WASHINGTON - The Obama administration on Friday removed a major roadblock to a planned $7 billion oil pipeline from western Canada to the Texas coast, saying in a report that the project is unlikely to cause significant environmental problems during construction or operation.

The thousand-page report by the State Department says the proposed 1,700-mile Keystone XL pipeline would have no significant environmental impacts on most natural resources in its six-state path.

Calgary-based TransCanada wants to build a massive pipeline to carry crude oil extracted from tar sands in Alberta to refineries in Texas. The pipeline, which would travel through Montana, South Dakota, Nebraska, Kansas and Oklahoma, would carry an estimated 700,000 barrels of oil a day, doubling the capacity of an existing pipeline from Canada. Supporters say it could significantly reduce U.S. dependence on Middle Eastern oil.

The project has become a flashpoint for environmental groups who say the pipeline would bring "dirty oil" that requires huge amounts of energy to extract and could cause an ecological disaster in case of a spill. Opponents of the pipeline have urged the Obama administration to block the project as a sign he is serious about protecting the environment.

Several hundred activists, including actress Margot Kidder and prominent scientists, have been arrested in recent days in protests outside the White House. Organizers say the protests are the largest acts of civil disobedience centered on the environment in many years.

TransCanada maintains that the project would create tens of thousands of jobs and would be built to strict environmental standards, including 57 conditions above those required by law.

For example, the company has agreed to build much of the pipeline 4 feet below ground, instead of the usual 3 feet. Depths would increase to 25 feet below the riverbed at more than a dozen major river crossings along the proposed route, including the Yellowstone and Missouri rivers. The pipeline would be built 5 feet underground at several hundred smaller waterways.

TransCanada also said it will allow an increased number of inspections and install a greater number of safety shut-off valves than usual.

The State Department report cites those conditions as among the reasons for its confidence in the project. The report endorses the current proposed route, which has drawn criticism from officials in Nebraska and other states because it passes through the Ogallala Aquifer, an environmentally sensitive formation that provides groundwater to eight states in the Great Plains.

Kerri-Ann Jones, an assistant secretary of state, said the report was "not a rubber stamp for this project," adding, "No decision has been made."

The report, the third environmental analysis submitted by the State Department since last year, kicks off a 90-day review of whether the project is in the "national interest" before a final decision is issued by the end of the year.

If approved by Secretary of State Hillary Rodham Clinton, the pipeline could be completed in 2013. The department has authority over the project because it crosses an international boundary.

In in its analysis, the State Department dismissed concerns from environmental groups that the pipeline would increase emissions of greenhouse gases blamed for global warming. Canada's oil sands are likely to be developed with or without the pipeline, the report said, making concerns about climate change moot.

"There are alternatives to the pipeline to move that potential fuel around" to other locations, Jones said, including barges, railways and tanker ships.

The American Petroleum Institute said the report brought the pipeline one step closer to reality. Charles Drevna, president of the National Petrochemical & Refiners Association, said the pipeline would "bring American consumers a sure and steady supply of oil from our close friend and neighbor Canada."

James Hansen, a NASA scientist who was an early crusader against climate change, said allowing the Keystone XL pipeline would be like accepting a dirty needle from a fellow oil addict, Canada.

"If Obama chooses the dirty needle it will confirm that Obama was just greenwashing all along, with no real intention of solving the addiction," he said.

Online:

State Department Keystone XL site: www.keystonepipeline-xl.state.gov/clientsite/keystonexl.nsf?Open

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