Pipeline boost? Keystone XL report may disappoint project's foes

Shown here is a section of the Keystone Pipeline in North Dakota. (Reuters)

The State Department is expected to release an environmental analysis on the Keystone XL oil pipeline on Friday that may disappoint environmentalists and opponents of the proposed project, according to individuals briefed on the matter.

Congressional sources, though, made clear that the analysis is not the final word, and the review process could continue to drag on. Sources familiar with the report said it does not give a "specific recommendation" -- and other agencies will still be asked to weigh in.

The release of the long-anticipated evaluation, known as an "environmental impact statement," sets the stage for a 90-day review period.

One source said it will remain up to President Obama whether to approve it.

The report's findings were not immediately available, but government officials told Fox News the review would probably disappoint Keystone opponents who say the pipeline would carry "dirty oil" that contributes to global warming.

One source who favors building the pipeline said the study "confirms there's no reason to stand in the way of the proposal."

Obama refused to issue a permit for part of the project in 2012 amid concerns about its potential impact on a large aquifer in Nebraska. TransCanada, however, received clearance to build the southern leg of the pipeline, which runs between Oklahoma and the Gulf Coast and began shipping oil on Jan. 22.

Obama backed the southern leg of the project during a 2012 visit to a pipeyard near Cushing, Okla, describing the city as a "bottleneck" between producers and refineries along the Texas coast. Obama said then that increased oil and gas production was part of his domestic energy policy.

The State Department, which has jurisdiction over the pipeline because it crosses an international border, released a draft environmental report last March that raised no major objections to the pipeline and said other options to get the oil from Canada to U.S. Gulf Coast refineries are worse for climate change.

The State Department was required to conduct a new environmental analysis after the pipeline's operator, Calgary-based TransCanada, changed the project's route though Nebraska.

TransCanada has agreed to implement 57 voluntary safety measures for Keystone XL in a bid to convince U.S. officials that the pipeline is a good risk.

"We are hopeful the report on Keystone XL is released soon," Shawn Howard, a company spokesman said late Thursday. "Fifteen thousand pages of scientific and technical study published in four environmental analysis reports since 2010 have all concluded this project would have minimal impact on the environment. We don't see how the final report would come to a different conclusion."

Republicans who want Keystone XL to go forward have claimed Obama could with the stroke of a pen help achieve energy independence for North America and create thousands of jobs — a claim that has been disputed by the project's critics because the number of permanent jobs isn't known.

Rep. James Lankford, R-Okla., said the absence of the Keystone project in Obama's State of the Union address on Tuesday was "conspicuous," especially since the president did talk about expediting permits and streamlining bureaucracy dealing with energy projects.

"The clearest form of bureaucratic mess is that pipeline has been almost 2,000 days in the making, just for a permit that happens to be sitting on his desk," Lankford said in a statement to The Associated Press this week.

Sen. Jim Inhofe, R-Okla., said Keystone wasn't mentioned during the speech because the president's "environmental base is keeping him anchored to the losing side of this argument."

"The southern leg of the pipeline has been constructed, starting in the heart of Cushing, Okla., and is already moving to the market vast amounts of resources that are being produced in our country's current energy boom," Inhofe said in a statement. "Like Americans across the country, I call on the president to stop blocking construction of the northern leg of the Keystone pipeline."

Fox News' Mike Emanuel, Kelly Chernenkoff and The Associated Press contributed to this report.