WASHINGTON (Dow Jones)
U.S. environmental officials are criticizing the State Department for its draft analysis of a controversial oil pipeline that TransCanada Corp. (TRP, TRP.T) wants to build between Canada and the U.S. Gulf Coast.
In a letter to State Department officials this week, the Environmental Protection Agency said the department failed to consider some of the pipeline's oil spill risks and didn't fully explore methods for reducing greenhouse gas emissions.
EPA said the State Department needed to conduct an additional review of these and other issues before deciding whether to allow TransCanada to proceed with its Keystone XL pipeline project.
"We have a number of concerns regarding the potential environmental impacts of the proposed project, as well as the level of analysis and information provided concerning those impacts," the EPA said.
TransCanada spokesman Terry Cunha said the company was still reviewing the EPA's comments, but that "in general, we believe the Department of State has done a fairly thorough job in reviewing the project."
The State Department, meanwhile, "will take EPA's concerns into consideration as we organize and incorporate the more than 100,000 comments received" on the draft analysis, a department spokesman said.
Last week, U.S. transportation officials barred TransCanada from restarting flow through an existing portion of its Keystone pipeline until the company resolved issues that led to the pipeline leaking twice in one month. Officials approved TransCanada's plan to restart the pipeline on Saturday.
The State Department is reviewing TransCanada's proposal to build a 1,700-mile extension of the Keystone pipeline system that would pass through Montana, South Dakota and Nebraska, among other states. The department is trying to determine whether the pipeline serves the U.S.'s national interest. It plans to make a decision on a permit before the end of the year.
Environmental groups have opposed the Keystone XL project and said EPA's most recent comments could undermine TransCanada's effort to secure a permit.
The EPA's comments were directed toward a supplemental draft review the State Department had conducted. The State Department intends to issue a final environmental review later this year.
The EPA also criticized an earlier version of the department's environmental review in 2010, saying that review failed to adequately address some potential environmental impacts.
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