Several environmental groups have filed a lawsuit against the US Department of State and Secretary John Kerry over the permitting of a controversial border-crossing northern leg of a pipeline system that DeSmogBlog has called Enbridge’s “Keystone XL Clone.”
The Keystone XL Clone is designed to accomplish the same goal as TransCanada’s Keystone XL: bringing Alberta’s tar sands to Gulf coast refineries and export market. It consists of three legs: the Alberta Clipper expansion as the northern leg, the Flanagan South middle leg and the Seaway Twin southern leg.
Green groups have called the northern leg an “illegal scheme” because the Enbridge Alberta Clipper expansion proposal didn’t go through the normal State Department approval process. Instead, State allowed Enbridge to add pressure pumps to two separate-but-connected pipelines on each side of the border and send Alberta’s diluted bitumen (“dilbit”) to market.
Enbridge dodged a comprehensive State Department environmental review, which involves public hearings and public commenting periods. The groups say this is illegal under the National Environmental Policy Act (NEPA) and have demanded a re-do for Enbridge’s application process.
“The only thing worse than dirty oil is dirty oil backed by dirty tricks. This is the fossil fuel equivalent of money laundering,” Kieran Suckling, executive director of the Center for Biological Diversity, said in a press release announcing the lawsuit. “The Obama administration should be ashamed of itself for letting Enbridge illegally pump more dirty tar sands oil into the United States.”
The maneuver has a keybeneficiary: former Obama Administration Secretary of the Treasury, Timothy Geithner, who now serves as President of the private equity giant Warburg Pincus.
Geithner’s connection to the lawsuit not only adds intrigue, but also reveals the purpose of Enbridge’s Keystone XL Clone: an export fast-track to the global market.
Timothy Geithner, MEG Energy, Warburg Pincus
Geithner departed as Secretary of the Treasury in January 2013 and in November of that year, Warburg Pincus named Geithner president of the firm. He assumed the role beginning March 2014 — a natural transition given the Warburg family played a key role in the creation of the US Federal Reserve Bank.
But what do Geithner and Warburg Pincus have to do with any of this?
Enter tar sands production company MEG Energy. Bloomberg data shows that Warburg Pincus owns a 16.88 percent stake in MEG, the largest equity owner of the company by percentage.
MEG Energy, which went public in 2010 on the Toronto Stock Exchange, owns the Christina Lake Project, the Surmont Project and other prospective tar sands production land lease holdings.
Beyond owning tar sands production projects, MEG has a contract to send its tar sands through Enbridge’s Keystone XL Clone pipeline system, according to a recent article published in the Globe and Mail.
“MEG has booked capacity for 25,000 barrels a day on the [Flanagan South] pipeline, due to start up in early December, with potential to boost shipments to 100,000 b/d over time,” wrote Global and Mail reporter Jeffrey Jones.
A document posted on the US Federal Energy Regulatory Commission (FERC) website confirms the contractual relationship between MEG and Enbridge. It began in December 2011, a month before President Obama kicked the can down the road on making a decision on Keystone XL’s northern leg.
“MEG…contracted with Enbridge…to ship crude oil on Enbridge’s Gulf Coast Access Project for service from Flanagan, Illinois to Cushing, Oklahoma and on to the Texas Gulf Coast, pursuant to an executed Transportation Services Agreement (MEG TSA),” reads the FERC document.
MEG and Tar Sands Exports
On MEG’s quarter three investor call, the company said it is considering applying for a permit to export tar sands from the Gulf coast.
“We certainly are looking at those types of things. We are well positioned,” Bill McCaffery, CEO of MEG Energy, said on the earnings call. He also noted thatMEG has achieved record quarterly tar sands production rates.
“If you take the Flanagan/Seaway combination, obviously it lands us in Houston area and obviously you can move to other built areas…We have not applied that at this stage, but we are evaluating that,” McCaffery continued.
Enbridge also has skin in the tar sands export game via its subsidiary Tidal Energy Marketing and has already exported tar sands crude to Italy and Spain. Enbridge received a permit from the US government to export “limited quantities” of tar sands crude this past spring.
Enterprise Products Partners, the co-owner of the Seaway Twin pipeline with Enbridge, also is a player in the oil exports game.
In June, the Obama Administration issued a permit to Enterprise to export oil condensate originating from the Eagle Ford Shale basin, the first US unrefined oil product exported from the US in over four decades.
“State Department Oil Services”
When 2016 Democratic Party presidential nominee Hillary Clinton served as Secretary of State, DeSmogBlog referred to the State Department’s backroom wheeling and dealing done on behalf of TransCanada and the proposed Keystone XL pipelineas “State Department Oil Services.”
It now appears Enbridge has taken a lesson from TransCanada’s playbook, with Geithner’s Warburg Pincus chomping at the bit for dilbit to flow through Enbridge’s Keystone XL Clone and to the global market.
“[T]he State Department must stop turning a blind eye to Big Oil schemes to bypass US laws and nearly double the amount of corrosive, carbon-intensive tar sands crude it brings into our country,” said Michael Bosse, Sierra Club deputy national program director, in a press release. “Enbridge has been allowed to play by their own rules…at the expense of our water, air, and climate.”
Watch the animation created by Mark Fiore for DeSmogBlog in 2012 about Hillary Clinton’s State Department Oil Services:
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy