The State Department's Office of Inspector General (OIG) is probing the department's handling of a pending decision on whether to grant a permit for a US-Canada oil pipeline, according to documents released Monday.

The State Department is handling public consultations on plans to build the 1,700-mile (2,700-kilometer) Keystone XL pipeline from the tar sands of Canada's Alberta province to the Gulf of Mexico in the southern United States.

Many environmentalists fear a potential pipeline accident would spell disaster for aquifers in central US Great Plains states. That could disproportionately endanger rural towns and Native Americans, they say.

In a letter dated Friday, the OIG's Harold Geisel wrote that the office was "initiating a special review of the Department of State's handling of the Environmental Impact Statement (EIS) and National Interest Determination" for the project.

"The primary objective of the review is to determine to what extent the Department and all other parties involved complied with federal laws and regulations relating to the Keystone XL pipeline permit process," it said.

The letter, released by the Natural Resources Defense Council (NRDC), said the decision was in response to a request from the US Congress. The State Department gave no immediate response when asked about the letter.

A letter signed by more than a dozen US lawmakers, which was also released by the NRDC, asked Geisel if TransCanada, the pipeline developer, improperly influenced the State Department's selection of a contractor for the EIS.

In its long-awaited environmental impact statement on the project, the State Department said in August that the pipeline would be safer than most current oil transportation systems.

Friends of the Earth last month alleged that emails it obtained through the Freedom of Information Act showed that department employees held a "pro-pipeline bias and complicit relationships with industry executives."

The State Department said last week it still aimed to issue a decision by year-end but cautioned the deadline could slip as the "first priority" is to ensure the pipeline's potential environmental impact is carefully studied.

President Barack Obama told a Nebraska television station last week that he expected to get a recommendation from the State Department in the "next several months" and would then deliberate on economic and environmental concerns.

"My general attitude is (to do) what is best for the American people, what is best for our economy both short term and long term, but also what is best for the health of the American people," Obama said.

"We need to make sure we have energy security, but there is a way of doing that and still making sure that the health and safety of the American people ... is protected."

The issue, pitting business interests against environmentalists, some of whom have been among his political base, could be a tough one, with his 2012 reelection year looming and with jobs the number one issue.

Thousands of protesters rallied outside the White House against the project on Sunday.