The draft report begins a 45-day comment period, after which the State Department will issue a final environmental report before Secretary of State John Kerry makes a recommendation about whether the pipeline is in the national interest.
Kerry has promised a "fair and transparent" review of the plan and said he hopes to decide on the project in the "near term." Most observers do not expect a decision until summer at the earliest.
Canadian Natural Resource Minister Joe Oliver said Friday that Canada will respect the U.S. review process and noted the importance of the pipeline to the Canadian economy. "Canada's continued prosperity will be determined by our ability to diversify markets for our energy products," Oliver said.
Obama's initial rejection of the pipeline last year went over badly in Canada, which relies on the United States for 97 percent of its energy exports.
Associated Press writer Rob Gillies in Toronto contributed to this report.
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