The US State Department suggested Friday that a $5.3 billion Canada-to-Texas oil pipeline would have no major impact on the environment, but stopped short of recommending it be approved.
The lengthy draft environmental impact statement examines how the Keystone XL Project could affect wildlife and surrounding areas as it crosses from the tar-sands of Alberta in Canada and travels 875 miles (1,408 kilometers) south.
The fate of the proposed pipeline, which many environmentalists fear could be damaging, is still awaiting approval from the State Department.
"The analyses of potential impacts associated with construction and normal operation of the proposed project suggest that there would be no significant impacts to most resources along the proposed Project route," the report said.
But it qualified its remarks by saying Keystone operators, TransCanada, would have to meet all the measures it has vowed to implement to mitigate any harm from the project.
The new report will launch a 45-day period for public comments, after which a final decision will be taken, US officials said.
"It really has no recommendations one way or the other. At this point we are looking at this very, very objectively" said Kerri-Ann Jones, assistant secretary for Oceans and International Environmental and Scientific Affairs.
"We want to make sure we serve the best interests of our country and so we are really taking a thorough look, and we waiting for everyone to comment and to give us their feedback."
President Barack Obama denied approval for an initial project last year in part due to criticism in Nebraska, where the proposed route would have crossed an area of sensitive wetlands and extensive areas of shallow groundwater.
TransCanada submitted a new route which avoids that Sand Hills region, but still traverses an area known as the High Plains Aquifer. Nebraska lifted its objections to the pipeline in January.
Environmental groups however were angered Friday that the Keystone project was still on the table.
"Oil spills, environmental damage, wildlife put in harm's way, a doubling-down on the climate crisis: It's hard to understand why the Obama government is even considering this project," said Bill Snape, of the Center from Biological Diversity, in a statement.
He said that the existing Keystone tar sands pipeline, which runs from Hardisty in Alberta to refineries in Illinois, has leaked 14 times since it came into operation in June 2010, including one spill of 24,000 gallons.
And the Natural Resources Defense Council said that the report had "numerous major flaws" and was "trying to duck the significant climate implications of this project."
TransCanada has argued though that the project would bring much needed jobs and boost America's desire to be increasingly energy self-sufficient.
Canadian officials said they were reviewing the complex State Department document, but Natural Resources Minister Joe Oliver said the pipeline "will create tens of thousands of jobs on both sides of the border."
"This project will replace oil from Venezuela and the Middle East with a stable continental supply, including from the oil sands and improve the energy security of North America," he added.
Some 42,100 jobs would be created over the one-to-two year construction period, the US report said, leading to $2.05 billion in earnings. However, in the long-term the project would create only 35 to 50 permanent jobs.
The State Department's report found that "after construction, the proposed pipeline would not obstruct flows over designated floodplains" in Montana, South Dakota and Nebraska.
It did find however that 24 protected or endangered species, including the whooping crane and the greater sage grouse, could face a loss of habitat or reduced food.
The pipeline would also "adversely affect" the American burying beetle.
It would cross the US-Canada border at Morgan, Montana and then travel to Nebraska where it will join up with existing pipeline facilities to shepherd the oil onward to Oklahoma and Texas.
The technical review released on Friday did acknowledge that US water resources could be tainted if there were any oil spills.