The State Department has issued its long-awaited report on the environmental impact of the Keystone XL pipeline. It listed no major environmental objections to the construction of the line, which would transport oil derived from tar sands in western Canada to a hub in Nebraska, where it would connect with other pipelines that would take the oil to the Gulf Coast of Texas.

That would appear to give cover to President Barack Obama, who said last summer that he would approve the pipeline if it did not “significantly exacerbate” greenhouse gas emissions, according to The New York Times. The State Department and Obama must approve construction of the pipeline because it crosses an international border.

Some environmental activists question the report’s validity, saying that the contractor hired to prepare an earlier draft of it has ties to TransCanada, the company hoping to build the pipeline. The State Department’s inspector general investigated ERM Group’s financial links to TransCanada, according to The Washington Post. But the IG refused to release its findings on that matter.

The State Department had asked TransCanada to provide names of consultants with whom the company had not worked or worked only in a limited capacity, according to a report by BuzzFeed. One of the companies named was ERM. It was later reported in Mother Jones magazine that ERM’s second-in-command on the project, Andrew Bielakowski, had previously worked for TransCanada on three pipeline projects.

“In what could be perceived as eagerness to please the oil industry and Canadian government, the State Department is issuing this report amidst an ongoing investigation into conflicts of interest, and lying, by its contractor,” said Erich Pica, president of the Friends of the Earth environmental group. “It is unacceptable that the oil industry and a foreign government are better informed than the American Congress and its citizenry.”

The report did say that the pipeline proposed would be “likely to adversely affect the American burying beetle.” Last year, an Interior Department letter said the draft report didn’t take into account long-term effects to wildlife.

“The question going into the State Department’s final environmental impact statement is this: Who will State listen to?” Jim Murphy, senior counsel at the National Wildlife Federation, said in a statement. “Will State reverse course after listening to the Environmental Protection Agency experts who criticized the first draft as ‘inadequate’ and the second draft as ‘insufficient’ on climate impacts, oil spill risks, and threats to water resources?”

The report said the tar sands oil fields in Canada would continue to be developed if the pipeline is not built. In that case, oil would be shipped to Texas via rail, which would cause more greenhouse gas emissions than shipping via pipeline.

Pipeline proponents say the construction and operation of the line will create jobs. However, some studies indicate that only 3,900 to 20,000 short-term jobs would be created during construction, and about 35 permanent jobs would be created to operate the line.

A White House spokesman said no decision would be made on the construction until various federal agencies and the public had had a chance to comment on the pipeline.

-Steve Straehley

To Learn More:

State Department IG Won’t Release Keystone XL Report on a Contractor Friday (by Juliet Eilperin, Washington Post)

New Documents Raise Questions About Keystone Environmental Study (by Evan McMorris-Santoro, BuzzFeed)

Keystone XL Oil Pipeline Clears Significant Hurdle (by Matthew Daly, Associated Press)

Interior Dept. Clashes with State Dept. over Impact of Keystone Pipeline on Wildlife (by Noel Brinkerhoff, AllGov)