Keystone Pipeline Report Boosts Supporters, Deflates Environmentalists

By Capitol Hill Reporter Lisa Desjardins

WASHINGTON (CNN) -- A new State Department report on the Keystone XL pipeline released Wednesday cheered advocates, who called for immediate approval, and dismayed environmentalists, who questioned it.

The Office of the Inspector General's report essentially boosted a critical document in the debate -- the State Department's environmental review, which forecast that the project would have minimal environmental impact. The inspector general dismissed complaints that the review was biased, finding it was handled properly, with standards sometimes "more rigorous" than required.

Environmental groups complained that some contractors who worked on the environmental study had also done work for TransCanada, the company which hopes to build the pipeline.

The inspector general found that the State Department should have disclosed more information about its contractors, but otherwise there is no evidence of bias or improper activity.

That means the environmental review, which is seen as more positive than negative for the pipeline, has cleared an important hurdle.

Conservatives and the oil industry quickly applauded.

"Another government report that finds no reason to continue blocking this commonsense, job-creating project," wrote Brendan Buck, spokesman for House Speaker John Boehner, in a statement. "It's long past time the president ... just approve it."

"Another report, another clean bill of health," echoed House Foreign Affairs Chairman Ed Royce, R-California, in a statement.

"After more than five years, all the excuses not to build Keystone XL have been exhausted," said the American Petroleum Institute's Cindy Schild.

But environmentalists saw the inspector general's report as another sign of serious flaws in the review process.

The group Friends of the Earth, which raised some of the initial complaints, pointed to the methods used by the inspector general's office in this latest report.

"Its conclusion that the agency followed its procedure seems to rest mainly on interviews with State Department lawyers who, the report points out, never documented all of the supposed due diligence they were conducting," Friends of the Earth President Erich Pica said in a statement.

"In the meantime, President Obama has more than enough information to deny the pipeline, and we remain confident that he will do so," Pica wrote.

This report is the last new federal document expected before a decision on Keystone.

The State Department's environmental report is under a 90-day review that ends in May. At that point, Secretary of State John Kerry is expected to make a recommendation on the project to Obama.