The Ogallala is already being destroyed -- by over pumping much in excess of natural recharge. And some of that water is being used to grow corn for conversion to ethanol fuel for vehicles, a use supported by tax breaks and that would be unnecessary if the US was allowed to produce sufficient oil from its own resources or new processes to convert to ethanol from coal, oil and natural gas move forward.
Of course the real reasons environmentalists oppose the pipeline do not involve protection of the Ogallala. They oppose use of the tar sands in northern Alberta which will be the source of the oil for its environmental impacts locally, because of the energy used and CO2 emitted to extract the oil, and because a new source of US oil will delay their attempts to force Americans from fossil fuel energy to that of their world of solar and windmills.
You’ve summed it all up nicely.