Canada's government on Tuesday approved a controversial pipeline proposal that would bring oil to the Pacific Coast for shipment to Asia, a major step in the country's efforts to diversify its oil exports if it can overcome fierce opposition from environmentalists and indigenous peoples

Approval for Enbridge's Northern Gateway project was expected as Canada needs infrastructure in place to export its growing tar sands production but hundreds of people protesting the decision blocked streets in downtown Vancouver, British Columbia. Police circulated through chanting crowds beating aboriginal drums and carrying anti-pipeline and anti-tanker banners.

The project's importance has only grown since the U.S. delayed a decision on TransCanada's Keystone XL pipeline that would take oil from Alberta to the U.S. Gulf Coast. The northern Alberta region has the world's third largest oil reserves, with 170 billion barrels of proven reserves.

Enbridge's pipeline would transport 525,000 barrels of oil a day from Alberta's oil sands to the Pacific to deliver oil to Asia, mainly energy-hungry China. About 220 large oil tankers a year would visit the Pacific coast town of Kitimat and opponents fear pipeline leaks and a potential tanker spill on the pristine Pacific coast.

Conservative Prime Minister Stephen Harper has said Canada's national interest makes the pipelines essential.

He was "profoundly disappointed" that U.S. President Barack Obama has delayed a decision on the Texas Keystone XL option, and spoke of the need to diversify Canada's oil industry. Ninety-seven percent of Canadian oil exports now go to the U.S.

The Harper government declined requests for comment on Tuesday, only issuing a statement.

Canadian Natural Resources Minister Greg Rickford said in a statement that Enbridge must meet the 209 conditions Canada's regulator imposed on the pipeline. The company has previously said it would.

Enbridge President and Chief Executive Officer Al Monaco welcomed the decision but noted "we still have some more work to do."

British Columbia Premier Christy Clark had set out five conditions for British Columbia's support, and on Tuesday she repeated her contention that those conditions have yet to be met. Environmentalists and Canada's First Nations could delay approval all the way to the Supreme Court, and the tribes still hold title to some of the land the pipeline would cross. That means the government will have to move with extreme sensitivity.

The Associated Press