Watchdogs: Contractor on Keystone XL Review Lied About Conflict of Interest With TransCanada

Two watchdog groups on Wednesday accused Environmental Resources Management (ERM), the top contractor behind the latest environmental review of the controversial Keystone XL pipeline, of lying on its conflict of interest statement filed with the State Department.

In a signed conflict of interest disclosure form filed with the State Department in June 2012, ERM claimed it had “no existing contract or working relationship with TransCanada,” the Canadian firm that wants to build the pipeline, in the past three years.

Publicly available documents, however, show otherwise, according to Friends of the Earth and the Checks and Balances Project. The groups have identified several documents indicating that, since at least 2011, ERM and its subsidiary, Oasis Environmental Inc., worked on the Alaska Pipeline Project, a natural gas pipeline being developed by TransCanada and ExxonMobile.

A 2011 report to the Alaska legislature, for example, lists ERM and Oasis Environmental among 44 contractors or service providers to the pipeline project. A similar list is also available in a presentation on the official state web site for the Alaska pipeline.

“ERM lied on its conflict of interest disclosure form, and the State Department is either asleep at the wheel or chose to look the other way,” said Ross Hammond, a senior campaigner for the environmental group Friends of the Earth, which opposes the Keystone XL pipeline.

The groups also point out that ERM, an international consulting firm, has also recently worked with several other energy companies that would directly benefit from the Keystone XL pipeline. The groups say that that ERM, which is a member of the American Petroleum Association, simply “rubber stamps” projects toward approval without raising meaningful environmental concerns.

The State Department did not reply to a request for comment from Truthout. An ERM spokesperson has not responded to an email inquiry from Truthout.

The Environmental Protection Agency (EPA) normally permits oil and gas pipelines that cross state lines, but because the proposed Keystone XL pipeline route crosses the northern Canadian border, the approval fell in the hands of the State Department. TransCanada has already begun construction of the southern end of the pipeline while awaiting federal approval.

The Keystone XL pipeline would be roughly 1,700 miles long and carry oil from the Alberta tar sands from Canada to Texas. With the final decision on whether to approve the pipeline in the hands of the Obama administration, the proposal has become one of the nation’s top environmental controversies, pitting landowners and environmentalists against the powerful oil industry and its allies in Washington.

The accusations now flying at ERM is not the first conflict of interest scandal to plague the State Department’s review of the Keystone XL proposal.

In March, Mother Jones revealed that portions of the same 2012 filing containing the conflict of interest statement indicated that ERM employees had worked on pipeline projects involving TransCanada in the past, but these portions had been redacted in the copy initially released by the State Department along with a draft environmental review of Keystone XL earlier that month.

In 2011, the State Department’s inspector general launched an investigation into the department’s decision to hire consulting firm Cardno ENTRIX to help conduct the first round of environmental impact reviews for the Keystone XL project after it was revealed that TransCanada screened applicants for the project. The inspector general did not find any foul play, but ordered the State Department to reform its process for identifying conflicts of interest when hiring outside contractors.

In a landmark speech on climate change delivered in late June, President Obama said he would approve the Keystone XL pipeline only if its served the national interest and does not significantly contribute to greenhouse gas emissions.

Hammond said that ERM’s dishonesty has “tainted” the review of Keystone XL’s potential environmental impacts and should not be the basis for the Obama administration’s decision. The final report on the potential impacts, known as an Environmental Impacts Statement (EIS), is expected to be released later this year.

Hammond and his allies have called for the current draft to be thrown out in light of the ERM revelations.

In March, the State Department released a draft EIS for the Keystone pipeline. ERM was a main contractor behind the report. The draft caught heavy criticism from the EPA, which said in its review that draft contains “insufficient information” and underestimates the amount of carbon pollution that could be produced as a result of building the pipeline.