"We believe that continued reliance on an `all-of-the-above' energy strategy would be fundamentally at odds with your goal of cutting carbon pollution," the environmentalists wrote in a letter to Obama.
Obama blocked the Keystone XL pipeline in January 2012, saying he did not have enough time for a fair review before a looming deadline forced on him by congressional Republicans. That delayed the choice for him until after his re-election.
Obama's initial rejection of the pipeline went over badly in Canada, which relies on the U.S. for 97 percent of its energy exports. The pipeline is critical to Canada, which needs infrastructure in place to export its growing oil sands production. The northern Alberta region has the world's third largest oil reserves, with 170 billion barrels of proven reserves.
In a bid to smooth over relations with Canada and other pipeline supporters, Obama quickly suggested development of an Oklahoma-to-Texas line to alleviate an oil bottleneck at a Cushing, Okla., storage hub. Oil began moving on that segment of the pipeline last week.
The 485-mile southern section of the pipeline operated by Calgary-based TransCanada did not require presidential approval because it does not cross a U.S. border.
(Watch: TransCanada pipeline explodes)
The latest environmental review, the fifth released on the project since 2010—acknowledges that development of tar sands in Alberta would create greenhouse gases, a State Department official said. But the report makes clear that other methods of transporting the oi—including rail, trucks and barges—would release more greenhouse gases that contribute to global warming than the pipeline.
U.S. and Canadian accident investigators warned last week about the dangers of oil trains that transport crude oil from North Dakota and other states to refineries in the U.S. and Canada. The officials urged new safety rules, cautioning that a "major loss of life" could result from an accident involving the increasing use of trains to transport large amounts of crude oil.
Several high-profile accidents involving crude oil shipments—including a fiery explosion in North Dakota and an explosion that killed 47 people in Canada last year—have raised alarms.
Keystone XL would travel through Montana and South Dakota before reaching Nebraska. An existing spur runs through Kansas and Oklahoma to Texas.
Shares of TransCanada, Enbridge, Oil sands, Canadian Natural and Imperial Oil rose following the report.
—By The Associated Press