* Pipeline will be approved, says environment minister
* Ottawa had previously declined to predict outcome
* Critics say they fear disaster if pipeline ruptures (In U.S. dollars)
By David Ljunggren
OTTAWA, Sept 1 Canada's government on Thursday revealed for the first time that it expects the United States will approve a controversial pipeline that would transport oil from the Alberta tar sands to the Gulf of Mexico Coast.
Opponents say they fear an environmental calamity if TransCanada Corp's (TRP.TO) planned $7 billion Keystone XL pipeline were to spring a leak near U.S. water aquifers. They also say the pipeline would cause greenhouse emissions to soar as output in the oil sands is cranked up to meet new demand.
The U.S. State Department, which concluded last week that the Keystone XL line would do little damage to the environment, will decide by the end of the year whether the pipeline is in the national interest.
"I think that we can look forward to eventual approval by the American government," Environment Minister Peter Kent told reporters when asked about the pipeline.
Canada's right-leaning Conservative government - which is actively pressing Washington to approve the 1,700 mile (2,750 km) pipeline - had until now declined to say whether it thinks the project will go ahead.
Canadian backers of Keystone say the pipeline, designed to carry around 500,000 barrels per day of oil sands crude to refineries on the Gulf Coast, would create thousands of jobs and increase U.S. national security by cutting the need to import oil from OPEC members.
Kent said TransCanada had "perhaps one of the best records of any pipeline operator" in North America.
"There are also the significant elements of both fuel security (and) energy security, but also jobs and stimulation of the economy along the path of the entire pipeline," he said.
Nebraska's governor urged U.S. President Barack Obama on Wednesday to block the pipeline, saying it could hurt a regional water source.
Nearly 600 Keystone XL opponents -- including high profile figures such as actress Daryl Hannah -- have been arrested in protests in front of the White House in recent days.
Kent, who raised eyebrows earlier this year by describing tar sands crude as an ethical source of energy, criticized those he said were spreading "a great deal of misinformation (and) distortions" about Keystone.
"The environmental concerns I think of everyone are very real ... and it's a matter of better informing those who might not understand exactly what the project would entail and at the same time ensuring that the project as it goes forward - assuming it will - is done in the most environmentally sensitive way possible," he said. (Reporting by David Ljunggren; editing by Peter Galloway)