(This post last updated at 6:57pm.)

So reports the Washington Post. With an asterisk.

The Obama administration will announce this afternoon it is rejecting a Canadian firm’s application for a permit to build and operate a massive oil pipeline across the U.S.-Canada border, according to sources who have been briefed on the matter. However the administration will allow TransCanada to reapply after it develops an alternate route through the sensitive habitat of Nebraska’s Sandhills.

The Prime Minister’s last comments on Keystone came Monday in his interview with the CBC.

I think what’s happened around the Keystone is a wakeup call, the degree to which we are dependent or possibly held hostage to decisions in the United States, and especially decisions that may be made for very bad political reasons. So I think that just … it puts an emphasis on the fact that we must perform our regulatory processes to get timely decisions on diversification of our markets.

Update 2:03pm. Maybe “rejected” is too simplistic a characterization. The New York Times has the project “on hold.”

The administration has until Feb. 21 to decide the fate of the 1,700-mile pipeline to carry heavy crude oil from formations in Alberta, Canada, to refineries on the Gulf Coast. Officials are expected to announce that they cannot meet that deadline and that they are looking for ways to complete a thorough environmental review before making a final decision on the project … The State Department is expected to say that routing, environmental and safety concerns raised by the project are too complex to be decided on that abbreviated timetable and is recommending that President Obama reject it for the time being.

Update 3:17pm. And here is the official statement from the U.S. State Department.

Today, the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest. The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest.

Update 3:28pm. A note from the Prime Minister’s Office on Mr. Harper’s conversation with Mr. Obama. Continue…