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U.S. Secretary of State John Kerry is leading a regulatory review of TransCanada Corp.’s Keystone XL pipeline proposal.Tony Gutierrez/The Associated Press

An influential liberal think tank is urging President Barack Obama to reject TransCanada Corp.'s plan to build the Keystone XL pipeline, dismissing the State Department's conclusion that the project won't lead to higher greenhouse gas emissions from the oil sands.

In a comment submitted to the department released Monday, the Center for American Progress (CAP) challenged the assumption that the project would have little impact on the amount of future investment or production from Alberta's carbon-intensive oil sector, noting that the Canadian government and many independent analysts have said all proposed pipelines are needed to get the anticipated volume of crude to market.

"After a careful review of the [State Department's] final supplemental Environmental Impact Statement and other outside evidence, we conclude that the approval of the Keystone pipeline permit will lead to a significant increase in carbon pollution, while creating relatively few jobs," the Washington-based think-tank said. "Therefore, we strongly recommend the disapproval of the pipeline's permit application."

CAP plays on the left side of Democratic Party policy making. Its founder and former chair is John Podesta, who is now serving as senior environmental adviser to President Obama. When he was appointed in December, Mr. Podesta said he would recuse himself from the Keystone XL deliberations because he publicly opposed the project while serving at CAP, though he has been pushing the president's climate agenda in other areas.

Billionaire Democratic fundraiser Tom Steyer – who has campaigned aggressively against Keystone XL – is a CAP director.

Federal Natural Resources Minister Joe Oliver and TransCanada chief executive officer Russ Girling both expressed confidence last week that the White House would approve Keystone XL, and are hopeful a decision will come by early summer.

In the environmental assessment released in late January, the State Department concluded that "approval or denial of any single [pipeline] project is unlikely to significantly affect the development of the oil sands," and hence, the production of greenhouse gases from Alberta. That was the key benchmark set by Mr. Obama in a speech last summer.

The Canadian government underscored the department's finding with respect to GHGs in its submission that was sent last week to Secretary of State John Kerry. It said reliance on rail would entail greater safety risks and more environmental impact. The pipeline would be the "safest, most economic and least GHG intensive method available," the letter from Ambassador Gary Doer said.

But echoing environmental activists, the Center for American Progress said it is not credible to suggest there would be no impact on the pace of oil-sands development from the construction of an 830,000-barrel-per-day pipeline to the massive Gulf Coast refining market that is particularly suited for processing the diluted bitumen.

And it rejected the argument that rail could fill the gap if the pipeline was denied. Far less crude reached the U.S. Gulf Coast by rail last year than the State Department review had been expecting, while safety concerns could slow the expansion and increase the cost of rail.

CAP's director of climate strategy, Daniel Weiss, said Canadian optimism about a pending approval may be misplaced. He noted Secretary of State John Kerry will play a major role in the decision-making, and Mr. Kerry has ratcheted up his department's activism on climate change since taking office.

"If the United States were to disapprove of the pipeline it would send shock waves across the world's energy industry and signal that the time for business-as-usual is over when it comes to climate change," he said.