Climate & Energy Blog

Statement: Keystone XL pipeline and corporate conflicts of interest

Posted Feb. 25, 2014 / Posted by: Adam Russell

WASHINGTON, D.C. – Today, Friends of the Earth President Erich Pica joined Reps. Raul Grijalva and Jan Schakowsky to call for a Government Accountability Office review of the State Department’s process for approving environmental impact statements, like the one recently released for the Keystone XL pipeline. This was due to conflicts of interest between the review vendor and Canadian oil interests. Below, are Mr. Pica’s remarks:

“Good afternoon. My name is Erich Pica and I am president of Friends of the Earth -- a national environmental advocacy group with more than 400,000 members, activists and followers. I am proud to stand with Rep. Grijalva, Rep. Schakowsky and others to draw attention to the ongoing ethics scandal surrounding the Keystone XL pipeline. 

For more than three years, the State Department has been charged with reviewing the environmental impacts of the Keystone XL pipeline. But instead of upholding the public trust in their environmental assessment, the State Department has allowed a foreign government and foreign corporation to leverage their influence and money to compromise the review process. The results have been ethical breaches and a shocking disregard for Congress and the American people. 

The State Department’s current ethical problems involve the oil and gas consulting firm Environmental Resources Management or ERM. From the very beginning, ERM has engaged in deceptive and misleading practices. When asked on a simple form if they had any potential conflicts of interests within the last three years, they answered “No.”

They failed to disclose their previous work with TransCanada; the oil company seeking to build the build the Keystone XL pipeline.

They failed to disclose their joint pipeline project with Exxon and TransCanada.

They failed to disclose their role with five organizations, including the American Petroleum Institute that spent more than $6 million, last year, advocating the Keystone XL pipeline.

They failed to disclose their work for TransCanada and over a dozen oil companies with a financial stake in Keystone XL. 

By not independently verifying ERM’s claims, per guidance from a prior conflict of interest investigation, the State Department failed the American people. Such a mishandled review process severely undermines their environmental review’s credibility.

This discovery has prompted another State Department Inspector General investigation. But recent press reports indicating that the forthcoming report may downplay ERM’s conflict of interest. We expect the IG to conduct a comprehensive review of both ERM’s misrepresentations and the agency’s failure to independently verify them.

Perhaps as troubling, public statements by TransCanada around the release of the Environmental Impact Statement, suggest that the State Department may have alerted the Canadian government and the American Petroleum Institute of the environmental review’s contents before members of Congress and the American people. Allowing Canada and the oil and gas industry to spin the environmental impact statement hamstrung the ability of Congress and the American people to have a real discussion of the Keystone XL pipeline’s impacts.  

Further complicating matters, is the recent Nebraska ruling, which invalidates the pipeline’s proposed route. With no approved route, or a clear plan, how can the State Department assess its environmental impact? 

Throughout the pipeline’s existence, promises of jobs, energy independence, carbon emissions, safety and even the integrity of its environmental review have been debunked. It’s time to move past the corruption and prioritize progress and a commitment to renewable energy over the interests of the oil industry.”

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