State Dept. IG Report Diffusing Keystone Contractor Controversy Seen as Revealing Flawed Process

Monday, March 03, 2014

Determined to derail the controversial Keystone XL pipeline, environmentalists publicly ridiculed an internal government investigation into the choosing of the firm that cleared the project of possible environmental harm.


Outrage began months ago before the contractor hired by the State Department, Environmental Resources Management (ERM), released its environmental review of Keystone XL, which critics say will further exacerbate the causes of global warming.


ERM, it turned out, utilized some staff members on the review who had previously worked for TransCanada, the Calgary-based builder of the pipeline, raising a possible conflict of interest.


“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,” Friends of the Earth president Erich Pica said in a press release.


Critics of the project also objected to ERM on grounds that the British-based firm is a member of the American Petroleum Institute, which represents the interests of oil companies.


Not surprisingly, ERM concluded in its study that the pipeline, which would carry tar-sands oil from Canada to Texas refineries to be exported to China and elsewhere, would not pose any significant threats to the environment.


That conclusion delighted Keystone supporters, who publicly called on Secretary of State John Kerry to recommend to President Barack Obama that the project proceed.


But opponents were outraged by the ERM study, and then further incensed when the State Department’s Office of Inspector General (IG) said the choosing of ERM for the review had followed agency procedures and did not violate conflict-of-interest rules.


Bill McKibben, an environmental activist opposing the pipeline, said the IG report (pdf) revealed that “dirty dealings” are business as usual in Washington.


“The real scandal in Washington is how much is legal,” said McKibben, co-founder of the group “This process has stunk start to finish.”


Representative Raul Grijalva (D-Arizona), a pipeline critic, said the IG’s review was too narrow, focusing only on “whether the State Department followed its own flawed process for selecting a third-party contractor.”


“The fact that the answer is ‘yes’ doesn’t address any outstanding concerns about the integrity of ERM’s work, the State Department’s in-house ability to evaluate its quality or whether the process itself needs to be reformed,” Grijalva told the Associated Press.


Critics seized on one aspect of the IG’s report that said the State Department’s process for hiring contractors could be better, and that its requirements for documenting how contractors are chosen were “minimal.”

-Noel Brinkerhoff


To Learn More:

Report: Keystone Contractor Followed Federal Rules (by Matthew Daly, Associated Press)

Groups: Investigation Shows 'Dirty Dealings' Just Business as Usual for Oil Industry (by John Queally, Common Dreams)

Inspector General's Report on Keystone XL Contractor Gives Thumbs-Up to Business as Usual (by Meteor Blades, Daily Kos)

Keystone XL Pipeline Project Compliance Follow-up Review: The Department of State’s Choice of Environmental Resources Management, Inc., To Assist in Preparing the Supplemental Environmental Impact Statement (U.S. Department of State and the Broadcasting Board of Governors, Office of Inspector General) (pdf)

State Dept. Releases Keystone Pipeline Report Amid Conflict-of-Interest Controversy (by Steve Straehley, AllGov)


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