An internal audit released Thursday cleared the State Department of major missteps and conflicts of interest in its three-year environmental review of the Keystone XL pipeline.
But the report faulted the agency for its lack of expertise in conducting environmental assessments and for not doing enough to consider alternate routes for the Alberta-to-Texas pipeline, issues at the heart of criticisms of the State Department’s review.
Last month, the State Department denied the Canadian company TransCanada its application to build Keystone XL, after determining that a 60-day deadline imposed recently by Congress on the permitting process would not let it complete a thorough review.
The Keystone issue has dragged on since 2008 in part because of criticisms of the State Department’s environmental impact statement, which the Environmental Protection Agency found severely inadequate in early versions. The project underwent further delay after the State Department ascertained that it needed to consider alternate routes to the pipeline, a point the project’s critics had made for years.
The new report on the environmental review process was issued by the State Department Inspector General’s office, and conducted at the request of several members of Congress, including Sen. Bernie Sanders (I-Vt.) and Rep. Steve Cohen (D-Tenn). The Inspector General’s report punctured arguments by long-time critics that the State Department’s review was tilted in favor of TransCanada, and that its staff built cozy relationships with TransCanada lobbyists.
The report said: “OIG [Office of Inspector General] determined that the department did not violate its role as an unbiased oversight agency.”
But it made several observations and recommendations that support critics’ claims that aspects of the review were problematic. In response to the congressional request, the Inspector General’s office looked into the relationship between TransCanada and Cardno Entrix, the outside contractor hired by the State Department to conduct the environmental impact statement. Last July, it emerged that Cardno Entrix considered TransCanada a significant client.
In its report, the Inspector General determined that there was no conflict of interest between Cardno Entrix and TransCanada. But it criticized the State Department for not performing “any independent inquiry to verify Cardno Entrix’s organizational conflict of interest statements.”
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-- Neela Banerjee in Washington, D.C.
Photo: The Keystone XL pipeline would have crossed the Nebraska Sandhills, which overlay the Ogallala aquifer. The aquifer provides water to eight states and is one of the nation's most important agricultural water supplies. Credit: Kim Murphy / Los Angeles Times