Obama rejects Keystone XL proposal, claims it's not in the best interest of the country

President Barack Obama rejected Friday the proposed Keystone XL pipeline, agreeing to Secretary John Kerry's conclusion that it is not in the best interest of the country's national security.

According to Yahoo, the move ended a seven-year political strife. Rejecting the pipeline is somehow a victory for environmental activists who have been fighting against it. This also puts the president along with the rest of the Democrats in a confrontation against the Republicans and energy advocates who are preparing for the 2016 presidential election.

CNN reported that the colossal project has pitted Republicans and oil companies against liberal activists and environmentalist. The pipeline would be 1,200 miles long spanning across six US states. It will transport about 800,000 barrels of petroleum from Canada to the Gulf Coast every day.

The president said, "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 leadership."

Meanwhile, Reuters reported that North American pipeline companies are now facing a crossroad. Their growth prospects are dwindling as it suffers from 50 percent drop in oil prices and tough environmental criticisms that have slowed the commencement of their projects. President Obama's move to reject TransCanada Corp's proposed pipeline is another blow for the industry.

Wood Mackenzie oil analyst Skip York said this is bad news for the midstream sector. Pipeline companies are very attractive to investors in the past years since they consistently pay out and give large dividends. However, interests from the investors are slowly fading as executives from the industry warns of slower dividend growth.

Obama's decision to reject the pipeline comes as his administration continues to promote the legacy on environmental agenda to fight climate change. Climate impact is the critical factor that lead to the determination to reject the pipeline, said Secretary Kerry in a statement.