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Canada confident Keystone pipeline will be approved after US State department report released

TORONTO - Canada's Natural Resources Minister said he remains "more confident" that the Keystone XL pipeline will be approved after the U.S. State Department raised no major environmental objections to the long-delayed project in a report released Friday.

Joe Oliver urged the Obama administration to make a "timely decision," noting the United States has been studying the pipeline for five years. He said the latest federal study was the fifth on its environmental impact and said each report has stated that the pipeline would not adversely affect the environment.

"This is a positive step on the route to approval," Oliver said. "We hope and expect the final decision will be positive."

The State Department report said the Canadian oil sands are likely to be developed regardless of U.S. action on the pipeline and other options to get the oil from Canada to Gulf Coast refineries — including rail, trucks and barges — would be worse for climate change.

"The report concludes that not building this project would result in emissions that are 28 to 42 per cent higher than if the project is built," Oliver said.

Canada has also warned if no new pipelines are built Canadian oil would instead be shipped to the U.S. Gulf Coast by rail, a more dangerous method of transporting it.

Concerns have been raised about the increasing use of rail to transport oil throughout North America. Several recent derailments have worried both officials and residents close to rail lines. In July of last year, 47 people were killed in Lac-Megantic, Quebec, when a train with 72 oil tankers derailed and exploded, destroying the small community's downtown.

Calgary, Alberta-based TransCanada's pipeline would carry 800,000 barrels of oil a day from Alberta and the U.S. Bakken across six U.S. states to refineries in the Texas Gulf Coast.

Obama's initial rejection of the pipeline went over badly in Canada, which relies on the U.S. for 97 per cent of its energy exports. The pipeline is critical to Canada, which needs more infrastructure to export its growing oil sands production. Alberta has the world's third largest oil reserves.

TransCanada chief executive Russ Girling said Friday they are "very pleased" with the report and called it "another important milestone."

Alex Pourbaix, TransCanada's President of energy and oil pipelines, said the latest study has a much more robust analysis of the impact of other modes of transportation and noted it backs up their contention that a pipeline it is a safer way of transporting oil. Girling has said if the Obama administration doesn't approve the pipeline he will look to the more dangerous alternative of building build rail terminals in Alberta and Oklahoma.

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