A lobbyist for the company behind the politically volatile Keystone XL oil pipeline touted assurances from the State Department that a final ruling on the Canada-to-U.S. proposal would not wait "as long as" U.S. EPA wanted, according to internal emails released today by a green group fighting the project.

Obtained under freedom-of-information law, the emails show a crescendoing drama over Keystone XL as State tackled environmentalist resistance to the project and Paul Elliott -- a lobbyist for its sponsor, TransCanada Corp., and a former campaign aide to Secretary of State Hillary Rodham Clinton -- worked to keep open a communication pipeline of his own to the agency.

In July 2010, four days after EPA panned a draft State review of the 1,661-mile pipeline's environmental impact as "inadequate" -- pressing for more consideration of the pipeline's effect on wetlands, wildlife and greenhouse gas emissions, Elliott emailed an aide at the U.S. embassy in Ottawa to say he had "just got off the phone" with two energy advisers at the State Department.

After telling the embassy aide, Marja Verloop, that TransCanada would yank a request to run Canadian oil-sands crude through the XL line at a higher pressure, Elliott reported confidence that EPA would not unduly prolong the permitting process at State.

Matthew McManus, a division chief in State's economic and business affairs bureau, told TransCanada that his department's move to allow other agencies extra time to weigh in on Keystone XL "does guarantee a delay (maybe 45 days) on State's recommendation of a presidential permit but such a delay won't be as long as the one advocated for by the EPA," Elliott wrote to Verloop.

The Elliott-Verloop correspondence takes a warm, personal turn as it dominates the latest release by Friends of the Earth (FoE), the advocacy group that sought the lobbyist's contacts with State through a Freedom of Information Act request. While Verloop's post suggests she has no role in the ultimate decision on whether to approve Keystone XL's construction -- expected from State before 2012 -- FoE billed her exchanges with Elliott as further evidence for the White House to take authority over the project away from the department.

"The bias and complicity evident in these emails, joined with substantial additional evidence that the State Department has abdicated its responsibility to be impartial, should disqualify the department from a decision-making role," the group's climate and energy director, Damon Moglen, said in a statement.

TransCanada has long defended Elliott's work as no different from lobbying that hundreds of other private firms and nonprofits conduct on a daily basis. Terry Cunha, a spokesman for the pipeline company, charged Keystone XL critics with hypocrisy for attacking the former Clinton aide as perpetuating bias within State while hiring paid representatives themselves.

"We challenge Friends of the Earth and other environmental groups to release any emails from their over 60 registered lobbyists sent to the Department of State and the EPA," Cunha said via email. "This should not be an issue unless there may be something untoward in these emails."

A State spokesman noted via email that the department has met "with industry as well as environmental groups, both in the United States and in Canada" during its deliberations over whether building Keystone XL -- which would nearly double U.S. imports of oil-sands crude if approved -- is in the national interest.

"We are committed to a fair, transparent and thorough process," the spokesman said. "We listen to all opinions, but there is much more that goes into the national interest determination decision."

The slow drip of emails released via FoE's Freedom of Information Act (FOIA) request, which was originally denied before State reversed course in February, comes as environmentalists and liberals ramp up their efforts to turn Keystone XL into a pivotal proving ground for President Obama's climate policy.

After a White House sit-in against the pipeline that drew more than 1,200 arrests, advocacy groups plan to return to Obama's doorstep on Nov. 6, the one-year mark ahead of a re-election run that will see Democrats target green voters for turnout efforts (Greenwire, Sept. 23). The oil and gas industry, joined by broader business lobbies such as the U.S. Chamber of Commerce and several labor unions, simultaneously is escalating its advocacy push to secure a permit for the pipeline by year's end.

The latest climax in the years-long battle is set for Friday, when State's public hearings on Keystone XL will culminate in a Washington, D.C., session that conservationists and industry expect to turn even more acrimonious than recent meetings in the Plains region that the pipeline would cross.

'Sick feeling in my stomach'

On Dec. 14, 2010, Elliott's emails to Verloop grew self-referential after FoE and other green groups filed their FOIA request as part of a broader bid to tar State as biased following a Clinton remark that she was "inclined" to approve the XL line.

Verloop, the embassy's energy and environmental aide, passed Elliott an E&E Daily story on the FOIA request with the subject line "Pleased to see your name in print :)" and a query about when he would be "coming up to visit."

The TransCanada lobbyist's response began: "Friends tell me I should be flattered from the attention of a story like this but I shake the sick feeling in my stomach... I imagine Ottawa is idyllic this time of year ... I have to try to find a way back to Ottawa soon so that we might catch up."

Verloop's reply to Elliott, which included two more electronic emoticons, told Elliott that "at the end of the day, it's precisely because you have connections that you're sought after and hired."

Two months earlier, Verloop offered a direct cheer for Elliott in response to Sen. Max Baucus' (D-Mont.) public endorsement of Keystone XL. "Go Paul!" she emailed him. "Baucus support holds clout."

'Interesting how we at State learn ...'

The draft environmental assessment of the pipeline that EPA slammed in July 2010, creating what Verloop described in an email to Elliott as "internal chaos," was followed by an extra review. That move came amid political pressure from Nebraska lawmakers in both parties who continue to warn that a possible oil leak from the XL link could endanger their state's sensitive Ogallala Aquifer.

While Verloop did not appear in the loop for those Washington-area reviews, one official who was -- Alexander Yuan, State's project manager for the EIS on Keystone XL -- remarked on the environmentalists' targeting of Elliott in February to a blind-copied email list titled "KeystoneEIS".

Above a news story on the State decision to grant green groups' FOIA request, Yuan wrote: "Interesting how we at State learn about these decisions ... Wendy needs to go over there and talk to them in person."

The email does not indicate the last name of the State official to whom he referred.

Three months later, Yuan sent a blind-copied list titled "KeystoneEIS2" a May video petition against the pipeline from a liberal group that echoed environmentalists' concerns about the higher emissions footprint of oil-sands crude relative to conventional fuel and the safety of the Ogallala. Yuan also passed on a letter from green groups that urged EPA to press for a longer public comment period and hearings on the pipeline, along the lines of those now being conducted (E&ENews PM, May 24).

"We will probably get an official request from EPA soon," Yuan wrote.

EPA officially gave State's second draft environmental review an "insufficient" rating in June, one step above its "inadequate" ruling on the first Keystone XL assessment. That move raised hopes among green-advocate opponents of the project that EPA is on the verge of interceding this fall to refer TransCanada's permit bid to the White House Council on Environmental Quality (CEQ).

At the moment, however, EPA has yet to suggest that CEQ resolve any dispute over the extent to which State's final assessment of the pipeline complies with the National Environmental Policy Act, or NEPA. Whether or not EPA weighs in, groups such as FoE are seen as likely to mount legal challenges of their own to any positive permitting decision for the XL line.

Moglen of FoE pointed to today's Elliott emails as illustrative of a compromised, pro-XL process at work. "I would hate to be a State Department lawyer charged with defending the environmental impact statement (EIS) [on the pipeline] after revelations like these," he said.