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Updated: Fri, 31 Jan 2014 13:33:04 GMT | By Alexander Panetta, The Canadian Press,

Keystone XL study results due Friday: report

WASHINGTON - Two national capitals are abuzz over expectations that a long-awaited report will be released on the Keystone XL pipeline.

Keystone XL study results due Friday: report

In this March 22, 2012 photo, President Barack Obama speaks at the TransCanada Pipe Yard in Cushing, Okla. THE CANADIAN PRESS/AP, LM Otero

WASHINGTON - Two national capitals are abuzz over expectations that a long-awaited report will be released on the Keystone XL pipeline.

In Ottawa, the Canadian government is prepared to respond to the U.S. State Department's environmental impact statement. In Washington, media reports say the document will be released this afternoon.

The report is not the final step in the years-long battle — but it could prove crucial in determining whether the project goes ahead.

The Canadian government is expecting the report to be released at 3 p.m. ET and plans a news conference for 3:45 p.m. to offer its comments.

Canadians are expecting good news.

Several federal sources, including diplomats in Washington and officials in Ottawa, say they've heard that the review won't be all that different from the last one by the State Department — meaning that it's expected to conclude that the pipeline wouldn't result in a dramatic increase in greenhouse-gas emissions.

That question of greenhouse-gas emissions is precisely what President Barack Obama has said will determine whether he approves the TransCanada Corp. (TSX:TRP) pipeline.

One diplomat told The Canadian Press this week that the results are "going to be positive for the project — and therefore positive for Canada."

Once the State Department review is in, there will be a 90-day national-interest determination period that will conclude with the dilemma ultimately landing on the president's desk.

Obama has been torn on this file.

He has been squeezed on one end by activists within his party, some of them extremely wealthy donors, and on the other by powerful economic interests and criticism that the stalling has undermined his goal of creating jobs.

The Canadian government has become increasingly strident in demanding an answer soon. Foreign Affairs Minister John Baird was in Washington recently pleading for a prompt reply, saying he didn't want to see another construction season wasted.

The company has complained of having lost money while its already-purchased materials for the pipeline sit idle. Pipeline workers, meanwhile, have complained that the uncertainty has hurt them financially.

But there has been vigorous opposition from a group of Nebraska landowners who say the financial benefit, for them, doesn't come close to matching the risk to their soil and water, let alone the impact of oil on greenhouse gases.

The contested route would complete an existing pipeline and carry oil from Alberta and the northern U.S. to Texas refineries. The project is designed to increase Canadian pipeline capacity in the U.S. by about one-quarter, to 2.4 million barrels per day.

Environmentalists, bracing for a setback, have already issued a news release warning that the fight is not over.

In a joint statement Friday, nine U.S. groups noted that other government agencies including the Environmental Protection Agency and the Department of Interior, which have expressed concern about the project, will now have a chance to weigh in.

It added the president has also occasionally expressed doubt about Keystone. Notably, he has brushed aside the job-creation claims as an exaggeration. The pipeline would create thousands of well-paying jobs, but the vast majority would only last a year or two.

"The final decision will, as it always has, fall to President Obama," the statement said. "The president has made it clear that he will reject the pipeline if it significantly increases climate pollution, has reiterated that the pipeline is not a jobs plan, and has expressed concern about the water issues in Nebraska."

Nebraska rancher Randy Thomspon added: "The facts have not changed: the Keystone XL pipeline is all risk and no reward — for landowners like me, and for anyone who is not a Big Oil executive. When the State Department corrects its previous flawed analysis and acknowledges the risks to water and climate, President Obama will have all of the information he needs to reject this risky pipeline."

Once the results are out, eight U.S. agencies will examine them, then send their observations to Secretary of State John Kerry. Obama would then decide whether or not to approve the pipeline.

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