The head of EthicalOil.org, a so-called "grassroots" campaign promoting Alberta's oil sands, has now left to join the Prime Minister's Office.

The Globe and Mail reported Monday that Alykhan Velshi will soon become director of planning within one of the most powerful political entities in Canada. It's a hire that puts him into close contact with Stephen Harper and blurs the already thin line separating the oil sands industry from the Conservative government.

Velshi resigned as Immigration Minister Jason Kenney's director of communications last summer to run EthicalOil.org. The online campaign portrayed Alberta's oil sands as more "ethical" than conflict oil from Saudi Arabia in a series of TV ads running last August on the Oprah Winfrey Network in Canada.

Velshi framed EthicalOil.org at the time as a "grassroots" organization that was "100 per cent independent of government and industry."

But a Tyee investigation revealed that Velshi's group appeared to have close ties to McLennan Ross LLP, a prominent Alberta legal group which claims to represent "63 per cent of the most dominant oil sands players."

The Ethical Oil argument was popularized by right-wing commentator Ezra Levant and has since been used by both Environment Minister Peter Kent and Prime Minister Harper.

Though it received significant attention in Canada, the conflation of ethics with oil production has yet to gain much traction in the U.S.

Case in point was the Barack Obama administration's recent decision to postpone TransCanada's Keystone XL pipeline by up to 18 months, some observers argue.

"It's not clear that the Canadian government was effectively speaking to the people it needed to convince," Council of Foreign Relations senior fellow Michael Levi recently told Postmedia. "The ethical oil slogan seems to mostly work with people who already agree with it (and) the sentiment behind it."

Velshi's new PMO position in a sense fills the gap left by Bruce Carson, the once-trusted top Harper advisor.

Carson at one point helped convene secret alliances between Alberta's oil sands industry and the federal government, but is now disgraced by a scandal involving his former sex-worker fiancée (click here to read an in-depth Tyee report).

Geoff Dembicki reports on energy and climate issues for The Tyee.