- The Washington Times - Wednesday, February 26, 2014

The company hired by the State Department that conducted a favorable review of the Keystone XL oil pipeline did not have a conflict of interest, according to a review by the State Department inspector general, countering charges from environmental groups that are trying to kill the project.

The long-awaited report, released late Wednesday afternoon, was a setback for environmental activists, some Democrats in Congress and other critics of the Canada-to-Texas pipeline who charged that the company hired to review Keystone, Environmental Resources Management, wasn’t objective.

The company concluded, contrary to claims by environmentalist groups, that the pipeline project would not significantly increase greenhouse gas emissions. The inspector general’s report did fault the State Department’s overall process and said it could be more transparent about how it vets contractors.

Critics pointed to the fact that Environmental Resources Management is a member of oil and gas industry groups advocating on behalf of the pipeline and charged that ERM employees had prior ties to TransCanada, the Canadian company that wants to build Keystone.

The inspector general’s report throws cold water on those allegations and exonerates the State Department and ERM, while putting to rest the notion that the Keystone environmental study was flawed by conflicts of interest.

“The process the department used to assess organizational conflicts of interest was effective in that a reasonable review was undertaken to independently evaluate ERM’s certification that it had no conflict of interest and the process achieved its intended result,” the report reads in part.

The study went on to say that the conflict of interest charges may have been the result of a lack of transparency and an insufficient amount of information released to the public, fueling speculation about the contractor’s work and objectivity.

“The department did not fully document its process. … Effective documentation is a necessary component of any government program and can go far to enhance oversight and reduce potential misperceptions of the process. [The inspector general] also found that the department’s public disclosures concerning its conflict-of-interest review could be improved,” the investigation found.

Republicans and other supporters of the project seized on the inspector general’s report and said it eliminates another argument against Keystone. They also urged the president to immediately approve the pipeline, which has been under federal review for more than five years.

“While the State Department is not guilty of bias in their review, this administration is surely guilty of foot-dragging and delaying construction of Keystone XL,” said House Energy and Commerce Committee Chairman Fred Upton, Michigan Republican.

In a statement, TransCanada said the report should close the book on conflict of interest accusations once and for all.

But Keystone’s dogged opponents aren’t likely to be convinced. Before Wednesday’s study, Rep. Raul M. Grijalva, Arizona Democrat, urged the Government Accountability Office to conduct its own review of the State Department’s processes.

Meanwhile, environmental activists remain deeply opposed to the project and said they have other problems with the State Department.

“The State Department’s industry-insider consultants downplayed the significant damage tar sands would have on the climate,” said Sierra Club Executive Director Michael Brune.

Meanwhile, the pipeline’s fate remains uncertain after a Nebraska court decision last week invalidated Keystone’s route through the state. The ruling, which has been appealed by Nebraska Attorney General Jon Bruning, may delay the federal approval process even more.


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