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State’s ‘Environmentally Sound’ Keystone Assessment Done By Firms Linked To TransCanada, Exxon Mobil, BP And Kochs

By Jeff Spross on March 7, 2013 at 6:07 pm

"State’s ‘Environmentally Sound’ Keystone Assessment Done By Firms Linked To TransCanada, Exxon Mobil, BP And Kochs"

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Yesterday, we found out via Inside Climate News and Brad Johnson over at Grist that the environmental impact statement the State Department just released on the Keystone XL pipeline was written by a private consulting firm being paid by the pipeline’s owner.

This obviously raises concerns about conflicts of interest with the report itself, but it also highlights the problems with turning government work and analysis over to private firms with possible financial ties to other private entities who may be affected by that work and analysis — a phenomenon that’s been underway since the 1990s.

State’s report, which found that the pipeline was “unlikely to have a substantial impact on the rate of development in the oil sands,” and will “not likely result in significant adverse environmental effects,” was written by Environmental Resources Management (ERM). Several years ago, Cardno Entrix, another private consultancy, was contracted by TransCanada to handle the State Department’s initial draft of the environmental impact statement, the Department’s hearings on the pipeline, and even its Keystone XL website.

As Johnson reported, ERM was paid “an undisclosed amount under contract to TransCanada” for the assessment:

The documents from the ERM-TransCanada agreement are on the State Department’s website, but payment amounts and other clients and past work of ERM are redacted. In the contract documents, ERM partner Steven J. Koster certifies that his company has no conflicts of interest. He also certifies that ERM has no business relationship with TransCanada or “any business entity that could be affected in any way by the proposed work” (notwithstanding the impact statement contract itself). In a cover letter, Koster promises State Department NEPA Coordinator Genevieve Walker that ERM understands “the need for an efficient and expedited process to meet the demands of the desired project schedule.”

An investigation by Inside Climate News finds that ERM’s report draws from work done by other oil industry contractors, Ensys Energy and ICF International.

According to State’s report, the department “directed the preparation,” but the project’s manager is the only government official actually listed on the cover page.

Inside Climate News reported Ensys has worked with ExxonMobil, BP and Koch Industries, though Ensys president Martin Tallet emphasized the consulting firm has also worked with the Environmental Protection Agency, the Department of Energy, and the World Bank. “We don’t do advocacy,” Tallett told Inside Climate News, pointing out that EnSys employees acted as expert witnesses for various state water agencies and against the oil industry in court cases on groundwater contamination from MBTE, a gasoline additive. “If we were the pet of government agencies or oil companies, the other side wouldn’t come to us.” ICF International declined to comment on the Keystone report.

According to both David Driesen, a law professor at Syracuse University and a former attorney for the Natural Resources Defense Council, and Joel A. Mintz, a law professor at Florida’s Nova Southeastern University, conflicts of interest can be difficult to avoid in practice, whatever the official statements:

“I think the question of conflict of interest is a legitimate one,” Driesen said. If consulting firms are “used to working for industry clients, it’s possible they would subtly orient their analysis in a certain way, and that could be reflected” in the document.

“The marketplace and ethics sometimes collide,” said Mintz, who is a member scholar at the Center for Progressive Reform, which favors green policies. “If their livelihood comes from consulting for the oil and gas industry, I think it would be expected they’d be sympathetic to their future and past clients. They’ll want to keep consulting.”

As Inside Climate News points out, State’s Keystone report is actually part of a larger trend, spanning more than a decade, of government farming out work it used to do in-house to private contractors. While the Defense Department has driven the majority of the contracting the United States government does with private firms, the practice ramped up in other departments significantly in the 1990s with the arrival of then-Vice President Al Gore’s “Reinventing Government” initiative. Since then, the federal workforce has shrunk as the contractor workforce has grown.

According to a report by the Center for Public Integrity, the government was spending $200 billion a year on private contractors as of 2003. A scholar at the Brookings Institution named Paul Light called this workforce the “shadow government,” estimating its size in 1999 at 5.6 million. Government agencies now routinely outsource reports like State’s environmental impact statement because they don’t have the staff or resources to handle the work in-house, and given the ubiquity of consulting firms’ work with industry, it’s difficult to find a company that doesn’t have industry ties.

Kathleen Clark — a practicing lawyer and law professor at Washington University in St. Louis, and an expert on government ethics — told Inside Climate News that, “In general, the government has rather strict standards for conflict of interest for its own employees, and in general when it outsources work to contractors, it doesn’t outsource those standards.”

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27 Responses to State’s ‘Environmentally Sound’ Keystone Assessment Done By Firms Linked To TransCanada, Exxon Mobil, BP And Kochs

  1. fj says:

    Idiocracy strikes again.

  2. BillD says:

    So that’s what happened. It was hard to believe that the state department itself really wrote such an obviously biased report. Unfortunately, maybe there are not many companies doing this kind of work about energy that actually give much weight to climate change.

  3. Scott says:

    They should get Greenpeace, 350.org, and the Sierra Club to update the report for them.

  4. “it’s possible they would subtly orient their analysis in a certain way, and that could be reflected” in the document.…”

    Subtly? The minute this report came out, I asked my wife, “How in the hell is the State Department qualified to write a report like this? Why isn’t the EPA doing it?”

    I didn’t know about the pervasive use of private contractors. I wonder if it is cost effective, all this privatization, or just a boondoggle for connected “consulting firms.”

    You’d think the Canadian crooks and the State Department would wise up. During the last go-round, all sorts of these corrupt practices were exposed through freedom of information acts, etc.

    If will be interesting to see if any of the MSM picks this up.

    • Merrelyn Emery says:

      You could get a lot of honest public servants doing the research for that amount of loot, MW

  5. Ozonator says:

    Did the corporate shills writing for the State note that Keystone will act as an idiot a wick for DPRK? “Furious over sanctions, NKorea vows to nuke US” (AP; google.com/hostednews, 3/7/13).

  6. Sasparilla says:

    Amazing after the blunder of the first report (written by TransCanada’s primary consultant) and PR embarrassment (part of the cause of the XL delay) – the Obama administration said “sign me up for another round”.

    They must get a lot of campaign money from these guys to make this worth it.

  7. Mark E says:

    When they say “not likely result in significant adverse environmental effects”

    they are comparing to other ways the tar sands might be developed.

    They are not comparing to just not mining the tar sands at all.

    • Bara says:

      Yeah, really; but their figuring of “insignificant” is interesting: An environmental policy analyst who does reports for the Congressional Research Service, Richard Lattanzio, said in his opening summary of “Canadian Oil Sands: Life-Cycle Assessments of Greenhouse Gas Emissions” (June 2012):

      “…discounting the final consumption phase of the life-cycle assessment (which can contribute up to 70%-80% of Well-to-Wheel emissions), Well-to-Tank (i.e., “production”) GHG emissions are, on average, 72%-111% higher for Canadian oil sands crude than for the weighted average of transportation fuels sold or distributed in the United States.”

      This is from the State Dept. assessment executive summary, under Key Findings:

      “WCSB crudes are more GHG intensive than the other heavy crudes they would replace or displace in US refineries, and emit an estimated 17% more GHGs on a life-cycle basis than the average barrel of crude oil refined in the US. in 2005.”

      It was pointed out to me that using life-cycle assessments when comparing and citing production differences is not appropriate and tends to make the differences appear smaller than comparing just the well-to-tank emissions, as Lattanzio more responsibly did above in his opening summary. We’ve been unable to find any similar clarification in the State Dept. assessment, but on page 71 of Appendix W, the report goes into a long attempt to justify their doing it the way they did. This issue might be good to include in letters to the President, Kerry, etc.

      • Bara says:

        Meant to mention that from what I’m told, the “consumptive phase” emissions from burning refined oil from all sources being compared are virtually the same. Although it’s useful to know the well-to-wheel emissions for other purposes, when arguing insignificantly higher emissions from production of tar sands WCSB crudes, it’s misleading to use a method that makes the percentage appear small and not straightforwardly give the well-to-tank (production) percentages, as Lattanzio did.

  8. Solar Jim says:

    Maybe the pres can keep tabs on converting the living biosphere of boreal forest into toxic waste pits and wildlife deathtraps with Predator or Reaper Drones. Welcome to the global gas chamber.

  9. Sounds like Deepwater Horizon all over again. When will people realize that privatization doesn’t improve anything and only result in more largess sloshing around on the stock market. Largess for CEOs and companies that already sit on those profits, doing no good for the US economy. Hmmm??

  10. ToddInNorway says:

    The states that the Keystone pipeline would cross should be doing their own due diligence and risk assessment. It is clearly not a task that can be trusted to the pipeline developer or to the federal government. If enough states find out that the risks from a potential pipeline are not acceptable, then they should clearly speak with a unified voice to Washington DC.

    • Camburn says:

      North Dakota and South Dakota want the pipeline.

      Nebraska has approved the pipeline.

      Kansas wants the pipeline.

      There are no states that do not want the pipeline.

      • SecularAnimist says:

        Camburn wrote: “There are no states that do not want the pipeline.”

        Translation from troll-speak:

        There are no Koch-owned Republican governors or Koch-owned Republican-dominated state legislatures that do not do want the pipeline.

    • Mike Roddy says:

      The West Coast Gateway pipeline ain’t happening. First Nations will stop it, with help from people like us.

  11. Anne says:

    Wasn’t the FIRST EIS found to be done by those with a conflict of interest? Is this a “fool me twice” moment? Is there no learning? Or ethics? Or shame? Tssk Tssk…

    • Sasparilla says:

      Good question Anne. Yes, the first EIS (and first PR disaster to help make the delay – since they were forced to write a new one) was that the primary consultant for TransCanada (the pipeline folks) wrote the environmental impact statement for the State Department (setting up a slam dunk approval – till the blatant conflict of interest came to light). I believe it was just a single guy that did the first one. Maybe they got two people this time. ;-)

      The lack of ethics, shame and the lack of fear of the public seeing this and taking the administration to the woodshed, is astounding and so brazen.

      Obviously those same good folks in the Administration were trying to set this one up for a slam dunk approval – again.

  12. Thomas Rodd says:

    Can anyone post a link to substantive, data-based responses to the EIS’s conclusion that non-approval of the KXL won’t make much difference as to how much these oil sands are mined?

    • Thomas Rodd says:

      No responses so far to this request, asked for a third time on this blog.

      When you haven’t got a strong substantive case, attack the process — is an old strategic maxim that may be in play here.

      Perhaps a strong substantive response to the EIS analysis will surface sometime reasonably soon.

  13. Bob Geiger says:

    This story should be the first words out of all of our mouths on Keystone. This is an outrage. We need to bring this up every time we talk about the issue. I am forwarding this to everyone I work with on this issue.