The proposed Keystone XL pipeline would have no significant environmental impact on most resources along its planned route, according to a draft supplementary environmental impact statement (SEIS) released earlier this month by the U.S. Department of State.

Industry groups, including the American Petroleum Institute, American Fuel & Petrochemical Manufacturers, and Association of Oil Pipelines, have praised the report’s release and are hopeful that the findings will encourage President Obama to approve the pipeline’s cross-border application. The 2,000-page report does not make any recommendations on whether the President should approve the project.

The report’s release comes after the Department announced in late 2011 that it would delay a decision on the project to study an alternative route for the pipeline. Some believe that the postponement was an effort by the Administration to avoid disappointing an important constituency in the midst of the 2012 presidential campaign.

Environmental groups dispute the report’s findings and are continuing to fight the proposal, however. Opponents contend that if the pipeline is built, it will increase carbon emissions and pose other significant environmental risks by giving producers an incentive to expand oil sands production. Despite this opposition, many observers believe that the President and his Administration will ultimately approve the pipeline.

The 875-mile pipeline proposed by TransCanada would transport more than 800,000 barrels per day of crude oil from Alberta, Canada, and the Bakken Shale Formation in Montana to facilities near Steele City, Nebraska, for delivery to the Gulf Coast region. In response to environmental concerns, the pipeline operator has revised the proposed route to avoid the Sand Hills Region in Nebraska.

The report is now subject to a 45-day public comment period.

If you have any questions, please contact any member of the Energy and Project Finance Group.

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