The United States senate has rejected a bill which would allow a controversial Canada-to-Texas oil pipeline to be completed.

The Keystone XL pipeline is at the centre of a fierce environmental dispute. The pipeline would transport oil from the tar sands in Western Canada to the Gulf of Mexico. Tar sands oil is considered to be one of the world’s most polluting fuels and those opposed to the pipeline say it would harm ecosystems, pollute water sources and spike levels of carbon dioxide emissions.

Those in favour say it would create thousands of jobs.

President Obama had opposed the legislation and was widely expected to veto it if passed.

In the end the Senate voted 59-41 in favour, falling short of the 60 votes needed.

US Republican Senator, John Hoeven, who was a lead sponsor of the bill said: “Well we are disappointed, we knew it was going to be tough to get the 60 vote threshold, we’ve had 59 as you are aware of. I thought we might get 60 or 61, didn’t happen, but all along, as we’ve said, we knew we would be in the new Congress on this issue, because the president has made it clear, he is going to veto this bill.”

Republicans, who will control both chambers of the new Congress from January say they plan resurrect the issue next year.