TORONTO (miningweekly.com) – US President Barack Obama has rejected Canadian energy infrastructure operator TransCanada’s proposed Keystone XL pipeline, ending a drawn out and highly politicised battle to build an $8-billion conduit that would have transported Canadian bitumen to large refining markets in the American Midwest and along the US Gulf Coast.

Speaking from the White House and flanked by Vice-President Joe Biden and State Secretary John Kerry, Obama said the pipeline “would not serve the national interests of the US. America is now a global leader when it comes to taking serious action to fight climate change. And, frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face – not acting,” he said.

Kerry had earlier this week rejected a request by TransCanada to pause its review of the ‘presidential permit’ application for the Keystone XL pipeline.

The State Department rejected the proposed Keystone XL pipeline on the grounds that it would have a negligible impact on US energy security; that it would not lead to lower petrol prices for American consumers; that the project’s long-term contribution to the economy would be marginal; that the proposed project raised a range of concerns about the impact on local communities, water supplies, and cultural heritage sites; and owing to the fact that the proposed project would facilitate the movement into the US of a “particularly dirty” source of fuel.

The proposed project entailed a 1 897 km, 36-inch-diameter crude oil pipeline, beginning in Hardisty, Alberta, Canada, and extending south to Steele City, Nebraska, in the US. The infrastructure project was seen as critical to narrowing the discount crude producers in the Alberta oilpatch received over their southern rivals.

Obama had earlier on Friday spoken telephonically with Canadian Prime Minister Justin Trudeau to inform him about the decision.

“We are disappointed by the decision but respect the right of the US to make the decision. The Canada–US 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 cooperation,” Trudeau said in a statement.

Unlike his Conservative predecessor, Stephen Harper, Trudeau suggested that pushing the development of Alberta's oil sands was not top-of-mind for federal policy. "The government of Canada will work hand-in-hand with provinces, territories and like-minded countries to combat climate change, adapt to its impacts and create the clean jobs of tomorrow,” he said.

TransCanada’s president and CEO Russ Girling said the company was disappointed with the decision to deny the Keystone XL application.

“Today, misplaced symbolism was chosen over merit and science – rhetoric won out over reason. Today's decision cannot be reconciled with the conclusions of the State Department's comprehensive seven-year review of the project,” he said in a statement.

Environmentalists were, however, quick to praise the Keystone XL rejection.

“This decision should not come as a surprise. The US government previously articulated a number of concerns with the climate impacts of the crude oil that would flow through Keystone XL. Canada still has no federal regulations for carbon emissions from our oil and gas sector and Alberta's existing emissions regulation has not been able to cut carbon emissions from the oil sands,” Alberta director at the Pembina Institute Simon Dyer stated.

During the Canadian national election campaign, the Liberal party committed to modernising the National Energy Board's review process. This included a commitment to include upstream carbon emissions in environmental assessments for projects such as pipelines, Pembina said.

Following the announcement, TransCanada's TSX-listed stock on Friday fell 4.27% to C$43.32 apiece.