State Dept. Inspector General Will Review Tar Sands Pipeline

WASHINGTON, DC, November 8, 2011 (ENS) – Congressional and public criticism of the U.S. State Department’s environmental assessment of TransCanada’s proposed 1,700 mile Keystone XL tar sands oil pipeline has prompted the department’s Office of Inspector General to conduct a Special Review.

In a letter released Monday, a spokesman for Deputy Inspector General Howard Geisel said the IG’s Office will examine the State Department’s handling of its Environmental Impact Statement and its process for deciding whether or not the $7 billion pipeline would be in the national interest.

State Dept. Deputy IG Howard Geisel now heads the IG’s Office. The top spot has been vacant since January 2008. (Photo courtesy U.S. State Dept.)

The pipeline would transport crude oil extracted from tar sands in northern Alberta to a new tank farm in Cushing, Oklahoma and refineries near Port Arthur and Moore Junction, Texas.

The review comes in response to an October 26 letter of request for an inquiry from Senator Bernie Sanders, a Vermont Independent, and 14 other members of Congress, all Democrats.

Senator Sanders said Monday, “I appreciate the inspector general’s responsiveness to our request and the willingness to treat this important matter, and the allegations of conflicts of interest, with the seriousness it deserves. This is a critically important issue for our environment and the energy future of our country.”

“At a time when all credible scientific evidence and opinion indicate that we are losing the battle against global warming, it is imperative that we have objective environmental assessments of major carbon-dependent energy projects,” said Sanders.

A 36″ diameter crude oil pipeline similar to pipe selected for the Keystone XL pipeline. (Photo courtesy U.S. State Dept.)

The Special Review will likely examine the State Department’s relationship with Cardno Entrix, a Houston-based environmental consulting firm contracted by the department to assist in preparing the EIS.

Cardno Entrix was selected at the recommendation of Calgary-based TransCanada, critics allege, although the firm had worked on projects with TransCanada in the past and describes the pipeline company as a “major client” in its marketing materials.

In fact, the State Department’s official web page about the Keystone XL Pipeline carries this credit line, “Cardno ENTRIX maintains this site as a portal for information from the U.S. State Department about the Keystone XL Pipeline Project.

The State Department has defended its review of the proposed pipeline against allegations of bias and conflict of interest, including the contract with Cardno Entrix.

On October 28, a dozen national environmental groups also called for an investigation of several U.S. Office of Government Ethics regulations that the groups allege State Department officials appear to have violated.

In addition to the Cardno Entrix connection, they are concerned about the relationship between TransCanada lobbyist Paul Elliott and State Department officials. Elliott was deputy campaign manager for the 2008 presidential campaign of Secretary of State Hillary Clinton.

The groups are also concerned about the recent hiring of former TransCanada lobbyist Broderick Johnson to be a senior adviser to Obama’s re-election campaign.

Anti-pipeline demonstrators at the White House, November 6, 2011 (Photo by Lu Tatum)

In addressing an estimated 12,000 demonstrators encircling the White House on Sunday, NRDC Founding Director John Adams called on President Obama to protect America’s environment, not the profits of oil interests, by rejecting the Keystone XL tar sands pipeline.

“We’re here today to stand together and say, we believe in a brighter future,” Adams said in prepared remarks before the White House, where nine months earlier he received the Presidential Medal of Freedom for his work protecting the environment.

“Instead of building a pipeline to the past, it’s time to draw a line in the sand,” Adams said. “And it’s time to draw the line on tar sands. That’s the line we’re drawing here today.”

The Inspector General’s special review will examine whether the State Department complied with federal laws and regulations in assessing the environmental impacts of the pipeline.

Published August 26, 2011, the State Department’s Final EIS Summary of Findings concluded “there would be no significant impacts to most resources along the proposed Project corridor.”

In his memo Friday to Deputy Secretary of State William Burns, Geisel wrote, “The review will be conducted at appropriate bureaus and offices, including the Bureau of Economic, Energy and Business Affairs, Bureau of Oceans, Environ and Scient, Bureau of Western Hemisphere Affairs, and the Office of the Legal Adviser. The review will include interviews of appropriate officials and an assessment of pertinent documents.”

Last week, President Obama indicated that he, himself, would make the national interest determination rather than delegating it to Secretary of State Hillary Clinton.

Map of TransCanada’s proposed Keystone XL pipeline (Map courtesy U.S. State Dept.)

While State Department officials have said that the decision would be made by year’s end, the lawmakers are asking that it be deferred until the Inspector General finishes his report.

“I once again urge President Obama to defer any decision on the pipeline until the State Department investigation has been completed,” Senator Sanders said.

Congressman Steve Cohen, a Tennessee Democrat, one of those requesting the inquiry, said, “Given the significant economic, environmental, and public health implications of the proposed Keystone XL pipeline, the American people deserve an accurate, unbiased review,” said Cohen, the only member of Congress to attend Sunday’s anti-Keystone rally outside the White House.

“The recent allegations of corruption and conflicts of interest are disconcerting, and I appreciate that the Office of Inspector General is investigating the State Department’s review process,” said Cohen. “As stated in a previous letter to the President, I ask that he withhold any final decision on the pipeline until the investigation is complete.”

On October 19, a group of 22 Democratic Congressmembers urged President Obama in a letter to issue the Presidential Permit for the Keystone XL Pipeline because of the project’s economic, energy and national security benefits.

The group, which includes Gene Green of Texas, Ranking Member on the House Subcommittee on Environment and the Economy, wrote, “Mr. President, America needs the Keystone XL Pipeline. It is in our national interest to have a Presidential Permit issued for Keystone XL as soon as possible. America truly cannot afford to say “no” to this privately funded, $20 billion, jobs-creating infrastructure project, which would bolster our economic, energy and national security.”

Green said, “The project, which has bipartisan support in Congress, has also earned the support of national and local groups in the states along the pipeline’s route. An exhaustive three-year, multi-agency review process, which the Department of State has led, confirmed that the pipeline will have a positive impact on America’s economy, energy supply and independence from foreign oil, and national security.”

In northern Alberta, a Syncrude upgrade facility turns heavy bitumen from the tar sands into lighter crude oil that can flow through a pipeline. (Photo by Art Luver)

The National Association of Manufacturers, too, is urging the Obama administration to approve the Keystone XL pipeline project.

NAM Vice President for Energy and Resources Policy Chip Yost said in October, “Americans need jobs, and this project will immediately create 20,000 construction and manufacturing jobs in the United States. Further, a Perryman Report estimates that the project will create an additional 118,000 indirect jobs and will inject $20 billion into our economy.”

But Tar Sands Action organizer Bill McKibben, who helped lead the White House demonstrations, said, “It’s good to see the administration beginning to listen to responsible lawmakers, and we look forward to the results of this inquiry about the warped environmental review process. But it’s important to understand that the process has always been the smaller of our objections. while we’ve been dismayed by the corrupt conduct of the state department, our real problem has from the start been the fact that these tar sands are the second largest pool of carbon on Earth.”

“Since the State Department didn’t even bother to study that global warming question, the only real answer is to send this back for a whole new review – or, better yet, for the President to simply back up his campaign promises and deny the permit outright,” said McKibben.

“Everyone should know that this will only encourage people across America to step up the tar sands fight. We’re headed to Obama offices across the country, including his headquarters in Chicago and in all the swing states, with the same message: President Obama promised to fight for the climate and now without Congress in the way, he can actually do it.”

Tar Sands Action is planning a demonstration at Obama’s Organizing for America campaign headquarters in Chicago on November 16.

To read earlier ENS coverage of the TransCanada Keystone pipeline issue see: