The United States will Wednesday reject the proposed Keystone XL oil pipeline from Canada, a politically charged project that is bitterly opposed by environmentalists, news reports said.
President Barack Obama's Republican rivals quickly denounced the reported decision. They had pushed for the pipeline and set a deadline of late February for the administration to give an answer.
The Politico news website and The Washington Post both said the State Department would announce a rejection later Wednesday but allow company TransCanada to pitch an alternative route.
State Department officials declined to comment on the reports but said that they expected new developments on the controversial project later Wednesday.
Environmentalists fear an accident along the proposed 1,700-mile (2,700-kilometer) extension into the Great Plains and note that the oil comes from tar sands, meaning it will emit high amounts of carbon blamed for global warming.
Republican lawmakers, the oil industry and the Canadian government say that the project will create jobs.
House Speaker John Boehner, asked about the reported decision, pointed to Canadian Prime Minister Stephen Harper's threats to sell oil to China if the United States does not approve the project.
"If we don't build this pipeline to bring that Canadian oil, and take out the North Dakota oil and deliver it to our refineries in the Gulf Coast, that oil is going to be shipped out to the Pacific Ocean and be sold to the Chinese," Boehner told reporters.
"This is not good for our country," he said.
With November elections expected to focus on job creation, Republicans have been eager to highlight the issue which has divided some of Obama's environmental and labor supporters.
Anti-Keystone protest leader Bill McKibben, founder of the activist group 350.org, hailed Obama for standing up to the "fossil fuel lobby" which he said was in control of Congress.
"Assuming that what we're hearing is true, this isn't just the right call, it's the brave call," he said in a statement.
"The knock on Barack Obama from many quarters has been that he's too conciliatory. But here, in the face of a naked political threat from Big Oil to exact 'huge political consequences,' he's stood up strong," McKibben said.
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