Obama rejects Keystone XL pipeline in win for greens

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Obama Administration to Reject Application to Build Keystone XL Pipeline

U.S. President Barack Obama on Friday rejected the proposed Keystone XL oil pipeline from Canada in a victory for environmentalists who 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 it would not reduce gasoline prices, and shipping "dirtier" crude from Canada would not increase U.S. energy security.

SEE ALSO:TransCanada requests suspension of Keystone XL permit

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 at global climate talks that start in Paris on Nov. 30 in which countries will aim to reach a deal to slow global warming.

See Americans voicing their opinions on Keystone XL:

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2016 issues: Environment, Climate Change, Keystone, Alt Energy
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Obama rejects Keystone XL pipeline in win for greens
UNITED STATES - JULY 7: Lilyana Distler, 4, of Waldorf, Md., holds a sign during a 'play-in' protest by kids and mothers in Upper Senate Park organized by Moms Clean Air Force, July 7, 2015. About 400 gathered to support the EPA's Clean Power Plan and call attention to climate change and air pollution. (Photo By Tom Williams/CQ Roll Call)
With AFP Story by Michael MATHES: US-politics-environment-climate,INTERVIEW Senator Sheldon Whitehouse, D-RI, holds a placard which he had with him during his speeches on the floor of the Senate during an interview with Agence France-Presse at his office in the Hart Senate Office Building on May 14, 2015 on Capitol Hill in Washington, DC. On Monday, May 18, 2015, the two-term Democrat offers his 100th Senate floor speech on climate change -- an unprecedented three-year odyssey demanding Republicans address one of the more pressing concerns of the 21st century. AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
WASHINGTON, DC - APRIL 18: will.i.am poses backstage during Global Citizen 2015 Earth Day on National Mall to end extreme poverty and solve climate change on April 18, 2015 in Washington, DC. (Photo by Kris Connor/Getty Images for Global Citizen)
LAS VEGAS, NV - AUGUST 24: (L-R) American Association of Blacks in Energy President and CEO Paula Jackson, U.S. Country President for the United States at Alstom Amy Ericson, CEO and Board Member of Advanced Microgrid Solutions Susan Kennedy, Chairman of Smart Wires Inc. Tom Voss and Director of the Advanced Research Projects AgencyÐEnergy Dr. Ellen Williams participate in a panel discussion at the National Clean Energy Summit 8.0 at the Mandalay Bay Convention Center on August 24, 2015 in Las Vegas, Nevada. Political and economic leaders are attending the summit to discuss a domestic policy agenda to advance alternative energy for the country's future. (Photo by Ethan Miller/Getty Images)
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U.S. Secretary of State John Kerry, who determined 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.

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.

CANADA-U.S. RELATIONSHIP

Newly sworn in Canadian Prime Minister Justin Trudeau, a supporter of Keystone, voiced disappointment but said the Canada-U.S. relationship "is much bigger than any one project."

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.

A senior U.S. State Department official left open the possibility TransCanada could seek a different decision under another U.S. administration, telling reporters: "for the State Department to reconsider the application at any time, the company would have to reapply."

TransCanada had asked the Obama administration on Monday to pause the review 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 5.2 percent on the Toronto stock exchange on Friday to C$42.90.

All the Democratic U.S. presidential candidates, including front runner Hillary Clinton, oppose the pipeline while most Republican candidates are in favor.

Friday's rejection was a loss for Republicans on Capitol Hill who in January had made Keystone their top issue of the new Congress. They passed a bill that would have allowed Congress to decide on the pipeline, legislation Obama vetoed.

See social reactions from leading Republicans:

13 PHOTOS
GOP reaction to Obama's Keystone XL pipeline decision
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Obama rejects Keystone XL pipeline in win for greens
The Obama Admin's politically motivated rejection of the Keystone XL Pipeline is a self-inflicted attack on the U.S. economy and jobs.
President Obama is bowing to radical environmentalists and snubbing thousands of high quality, high paying energy sector jobs. #KeystoneXL
Thousands of high quality energy sector jobs will be left on the altar of Obama’s environmental extremism. #KeystoneXL
Obama’s rejection of #KeystoneXL will flush American jobs down the drain... all to appease the agenda of science denying radicals.
.@BarackObama has abandoned American workers to appease the environmental fringe. #KeystoneXL #sad
As President I’d authorize #KeystoneXL, and we'd get Americans to work!
Keystone XL pipeline should be approved! @POTUS is once again stopping progress and blocking job creation.
Why is @BarackObama so obsessed with worshiping the gods of green energy and rejecting the #KeystonePipeline? (1/4)
Why is @BarackObama more interested in satisfying radical liberals than creating tens of thousands of good-paying American jobs? (2/4)
Building the #KeystonePipeline is an absolute no-brainer, too bad @POTUS has lost his mind. (3/4)
Radical Islamic terrorism is a greater threat than a sunburn. (4/4)
The rejection of #KeystoneXL is yet another blow to our limping economy. It won't stop the oil but it will mean its transport is less secure
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Senator John Hoeven, a Republican of oil-producing North Dakota, said TransCanada would be able to challenge the decision under international trade agreements such as NAFTA or the World Trade Organization.

Obama's decision will have a "chilling effect" on any company considering building energy infrastructure, which could leave the United States at risk in the long term of not having the pipelines it needs, Hoeven said in an interview.

(Reporting by Jeff Mason, Timothy Gardner, Arshad Mohammed, Patrick Rucker, Roberta Rampton and Ayesha Rascoe in Washington and Nia Williams in Calgary; Writing by Timothy Gardner; Editing by Lisa Lambert and James Dalgleish)

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