BY WILLIAM YARDLEY AND CHRISTI PARSONS

Tribune Washington Bureau, (TNS)

WASHINGTON – When a Canadian company first proposed building the Keystone XL oil pipeline in 2008, Barack Obama was a presidential candidate running to end wars, climate change was a fringe issue to many people and the nation was entering a devastating recession that would send unemployment soaring to 10 percent.

But the politics of oil and climate changed dramatically in the intervening years, and President Obama’s announcement Friday that the controversial pipeline through the U.S. heartland “would not serve the national interest of the United States” reflected an improved economy and a broad new public awareness of the relationship between fossil fuels and climate change.

In rejecting a cross-border permit for the 1,179-mile pipeline between Canada and Nebraska, Obama cited new data showing unemployment has declined to 5 percent, and the U.S. now produces more oil than it imports. The price of gasoline, like oil, has plummeted.

Additionally, in those seven years since the pipeline was proposed, awareness of the serious costs of climate change surged amid devastating drought in the West, natural disasters like Hurricane Sandy and the hottest years in recorded history. Activists on the left targeted not just Keystone XL, but a broad array of fossil fuel transport facilities, from oil trains to coal export terminals. The New York attorney general is investigating ExxonMobil for potentially misleading both investors and the public about climate change.

Along the way, the president himself became one of the world’s most prominent environmental leaders _ limiting emissions from power plants and vehicles while investing in renewable wind and solar energy. On Friday, he all but said outright that he wants to burnish that image in advance of a summit in a few weeks in Paris where he hopes to help broker an international agreement to limit carbon emissions.

“America is now a global leader when it comes to taking serious action to fight climate change,” Obama said Friday. “And frankly, approving this project would have undercut that global leadership.”

Amid the upheaval in recent years, Keystone XL, which would have helped deliver 800,000 barrels of crude oil a day from the tar sands of Alberta, Canada, through the U.S. Great Plains and to the Gulf Coast, became the debate that would not go away. Because it crossed an international border, the pipeline required federal approval.

Environmental groups, led by prominent national activists like Bill McKibben but also local leaders like Jane Kleeb, who organized fights by property owners in Nebraska who did not want the pipeline on their land, cast Keystone as a symbolic choice.

Would Obama allow it to go forward, they asked, enabling the extraction of a particularly dirty form of fossil fuels and exposing him to criticism that his commitment to climate was hollow? Or would he reject it, using it to make a stand for the future of renewable energy, appeasing the left in the process?

Even as studies found that the pipeline’s environmental and economic impacts both would likely be modest _ it would create fewer than 40 permanent jobs and, a State Department official said Friday, just .02 percent of U.S. economic output _ the president chose the second option.

He affirmed the symbolic power that Keystone XL had assumed as a climate issue even as he sought to downplay the pipeline’s importance.

“For years, the Keystone pipeline has occupied what I, frankly, consider an overinflated role in our political discourse,” he said Friday. “It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter. And all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others.”

TransCanada, the company trying to build the pipeline, had sensed rejection was coming. Earlier this week, the firm formally asked Kerry to pause the State Department review of the project, hoping to delay a decision until a new president takes office in 2017. The Obama administration quickly said it would not honor the request.

“Today, misplaced symbolism was chosen over merit and science,” Russ Girling, TransCanada’s president and chief executive, said Friday in a statement.

Girling said that it was “disappointing the administration appears to have said yes to more oil imports from Iran and Venezuela over oil from Canada, the United States’ strongest ally and trading partner, a country with rule of law and values consistent with the U.S.”

But a political shift in Canada likely made Obama’s decision easier. While the former prime minister, Stephen Harper, a conservative, was critical of the president for not approving Keystone XL years ago, his recently elected and more liberal successor, Justin Trudeau, took the news in stride on Friday after speaking with Obama.

“The Canada-U.S. relationship is much bigger than any one project and I look forward to a fresh start with President Obama to strengthen our remarkable ties in a spirit of friendship and cooperation,” said Trudeau, who supports the pipeline.

Sounding like the American president, Trudeau said his administration “will work hand-in-hand with provinces, territories and like-minded countries to combat climate change, adapt to its impacts and create the clean jobs of tomorrow.”

Reaction in the United States was divided. The Democratic presidential front-runner, Hillary Rodham Clinton, opposes the pipeline, and Republicans immediately tried to tie her to Obama’s decision.

“Barack Obama and Hillary Clinton caved to extreme special interest groups and rejected good American jobs,” Republican National Committee Chairman Reince Priebus said in a statement. “This move can only be described as a politically motivated embarrassment.”

Although the pipeline was expected to create only a few dozen permanent jobs, building it was expected to create temporary construction work for thousands.

“These jobs were so critical to our membership and their families to maintain their place in the middle class,” Sean McGarvey, president of the North America’s Building Trades Unions, said. “At this point, it’s safe to say we’re out of hope.”

State Department officials attributed the lengthy review of the pipeline to the complexity of the project and what they said was unprecedented public response to it. They said the department received 5-million public comments.

Officials said the decision would not necessarily dampen energy production in Canada, citing global demand and the capabilities of energy companies as more direct influences. They did acknowledge that rejecting the pipeline could increase the use of rail to transport crude. That also is controversial.

But the administration said that issue was unrelated to the decision on the pipeline.

“We are continuing to lead by example,” Obama said. If world leaders are going to protect the environment, he said, “we’re going to have to keep some fossil fuels in the ground rather than burn them.”

 Few celebrated the decision more than the activists who devoted years to the issue. They also made no apologies for contributing to Keystone XL’s outsized symbolism.

“The Keystone principle is even more important than the Keystone pipeline,” said K.C. Golden, the chairman of the climate activist group 350.org. “At this point, nothing serves our national interest if it significantly contributes to the climate crisis.”

Recalling the early days of the pipeline fight years ago, he added, “I can’t tell you how many beers I’m going to collect from all the congressional staffers who bet me Keystone was a done deal when this first started.”