State Dept. report favors US-Canada oil pipeline

By MATTHEW DALY | August 26, 2011 | 11:30 AM EDT

WASHINGTON (AP) — The State Department says a Canadian company's plan to pipe oil from Alberta to the U.S. Gulf Coast wouldn't cause significant environmental problems during construction or operation.

A new environmental study of the proposed $7 billion, 1,700-mile pipeline shows no new issues since a similar report was issued last year.

The report issued Friday is the third on the controversial Keystone XL pipeline, which would carry crude oil extracted from tar sands in western Canada to refineries in Texas. The pipeline would travel through Montana, South Dakota, Nebraska, Kansas and Oklahoma.

The State Department report removes a major roadblock to construction of the pipeline, but does not grant final approval. The department has authority over the project because it crosses an international boundary.