Keystone XL and the dark side of green

October 10, 2013, 11:48 AM UTC

Here’s what environmental activists have to show for their success in blocking construction of the Keystone XL pipeline over the past three years: an uptick in oil traveling by rail and trucks. North Dakota officials estimate that the state’s highways are being pounded by 300 to 500 additional semi trucks a day, belching fumes and adding to traffic fatalities.

That’s the kind of fallout from a rigid enviro-agenda that makes Gary Doer, the Canadian ambassador to the U.S., shake his head with bemusement. “The fundamental argument that if you stop the pipeline you stop oil from being developed is just wrong,” he points out. “Oil gets to market.”

It sure does, and with a North American oil boom well under way, that black gold is already end-running President Obama’s reluctance to bless a critical stretch of pipeline that would transport oil from Alberta to Texas refiners on the Gulf, with on-ramps in North Dakota and Montana.

It’s now been five years since TransCanada Corp. filed its cross-border application, and Keystone XL remains in limbo. The State Department has completed four reviews — and is on its fifth. Its 2011 report concluded that the pipeline would have “no significant impacts” on the environment. Bipartisan majorities in both houses of Congress support it. And pipeline construction is a rare point of agreement between the U.S. Chamber of Commerce and the AFL-CIO, which is eyeing the 42,000 direct and indirect jobs coming online during the construction phase.

But environmental groups, claiming the moral high ground, have poured millions into a campaign to pressure Obama: Actors such as Robert Redford have opposed it, and billionaire hedge-funder Tom Steyer launched a million-dollar TV ad campaign in September. That’s what gets under the skin of Doer, who openly criticizes an activist “industry” based on self-sustaining fundraising. He asks if any of those West Coast elites have ever even driven down North Dakota’s truck-clogged highways. More to the point, he complains, the activist community ignores the advantage of pipeline vs. rail, which leaves a bigger carbon footprint and the potential for accidents — like Quebec’s devastating derailment of a train ferrying tankers of crude. “They delayed Keystone in 2011, and in 2012 train transportation for oil went up 46%,” he says.

As Canada’s chief advocate in Washington for the Keystone project, Doer is having to deploy his considerable political skills (he’s been likened to Tony Blair) while touting his own solid environmental record. As Manitoba’s premier, he closed down two coal plants, replacing them with natural gas. He supports the Copenhagen Accord to reduce greenhouse gas emissions — and he makes a passionate case that President Obama deserves big-time legacy credit for restricting tailpipe emissions, the real driver of pollution.

But Doer collects the absurdities of the environmental activist agenda like a shaman collecting prayer beads. Another Doer pet peeve: the predictable opposition to building transmission lines, which, by the way, are needed to carry solar and wind-generated power. “To get alternative energy into the grid, you need transmission lines, and I haven’t seen a transmission line that hasn’t been opposed — in either country,” he says. “So it’s not just about pipelines. That’s not a can-do culture for getting even clean energy around.”

On Keystone, he worries that the President will, in the end, seek a “short-term hallelujah chorus” from activists. “Look,” he tells me, “Canada does not want to get in the middle between America’s Oilcan Harriet and Birkenstock Bob.” Still, Doer can’t help advising the President to look to long-term legacy — not the temptation of seeking praise from the activist chorus. “We want the United States to proceed on energy independence in North America,” Doer says. “It makes more sense to get oil on a pipeline from middle America than the Middle East, and to get oil from Canada rather than Venezuela.”

Wise words from our laid-back northern neighbor.

This story is from the October 28, 2013 issue of Fortune.