A 44-page review of the pipeline published Friday by the State Department said the project is "unlikely to significantly impact the rate of extraction in oil sands."
Environmental groups say increased exploitation and production of oil sands, a more viscous form of crude oil, could lead to greater problems like higher greenhouse gas emissions. Spills from pipelines carrying Canadian crude in Michigan and Arkansas, meanwhile, raised concerns because that type of oil lingers in the environment longer than other grades.
The review found the "statistical risk of a pipeline spill" may be increased by secondary effects like flooding and there's even a greater risk of third party damage. There's only a 4 percent risk of a major pipeline spill greater than 1,000 barrels, the report said.
"This final review puts to rest any credible concerns about the pipeline's potential negative impact on the environment," Jack Gerard, president of the American Petroleum Institute, said in a statement.
TransCanada last week started sending crude oil through the Gulf Coast project, the so-called domestic leg of Keystone XL. The company didn't need what's known as a presidential permit for that section, which extends south from Cushing, Okla., because it's confined to U.S. territory.
Keystone XL would be a 1,179-mile oil pipeline running from Hardisty in Alberta, Canada, south into Nebraska. From there, it would link to a separate pipeline extension project connected to terminals in Cushing.
Supporters of the project said the State Department's decision is a victory for the U.S. economy and the American people.
"Keystone XL is exactly the infrastructure project the American people are looking for to create construction jobs and move the U.S. closer to energy security," Michael Whatley, executive vice president of the Consumer Energy Alliance, said in a statement Friday.
Sierra Club Executive Director Michael Brune, however, said he disagreed with the State Department's reporting, saying Keystone XL "fails the basic climate test."
Before the report's release, the State Department cautioned the review was not the same as an endorsement from President Obama. The president said he'd weigh the pipeline against its environmental footprint.
Jane Kleeb, executive director of pipeline opponent Bold Nebraska, said she was "confident President Obama will make the right decision and deny the permit."