UPDATE 1-Pressure builds for Keystone decision after Obama speech

Wed Feb 13, 2013 5:20pm EST

* Environmentalists arrested in front of White House

* Oil and gas lobby plans national advertising campaign

By Valerie Volcovici

WASHINGTON, Feb 13 (Reuters) - Environmentalists and industry groups ramped up efforts on Wednesday to sway the White House's decision on the Keystone XL pipeline project, a day after U.S. President Barack Obama said he will take action to curb climate-warming emissions.

A small group of activists and celebrities staged a protest in front of the White House to put pressure on Obama to reject the controversial proposed crude oil pipeline. About four dozen protesters, including actress Daryl Hannah, were arrested.

The action came ahead of a rally planned for Sunday on Washington's National Mall, which organizers have dubbed "the largest climate rally in history".

The TransCanada Corp pipeline would transport 830,000 barrels of crude from the oil sands of northern Alberta, the world's third largest crude resource, to refineries and ports in Texas. TransCanada has been waiting for approval for 4-1/2 years.

Environmentalists say approval of the pipeline will encourage more development in the oil sands, where extraction is carbon intensive, leading to greater greenhouse gas emissions.

The State Department in the coming days is due to issue a new environmental impact statement on the project, which is expected to guide the White House as it decides whether to give the project the go-ahead.

Obama had been widely expected to approve the pipeline after the governor of Nebraska approved a revised route through his state that avoided ecologically sensitive areas and aquifers.

But doubts rose after Obama made a surprise emphasis on climate change in his January inaugural address, leading pipeline watchers to question whether the president would heed pressure from environmentalists.

Still, Canada's Natural Resources Minister said on Wednesday he was cautiously optimistic that Washington would approve the pipeline.

The American Petroleum Institute, the country's biggest oil and gas lobbying group, and some labor unions said they were also quietly confident that Obama will approve Keystone.

"This is the one of the most scrutinized infrastructure projects in our nation's history," Sean McGarvey, president of building and construction at labor union group AFL-CIO.

"The president has thoughtfully and methodically looked at this issue. I have no doubt that the president will make the right decision."

Many environmental groups welcomed Obama's focus on climate change in Tuesday's State of the Union speech. But some warned that the Keystone decision would be more meaningful

"I'm glad to see the president, after the long, odd silence of the campaign, ratcheting up the rhetoric about climate change," said Bill McKibben, founder of environmental group 350.org. "The test of that rhetoric will be what he does about the purest, simplest test: the Keystone XL pipeline."

McKibben and National Association for the Advancement of Colored People President Julian Bond were also among the protesters arrested in Wednesday's action outside the White House.

Meanwhile, the API is ramping up pressure on Obama to approve Keystone, which its members say will create more jobs and help ensure U.S. energy security. The group plans a national advertising campaign and "grassroots events across the country," urging Obama to approve the project.

Republican lawmakers, including House Speaker John Boehner, have called on the president not to delay the decision further.

The House Energy and Commerce Committee launched an online clock this week that tallies how long it has been since the project was first submitted for approval.

TRADE OFFS

Some policy analysts guess that with greater scrutiny over his Keystone decision, Obama could announce other carbon cutting measures if he were to approve the pipeline.

Joshua Saks, legislative director at the National Wildlife Federation, rejected such a trade-off.

"You can't do something else to mitigate the enormous effects of passing the Keystone pipeline," he said.

But Paul Bledsoe, an energy consultant who served on the White House Climate Change Task Force under President Bill Clinton, said Obama should roll out sweeping regulations targeting emissions at power plants, which account for one-third of U.S. greenhouse gas emissions, if he approves the pipeline.

"It would be logical to package this and greenhouse regulations together," said Bledsoe.

Environmental groups should not dwell on Keystone, Bledsoe said, calling it "one isolated decision" within Obama's overall "long-term climate change vision."

"A slavish devotion to the wishes of the environmental lobby got the president into a boat load of trouble last time," he said. Bledsoe was referring to Obama's failed first-term attempt to make to make polluters such as power plants pay for each ton of carbon they produced, a move that proved hugely unpopular during the severe economic downturn at the time.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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