The State Department said TransCanada should commission an independent study of risks to water supplies, focusing on valves and external leak detection systems.

The EPA also wanted more analysis of the lifecycle greenhouse gas emissions from the Canadian oil sands. The review found that the oil sands do not produce much more carbon dioxide than other heavy crudes such as Venezuelan oil, which is widely used in U.S. refineries.

It also said improved extraction techniques may over time cut the greenhouse gas intensity of oil sands crude compared to other oils.

(Additional reporting by Andrew Quinn and Jeff Jones in Calgary; editing by Alden Bentley)

Republished with permission.