A State Department review of Keystone XL found the environmental risks from the pipeline would be minimal. Pipeline critics raised doubts because the pipeline assessment's contractor, Environmental Resources Management, had ties to TransCanada, the company planning the pipeline.
The U.S. State Department Inspector General said it found no conflict of interest in its assessment of ERM.
Sierra Club Executive Director Michael Brune said in a statement Wednesday the latest development does little to erase environmental concerns. He said the State Department's "industry insider consultants ... virtually ignored" some of President Obama's own climate action plans.
Scott Parkin, a climate campaigner at Rainforest Action Network, said the inspector general's report will be used by pipeline supporters to "prop up the legitimacy of the oil-soaked approval process."
Cindy Schild, a senior manager at the American Petroleum Institute, however, said the inspector general's report clears another hurdle in the Keystone XL approval process.
"After more than five years, all the excuses not to build Keystone XL have been exhausted," she said in a statement.
TransCanada suffered a setback earlier this month when a judge in Nebraska ruled Gov. Dave Heineman exceeded his authority when he signed off on the pipeline's modified route through the state. TransCanada was forced to revise the original route to avoid a sensitive ecosystem.