UPDATE 1-US State Dept to assess Canada oil pipe next month

Fri Jul 22, 2011 2:47pm EDT

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(adds comments from State Dept official, state meetings)

WASHINGTON, July 22 (Reuters) - The U.S. State Department said Friday it expects to issue a final environmental assessment next month on TransCanada Corp's (TRP.TO) proposed $7 billion pipeline that would deliver crude from Canada's oil sands to refineries to Texas.

The pipeline has been opposed by many lawmakers and environmentalists for greenhouse gas emissions associated with oil sands production and because the line would run across one of the world's largest aquifers.

Federal agencies would have 90 days to comment on the department's final environmental assessment after it's issued in August.

The State Department said it still expects to make a final decision on approval of the line by the end of the year.

The department is currently writing the pipeline's final environmental impact statement, which will total more than 1,000 pages, said Daniel Clune, the State Department's Principal Deputy Assistant Secretary in the Bureau of Oceans and International Environmental and Scientific Affairs.

The department will consider energy security issues, including the impact of the disruption in Libyan oil exports, when deciding whether to issue a permit, Clune said.

The department is planning to hold a series of meetings in September in the capitals of the states where the pipeline would cross, which are Montana, South Dakota, Nebraska, Oklahoma and Texas.

(Reporting by Timothy Gardner, additional reporting by Tom Doggett; Editing by Alden Bentley)

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