Update 1:

Ed just touched on the report again - said that two high-level sources at the White House told Rolling Stone it’s not a matter of if, because the President has already decided to reject KXL, but WHEN - when to announce the rejection.

Update 2:

From Rolling Stone:

Exactly how the president has weighed the decision on Keystone is a closely guarded secret in the White House, known only to a few senior advisors like Valerie Jarrett and Dan Pfeiffer. But it’s no surprise that I was told recently by members of the administration that the pipeline would, in fact, be rejected. “If the president is really serious about his legacy on climate change, he can’t have that and approve Keystone,” an Obama insider told me. “The only question now is the timing of the announcement.”  
http://www.rollingstone.com/…

According to Ed, this is a recent update to an article posted earlier today.

Update 3:

From the comments, bobswern has found another relevant passage in the same Rolling Stonearticle:

Although no final decision has been made, two high-level sources in the Obama administration told me recently that the president has all but decided to deny the permit for the pipeline – a dramatic move that would light up Democratic voters and donors while further provoking the wrath of Big Oil. Finally, Obama is positioning the U.S. to play a key role in negotiations on a new global-climate treaty that will begin next year, establishing American leadership on climate issues and giving him one last chance to lead the world to a cooler future before he leaves the Oval Office…