It was Project Chariot, in Alaska. A good book about it is the Firecracker Boys, I recommend you read it if you are interested in the subject. I think it was cancelled because conservationists and Alaska Natives brought it to the attention of the general public, and it would have been a disaster. The proponents were perfectly willing to try it (they had their own reasons, related to the "Atoms for Peace project"/Operation Ploughshare) and did not really care a bitmuch about the long-term consequences.