The approval lies with the WH. The State Department report found no environmental problems.
The State Department has not approved it. The environmental report was part of their review process. It is controlled by the White House only in that the State Department reports to the President.
http://keystonepipeline-xl.state.gov/documents/organization/221135.pdf
For proposed petroleum pipelines that cross
international borders of the United States, the President,
through Executive Order (EO) 13337, directs the
Secretary of State to decide whether a project serves the
national interest before granting a Presidential Permit.
To make this decision (i.e., the National Interest
Determination), the Secretary of State, through the
Department, considers many factors, including energy
security; environmental, cultural, and economic
impacts; foreign policy; and compliance with relevant
state and federal regulations. This Supplemental EIS
was produced consistent with the National
Environmental Policy Act (NEPA) and will help inform
that determination. Before making such a decision, the
Department also asks for the views of eight federal
agencies identified in EO 13337: the Departments of
Energy, Defense, Transportation, Homeland Security,
Justice, Interior, and Commerce, as well as the
U.S. Environmental Protection Agency (USEPA).
If the proposed Project is determined to serve the
national interest, it will be granted a Presidential Permit
that authorizes the construction, connection, operation,
and maintenance of the facilities at the border between
the United States and Canada. The applicant would be
required to abide by certain conditions listed in this
Supplemental EIS and the Presidential Permit. The
Department’s primary role is to make a National
Interest Determination. Its jurisdiction does not include
selection of specific pipeline routes within the
United States.