A lengthy battle over the controversial Keystone XL pipeline, which aims to funnel oil from Canada's tar sands to coastal Texas, heads to the most hotly contested area along the route Thursday.

Hundreds of people are expected at a public hearing in Nebraska's environmentally sensitive Sand Hills as the US State Department prepares its recommendation on whether to approve the $5.3 billion project.

While the final decision rests with US President Barack Obama, the State Department concluded in a draft report last month that the rerouted project -- which avoids the Sand Hills -- would have no major impact on the environment.

Environmentalists and concerned landowners along the nearly 3,200-kilometer (2,000-mile) route vehemently disagree.

"We do believe that we can stop the pipeline," Jane Kleeb, director of the advocacy group Bold Nebraska, told AFP.

But the battle is already half lost.

After nearly four years of fighting for approval of the entire project, TransCanada stripped the southern portion out of its presidential permit application and began building the renamed Gulf Coast pipeline last year.

Once that begins operations later this year, TransCanada will be able to start shipping tar sand oil from Alberta to Texas using a pipeline that came online in 2010 to serve refineries in Oklahoma and Illinois.

What's left for Obama to decide is whether TransCanada can increase its capacity from 590,000 to 1.4 million barrels per day by adding a second line -- Keystone XL -- along the northern route.

--'The dirtiest fuel on the planet'--

It's not yet clear what Obama will do, especially now that he no longer has to walk a careful line between competing interests while seeking a second, and final, term in office.

Obama has long favored an "all of the above" approach of expanding oil and gas production while investing in green energy, and he embraced the southern end of the pipeline in a campaign appearance in the oil depot town of Cushing, Oklahoma last year.

Environmentalists are hoping he won't be swayed by the new route or the State Department's assessment and will instead look at the broader impact of increasing US imports of tar sand oil.

"It's inconsistent with an administration that wants to fight climate change to unleash production of the dirtiest fuel on the planet," said Danielle Droitsch of the Natural Resources Defense Council.

Unlike traditional crude, which gushes out of a well, tar sand oil needs to be dug up and essentially melted with steaming hot water before it can be refined into useable petroleum products.

The State Department estimated that the process produces 17 percent more greenhouse gasses than the average barrel of crude refined in the United States, but concluded that the pipeline would not result in increased emissions because Canada would simply sell the oil someplace else.

Given the obstacles operators have encountered trying to build new pipelines in Canada, it's not clear that is the case, Droitsch said.

Nor does the threat to groundwater disappear just because the new route avoids the Sand Hills, she said, because it still crosses over 1,000 bodies of water, including the massive Ogallala aquifer, which reaches eight US states.

"We are not dealing with conventional oil here. This is stuff that actually sinks in water," Droitsch said, noting that the Kalamazoo river in Michigan has still not recovered from a 2010 spill of more than 800,000 gallons of tar sand oil after an Enbridge pipeline burst.

--'The case for Keystone XL remains strong'--

Pipelines nevertheless remain a far safer way to transport oil than rail, truck or ship, TransCanada spokesman Shawn Howard told AFP.

Keystone XL will be equipped with industry-leading safety technology that includes the ability to isolate a problematic section within minutes with remote-controlled valves and 21,000 sensors, which will report pipeline conditions every five seconds.

"We continue to believe that Keystone XL will be approved," Howard said.

The pipeline has undergone the most extensive review in US history and more than 12,000 pages of published analysis have "asked and answered" questions about the environmental risks and the need for the project, he said.

"The case for Keystone XL remains strong," Howard said in an email.

"In fact the longer it is delayed, the stronger the case for approving Keystone XL becomes, since the US refineries who need the product we will deliver to them will not have some of their current supplies (i.e., Mexico and Venezuela) in the next couple of years."

Key facts about the controversial Keystone XL pipeline
Chicago (AFP) April 15, 2013 - The fate of the controversial Keystone XL pipeline, a $7 billion project to bring oil from Canada's tar sands all the way to refineries in the US state of Texas, will be debated at a public hearing in Nebraska Thursday.

Here's some key facts about what's at stake.

WHAT IS IT?

Keystone XL is an expansion of TransCanada's existing system to funnel oil from Alberta's tar sands to refineries in the United States. The initial $7 billion proposal in 2008 was to build a second pipeline from Hardisty, Alberta that would cut through Montana to meet up with TransCanada' existing line in Steele City, Nebraska and then add on a new southern leg to bring the oil to refineries in Texas. But after years of delays, TransCanada separated the southern portion of the pipeline into a new project that did not require presidential approval and is currently under construction. What remains is a $5.3 billion proposal to build a 1,179-mile (1,897 kilometer) pipeline from Alberta to Nebraska.

WHY IS IT SO CONTROVERSIAL?

Alberta's tar sands are considered to have the 'dirtiest' oil on the planet. Unlike traditional crude which gushes out of a well, tar sand oil needs to be dug up and essentially melted with steaming hot water before it can be refined into useable petroleum products. This means a lot more fossil fuels need to be burned as part of the extraction process, which further contributes to climate change. It also results in huge lakes of polluted water and the strip mining of millions of acres of once-pristine boreal forests. Environmentalists also argue that it contains a harmful and corrosive component -- bitumen -- which makes pipeline ruptures or leaks more likely and carries a greater health and safety risk. Since it is heavier than traditional crude, tar sand oil is also harder to clean up because it sinks rather than floats in water. There was also significant opposition to the initial route because it passed through Nebraska's environmentally sensitive Sand Hills wetlands and over a huge and critical aquifer which serves eight US states.

ECONOMIC IMPACT:

The $7 billion proposal was welcome news to a nation suffering from the 2008 financial crisis and the worst economic downturn in decades. The State Department estimates the current $5.3 billion project will create 42,000 temporary jobs over the one to two year construction period, of which 3,900 will be direct construction jobs. Opponents note that just 35 permanent jobs would be created for pipeline maintenance and argue that the project will kill more jobs than it creates by diverting investment away from more labor-intensive green energy alternatives like wind and solar power.

ENERGY SECURITY:

"Drill baby, drill" was a common chant at Republican political rallies ahead of the 2008 election and many Americans still believe climate change is a farce. TransCanada argues that bringing another 830,000 barrels of oil per day from friendly, neighboring Canada would reduce US dependence on the Middle East and Venezuela by as much as 40 percent. Opponents argue that Keystone XL will have no impact on energy security because much of the oil will be shipped to refineries that produce diesel in tax-free foreign trade zones and end up being exported to Europe and Latin America.

SAFETY:

TransCanada argues that buried pipelines are a far safer alternative to transporting oil than ships or trains and claims to have "one of the best safety records in the industry." It also notes that there are more than 2.6 million miles of oil and natural gas pipelines in the United States "that deliver 99.9998 percent of their products safely and reliably every day." The pipeline will also be equipped with 21,000 sensors that provide updates every five seconds via satellite and the ability to isolate a problem within minutes through remote-controlled valves. Critics note the existing Keystone pipeline developed a dozen leaks in its first year of operation, including a 21,000 gallon spill in North Dakota.