Bombshell: State Department Outsourced Tar Sands Pipeline Environmental Impact Study to ‘Major’ TransCanada Contractor Game was Rigged: Entire Environmental Impact Statement Should Be Invalidated

The State Department assigned an important environmental impact study of the proposed Keystone XL pipeline to a company with financial ties to the pipeline operator, flouting the intent of a federal law meant to ensure an impartial environmental analysis of major projects.

The department allowed TransCanada, the company seeking permission to build the 1,700-mile pipeline from the oil sands of northern Alberta to the Gulf Coast in Texas, to solicit and screen bids for the environmental study. At TransCanada’s recommendation, the department hired Cardno Entrix, an environmental contractor based in Houston, even though it had previously worked on projects with TransCanada and describes the pipeline company as a “major client” in its marketing materials.

While it is common for federal agencies to farm out environmental impact studies, legal experts said they were surprised the State Department was not more circumspect about the potential for real and perceived conflicts of interest on such a large and controversial project.

John D. Echeverria, an expert on environmental law, referred to the process as “outsourcing government responsibility.”

The subsequent study, released at the end of August, found that the massive pipeline would have “limited adverse environmental impacts” if operated according to regulations. That positive assessment removed one of the last hurdles for approval of the proposed pipeline.

That’s from a stunning New York Times story today, “Pipeline Review Is Faced With Question of Conflict.”

UPDATE:  This story was first broken by Neela Banerjee of the L.A. Times.

Bill McKibben, of Tar Sands Action, tells me, “This is a crime still in progress. The surveillance camera has caught a clear image of the thieves and now we’ll see if the sheriff does anything about it or looks the other way.”

I think this is such a grotesque violation of due diligence that the entire environmental impact statement should be invalidated, and the process should begin anew.  That’s particularly the case here because as the NY Times reports:

The National Environmental Policy Act, which took effect in 1970, allows for agencies to hire outside contractors to perform its required environmental impact studies, but advises that contractors be chosen “solely by the lead agency” and should “execute a disclosure statement” specifying that they “have no financial or other interest in the outcome of the project.”

Obviously Cardno Extrix has financial or other interest in making sure that TransCanada gets its pipeline.

Oliver A. Houck, a law professor at Tulane University and an expert on NEPA, said Cardno Entrix should never have been selected to perform the environmental study on Keystone XL because of its relationship with TransCanada and the potential to garner more work involving the pipeline. The company provides a wide ranges of services, including assisting in oil spill response.

Cardno Entrix had a “financial interest in the outcome of the project,” Mr. Houck said, adding, “Their primary loyalty is getting this project through, in the way the client wants.”

This isn’t the first such charge leveled at the State Dept.

The State Department has also faced charges of political conflict of interest over its handling of the Keystone XL application because TransCanada’s chief Washington lobbyist, Paul Elliott, was a top official in Hillary Rodham Clinton’s 2008 presidential campaign.

Cardno Entrix officials referred all questions about its participation to the State Department. Cardno Entrix did submit a disclosure statement acknowledging that it was paid $2.9 million to handle the environmental review of an earlier pipeline in the Keystone network. It did not mention another project it had done for TransCanada, consulting on a natural gas pipeline that runs through Wyoming, Montana and North Dakota.

The bottom line is that if the State Department doesn’t withdraw the environmental impact statement, they can, should, and no doubt will be sued:

“Generally,” he said, “lead agencies are very cautious about finding someone who is going to give them good, reliable, information because they are the ones that are going to get sued.”

And  at the very least that could hold up the pipeline for a while, until we have a  a president who understands the urgent need to stop building huge amounts of infrastructure that lock us into ever-rising greenhouse gases.

Related TP Green Post:


36 Responses to Bombshell: State Department Outsourced Tar Sands Pipeline Environmental Impact Study to ‘Major’ TransCanada Contractor

  1. david g swanger says:

    Pretty appalling. Hard to believe State let this happen, since as you said, it leaves them open to lawsuit. Not only is it corrupt, it’s stupid, too.

  2. prokaryotes says:

    Crimes against Humanity

  3. Michael Tucker says:

    “I think this is such a grotesque violation of due diligence that the entire environmental impact statement should be invalidated, and the process should begin anew.”

    Hear, Hear!!

    All work on the pipeline should be stopped immediately.

  4. Keystonegate just gets more and more unethical and anti-democratic with every drip of info that leaks out about it.

    This is a project presided over by both Hillary Clinton and Obama. Can someone please point out how either of these two are a “change” from Dick Cheney when it comes to Big Oil’s ownership of our government? And just what is left that we are supposed to “believe in”?

    The whole thing just reeks. The continued silence of Obama and Clinton on the travesty is damning.

  5. Leif says:

    All of the above. Where is that “ecocide law”?

    “Things are going to slide, slide in all directions. There will be nothing you can measure … any more.” “Repent” by Leonard Cohan.

  6. Mark says:

    I never thought I’d use this…. but…..



  7. Robert Brulle says:

    Joe is exactly correct. This invalidates the EIS. So this gives the administration a convenient way to delay making a decision. They can invalidate this study and say they need an entirely new one. But of course that will take months. That way, they can delay the decision about the pipeline till after the election. Cynical – yes. But I think this is the tack they will take.

  8. Paul Magnus says:

    Were being shafted by the democrats too.

  9. bubba says:

    Cardno Entrix was the primary consulting company representing BP on environmental issues during the Deepwater Horizon fiasco. Cardno employees were sitting with BP execs during key decision-making meetings of the Coast Guard, EPA and NOAA to argue that things were not really so bad.

    Here’s one link among the oil soaked sea of links:

    “In most cases, BP is represented by employees of Entrix, an environmental consulting firm it contacted within hours of the Deepwater Horizon explosion.”

  10. Lewis Cleverdon says:

    Robert – with respect I’d differ with your analysis, in that its doesn’t seem a remotely ‘convenient’ way of postponing the decision on Keystone:
    it leaves the State Department facing allegations of corrupt practices – and of incompetence in their enactment – under Clinton’s direction and at Obama’s behest.

    Bill McKibben’s analogy seems too kind – we aren’t waiting to see if the sheriff “looks the other way” – it is the sheriff’s own deputy who has overseen this scam on his behalf. On an issue with the profile and strategic importance of Keystone, with Obama having sole executive decision, he has to have been in the loop.

    This exposure of the greenwashing of the pipeline again demonstrates that Obama’s campaign team see no reliable value in the environmental vote – the Nader effect perhaps ? Which in turn means that there is little or no chance of influencing his decisions in a green direction short of suing or, perhaps, a drastic scale of protest.

    Joe’s concluding remark is intriguing:
    “. . . . at the very least that could hold up the pipeline for a while, until we have a president who understands the urgent need to stop building huge amounts of infrastructure that lock us into ever-rising greenhouse gases.”

    The soonest we could have “a president who understands” would be January 2013, and that would require a nationwide effort to find and elect an alternative Democrat presidential candidate. On the other hand, if Obama were to win a second term,
    despite squandering the environment, youth and immigration votes,
    and despite another year of effective GOP power plays and propaganda,
    and despite the exceptionally dire economic prospects,
    and if this scandal were somehow to obstruct a decision on Keystone throughout his second term,
    what would be the likelyhood of another Democrat president being elected in 2016, after two terms of Obama ?

    Thus to get “a president who understands” before the 2020 election, it seems clear that the best chance is via a successful primary challenge to Obama in 2012. I’m wondering if Joe’s remark might reflect his thinking along these lines.



  11. Anna Haynes says:

    First covered by the LA Times in mid-July, it appears:
    (was it broken somewhere else before then?)

  12. this makes it even more important that we get everyone we possibly can to dc on nov 6 to surround the white house with people. we’re fighting for clean air, and clean govt.

  13. Lollipop says:

    This is why I joined the #OWS protest:—one-movement-goal/. If we don’t halt the machine and reclaim power, policy has no chance of working. The system is corrupt to it’s core. It is not redeemable through anything other than mass civil disobedience and protest.

  14. Lollipop says:

    Damn you autocorrect! I meant its. Not it’s.

  15. Leif says:

    This is a You-Tube post from the kids on my FB. The Revolution will not be Televised:

    I found it interesting.

    “Clean air and clean government” What a novel request for a government of, by and for the people.

  16. Mike Roddy says:

    No surprise here. Did people not notice the stalled ozone regs, or approval of drilling in the Arctic? Clinton and Obama have clearly calculated that Americans are too dumb, and the media too bought, to pay attention to horrifyingly cynical actions such as this one. Can’t knock McKibben for trying to persuade Obama, but that hope was born dead.

    My dancer friend from Beverly Hills is turning out to be right. She told me in early 2008 that Clinton and Obama were chosen to be in the leader pool very early in their careers by the people who actually run this country.

    Political affiliation was not important. They needed to be good talkers, and bright, but not too bright, and willing to do anything to gain money and power. Just like the people who run the oil companies, in other words.

    We need real people to step up. Inslee? Dean? Sibelius? I don’t know. But Americans will recognize authenticity and courage when they see it. We don’t have anyone now, and may not even produce those men and women anymore. We’d better find one fast, even if we have to look through the shrubbery.

  17. Lewis Cleverdon says:

    Mike –

    Well said !

    One from the shrubbery is Matt Damon, with both a long track of commitment to social justice, and strong name recognition, and clean hands.

    But perhaps the ideal is young-ish, female and of Latino descent ? None of these as senators as far as I can tell.



  18. lasmog says:

    This is indefensible. Just another example of lobbyists and crooked politicians putting profits ahead of everything else. This is why we need protestors on Wall Street and virtually every other street in America.

  19. Paul magnus says:

    It’s time for a revolution….

  20. John Tucker says:

    ¨At TransCanada’s recommendation, the department hired Cardno Entrix, an environmental contractor based in Houston, even though it had previously worked on projects with TransCanada and describes the pipeline company as a “major client” in its marketing materials.¨

    Beyond belief. I dont see how that could even happen. It speaks of incompetence on so many levels.

    I would question State Department´s ability to make valid environmental assessments, including past decisions and recommendations knowing now how formulate arguments. – No wonder Cheney expressed admiration for Clinton.

  21. prokaryotes says:

    James Hansen slams Keystone XL Canada-U.S. Pipeline: “Exploitation of tar sands would make it implausible to stabilize climate and avoid disastrous global climate impacts”

  22. Andy says:

    This is the way it’s been done since Reagan gutted the EPA and other natural resource agency budgets. Who was the State Dept. supposed to get to do the study? The guy who answers their phone? Wait, no, that position was outsourced to a consultant a long time ago. Is there anyone in Washington who is actually on the federal payroll anymore?

    It’s a hell of a lot fewer folks than you’d think. Just take a look at federal employment since the 1970’s. Other than defense and law enforcement it’s declined precipitously. There’s very few staff left to enact environmental laws and that’s the way the congress, senate and whitehouse want it, both Democrats and Republicans. They’re all business men and women and lawyers. And that’s the way it’ll be until we get money out of campaigns.

    Of course a consulting company was hired and of course they’ll be on working on the Keystone Pipeline for years to come. This is the status quo.

    I dispute that the EPA lacks folks who are up to the task of evaluating the documents produced by CardnoEntrix. There are some very smart and supremely dedicated folks there, but the outcome of this project’s environmental evaluation was preordained by our government’s bias towards short term business goals.

    The measure by which the State Department evaluates this project isn’t whether or not the project could harm the environment; but rather whether or not it will harm the environment. Directly. Indirect harm such as global warming is discarded from serious consideration. In other words unless someone is blessed with second sight and can prove it is going to spill a lot of oil into an important natural resource and that it can’t be cleaned up and that it will definitely destroy the resource and that that the harm will outweigh any benefits of cheaper oil on the area’s economy; then the federal government is going to approve it.

    I know of only two major projects the EPA nixed in all of its history. The Two Forks Dam in Colorado and The Yazoo Pumps off the Mississippi.

    Go to your library and look up any NEPA EA or EIS for a new highway, ship channel dredging, airport expansion, flood control project, etc. They’re all paid for and evaluated just as the Keystone Pipeline has been.

    We need to strengthen our environmental laws.

  23. Joan Savage says:

    Cardno Entrix is like numerous other consulting and engineering companies who have lucrative contracts with industry clients, enabling them to offer competitive salaries to environmental scientists.
    When I was in grad school in environmental science, one of my predecessors sternly asked me what I intended to do with my degree. She herself had ended up teaching in a private high school. At that point I loved the material and hadn’t really focused on what kinds of jobs were available. But she was right about the limitations. Government work and academic positions shriveled, and I know several people who ended up working for companies like Cardno Entrix, at least for a time. Many job openings in environmental science at this time are with companies that work for polluters and potential polluters that have substances to sequester, remediate, store, etc.
    I don’t cut the Department of State any slack on hiring a firm with conflict of interest.
    I do believe that if the White House calls for a new clean EIS it will be interesting to track the effort to locate a firm that has both capability for a large EIS and doesn’t have conflict of interest.

  24. dick smith says:

    Brilliant. These rolling protests you started may just work. We protested at the Milw. Obama HQ last week with very good results.

    Dumb. How could you do a dust jacket blurb praising Curt Stager’s new book, “Deep Future” as “fascinating…eloquent…both a scientifically and ethicallycrucial book”? What were you thinking? This book is awful on so many levels. My book club selected it. I will have a lot of work undoing the nonsense in Stager’s book.

    Quick examples. Stager uses Bjorn Lomborg to discredit Al Gore (p. 143).

    “…aggressive activist stances among prominent scientists make me nervous…. But I also know of at least one well-known figure inthe climate community has purposely exaggerated the dangers of global warming in public presentations, because he told me so at a confernce. His justification was this: “that if people aren’t scared, they won’t pay attention.” (140-141). This is virtually the same language Joe McCarthy used about communists in State Department.

    He mentions James Hansen only once (p. 129-130) predicting a 5m rise in sea level by 2100. As Stager put it: “Not everyone agrees with me, of course. James Hansen, NASA’s most widely quoted advocate for taking climate change seriously, is know to occasionally focus public attention on the extreme end of the list of possible climate futures to avoid….”

    And, in talking about the maps that show sea level rise he all but calls Hansen, Gore and other “TERRORISTS”. That is a loaded word these days–and Stager knows it. “These maps can be TERRYIFYING to behold…. But is TERROR the most suitable response?…. I’m not exaggerating when I use the word ‘TERROR’ here…. [They are causing] much unhelpful panic.” (p. 127)

    By Stager’s description, you are friends. It’s time to make him a “former friend.” This book is misleading by omission as well as commission, but I don’t have space here to explain all that he left out or avoided.

    At every opportunity, he emphasizes there will be “winners” in GW–like Greenland–to which he devotes a chapter. He admits Native Greenlanders will lose, but 6,000 Danish governed G-landers will win with GW. Come on!

    This book is dangerous because some of it is factual–but much of it is intended to minimize the threat–and to discredit those who are alarmed.

  25. Jeff Huggins says:

    I also have the concern that Robert Brulle expresses in his comment 7.

    As I’ve said before, I won’t be voting for President Obama again if he approves Keystone XL. And if this whole issue here delays the necessity for President Obama to make his decision until after the election, I won’t be voting for him in that case either. (In the latter case, one exception would be if he promises, clearly and concretely, to say ‘no’ to Keystone XL during his reelection campaign, with no outs and no strings attached.)

    This is incompetence, and it is on his watch and Hillary Clinton’s watch. They — both of them — need to come out quickly and clearly and choose to throw away this EIR, and then they need to quickly get another one started such that Obama will still need to make his final decision on the thing before the next election. Otherwise “I’m outta here” when it comes to this Administration, period.

    And I’m also deeply disappointed in our own (lack of) stance, in our own soft-activism posture. I’ve been to every major annual event here in the Bay Area — all of the annual events, as well as the earlier ones, before was named. I’ve demonstrated at the White House, long ago on Earth Day 2010. I’ve been commenting on blogs for years now. And I’m going to STOP participating unless we, the events, begin to take a more clear and decisive tone. I do not agree that we should be saying “please do X” (but we’ll vote for you either way) to President Obama, and I’ll no longer be able to participate in those sorts of events at this point. Here is what we ought to be saying (and doing) at this point: “President Obama, I voted for you last time. This time, if you want my vote — or even a good chance at it — you’ll have to say ‘no’ to Keystone XL (before the election). If you approve Keystone XL, I will not vote for you. Period. End of story. Get it?”

    Events and activities that adopt that sort of message will gain my involvement. Others won’t.

    I’ll also take this moment, again, to encourage Joe and CP to allow the airing of discussions around that issue, i.e., to allow the raising of that question and the discussion of arguments pro and con. It’s an important question, and nobody has raised it for discussion, pros and cons, in an actual post, as far as I can tell. It is as if CP is taking it as a given that the best approach is the “please” approach, and thus no other approach is even getting air-time for debate and consideration.

    But all I can do is my best. This’ll be the last time I raise the request; I’ve done it enough already.

    Be Well,


  26. dick smith says:

    I need to add. Stager never does get aroud–even in his summary–to explaining what his vision of the near future is. He repeatedly agrees we need to take GW seriously–but never explains in quantitive terms how seriously–how much and how fast. His qualitative analysis isn’t much clearer–glittering generalities about moderation. doesn’t quantify or explain what needs to be done.

  27. Joan Savage says:

    I included the factor of compromised EIS authorship in my last-hours comments to the Department of State, deadline today.

  28. gus says:

    Chances are, that’s nearly impossible. That fact alone should make the project dead in the water: If we CANNOT get a non-crooked EIS for something with such huge long-term effects, it should be illegal.

  29. gus says:

    Not incompetence. Blatant [snip] corruption. Those in the loop knew and hoped to hide it long enough to get it through (or they simply didn’t care whether we found out and will do it anyway).

    Our system has been lethally corrupt since the Reagan era, but it really accelerated with the passage of NAFTA under Clinton. Most of the top echelon folks in our government, and many others, have loyalty ONLY to their own jet-set clade, which is international and usually extremely wealthy, and to a profoundly disturbed philosophy that they can do whatever they want with no repercussions…

    These people are drunk with wealth and power, and, like passengers getting into a car, we MUST take their hands off the wheel before they kill us.

  30. Celia Schorr says:

    Joan (and Andy) – These are important points. I’ve worked on a couple of NEPA projects, and agree with you. There’s probably only a limited number of firms with the expertise in pipelines and the capacity to work on a project of this size. And probably even fewer with the capability of handling all the bureaucratic paperwork that comes with a gov’t. contract. The environmental laws need to be strengthened, just as the funding for enforcement needs to be increased. Sigh. As always, comes back to the 99% vs. the 1%…

  31. John Tucker says:

    Im starting to think of – error – illogical incompetence – corruption are so related in outcome as to be almost indistinguishable. They lead to suffering and costly failure.

    You can fixate on motivation and puritanical desire for justice but I think that makes you too defensive when it comes time to correct your own course. Being wrong, especially when it becomes evident it was universally so and that it has harmed others is punishment enough.

    They need to fix this.

  32. Chris Wilson Austin tx says:

    Dirty Oil +Dirty Politics =FRAUD
    Keystone XL in NOT in the National Interest
    It is in the interest of a foreign corporation for said profit of foreign corporation.
    PoliTics = Poli =many + Tics = blood sucking creatures
    Mr Obama tear up that permit!

  33. Adrian says:

    Re a Dem primary challenger: and and who could that possibly be? Are there any Dems of national stature who would nay-say the project? Oh would that it were so. (cynical laughter)

  34. Adrian says:

    Tar Sands Action is stopping by O. for A. headquarters in Chicago at 3 pm Friday, October 14 (29 S. LaSalle). Occupy Chicago will be there too.

  35. GRACE NEFF says:

    Is this the underhanded way the State Department works? Don’t we have any honest people left in our Government?
    The XL Pipeline would be an accident waiting to happen and the ones who support it have other things in mind than what is best for our land and the people and wildlife who would be affected.

  36. Lionel Gambill says:

    This is a horrendous and disgusting scandal, and it should be on the front page of every newspaper.