransCanada Corp's more than 800,000 barrels per day project will make it more difficult for producers to develop the province of Alberta's oil sands. It could also put the United States in a stronger position for global climate talks in Paris that start on Nov. 30 in which countries will aim to reach a deal to slow global warming.
Secretary of State John Kerry, who determined that the pipeline was not in the country's interest before Obama's final decision, said approving Keystone "would significantly undermine our ability to continue leading the world in combating climate change."
Keystone XL would have linked existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois and, eventually, the Gulf of Mexico coast.
TransCanada first sought the required presidential permit for the cross-border section in 2008 but the proposal provoked a wave of environmental activism that turned Keystone XL into a rallying cry to fight climate change. Blocking Keystone became a litmus test of the green movement's ability to hinder fossil fuel extraction in Canada's oil sands.
"This is a big win," said Bill McKibben, co-founder of the environmental group 350.org which helped make Keystone a symbol of a movement to slow global oil output. Obama's decision "is nothing short of historic, and sets an important precedent that should send shockwaves through the fossil fuel industry."
TransCanada and other oil companies said the pipeline would have strengthened North American energy security, created thousands of construction jobs and helped relieve a glut of oil in the country's heartland.
But since 2008 the United States has experienced a domestic drilling boom which has boosted oil production 80 percent and contributed to a slump in U.S. oil prices from above $100 a barrel to about $44.
TransCanada Chief Executive Russ Girling said the company would review its options to potentially file a new application for a pipeline to bring oil sands crude to the United States.
"Today, misplaced symbolism was chosen over merit and science, rhetoric won out over reason," he said in a statement.
The company on Monday asked the Obama administration to pause the review of the pipeline in a move seen by many as an attempt to postpone a decision until a new U.S. president took over in 2017. TransCanada shares fell about 4.6 percent on the Toronto stock exchange on Friday to C$43.15.
All the Democratic presidential candidates, including front runner Hillary Clinton, oppose the pipeline while most of the Republican candidates are in favor of it.
