Obama rejects Keystone XL pipeline project

U.S. President Barack Obama on Friday rejected the construction of an extension to a controversial oil pipeline that would have carried heavy crude oil from Canadian tar sands to the refineries in the Gulf of Mexico. 

"This morning, Secretary [John] Kerry informed me that after extensive public outreach, the State Department has decided that Keystone XL pipeline will not serve the national interest of the U.S.," Obama said during a press conference at the White House. "I agree with that decision."

Obama said the pipeline would not have contributed significantly to the U.S. economy, lower gas prices for American drivers and would not have improved the country’s energy security.

For the first time in two decades the U.S. is now producing more oil than it imports but the country will continue to rely on oil and gas as it transitions to a clean energy economy, Obama said, as he took time to tout his record on the issue.

"Since I took office, we tripled the power we generated from the wind, and multiplied the power we generate from the sun 20 times. Our biggest and most successful businesses are going all in for clean energy," he said.

"Today, the U.S. is leading on climate change with investments in clean energy. Because of American leadership, more than 150 countries representing nearly 90 percent of global emissions have put forward plans to cut pollution," he added.

Approving the Keystone XL pipeline project "would have undercut that global leadership", he said, while adding that he looks forward to meeting world leaders at a UN climate change summit in Paris next month. 

The Obama administration has dragged its feet on issuing a definitive decision on the pipeline project and even vetoed a bill in late February that was approved by Congress two weeks earlier.

Opponents of the project have cited environmental concerns, among others, while proponents pointed to job creation and reducing U.S. dependence on foreign oil.

The State Department earlier this week rejected a request by TransCanada, operator of Keystone XL, for a delay in the project’s review process. 

To carry heavy crude oil from Alberta's tar sands through the U.S. states of Nebraska and Oklahoma to reach the refineries along the Gulf Coast, the northern extension of the $8 billion project would have brought the total capacity of the 2,150-mile long (3,460-kilometer) pipeline to more than 1 million barrels a day, with a total investment of more than $12 billion, according to TransCanada.

Although the U.S. has significantly increased its domestic oil production since the shale revolution began in 2008, most of that oil is light sweet crude, whereas there are refineries in the U.S.' Gulf that run on heavy crude, similar to Canadian oil. Such refineries are still depending on heavy crude oil imports from overseas.