NEWS
10/06/2011 04:29 EDT | Updated 12/06/2011 05:12 EST

Keystone Pipeline Battle: Final Hearing Held Friday As Protests Continue

AP

WASHINGTON - The U.S. State Department holds its final public hearing Friday on TransCanada's controversial Keystone XL pipeline as the project increasingly becomes a political hot potato for the Obama administration in the face of relentless attacks from American environmentalists.

A group of youth and environmental activists were planning yet another protest against the pipeline, this one a "sleep-in" Thursday night outside the downtown D.C. building where the hearing is being held. Another thousand activists are slated to march upon the Ronald Reagan Building during Friday's hearing.

The latest demonstrations cap a bad week for Keystone XL with State Department officials insisting they've been unbiased in their ongoing review of the project. The State Department is ruling on the pipeline because it crosses the Canada-U.S. border.

Earlier this week, the department released a list of pipeline meetings held in Washington and at the U.S. Embassy in Ottawa. Officials say the list proves they've given equal time to various stakeholders on both sides of the debate.

"It's obviously their First Amendment right to say what they'd like to say," said State Department spokeswoman Victoria Nuland. "We reject their accusations."

Within weeks, the Obama administration is slated to determine the fate of the $7 billion pipeline in a decision many considered a no-brainer just a few months ago, given a near-universal desire in the United States to end reliance on oil from more volatile and sometimes hostile OPEC countries.

That was before the U.S. environmental movement, seething in the aftermath of failed federal climate change legislation on Capitol Hill last year, came together in passionate opposition to the pipeline and Alberta's carbon-intensive oilsands.

TransCanada's CEO, Russ Girling, said recently the pipeline has been caught in the crossfire of a greater ideological debate in the U.S. about fossil fuels versus renewable sources of energy.

And how, says Jon Entine, a fellow at the American Enterprise Institute for Public Policy Research who examines environmental and corporate responsibility issues.

"Keystone has now become emblematic of the great divide that's opened up in the United States between the left and the right; the Keystone debate defines the polarized political climate in Washington," he says.

"People are looking for ways to symbolize their political beliefs. The debate over the pipeline has taken on the most visible signs of the divide, so Keystone is never going to be debated on its merits."

The left is exaggerating the environmental dangers posed by the pipeline, Entine says, while the right is exaggerating the jobs it will create.

And now U.S. President Barack Obama is faced with a difficult choice: to side with those who insist the pipeline will create jobs as the U.S. struggles to recover from a devastating recession, or with the environmentalists within his liberal base who have threatened to stay home in November 2012 if he fails to block Keystone XL.

Canada itself has been slurred throughout the increasingly heated efforts to get Obama onside with the environmentalists.

Determined to convince Obama to end America's gluttony for oil, environmentalists have repeatedly portrayed Canada as a dirty polluter consumed with profits while turning a blind eye to environmental standards and reducing greenhouse gas emissions.

Little mention has been made in the roar of the battle about Canada's continuing efforts to make oilsands extraction a cleaner process or that TransCanada has agreed to pipeline safeguards that exceed American requirements.

Every day, it seems, there has been a new study or a new voice condemning both the oilsands and the pipeline.

Nobel laureates are campaigning against Keystone XL. One respected NASA climate scientist, James Hansen, has said it would be "game over" on the climate front if the pipeline wins approval.

Environmental groups have made a new freedom-of-information request, demanding more public documents about a half dozen lobbyists with ties to the Obama administration.

The Center for Biological Diversity, Friends of the Earth and Western Nebraska Resources Council have sued the U.S. government in Nebraska federal court, calling the State Department's environmental analysis of the pipeline a "sham public process."

The State Department is on the defensive, particularly after releasing a second batch of emails between TransCanada's chief lobbyist and agency officials that suggest a chummy relationship. One employee at the U.S. embassy in Ottawa even cheered on Paul Elliott's efforts to win approval for Keystone XL.

Elliott's former role as a chief campaign worker during Hillary Clinton's failed bid for the Democratic presidential nomination in 2008 has raised eyebrows in the U.S. capital.

But he's not the only one involved in the lobbying process with close ties to Clinton and the Obama administration. The environmental website DeSmogBlog.com says seven others with similar links have lobbied for Keystone XL approval.

"Lobbyists with strong ties to Secretary Clinton are spread out over three firms, including one that was the largest single source of funds of any corporate entity to Clinton's 2008 presidential run," DeSmogBlog's Brendan DeMelle wrote on Thursday.

Some of those lobbyists, however, point out that it would be foolish for a corporation to hire a firm without ties to the administration. Hiring well-connected lobby firms, they add, is standard operating procedure in Washington, D.C.

One lobbyist close to the debate, speaking on condition of anonymity, accused anti-pipeline environmentalists of failing to register to lobby at all, operating below the radar as they attack those who comply with the law.

That apparently isn't much comfort to Democrats in the House of Representatives, who urged Clinton this week to stop the pipeline in light of the Elliott emails.

All in all, it's turned into a public relations nightmare for TransCanada, Entine says, but one company officials must have partially anticipated.

"The industry knew the were going to get into a battle given the way you have to excavate oil from the tarsands; it's pretty rapacious, it's awful, and it really does do damage to a contained area," he said.

"Any person with a heart who goes there is taken aback by the vast territory that's been destroyed, but we also live in a real world. And that world consumes energy and people fly airplanes. The left doesn't deal with the real world. They don't care if the price of energy goes up for consumers, but that's not really the way the world works."

Environmental extremists, he adds, have portrayed the battle over the pipeline almost in life-and-death terms, something he calls "disappointing."

"The reality is that there are no alternative energy sources out there that are going to be able to compete with fossil fuels for dozens of years," he said. "Environmentalists feel any new projects involving fossil fuels will forever doom renewable sources of energy, and so it's become a death match with no room for pragmatism."

And that could influence Obama's ultimate decision on the pipeline.

"This changing political culture could very well change the calculus of how the Obama administration comes down on this decision," Entine said.

"The pipeline may not be rejected on environmental or economic grounds, but on ideological grounds."