This report has been updated and expanded since it was originally posted.

The Obama administration today rejected the controversial Keystone XL pipeline -- with the proviso that TransCanada can reapply with a different route for the 1,700-mile project, which is designed to transport tar sands oil from northern Alberta to refineries on the Texas Gulf Coast.

The decision comes after Congress forced the administration's hand with a requirement to make a decision by February 21.

"As the State Department made clear last month," President Obama said in a statement, "the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree."

Supporters of Keystone XL claim that the project would generate thousands of jobs -- a claim that has been widely debunked -- while opponents cite huge environmental risks from the pipeline itself and the dirty tar sands oil that it would carry across sensitive areas since as the Ogallala aquifer.

Though saying no to the current Keystone XL proposal is a good start, the option to reapply after finding a new route across the sensitive Nebraska Sandhills won't sit well with many opponents of the project. The company was already working on new routes after the State Department delayed a final decision on the pipeline in November, pushing it back to 2013. More recently, TransCanada said it would have a new proposal ready within a few weeks; it is unclear how the administration's decision today will affect that route.

The pipeline's rejection isn't completely surprising, given the president's apparent distaste for the 60-day deadline imposed by Congressional Republicans. Earlier this week, White House spokesman Jay Carney said "there was an attempt to short-circuit the review process in a way that does not allow the kind of careful consideration of all the competing criteria here that needs to be done."

Just before news of the White House decision broke today, a group of two dozen congressional Democratics wrote to the president, saying: "We strongly oppose an expedited review process and urge you to reject the tar-sands pipeline because of the unnecessary and inappropriate short circuiting of the review process."

Reaction from the GOP to the Keystone XL denial came quickly, with a spokesperson for House Speaker John Boehner saying: "This is not the end of this fight. ... President Obama is about to destroy tens of thousands of American jobs and sell American energy security to the Chinese."

But Susan Casey-Lefkowitz, director of NRDC's international program, said in a blog post that the GOP's arguments on jobs and national security are specious. "The pipeline was rejected for all the right reasons," Casey-Lefkowitz writes. "President Obama put the health and safety of our people, our air, lands and water -- our national interest -- above the interests of Big Oil."

Image: Fibonacci Blue/Flickr