The U.S. State Department's inspector general said the agency's selection of a contractor to write an environmental review of the Keystone XL pipeline didn't violate federal conflict of interest rules, a finding that removes another hurdle for the long-delayed project.

Environmental groups including Friends of the Earth had alleged that the contractor, Environmental Resources (TRP) Management, didn't disclose financial ties to TransCanada Corp., the Calgary-based pipeline company that is proposing to build Keystone.

A months-long review didn't back-up the claims.

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