• Review: no significant effect on carbon emissions likely • Campaigners hope Obama will say no to crude-oil project

The Keystone XL, a mundane pipeline project that escalated into a bitter proxy war over climate change and North America's energy future, moved one important step closer to reality on Friday.

The State Department, in its final environmental review of the project, concluded that the pipeline, which would carry crude from the Alberta tar sands in Canada to refineries on the Texas Gulf coast, would not – on its own – have a “significant” effect on carbon pollution.

The report acknowledged that crude from the tar sands was 17% more carbon intensive than conventional oil. But it said that did not mean that the project on its own would worsen climate change by expanding production from the tar sands.

“The approval or denial of any single given project is unlikely to significantly affect the extraction of the oil sands,” Kerri-Ann Jones, assistant secretary of state, said during a conference call with reporters.

The finding clears the way for President Barack Obama to approve a project that has became a highly charged symbol of the fight over North America's energy future. But he is under no deadline. The State Department said that the environmental impact statement it released on Friday was not an automatic guarantee Keystone XL would be completed.

“It's only part of what we need to look at in order to make this important decision,” Jones said. She said that the decision-making process would also examine issues of energy security, foreign policy and economic interests, along with climate change.

Eight government agencies and the public now have 90 days to weigh in on the project. Secretary of State John Kerry, who worked on climate change for years in the Senate, will also have a say. The final decision rests with Obama, who will determine whether Keystone XL is in the US national interest.

But after five years of wrangling and delays, it now appears increasingly likely that TransCanada will be able to build the pipeline.

“If anything I would hope we would see a shorter time frame rather than a longer time frame,” Russ Girling, TransCanada's chief executive, told reporters. “My view is that the 90 days could be truncated significantly because I do believe that a lot of the inter-agency consultation has already taken place.”

Girling said it would take two full years to build the pipeline, once it had final approval.

The State Department, in Friday's report, essentially concluded that Keystone would have little material effect on greenhouse gas emissions and that Canada would continue to develop and ship tar sands crude with or without the pipeline.

“Approval or denial of any one crude oil transport project, including the proposed project, is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude at refineries in the United States,” the review said.

The review included models suggesting that transporting oil by rail would generate even more greenhouse gas emissions than a pipeline, and also discussed measures to reduce greenhouse gas emissions from the pipeline.

“The facts do support this project. The science continues to show that this project can and will be built safely,” Girling said. “It will have a minimal effect on the environment and it will not significantly impact carbon emissions.”

The finding came as a bitter disappointment to environmental groups and some Democratic members of Congress, who had urged Obama to reject the pipeline.

“Even though the State Department continues to downplay clear evidence that the Keystone XL pipeline would lead to tar sands expansion and significantly worsen carbon pollution, it has, for the first time, acknowledged that the proposed project could accelerate climate change,” said Susan Casey-Lefkowitz, a campaigner for the Natural Resources Defence Council.

“Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate. This is absolutely not in our national interest.”

The campaign against Keystone XL has become a national movement over the last three years, with environmental activists, Nebraska landowners and hedge fund managers all coming out against the project. In 2012, Obama, under pressure from landowners concerned about underground water sources and sensitive prairie, rejected the first proposed route for the pipeline across Nebraska.

The White House continued to come under pressure from environmental campaigners. Former hedge fund manager Tom Steyer took out television ads on Tuesday, the night of Obama's state of the union address, attacking Keystone XL, and other wealthy Democratic donors wrote open letters to the White House seeking to shut down the project.

The pipeline would eventually double the amount of crude oil being shipped from Alberta's tar sands.

Facebook Twitter Pinterest Protesters against the Keystone XL oil pipeline have made their presence known. Photograph: Yuri Gripas/Reuters

Campaign groups argued it would open up a vast store of carbon and tie North America more closely to a fossil fuel future. The climate scientist James Hansen said building Keystone XL would be “game over” for the planet.

Industry groups and supporters said the project would help protect America's energy supplies and provide jobs. Republicans in Congress – joined by some Democrats in conservative or oil-producing states – put forward legislation to compel Obama to move on the pipeline. They also warned that rejection of Keystone XL would damage relations with Canada, which has lobbied hard for the project.

Canada's prime minister, Stephen Harper, built his economic strategy around natural resource extraction – despite its toll on the climate. The Canadian government, in a report to the United Nations last September, estimated its carbon emissions will soar 38% by 2030, largely because of the development of the tar sands.

Others argued that opponents had oversold the importance of Keystone XL as a contributor to future climate change. They said Obama's commitment to cutting carbon pollution from power plants – the single biggest source of carbon dioxide emissions – would have a far greater impact on the climate.

Obama said last June that he would base his decision on the project's carbon pollution impacts.

Some campaigners said they hoped Friday's finding would still provide enough leeway for a refusal.

“The State Department has given Obama all the room he needs to do what he promised in both campaigns: to take serious steps against global warming," said Bill McKibben, the co-founder of 350.org, which led the fight against the pipeline. “Now we'll see if he's good for his word.”

But Obama has been consistent in trying to move on climate change while expanding fossil fuel development, much to the frustration of campaigners who say the two policies are incompatible. In his state of the union address, Obama gave strong support to natural gas development, but made no mention of Keystone.

The State Department had conducted two earlier environmental reviews of the project. Last March, it found that if Obama rejected the pipeline Alberta crude would go to market by rail or other pipelines. But it revisited the issue under criticism from the Environmental Protection Agency, which said the early reviews had not been broad enough.

The State Department is awaiting a separate report from its inspector general, into allegations by environmental groups that a contractor's review was biased because of connections to TransCanada and the oil industry.

“It seems like it's been very influenced by industry and that's highly problematic,” said Scott Parkin, senior campaigner at Rainforest Action Network.

Activists immediately called a series of protests against the decision.

Nearly 80,000 people have signed up to commit civil disobedience to stop approval of the pipeline, said Elijah Zarlin, senior campaign manager at Credo.

“If the State Department is recommending to the president that this is in the national interest, that would trigger action,” he said.