Opponents decry State Dept 'bias' on oil pipeline

AP News

10/4/2011 2:37:27 PM - AP News

Environmental groups on Tuesday asked President Barack Obama to intervene on a Canadian company's plan to pipe oil from tar sands in western Canada to the Texas Gulf Coast, ratcheting up their opposition in the long-running battle against the Keystone XL pipeline.

The groups charged that the State Department is biased in favor of the pipeline, and they urged Obama to push the State Department aside and personally make a decision on the pipeline plan.

"Mr. President, the State Department has erred, but there is still time for you to do the right thing," the groups said in a letter to Obama. "Tell the lobbyists in Washington that their days of setting the agenda are over. Reject this dirty tar sands oil pipeline."

The request by Friends of the Earth and other environmental groups _ including Sierra Club, Greenpeace USA, Physicians for Social Responsibility and the Center for Biological Diversity _ was the latest skirmish in a long-running battle over a plan by Calgary-based TransCanada to build a massive pipeline to carry crude oil extracted from tar sands in Alberta to refineries in Texas.

The 1,700-mile pipeline, which would travel through Montana, South Dakota, Nebraska, Kansas and Oklahoma, would carry an estimated 700,000 barrels of oil a day, doubling the capacity of an existing pipeline from Canada. Supporters say it could significantly reduce U.S. dependence on Middle Eastern oil.

The project has become a flashpoint for environmental groups who say it would bring "dirty oil" that requires huge amounts of energy to extract and could cause an ecological disaster in case of a spill.

Friends of the Earth released internal emails and other documents this week that they said demonstrate an overly cozy relationship between State Department officials and TransCanada. Friends of the Earth and other critics singled out friendly exchanges with TransCanada executive Paul Elliott, a former aide in Secretary of State Hillary Rodham Clinton's 2008 presidential campaign.

One email, from Marja Verloop, an official at the U.S. Embassy in Ottawa, cheered news from Elliott that Sen. Max Baucus, D-Mont., was supporting the pipeline.

"Go Paul! Baucus support holds clout," Verloop wrote.

In an e-mail to David Jacobson, the U.S. ambassador to Canada, Verloop described TransCanada as "comfortable and on board" with developments in the review process.

Terry Cunha, a spokesman for TransCanada, said Elliott lobbied State Department officials in much the same way as lobbyists for Friends of the Earth and other environmental groups.

"Mr. Elliott was and is simply doing his job," Cunha said. "No laws have been broken"

Cunha called it "absurd" to suggest that Elliott or Verloop _ described by the State Department as a career Foreign Service officer _ could determine the outcome of a review that involved 10 federal agencies and a "myriad" of local governments. The three-year U.S. review included detailed environmental assessments by the State Department and Environmental Protection Agency, and a series of public hearings.

Victoria Nuland, a State Department spokeswoman, said Verloop, a counselor for energy/environment at the U.S. Embassy, did not "have any impact or any input in the development of the Keystone environmental impact statement" released by the State Department in August.

Nuland said officials were reviewing emails from Verloop and other officials regarding the Keystone project, adding that she was confident the review "is going to show broad engagement with the government of Canada, with industry, with (non-governmental organizations), with the environmental community, with public interest advocates on all sides of this issue."

The State Department has authority over the $7 billion project because the pipeline would cross the U.S. border. Officials have promised a decision by the end of the year.

Public hearings on the project were held in each of the affected states last week, drawing large crowds for and against the pipeline. A final hearing is scheduled Friday in Washington.

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Follow Matthew Daly on Twitter at http://twitter.com/MatthewDalyWDC