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BY VICTORIA CRAIG

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The US State Department announced Wednesday the Obama administration will reject the highly controversial Keystone XL pipeline -- a project that would transport oil from Canada to refineries in Texas. For months the effort has pitted environmentalists against those who say the effort would help create US jobs. Fox News' Shepard Smith quotes the President.

"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people," Obama said in a statement. "I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil."

The administration didn’t have to make a decision about the pipeline until February 21st. Fox News explains the state department’s reason for making an early decision.

“There is simply not enough time in the 60 days Congress has given the administration to run an environmental-impact statement necessary to start the construction of the Keystone XL pipeline to bring oil from Canada to the refineries in Texas.”

But a Bloomberg reporter says-- the fight ain’t over yet.

“Now the question is: Will the company here, TransCanada, be allowed to apply again once it’s more firmly established an alternative route around some sensitive areas in Nebraska. That’s the question mark, Margaret, this is not over with to be sure.”

Many say this decision is a win for environmentalists who have opposed the project from the start. The LA Times explains why those groups have been so vocal in their opposition, saying they argue...

“...that the transportation of petroleum from Canada’s oil sands would profoundly damage the environment. They also contend that much of the gasoline and other products refined from the Canadian oil would be exported, doing little for American energy security.”

But as The Wall Street Journal explains-- those who support the pipeline argue it will give the U.S. an economic boost, and...

“...create thousands of jobs, break a supply logjam in Cushing, Oklahoma, and carry the oil to refineries along the Gulf Coast.”

Just one day before the announcement to reject the pipeline, the president’s jobs council advised the president to focus on investing in energy infrastructure -- and the pipeline was one way to do that. But CNBC’s Jim Cramer says this big decision comes down to pure politics.

“There’s a lot of people who, I think, have decided this is a make or break issue for the president. And that the way he wants to win this is to be able to say he wants to be environmentally sound, and let’s scrap it.”

Politico reports Congressional Republicans are already working to craft contingency plans to keep the pipeline issue relevant.