The US Senate on Tuesday narrowly rejected a bill that would have approved construction of the Keystone XL pipeline to bring crude oil to Gulf coast refineries from Canada's controversial tar sands.
Supporters of the long-delayed project, a top Republican energy priority, came up one vote short of the 60 needed for approval in the 100-member chamber.
Rejection of the pipeline, which became a political football in the aftermath of November's midterm elections, sets up another likely showdown when the new Republican-controlled Congress convenes in January.
Many of the 45 Republicans who supported the bill, as well as some of the 14 Democrats who voted with them, described Keystone XL as a "no-brainer" that would generate thousands of jobs and improve American energy independence.
But critics, led by Senate Democrat Barbara Boxer, fiercely oppose the project due to concerns that it would harm the environment.
Republicans vowed they would bring the bill to another vote in January.
"Senate Democrats once again stood in the way of a shovel-ready jobs project that would help thousands of Americans find work -- a remarkable stance after an election in which the American people sent a clear message to Congress, to approve serious policies," top Republican Senator Mitch McConnell said.
"But once the 114th Congress convenes, the Senate will act again on this important legislation, and I look forward to the new Republican majority taking up and passing the Keystone jobs bill early in the New Year."