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Oil pipe lobbyist, State Dept too close: group

Demonstrators stage a "sit in" after crossing a police barricade during a protest against the Keystone XL pipeline on Parliament Hill in Ott
Demonstrators stage a "sit in" after crossing a police barricade during a protest against the Keystone XL pipeline on Parliament Hill in Ott

By Timothy Gardner

WASHINGTON (Reuters) - As Washington edges closer to deciding the fate of a pipeline to bring crude from Canada's oil sands to Texas, emails between the company's lobbyist and the State Department show a cozy relationship that indicates a U.S. bias toward the project, an environmental group says.

The department rejects the charge, saying it has met with both industry and environmentalists on the project and is committed to a fair process. The company, TransCanada Corp, says its lobbyist, Paul Elliott, is simply doing his job and broke no law.

Elliott served as the national deputy campaign manager for Hillary Clinton during her 2008 run for president. Clinton is now Secretary of State.

Friends of the Earth, the environmental group, said emails it released on Monday reveal that Elliott set up multiple meetings and had influence on officials at the State Department, which plans to decide this year whether the $7 billion Keystone XL pipeline is in the country's national interest.

It said Marja Verloop, a senior diplomat at the U.S. Embassy in Ottawa, seemed to be cheering for Elliott after he included her on a note saying U.S. Senator Max Baucus from Montana supported the pipeline.

The Verloop email read: "Go Paul! Baucus support holds clout."

The State Department appears close to approving the project after releasing assessments that found the 1,700-mile pipeline would not wreck the environment.

Environmentalists oppose the pipeline, which would carry up to 500,000 barrels per day of oil from Canada, because of the greenhouse gas emissions they say would be generated by exploiting the massive oil sands.

It was the second batch of emails Friends of the Earth has released through a Freedom of Information Act request. The group said it has more documents.

The emails show "an absolute bias and complicity between the State Department and TransCanada, a company they are supposed to be acting as a regulator and an independent investigator on," said Damon Moglen, the climate and energy director at the group.

"FAIR, TRANSPARENT AND THOROUGH"

Not all of the emails suggest cozy relations between TransCanada and the State Department. Some show department officials were hesitant to meet with TransCanada officials too frequently.

Moglen said the department gave industry lobbyists more access to officials than it gave to representatives from environmental groups.

A spokeswoman for the State Department said it has been in communication with industry as well as environmental groups in the United States and Canada throughout the process of evaluating the Keystone project.

"We are committed to a fair, transparent and thorough process," she said.

Another State Department spokeswoman, Victoria Nuland, said on Monday that Verloop met regularly with industry representatives and environmental groups, but that the latter were not reflected in the emails released to Friends of the Earth.

James Millar, a TransCanada spokesman, said Elliott "was and is simply doing his job -- no laws have been broken," adding that Friends of the Earth had also met with State Department officials on the pipeline.

The company declined a request to make Elliott available for comment.

Many environmentalists oppose the development of the oil sands because the petroleum is energy-intensive to produce, releasing more greenhouses gases than average crude oils.

In addition, TransCanada has had several small leaks on pipelines in recent months. Environmentalists warn the abrasive nature of bitumen petroleum from the oil sands is hard on pipelines.

Nebraska's two U.S. senators and governor oppose the proposed route of pipeline because it would cross the Ogallala Aquifer, a vast water source in the country's midsection.

The project's supporters say it will provide jobs and lessen U.S. dependence on oil from countries that are unfriendly to Washington.

The State Department hopes to make a decision on a presidential permit, which the project needs because it crosses the U.S. border, by the end of the year.

The pipeline could also transport several hundred thousand barrels per day of U.S.-produced oil and ease a glut of crude in the country's midsection brought on by the development of new fields.

(Additional reporting by Andrew Quinn; Editing by Xavier Briand)

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