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The Obama administration has rejected a Canadian company's proposal to build a controversial pipeline from northern Canada to the Texas Gulf coast.

The State Department Wednesday recommended that President Barack Obama reject a permit for TransCanada's proposed Keystone XL pipeline, saying the project does not serve the national interest. Officials said they did not have enough time to assess the project, but that the denial does not preclude any subsequent permit application or applications for similar projects.

President Obama issued a statement saying the decision is not a judgment on the merits of the pipeline, but what he called “the arbitrary nature” of a 60-day deadline mandated by congressional Republicans to decide on the application. The White House had until February 21 to decide on the $7 billion project. The president said the deadline prevents a full assessment of the proposed pipeline's impact on the environment and the health and safety of Americans.

The office of Canadian Prime Minister Stephen Harper said he expressed his “profound disappointment” to President Obama in a telephone call. Canadian officials also said Mr. Harper indicated he hopes the project ultimately will be approved, given the jobs it would create in both the United States and Canada.

TransCanada is considering another proposal that would reroute the pipeline around aquifers in Nebraska's Sandhills region. A State Department official said she could place a timeline on how long a review of a new application might take.

Last year, President Obama delayed a decision on granting a permit for the pipeline, largely because of worries about its environmental impact. The White House sought to hold off on a decision until after the presidential election this November.

Some Republicans, along with many labor unions and the oil industry, support the project, saying it will create jobs. Environmentalists oppose it because the crude will come from Canadian oil sands, which involve producing carbon emissions. Environmentalists also fear an accident along the proposed 2,736-kilometer route.

As the decision was formally announced, the Republican speaker of the U.S. House of Representatives denounced it. John Boehner said the decision shows the president is not serious about lowering unemployment because the plan might have alienated political supporters in environmental groups. Boehner also said, “This is not the end of the fight.”