Keystone XL Environmental Consultant ‘Lied’ About TransCanada Ties

Keystone pipeline construction in Yankton, South Dakota (Photo by South Dakota Tar Sands)


WASHINGTON, DC, July 11, 2013 (ENS) – The latest environmental assessment of the controversial TransCanada Keystone XL tar sands pipeline is flawed because the contractor hired by the U.S. State Department to write the review “lied” on its conflict of interest disclosure form about its past work for TransCanada, finds research released Wednesday by two environmental groups.

The international consultancy Environmental Resources Management was hired by the U.S. State Department in 2012 to write a supplemental assessment of the environmental impact of TransCanada’s proposed Keystone XL pipeline.

In their research report, Friends of the Earth and the Checks & Balances Project cite the publicly-available conflict of interest disclosure form signed by ERM Senior Associate Partner Steve Koster, PE, which states, “ERM has no business relationship with TransCanada or its affiliates, and in the attached is certifying that no conflict of interest exists for working on this Project.”

Keystone pipeline construction in Yankton, South Dakota (Photo by South Dakota Tar Sands)

But Friends of the Earth’s review of Environmental Resources Management’s business connections found that, in fact, ERM and TransCanada have worked together at least since 2011 on another pipeline – the Alaska Pipeline Project, a partnership between ExxonMobil and TransCanada designed to connect Alaska’s North Slope natural gas resources to new markets.

“ERM lied again when it said it had no relationship with any business that would be affected by construction of the Keystone XL, which would carry tar sands oil from northern Alberta to refineries on the Gulf Coast,” Friends of the Earth states in the research report. “In fact, ERM’s own publicly available documents show that the firm has business with over a dozen companies with operating stakes in the Alberta tar sands.”

Environmental Resources Management, Inc., based in London, UK with 140 offices in 39 countries and territories, was contracted to write the Supplemental Environmental Impact Statement, SEIS, for TransCanada’s proposed Keystone XL tar sands pipeline.

The new 875-mile pipeline would allow delivery of up to 830,000 barrels per day of diluted crude oil from the tar sands of Alberta and the Bakken Shale Formation in Montana and North Dakota to Nebraska for onward delivery to Gulf Coast refineries.

TransCanada has applied for a Presidential Permit which, if granted, would authorize the proposed pipeline to cross the Canada-U.S. border.

The SEIS was required because the State Department’s Final Environmental Impact Statement, FEIS, written by contract consultant Cardno Enterix and issued in August 2011, did not cover a change to the route through Nebraska to avoid the environmentally sensitive Sand Hills region over the Oglalla Aquifer. In February 2012, this FEIS was criticized for conflict of interest in a report by the State Department’s own Inspector General.

“From the beginning, the State Department’s review of Keystone has been plagued by influence peddling and conflicts of interest,” said Ross Hammond, senior campaigner for Friends of the Earth.

“This is more serious. If ERM lied about its relationship with TransCanada, how can Secretary Kerry, President Obama or the American people believe anything the company says about the pipeline’s environmental impact?” said Hammond.

Hammond said ERM’s lies call into question the entire Keystone XL environmental review process.

Friends of the Earth and The Checks & Balances Project have called for an investigation by the State Department’s Inspector General into how ERM was hired given these conflicts of interest.

In the wake of the new evidence that ERM lied on State Department disclosure forms, the groups are asking Secretary of State John Kerry to throw out the ERM study and not allow it to determine the Obama Administration’s decision on whether to issue a pipeline permit.

In papers filed with the State Department in June 2012, ERM certified that it had “no existing contract or working relationship with TransCanada” for at least three years.

But public records show that TransCanada, ERM and an ERM subsidiary, Oasis Environmental, have worked together at least since 2011 on the Alaska pipeline project.

On its conflict of interest form, ERM also certified that it had no “direct or indirect relationship … with any business entity that could be affected in any way by the proposed work.”

But ERM’s own publicly available documents show that in the period 2009-2012 the firm was working for over a dozen of the largest energy companies involved in the Canadian tar sands which stand to benefit if the Keystone XL pipeline is built, including Exxon, Shell, Chevron, Conoco Phillips, Total and Syncrude.

ERM employees working on the SEIS had ties to TransCanada. As “Mother Jones” reported, “ERM’s second-in-command on the Keystone report, Andrew Bielakowski, had worked on three previous pipeline projects for TransCanada over seven years as an outside consultant. He also consulted on projects for ExxonMobil, BP, and ConocoPhillips, three of the Big Five oil companies that could benefit from the Keystone XL project and increased extraction of heavy crude oil taken from the Canadian tar sands.”

More recently, Friends of the Earth points to the May 14 version of the LinkedIn profile for Mark Jennings that listed him as Socioeconomic Advisor for ERM. Among his roles for the company were since 2011, “Consultant to ExxonMobil Development Company for the Alaska Pipeline Project,” for which Exxon and TransCanada are partners. But less than a month later, Jennings’ LinkedIn profile made no mention of his work for ERM.

ERM is a member of the American Petroleum Institute, the oil and gas industry’s national trade association, which has spent millions lobbying in favor of the Keystone XL pipeline.

“ERM is not in the business of providing unbiased environmental reviews, but working with clients “all the way to final approval” according to marketing materials,” say the environmental groups. “ERM brags about its record and experience of “Gaining Development Approval and Access to Resources” for oil and gas companies.”

Keystone XL pipeline protesters greet President Barack Obama in Palo Alto, California, June 6, 2013 (Photo by Sierra Club)
Keystone XL pipeline protesters greet President Barack Obama in Palo Alto, California, June 6, 2013 (Photo by Sierra Club)

The State Department’s review of Keystone XL has been criticized by the EPA and the scientific community for failing to consider the climate and other impacts of the pipeline.

Although the SEIS states, “Construction and operation of the proposed Project would result in numerous impacts to the environment,”it concludes that “approval or denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area.”

The environmental groups say it is impossible for the State Department to fairly evaluate whether the pipeline is in the national interest when its environmental review was conducted by a company with deep ties to the oil industry.

In April, Checks & Balances Project and 11 environmental, faith-based and public interest organizations called on Secretary of State Kerry and the State Department Deputy Inspector General Harold Geisel to investigate whether Environmental Resources Management hid conflicts of interest which might have excluded it from performing the Keystone XL environmental assessment and how State Department officials failed to flag inconsistencies in ERM’s proposal.

“Secretary Kerry must halt this flawed review process and direct the State Department to conduct a full, unbiased review of the Keystone XL pipeline’s impact,” said Gabe Elsner, director of the nonprofit Checks and Balances Project.

“In addition, the State Department Inspector General should pursue a full investigation into how a contractor with clear conflicts of interest was allowed to write the U.S. government’s assessment of Keystone XL and why the State Department failed to bring those conflicts of interest to light,” said Elsner.

“Finally,” he said, “the State Department should determine appropriate disciplinary actions for ERM to discourage contractors from lying to the federal government in the future.”

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