The U.S. imports about half its oil. The biggest foreign supplier is Canada, at 23.3 percent, followed by Venezuela at 10.7 percent. The biggest Mideast supplier is Saudi Arabia, 10.4 percent.
The report was made public ahead of President Barack Obama's meeting in February with Harper, who is urging Obama to endorse it.
Environmental groups want him to reject it, seeing it as a test of Obama's will to fight climate change.
The State Department, which must approve any pipeline entering the U.S. across an international border, has promised a decision by year's end. But Republicans on the House Energy and Commerce Committee want it by Nov. 1.
Committee chairman Fred Upton, R-Mich., said the pipeline will create at least 100,000 jobs and that the U.S. needs Canadian oil.
Michael A. Levi, the senior fellow for energy and the environment at the U.S. Council on Foreign Relations, said environmentalists are exaggerating the impact on the oil sands.
"A lot of people have been convinced that this is the cutting edge of the climate change fight," he said. "In the end this is the equivalent to half a percent of U.S. emissions."
He said the choice of pipeline was a critical decision in U.S-Canada relations and that turning down the Texas route would go over very badly in Canada.
But David Goldwyn, a former State Department energy official who left this year to work as a consultant, said he's confident the pipeline to Texas will be approved, especially considering the potential for Middle East turmoil to disrupt supplies in the future.
"I think it would be a huge waste of a great opportunity to provide supply security. We don't often get the choice of where we can get our oil from. In this case we get to choose Canada. That's an opportunity we shouldn't miss," he said in an interview.
He saw no threat from Chinese inroads into Canada because there is more than enough oil for all concerned.
By investing to boost Canadian production the Chinese "are growing the pie to meet their own demand. That's a whole lot better than mopping up supply from the existing pie and creating competition for resources," Goldwyn said.
But China would almost certainly react badly to a rebuff. Alberta Energy Minister Ron Liepert fears Chinese investment will dry up should Canada not approve a pipeline to the West Coast.
Zhang Junsai, China's ambassador to Canada, said his country is willing to invest heavily in Canada. He told The Associated Press that the fact that China's $300 billion sovereign wealth fund, China Investment Corp., chose Toronto as the venue for its first overseas office is a "very good sign." The fund invested $800 million in Calgary-based Penn West Energy last year and $1.5 billion in Canadian mining company Teck Resources in 2009.
Apart having a stake in the $5.5 billion in the Northern Gateway pipeline plan, Sinopec paid $4.6 billion for a nine percent stake in Syncrude, Canada's largest oil sands project. And in 2009 PetroChina, Asia's largest oil and gas company, bought a $1.7 billion stake in Athabasca Oil Sands Corp.
William Cohen, who was secretary of defense in the Clinton administration, said any Chinese-Canadian oil partnership must be done "with some diplomacy and care," in a way that isn't "a threat to the United States."
Canada can do whatever it wants, but "Canada knows it has a very close and vital relationship with the United States. I'm sure there will be discussions," he said in Toronto after a public debate about whether China will dominate the 21st century.
Eddie Goldenberg, chief of staff to former Prime Minister Jean Chretien, said in an interview that Canada should care less if some American officials are leery about Canada selling oil to China.
"We're not the 51st state. It's not the business of the United States to decide where Canada sells its resources," he said.
Copyright © 2011 The Associated Press. All rights reserved.
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