The U.S. State Department has released an environmental assessment of TransCanada's proposed Keystone XL pipeline, which says the project won't lead to increases in Alberta's oilsands development.

The pipeline "remains unlikely to significantly impact the rate of development of the oilsands or the demand for heavy crude oil in the United States," a State Department official told reporters in a conference call Friday.

The pipeline also doesn’t pose any greater risk to the environment than other modes of transporting oil across North America, said Kerri-Ann Jones, an assistant secretary at the department.

The finding may help TransCanada clear a major hurdle in its efforts to get approval from the White House for the project.

The proposed $7-billion pipeline would transport crude oil from the Alberta oilsands through Saskatchewan and six U.S. states to Texas refineries on the Gulf Coast.

Last year, U.S. President Barack Obama rejected TransCanada's original permit application for the pipeline, saying a rushed deadline set by congressional Republicans did not give lawmakers enough time to properly review the proposal.

Concerns were raised about the pipeline’s presence in environmentally sensitive areas of Nebraska so TransCanada was invited to submit another application with a different route.

Now, it’s up to Obama to approve or deny the Calgary-based company’s revised Keystone XL plan.

But first, there will be a 45-day public input period, during which Americans and Canadians will be able to have their say on the pipeline, either at public meetings or by sending emails and letters to the U.S. State Department.

Officials stressed that they are looking at the project “very objectively” and that’s why the department’s draft environmental assessment, released Friday, does not endorse or reject the pipeline. A final report will be done after the public hearings.

The lengthy document identifies a number of environmental risks associated with the project, including possible soil and groundwater contamination.

But it also says the potential impacts would be mitigated by safety measures and construction methods designed to reduce the risk of soil erosion, oil spills and other dangers.

Environmental groups expressed their disappointment with the draft report Friday and questioned how it could suggest that Keystone XL would not have a large impact on Alberta’s oilsands.

“It’s pretty clear they missed the mark on the massive expansion of tar sands production in Canada that this pipeline will facilitate,” Adam Scott of Environmental Defence told CTV’s Power Play. “A pipeline that can carry close to a million barrels per day is going to have a huge impact.

“We’re really very confused by how they can conclude that there’s little environmental impact from something like this. It’s massive.”

John Bennett, executive director of the Sierra Club, told CTV News Channel that his organization will be writing to the U.S. State Department about its report, stressing how “carbon-intensive” oilsands production is.

But the president and CEO of TransCanada says the draft report affirms what the company has been saying all along – that the pipeline is a safe and efficient way to transport oil.

“No stone has gone unturned,” Russ Girling said of the environmental review. “We have addressed every possible issue.”

Girling said the State Department’s draft report is a “pretty significant step” towards building a pipeline that is “very much needed.”

Despite the lengthy review process, Girling said construction could still begin by the end of 2014 or early 2015, depending on when the final report is released in the U.S.

Alberta Premier Alison Redford welcomed the report and “further progress towards a decision on the Keystone XL pipeline.”

“As the safest, most secure and responsible energy supplier to the U.S., Alberta applauds the U.S. Administration for the extensive, exacting and comprehensive review of potential environmental impacts from the project,” she said in a statement.

Redford has travelled to the U.S. to drum up support for the pipeline, meeting with 19 state governors to tout Keystone XL as a boost to the economies of both countries and a reliable supplier of oil.

But the U.S. Department’s report suggests that the U.S. doesn’t really need Keystone XL to meet its energy needs, pointing out that rail transport of oil from Western Canada and America’s Great Plains could provide enough oil over the next decade.

Saskatchewan Premier Brad Wall, who is travelling to Washington next week, has also promised to urge U.S. lawmakers to approve the pipeline. He has already written to Obama about the issue.

But environmentalists have described the proposed project as “dirty oil” and protested the pipeline in front of the White House earlier this month. Actress Daryl Hannah and Robert F. Kennedy Jr., John F. Kennedy’s nephew, were among those arrested during one of the demonstrations.

With files from The Canadian Press