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Keystone XL pipeline route
The months-long assessment of a conflict of interest by the contractor who conducted the Keystone XL pipeline environmental review was released by the State Department's Office of the Inspector General Wednesday. Conclusions: Nothing to see here, folks. Tempest in a teapot. Move along.

Reaction from environmental advocacy groups and individuals opposed to the pipeline's construction was swift. Bill McKibben, co-founder of the climate change advocacy group 350.org and one of the early foes of Keystone XL who has been arrested several times for his anti-pipeline protests outside the White House, said:

“The real scandal in Washington is how much is legal. This process has stunk, start to finish.”
While it's not a killer blow to pipeline opponents, the report gives more ammunition to the forces eager to see Keystone XL thick with tar-sands petroleum flowing from Alberta to the Gulf Coast: Calgary-based pipeline builder TransCanada, the oil industry in general, Republicans, a significant fraction of congressional Democrats, and many unions, with AFL-CIO chief Richard Trumka now firmly in the camp of the supporters.

Whether driven by profit, by campaign contributions, by climate-change denial or by desire to create more jobs in an economy plagued by a tepid recovery for all but the top tier of Americans, those supporters like to pretend that the fight against Keystone XL is, at best, a not-in-my-backyard battle rather than merely one front in the broad struggle to keep as much fossil fuel in the ground as possible. Even if Secretary of State John Kerry does back bends away from his tough climate change speech in Jakarta and recommends that President Obama approve Keystone XL and the president agrees, that won't be the end of opposition to the pipeline or to extracting dirty petroleum from the tar sands. In that light, the OIG's report makes little difference.

The FSEIS contractor, London-based Environmental Resources Management, was hired by TransCanada, the builder of the Keystone XL, to supply the State Department with the Final Supplemental Environmental Impact Statement on the pipeline. Environmental advocates objected to the FSEIS as flawed and incomplete just like the two previous versions. But months before the impact statement was published, they had objected to who was writing it on the grounds that ERM—which has strong ties to the oil industry, including membership in the American Petroleum Institute—had not been forthcoming about its relationship with TransCanada.

Please read below the fold for more analysis.

The 35-page OIG report concluded:

[I]n the case of concerns raised about ERM’s alleged lack of objectivity because current ERM staff had previously worked for TransCanada and other oil and pipeline companies, OIG found that the Department’s conflict of interest review was effective and that the review’s conclusions were reasonable. Specifically, OIG’s review found the following: (i) ERM had fully disclosed the prior work histories of its team members as part of its proposal; (ii) L/OES attorneys had reviewed and researched the nature of the prior work and had discussed the prior work with ERM during the pre-selection interview; (iii) L/OES attorneys had determined that the prior TransCanada work occurred before the staff began work at ERM and that none of the prior work had involved Keystone XL; (iv) the Department’s prescribed conflict of interest guidance provides four factual scenarios that may create impairments to objectivity;10 (v) the employees’ prior work histories did not involve any of those four scenarios; (vi) this prior work had not impaired ERM’s objectivity; (vii) the totality of information provided by ERM to the Department was not misleading; and (viii) the Department’s conflict of interest guidance is consistent with pertinent regulations and case law.

However, OIG did find that the process for documenting the contractor selection process,
including the conflict of interest review, can be improved.

Included in the report were useful but minor recommendations for making those improvements.

In response, Erich Pica, president of Friends of the Earth, which had first spotlighted the conflict-of-interest complaints, said:

"This Inspector General Report raises more questions than it answers. In fact it reveals serious errors in the State Department’s process for vetting conflicts of interest. It’s conclusion that the agency followed its procedures, seems to rest mainly on interviews with State Department lawyers who, the report points out, never documented all of the supposed due diligence they were conducting.

There are notable failures in the process, including the fact that ERM only disclosed its relationship with TransCanada after they were awarded the contract; even though conflicts of interest were supposed to be one of the criteria. This is not reassuring, but we’re hopeful that the GAO will get to the bottom of this.

350.org Policy Director Jason Kowalski said:
“Far from exonerating the State Department of wrongdoing, the Inspector General report simply concludes that such dirty dealings are business as usual. While allowing a member of the American Petroleum Institute to review a tar sands oil pipeline may technically be legal, it’s by no means responsible."
Tom Steyer, the billionaire founder of NextGen Climate Action who has pledged to spend $100 million on ads going after congressional and gubernatorial candidates governorships who refuse to act on climate change, said:
“It is disappointing that the Inspector General’s office chose to conduct such a narrow review of the FEIS process, especially given the important role that it will play in informing the President’s decision on the Keystone XL pipeline. This was a missed opportunity to seriously investigate the integrity of the FEIS document and process.

The State Department did not actually consider the test established by the President  during his speech at Georgetown last June: that no project that increases the amount of air pollution will be approved. Additionally it ignores statements by the tar sands executives that the Keystone XL pipeline is the key to their ability to develop the tar sands. As I have said before, the FEIS is a flawed document, and it would be a disservice to President Obama and his legacy on climate change to rely on this report.”

Elijah Zarlin, CREDO's senior campaign manager said:
"Secretary of State John Kerry inherited this mess, and now it's time for him to bring it to a close by stating what is obvious—that this pipeline is not in our national interest. If he doesn't, more than 78,000 Americas stand ready to risk arrest to stop the White House and the State Department from putting the oil industry’s interest before our national interest, and recommending approval of Keystone XL.”
Even if Kerry and Obama have already made up their minds on how they will stand on Keystone XL, a publicly announced decision is still months away. The State Department has opened public comments up until March 7, and a 90-day federal interagency review does not end until April 30. The earliest announcement, therefore, would be May 1, but probably at least several weeks later.

That depends, however, on when the situation in Nebraska gets resolved. A state district judge ruled recently that transferring authority to approve a new pipeline route from Nebraska's Public Service Commission to the governor was unconstitutional. TransCanada made the change as a result of President Obama's rejection of its first application for a permit to build the pipeline through wetlands in the state. PSC commissioners say they will wait to see what happens to court appeals of the judge's decision. If it's upheld, they will have seven months, possibly extended to 12 to approve or reject the new route.

Originally posted to Meteor Blades on Thu Feb 27, 2014 at 01:21 PM PST.

Also republished by Daily Kos.

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