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Nati Harnik, Associated Press
A mowed swath of pasture in the sandhills marks the exact route of the Keystone XL pipeline, Thursday, Sept. 29, 2011. A public hearing on the pipeline was sponsored by the Sate Department at the Atkinson high school.

ATKINSON, Neb. — Bruce Boettcher strolls over a hilltop in desolate Nebraska ranching country, stares down at the tightly packed sand around his boot, clenches his jaw and kicks a fistful into the breeze.

Four generations have worked the land where 55-year-old rancher tends cattle. His rolling, sunburnt 480 acres sit atop the Ogallala aquifer, an underground water supply that has become ground zero in a national fight over the Obama administration's environmental priorities.

The latest showdown is taking place in the north-central Nebraska town of Atkinson, a farming and ranching community near the Keystone XL pipeline's proposed route. The pipeline operated by Calgary-based TransCanada would carry tar sands oil over the Canadian border and through six states on its way to Texas refineries. U.S. State Department officials are holding hearings this week in Montana, South Dakota, Nebraska, Oklahoma and Texas before they decide whether to grant a federal permit.

Boettcher said he is angry that TransCanada, in his view, has pitted neighbors against one another and tried to quietly rush the project toward approval. A U.S. State Department environmental report has found no major concerns with the project, although opponents question its objectivity.

"They have scientists, they have geologists, they have the EPA, and they find nothing wrong here," Boettcher said. "But the people who live here know more. It's not because we have some title and a name tag. We work with this land. We know what you can do and what you can't do. And this is not one of the things you should not be doing."

Pipeline supporters point to U.S. State Department studies and other water experts who insist the project is safe. Business groups and unions have welcomed the project as a major job-creator that will reduce the nation's dependence on Middle East oil. But the pipeline has drawn fierce opposition from an unlikely coalition of farmers, ranchers and environmental groups who fear it will leak and contaminate the Ogallala aquifer, which supplies drinking and irrigation water to eight states.

Pipeline supporters and top TransCanada executives have said the criticism is baseless and an attempt to stir fears.

Hundreds filled the West Holt High School gymnasium on Thursday, hoping to sway State Department officials before they decide whether to allow the $7 billion project to proceed.

On Thursday, as both sides held back-to-back press conferences, Terry Frisch rumbled through the Sandhills in a red, dust-caked Chevy pick-up. The 64-year-old Republican and part-time rancher said he seldom agrees with environmentalists, and has never participated in such a large political fight.

But Frisch said he joined the opposition because much of his land sits within inches of the top of the underground water table. In the summer, he said, his property often floods.

"It isn't going to affect us near as it's going to affect our kids and their kids," he said. "It's going to be a long-term effect."

South Dakota Gov. Dennis Daugaard voiced support for the pipeline on Thursday. Daugaard said he could not attend a hearing being held in Pierre by the U.S. State Department, which will decide whether to approve the 1,700-mile pipeline, but that an aide would deliver a letter from him urging federal officials to approve the project. The pipeline needs approval from the State Department because it would cross the U.S.-Canada border.

Daugaard said the proposed pipeline will create jobs in South Dakota, pay more than $10 million in local property taxes each year and provide a way to deliver oil produced in the state to refineries.

However, opponents said they believe the pipeline would leak.

Matt McGovern of the National Wildlife Federation said the original Keystone pipeline built across eastern South Dakota had a dozen spills in its first year of operation. A leak in May at a pumping station in southeastern North Dakota spilled more than 14,000 gallons of oil, he said.

"They don't have a good safety record," McGovern said.

Associated Press reporter Chet Brokaw contributed from Pierre, S.D.