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Critical Part of Keystone Report Done by Firms with Deep Oil Industry Ties

Two consulting firms provided State Department with key analysis of whether the pipeline would speed development of Canada's oil sands.

Mar 6, 2013
(Page 2 of 2 )
Protesters march to the White House and urge Pres. Obama to reject the Keystone

"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."

Driesen said the State Department and other government agencies routinely outsource reports like the EIS because they don't have the staff or resources to handle the work in-house. Since most consulting firms work with industry, it would be difficult to find a company without industry ties.

Industry experience can also be an asset, he said, because it can give consultants a deeper understanding of the issues. "There's tension between the desire to have the appearance of conflict-free analysis and having experts who know what they're talking about."

No Response from State Department

The State Department did not respond to questions about what role agency officials played in the EIS analysis and review. According to the EIS, the agency "directed the preparation" of the report, but the cover page lists the name of just one official, the project's manager.

A section of the report titled "List of Preparers" names 58 employees from six consulting firms, including EnSys and ICF.

None of the companies have known ties to TransCanada. But Environmental Resources Management, the consulting firm that accounted for 45 of the 58 "preparers," has worked with Chevron and Shell, both of which are developing Canadian oil sands.

The remaining three consulting firms apparently don't have publicly available websites. When contacted by InsideClimate News, they refused to discuss their client list and directed questions about the EIS to the State Department.

Tallett, the EnSys president, said that although his company's clients include the American Petroleum Institute and other industry interests, EnSys has also worked against the oil industry. EnSys employees acted as expert witnesses for various state water agencies in court cases on groundwater contamination from MBTE, a gasoline additive.

"If we'd shied clear of an assignment from the Department of State because sometime in the past we've worked for a company that could benefit [from the Keystone XL]—and if we did that consistently—we would be out of a business," he said.

Less Screening for Contract Employees

The outsourced EIS is part of a decades-long trend in hiring private consultants to conduct government work. "Everywhere you look, almost everything the government does is by contractors and grantees," said Kathleen Clark, a practicing lawyer and law professor at Washington University in St. Louis who's an expert on government ethics.

One of the problems with this system, Clark pointed out, is that contractors don't necessarily follow the conflict of interest rules that apply to government workers.

"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," she said.

For example, if a State Department official has a second job with a company that might benefit financially from the Keystone XL—or is negotiating with them for a future job—then he or she would be barred from working on the EIS. The same restrictions would apply if the employee's spouse worked for that company.

The State Department did not respond when asked if it screened the consulting firms' employees.

The latest EIS is the agency's fourth attempt to evaluate the Keystone's environmental footprint. The first two versions were criticized by the EPA for failing to adequately account for the project's greenhouse gas emissions, among other things. When the third version was released in August 2011, the agency came under fire for allowing Cardno Entrix, a consulting firm that lists TransCanada as one of its clients, to work on the report.

During a press conference on Friday, an agency official emphasized that the latest EIS is a draft document that neither supports nor opposes Keystone XL. The public will have 45 days to submit comments, after which the State Department will publish the final EIS. That document will factor into the Obama administration's decision on the pipeline, expected sometime this summer.

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