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The company proposing the pipeline, TransCanada, largely has been tight-lipped about the investigation.

“Quite frankly, there is nothing new here and this is a matter for the U.S. Department of State and ERM to address,” TransCanada spokesman Shawn Howard said.

TransCanada — along with many in the Canadian government — has been frustrated by the Obama administration’s seemingly endless delays.

Environmental reviews of Keystone have dragged on for years. Indeed, supporters of the project, including a bipartisan coalition in Congress, have dubbed it “the most studied pipeline in history.”

If the inspector general’s review determines that the whole State Department process was marred by conflicts of interest, it likely would necessitate another round of studies and, potentially, years of further delay.

Meanwhile, Canada has begun looking for alternatives to get its valuable fuel to market.

On Dec. 19, a three-member review panel recommended that the Canadian government approve a pipeline west to the Pacific Coast, allowing oil to be shipped to burgeoning markets in Asia.

That development, among others, could make Keystone a less-attractive project from an economic perspective, Mr. Kish said.

For Mr. Obama, it also would carry clear political benefits.

“He could say, ‘Hey, I didn’t do that. It was a failure of the market system,’” Mr. Kish said. “I’ve seen this over several decades with these environmental battles. First they say you need to study it, to do this and to do that. It delays it, delays it, delays it. And all of a sudden the project becomes uneconomic or they have sent a political signal to the market that they ought to back out.”