NEW YORK (TheStreet) –- Keystone XL pipeline project supporters were handed a defeat Tuesday evening as approval for the controversial project was rejected in the U.S. Senate by the narrowest of margins. As a result, President Obama's previously anticipated veto will not come into play.

The Senate voted 59 to 41 to reject the measure. Throughout the day it was not clear heading into the vote whether supporters would be able to muster the minimum 60 votes needed to avoid a filibuster. However, in the end, Democrats previously viewed as potential swing votes voted with their party.

The House passed an identical bill last week. President Obama recently indicated he would veto the bill in its present form.

 

Currently, the State Department has the authority to approve construction of the pipeline, but environmental concerns have delayed that approval. A final decision is on hold indefinitely pending the outcome of a court case in Nebraska that could re-route the project.

North Dakota Republican Sen. John Hoeven, a leading supporter of the pipeline and sponsor of the Senate bill, indicated last week that a presidential veto was expected if the bill passed.

Hoeven, at the time, indicated that if Obama vetoed the bill, approval of Keystone XL would be sought through other means. It has yet to be seen whether a similar move will be undertaken with the rejection of the bill coming from within the Senate. "We'll pass it as either part of broader energy legislation or as an amendment to another must-pass bill, either in the lame duck or in the new Congress," Hoeven said at the time.

In the wake of the party's victory in the mid-term elections, Republicans quickly introduced bills in both houses of Congress that would give the go-ahead for construction.

The pipeline, which would carry heavy crude oil from the tar sands of Alberta, Canada to refineries on the U.S. Gulf Coast, has been the focus of fierce confrontation between business interests who say the project would generate jobs and boost energy independence, and environmentalists who argue it would sharply increase carbon emissions and set back global efforts to slow climate change.

Obama had longed hedged on the pipeline's approval, citing environmental concerns including its possible carbon footprint.

Beneficiaries of a completed pipeline would include Gulf Coast refineries such as Valero (VLO - Get Report) , which would pay less for piped crude than currently to ship it by rail, while forcing freight railroads to seek new customers, energy analysts have said.

Democratic supporters included Sen. Tom Carper of Delaware. Carper said by breaking a partisan deadlock he hoped progress could be made on other environmental and public health threats posed by greenhouse gases.

However, Carper's rank-breaking support for Keystone angered environmentalists among his constituents, who said the decision would mean continued shipments of Canadian crude to a Delaware refinery and would heighten the risks posed by rising seas in the low-lying state.

"Carper's support for the Keystone XL pipeline and the import of tar sands to Delaware City is offensive to the hundreds of Delawareans who marched for climate action in New York City this September, and insulting to his constituents who are already feeling the impacts of sea-level rise," the local Sierra Club said in a statement.

This article was written by a staff member of TheStreet.