Environmentalists today are aiming an arrow at the economic case for the Keystone XL pipeline made by the GOP and industry, releasing a report that savages the controversial project as a giveaway to Canadian oil companies with no benefits to U.S. consumers.

The anti-Keystone XL arguments made by the Natural Resources Defense Council (NRDC) and Oil Change International (OCI) are not themselves new to the months-long political showdown over the 1,700-mile pipeline that links the Alberta oil sands to Gulf Coast refineries. But as a Feb. 21 deadline nears for the White House to rule on the pipeline, greens are reopening a second front to challenge the economic upside of a $7 billion project that they also accuse oil companies of over-promoting when it comes to job creation.

"Keystone XL's backers want to re-direct tar sands oil from the American Midwest to reach the international market, where tar sands oil would fetch a higher price," NRDC and OCI write in their new report. "The Keystone XL pipeline would thus add billions of dollars to their annual profits while raising the cost of oil for millions of American consumers in the U.S. heartland."

At the heart of the conservation groups' report is a contention made by three oil companies during a 2009 evaluation of the XL line before Canada's National Energy Board: that the northern nation's oil sands crude producers would not be able to fill the pipeline's daily capacity of up to a half-million barrels in a timely enough fashion.

That excess capacity, greens say, underscores the value of the pipeline as a profit-builder for refineries that aim to send finished products overseas, effectively diminishing Keystone XL's value to everyday U.S. fuel users.

Canadian policymakers make no secret of their desire to diversify an oil sands crude export market currently dominated by the United States. "You're not going to become a global superpower of anything with one customer," then-Alberta Energy Minister Ron Liepert told E&E Publishing in August (Greenwire, Sept. 13, 2011).

That fuel prices in the Midwest -- where most Canadian oil sands pipelines currently terminate and refiners pay less for crude from that region -- would necessarily rise as a result of Keystone XL, however, is a claim hotly disputed by supporters and Obama administration analysts who endorsed the project last year.

"Midwest refiners used to pay more for oil because oil had to flow north from the Gulf," analysts at the Energy Department wrote in a June memo to the State Department, which is leading environmental review of the pipeline pitch. "Now, with Bakken crude, Canadian [oil sands product] and other land-locked supplies, oil needs to flow south."

"The crude price advantage" currently operative for Midwestern refiners is not justified by long-term transportation costs, the DOE analysts continued. "Eliminating these constraints [behind the advantage] would result in a more competitive oil market."

Bringing the debate over Keystone XL's economic impact into such wonkish territory may yet cloud the broad-brush drama over the pipeline, which many observers expect the administration to reject or at least punt on before Feb. 21, the deadline pushed by Republicans. The GOP has confined its push for the pipeline to a straightforward reliance on jobs projections made by industry groups and condemned as illusory by environmentalists, with a foray yesterday into satire courtesy of a web ad mocking MSNBC host Rachel Maddow (Greenwire, Jan. 17).

Last night, Rep. Lee Terry (R-Neb.) said that his bill to advance the Keystone XL decision through the Federal Energy Regulatory Commission rather than the State Department is still on the table as a GOP strategy, along with all other options. Terry said that Republicans on the House Energy and Commerce Committee were planning a meeting next week to run through their options, which also include a bill from Sen. John Hoeven (R-N.D.) that would empower construction to start without going through FERC.

Terry said that chairmen and vice chairmen on the Energy Committee held a meeting yesterday in which the pipeline came up, including the question of whether Republicans should wait until the White House had made a decision on the project before acting on new legislation.

"We had a conversation and we'll have a more in-depth discussion mapping the path forward," Terry said. "The fact that we're putting everything on the table muddies the water until next week."

Terry also said that the delays from the White House and language from the president "telegraphed" that he would be rejecting the pipeline.

Reporter Jason Plautz contributed.