Report: Keystone contractor followed federal rules


WASHINGTON (AP) — A consulting firm that helped write an
environmental review of the proposed Keystone XL oil pipeline complied
with federal rules regarding possible conflict of interest, the State
Department’s inspector general said Wednesday in a report that buoyed
supporters of the controversial pipeline and disappointed critics.
report said the contractor, Environmental Resources Management, fully
disclosed that some staff members who worked on the State Department
report had previously done work with the pipeline operator,
Calgary-based TransCanada. None of the work for TransCanada involved
Keystone XL, and all of it occurred before the staff members began work
at ERM, the report said.
The State Department followed federal
guidelines regarding use of outside contractors, the report said, "and
at times was more rigorous than that guidance."
Still, the report
said the State Department’s process for hiring outside contractors can
be improved, adding that requirements for documenting how contractors
are selected were "minimal."
London-based ERM largely wrote the
State Department’s Jan. 31 environmental report on the $5.3 billion
pipeline, which would carry oil derived from tar sands in western Canada
through the U.S. heartland to the Texas Gulf Coast. The report raised
no major environmental objections to the pipeline and was seen as a
major victory for pipeline supporters.
Environmental groups have
criticized the State Department’s hiring of ERM, saying the firm should
be disqualified because of its previous work for TransCanada.
spokesman for House Speaker John Boehner, a strong Keystone supporter,
said the inspector general’s report was the latest study to find no
reason for the Obama administration to continue blocking the project.
The pipeline was first proposed in 2008.
"It’s long past time the
president stop pandering to his extremist allies and just approve it so
we can get people back to work," Boehner spokesman Brendan Buck said.
But Rep. Raul Grijalva, D-Ariz., a pipeline critic, said the inspector general’s review was overly
report focused on "whether the State Department followed its own flawed
process for selecting a third-party contractor," Grijalva said. "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."
Far from inspiring confidence in the project, the report "is evidence of the problem," Grijalva
The 1,179-mile pipeline has become a symbol of the political debate over climate change.
supporters, including lawmakers from both parties and many business and
labor groups, say the project would create thousands of jobs and reduce
the need for oil imports from Venezuela and other politically turbulent
Opponents say the pipeline would carry "dirty oil" that contributes to global warming. They
also worry about possible spills.
McKibben, an environmental activist who has led opposition to the
pipeline, said the report 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."
McKibben said he was reassured that
the process was now in the hands of Secretary of State John Kerry,
saying Kerry has a long record as a climate champion. "There’s at least
an outside chance of a decision not based on cronyism," McKibben said.
report marks the second time the inspector general has cleared the
State Department of wrongdoing in its oversight of the pipeline project.
In February 2012, the IG found no evidence that State Department
employees were improperly influenced by a previous contractor, Cardno
Entrix, that had conducted an earlier review.
The State Department has authority over the project because it crosses a U.S. border.
official with the American Petroleum Institute, the top lobbying group
for the oil and gas industry, said the watchdog report removes another
attempt by pipeline opponents to block the project.
"After more
than five years, all the excuses not to build Keystone XL have been
exhausted. The state of limbo needs to end," said Cindy Schild, API’s
senior manager of downstream operations.
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