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It's official. The Keystone XL pipeline has become collateral damage in a war of perceptions.

The tortuous saga of the cursed pipeline merits its very own and very long chapter in the annals of Canada-U.S. relations. A decision that Stephen Harper fatefully called a "complete no brainer" morphed into a litmus test of President Barack Obama's environmental cred, one in which symbolism trumped facts and cross-border correspondence descended into nasty jibes.

In denying TransCanada a permit to build the contentious project, Mr. Obama on Friday conceded that Keystone took on an "over-inflated role in our political discourse" as environmentalists called the pipeline a "game over" proposition for the climate while business groups touted the economic benefits and energy security it offered the U.S. economy.

"It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter," Mr. Obama said. "This obscured the fact that this pipeline would neither be a silver bullet for the economy … nor the express lane to climate disaster."

Despite the bitterness the project has provoked, Keystone would not, on its own, have a significant impact on greenhouse gas emissions and its construction would not meaningfully boost economic growth on either side of the border. The issue of pipeline safety is moot; tens of thousands of kilometres of U.S. oil pipelines were built as Mr. Obama mulled Keystone.

So, let's try and get this straight. The President concedes the Armageddon arguments against Keystone are hype, but he's killing an entirely viable private-sector infrastructure project anyway? So much for evidence-based policy.

If the facts on Keystone are not well known outside North America, however, the symbolism surely is.

Mr. Obama is deeply committed to securing a global commitment to combatting greenhouse gas emissions at the United Nations climate summit that begins in Paris later this month. Allowing Keystone to proceed would "undermine our ability to persuade other countries to follow our lead on fighting climate change," White House press secretary Josh Earnest said on Friday. A State Department official, speaking earlier on background, said the Keystone decision had come to be seen around the world as "a test of U.S. resolve" on climate change.

Rather than correct those impressions, Mr. Obama played into them.

U.S. Secretary of State John Kerry conceded Friday that Keystone "by itself is unlikely to significantly impact the level of crude extraction or the continued demand for heavy crude oil at refineries in the United States." On a conference call later, a department official added: "I would anticipate there would be an increase in transportation [of oil sands crude to the U.S.] by rail."

Mr. Obama's decision threatens to aggravate Canada-U.S. relations, which, on key policy issues at least, have not thawed since Prime Minister Justin Trudeau took over. Mr. Trudeau had argued that his government's plan to make the climate file a priority would enhance Keystone's odds of approval. Mr. Obama did not offer him the courtesy of waiting.

Despite the apparent warmth between the two leaders, Mr. Trudeau's vows to pull Canada out of the U.S.-led campaign to bomb Islamic State targets in Iraq and Syria and nix plans to purchase the F-35 fighter jet for the Canadian Forces will test their budding friendship.

But one suspects Mr. Trudeau is also relieved that he no longer has to defend Keystone, a project that divides his supporters. Foreign Minister Stéphane Dion's half-hearted expression of disappointment over the Keystone decision spoke volumes. Mr. Dion, who chairs the cabinet committee on climate change, seemed more eager to concur with Mr. Obama's description of oil sands crude as "dirty oil" than to point out the flaws in the President's logic.

With "advocates" like this, it could be a while before Keystone gets a second chance.

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