President Obama announced on Nov. 6 that the State Dept. would not issue a permit to allow the controversial, long-delayed Keystone pipeline to be built, ending years of speculation about whether the administration would approve the remaining $3.3- billion portion of the pipeline project.

The decision is a blow to contractors and construction unions, which had strongly pushed for the project, contending that it would create thousands of jobs and stimulate the economy.

But environmental groups have argued that the project, proposed by Calgary-based TransCanada Corp., would open the door to more crude-oil projects from the Tar Sands region. They say such oil is a dirtier fuel than other sources of energy.

The president said that Secretary of State John Kerry had decided that the pipeline would not be in the national interest. “I agree with that decision,” Obama told reporters.  “America is now a global leader when it comes to taking serious action to fight climate change. And frankly, approving the project would have undercut that global leadership,” he added.

Senior administration officials told reporters shortly after Obama’s announcement that Kerry based his decision on several conclusions outlined in the Record of Decision National Interest Determination, which is now published on the State Dept. website.

The chief conclusion was that even though the project itself was not expected to significantly increase greenhouse gas emissions, it had become a symbol of the U.S. stance toward addressing climate change worldwide.

“The U.S. is the world’s largest economy and the second-largest emitter of greenhouse gases. As such, strong policy domestically to combat climate change sets an important example for other countries and puts credibility behind the U.S. message,” one official said.

In a statement, Kerry said: “The United States cannot ask other nations to make tough choices to address climate change if we are unwilling to make them ourselves. Denying the Keystone XL pipeline is one of those tough choices, but it is the right decision, for America and the world.”

The application process for the project has been excruciatingly drawn out. Parts of the pipeline have already been built but the most controversial portion, a 1,179-mile stretch from Hardisty, Alberta, to Steel City, Neb., has been held up for more than seven years as both sides of the debate have fought bitterly.

Environmental advocates celebrated the administration’s decision, although they acknowledged that a future president more sympathetic to the project could reopen the issue.

Bill McKibben, co-founder of environmental organization, told reporters,  “President Obama is the first world leader to cancel a fossil-fuel project because of its effect on the climate. That gives him new stature as an environmental leader.”

He added that the grassroots advocates who fought the pipeline project—an unlikely alliance of landowners, agricultural interests, American Indians and environmental groups—will campaign against other large energy proposals. “Now every fossil-fuel project here and around the world will be under siege,” he said.

But criticism of the State Dept. decision came just as swiftly.

Sean McGarvey, North American Building Trade Unions president, says that between 2009 and 2014, more than 12,000 miles of oil transmission pipelines have been built in the U.S.

McGarvey added: “We have built the equivalent of 10 Keystone XL pipelines since 2009, and the White House has not uttered one single word about those projects. In fact, President Obama attended the groundbreaking for the southern leg of the Keystone XL pipeline.”

Still, despite the fact that the State Dept. concluded in its Final Supplemental Environmental Impact Statement released in early 2014, that the project would not have a significant impact on greenhouse gas emissions, “President Obama has chosen to place politics over substantive policy that only serves to advance the agenda of well funded radical environmentalists,” McGarvey said.

Stephen Sandherr, Associated General Contractors of America’s CEO, says that the administration’s action on Keystone is “a lost opportunity. It is a decision that clearly was made on politics, not on logic.”

TransCanada CEO Russ Girling said he is disappointed in the decision and added that the company is carefully reviewing the decision and its rationale. “We believe KXL is in the best interests of the United States and Canada,” he said in a statement. 

Related Links:

State Dept. Keystone XL application page, which includes Record of Decision/National Interest Determination

TransCanada statement