Supporters of the Keystone XL pipeline, including its developer, TransCanada, are finding they’ve got a fight on their hands from environmentalists that hasn’t lost a step in terms of creating energy among the green movement. Gary Park in Calgary has had a front row seat, and he writes about it in this week’s Oilgram News column, Petrodollars.

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Once TransCanada’s Keystone XL project was dragged from the predictable confines of regulatory hearing rooms—long the domain of consultants and attorneys, government officials and industry proponents—it entered unknown territory.

Only the activists, mostly representing US-based environmental groups, seemed to have a clear sense of what they wanted and how to achieve their objectives.

Any notion that they would eventually tire and fade away has long since disappeared, although TransCanada and its backers—Alberta oil sands producers, Gulf Coast refiners, petroleum industry lobby organizations and the Alberta and Canadian governments—were slow grasping that reality.

Now they can see Keystone XL and other fossil-fuel projects in North America face actual, not fleeting challenges.

The fallout has already spread to the Kinder Morgan Trans Mountain pipeline and Enbridge’s Northern Gateway pipeline, both targeting new markets in Asia, and plans by TransCanada and Enbridge to ship oil sands bitumen to eastern Canada and the US.

Even if the Obama administration issues a presidential permit, opponents show no signs of quietly backing down.

For the first time in its 120-year history, the Sierra Club has condoned civil disobedience, with two of its leaders arrested last month for engaging in a protest outside the White House, forcing the club’s 50-year-old Canadian branch to engage in its own soul-searching by asking members for guidance.

Emboldened and empowered green groups, joined by landowners and First Nations, have seen proof that they can wreak havoc in the oil sands sector by stalling pipelines and forcing companies to shelve billions of dollars of investment and delay planned production.

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None has been more uncompromising than the Washington-based Natural Resources Defense Council, whose international director Susan Casey-Lefkowitz said US economic and national security depends on “building a world where we depend on clean energy.”

Roger Mattells, who has litigated for the US Department of Justice and the Environmental Protection Agency and is now practicing environmental and energy law, has a chilling observation for those who cling to hope that Keystone XL will go ahead.

Although unwilling to discuss Keystone XL in detail or predict whether the project could face a decade of litigation, he said: “Much smaller projects have been tied up for longer periods of time. There are ways to stretch things out.”

Mattells said what others have whispered in backrooms. Aside from the cost, endless court battles could doom Keystone XL.

TransCanada will not say at what point those who have signed shipping commitments can walk away, but CEO Russ Girling’s increasingly testy portrayals of his opponents and the parade of Canadian provincial premiers and federal cabinet ministers trekking south to make their case for Keystone XL are clear evidence of rising tensions in Canada.

In the process, what the pipeline allies are discovering is that their version of the facts is landing with a dull thud.

Natural Resources Minister Joe Oliver has attacked coal as a dirtier source of fuel than the oil sands, arguing it powered 42% of US electricity generation in 2011 and produced emissions 40 times greater than those from the oil sands, which he said account for 48 million metric tons a year of carbon-dioxide emissions while coal-fired plants in the state of Wisconsin alone produce 43 million metric tons. To no avail.

He and Alison Redford and Brad Wall, the premiers of Alberta and Saskatchewan, respectively, have buttonholed lawmakers in Washington over recent weeks, hammering home a time-worn message that Canada is the US’s best hope for secure energy and job creation.

David Pumphrey, an energy and security analyst at the Washington-based Center for Strategic and International Studies, said any attempt to turn coal plants into the enemy is challenged in the court of public opinion.

“You can rally around Keystone XL and turn it into a slogan and make it into an icon in the climate fight…and it becomes less about facts and more about ideology,” he said.

What is now troubling the Keystone XL faction is a lack of confidence that President Barack Obama is willing to offend the environmentalists who contributed so much to his re-election, rather than set aside his climate-change pledges one last time and allow the pipeline to proceed.

That has led to rumblings in Canadian government circles that Obama is ready to use Keystone XL as a bargaining chip to demand environmental concessions from his northern neighbor.

In a recent letter, Wall urged the US Ambassador to Canada David Jacobson to discourage Obama from encroaching on Canadian domestic policy.

Within Canadian government circles, officials darkly talk about a possible “betrayal,” setting the stage for what could be an unimagined setback for an unprecedented bilateral trading relationship.–Gary Park in Calgary

 

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