31 January 2014
Last updated at 16:54 ET
Crews have already begun construction of portions of the pipeline in the US state of Texas
The proposed pipeline is unlikely to accelerate the pace of Canadian oil sands development, the report found.
Environmentalists say the project would increase carbon emissions, contribute to global warming, and risk spills along its route.
It is unclear whether President Barack Obama will now back its construction.
In an environmental impact statement released on Friday, the US state department said that approval of the project "is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices".
Political debate
Rather, it is described as a technical assessment of the project's environmental impact.
If it is approved by the White House and permitted for construction, it would connect to already-built US pipelines to transport more than 830,000 barrels of crude oil daily to Texas refineries.
It would be built by TransCanada Corp, which first applied for a permit from the US government in 2008.
TransCanada chief executive Russ Girling said on Friday he was "very pleased" with the report's findings.
The project, estimated at $7bn (£4.26bn), has become a source of significant political debate, with environmental advocacy groups saying it would contribute to global warming and pleading with Mr Obama to block it.
Environmental groups say oil extracted from tar sands produces more greenhouse gas emissions than conventional crude oil and must be more extensively refined to be turned into fuel.
The pipeline would also threaten leaks and spills along its route through the US, its opponents say.
Meanwhile, the opposition Republicans have long supported the initiative, saying it would boost the US economy, create jobs, and reduce North America's dependence on foreign oil.
The approval process has been mired in Washington politics, with the Republicans aiming to force Mr Obama's hand.
The White House stalled the project in 2011 amid concerns it would damage the environment along the route, and Mr Obama has yet to endorse it.
The US state department approval is required for the initiative as the pipeline crosses the US border.
National interest
Report: Keystone XL pipeline 'won't boost oil sands use'
Crews have already begun construction of portions of the pipeline in the US state of Texas
The
US state department has raised no major environmental objections to the
Keystone XL oil pipeline from Canada, according to a new report.
Environmentalists say the project would increase carbon emissions, contribute to global warming, and risk spills along its route.
It is unclear whether President Barack Obama will now back its construction.
In an environmental impact statement released on Friday, the US state department said that approval of the project "is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices".
Political debate
Continue reading the main story
Susan Casey-Lefkowitz National Resources Defense Council"Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate”
The report does not directly
recommend approval of the 1,408km (875 mile) pipeline, which would carry
oil from the western Canadian tar sands region to Nebraska.
If it is approved by the White House and permitted for construction, it would connect to already-built US pipelines to transport more than 830,000 barrels of crude oil daily to Texas refineries.
It would be built by TransCanada Corp, which first applied for a permit from the US government in 2008.
TransCanada chief executive Russ Girling said on Friday he was "very pleased" with the report's findings.
The project, estimated at $7bn (£4.26bn), has become a source of significant political debate, with environmental advocacy groups saying it would contribute to global warming and pleading with Mr Obama to block it.
Environmental groups say oil extracted from tar sands produces more greenhouse gas emissions than conventional crude oil and must be more extensively refined to be turned into fuel.
The pipeline would also threaten leaks and spills along its route through the US, its opponents say.
Meanwhile, the opposition Republicans have long supported the initiative, saying it would boost the US economy, create jobs, and reduce North America's dependence on foreign oil.
The approval process has been mired in Washington politics, with the Republicans aiming to force Mr Obama's hand.
The White House stalled the project in 2011 amid concerns it would damage the environment along the route, and Mr Obama has yet to endorse it.
The US state department approval is required for the initiative as the pipeline crosses the US border.
National interest
Now, other US agencies including the Environmental Protection
Agency have 90 days to comment before the state department issues its
final recommendation to Mr Obama.
A decision is not expected for several months.
Environmental groups condemned the report.
The National Resources Defense Council said it was "absolutely not in our national interest" to allow its construction.
"Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate," the council's international programme director, Susan Casey-Lefkowitz, said.
A decision is not expected for several months.
Environmental groups condemned the report.
The National Resources Defense Council said it was "absolutely not in our national interest" to allow its construction.
"Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate," the council's international programme director, Susan Casey-Lefkowitz, said.
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