Senate defeats Keystone XL pipeline

Senate rejects Keystone by one vote

The Democrat-controlled Senate failed to gather the 60 votes it needed to approve the construction of the Keystone XL pipeline. The Senate's 59-41 vote Tuesday night was a nail-biter to the end.

The Keystone XL pipeline project has been at the center of a major political debate since 2008 when TransCanda applied for permission to construct the 1,179-mile-long pipeline.

Sen. Mary Landrieu, D-La., who chairs of the Senate Energy and Natural Resources Committee, worked hard to convince holdouts that the pipeline was a good idea. She pointed to the country's long history of building pipelines as a reason to support the bill.

US Senate blocks Keystone bill -- what's next?

"What is everybody upset about?" Landrieu asked from the Senate floor on Tuesday. "We already have 2.6 million miles of pipe in America." She noted that the Keystone project would add "basically 1,000 miles."

Landrieu, who faces a runoff against Republican Rep. Bill Cassidy in her home state Dec. 6, has fought to make the issue a top priority during the lame-duck congressional session. However, critics see her efforts as a last-minute attempt to win over voters in Louisiana, where the bill has gained public support.

Read MorePrivate equity bets on 'revolution'—in oil and gas

The House passed Cassidy's version of the bill on Friday.

Earlier in the year, the State Department concluded that the project would create 42,100 jobs and about $2 billion in earnings throughout the country. However, it defined those jobs as lasting for about a year.

Proponents of the construction argue it would help the U.S., which still imports about 30 percent of its oil supply, move away from relying on energy sources in unstable areas of the world. However, environmental activist who oppose the pipeline say it would jeopardize public health and spike carbon emissions.

The White House has indicated that President Barack Obama would veto the bill if it passed.

Read MoreCracks widen at OPEC as oil prices tumble

House Speaker John Boehner told reporters earlier that a veto of a bill to approve the pipeline "would be the equivalent of calling the American people stupid."

"Let's be clear about this. A Keystone pipeline veto would send the signal that this president has no interest in listening to the American people," Boehner said during conference on Capitol Hill Tuesday. "Vetoing a overwhelmingly popular bill would be a clear indication that he doesn't care about the American people's priorities."

The 45 Republican members of the Senate support the bill, which needed a total of 60 votes to pass.

The Associated Press contributed to this report.