Conflicts of Interest and Weak Oversight Plague Keystone XL Pipeline

Categories: Biz

Peter Ryan
If the Keystone XL revelations have demonstrated anything, it's that the people and companies revolving around the proposed continent-straddling mega-pipeline form an incestuous, revolving-door miasma, powering a conflict of interest-generating engine.

We learned Wednesday from environmental network Friends of the Earth that the firm conducting the pipeline environmental impact study for the State Department has an apparent conflict. In a questionnaire for State, when Environmental Resources Management is asked whether it has had any relationships with business entities that could be affected by its report within the last three years, the firm gives an evasive answer. "No. ERM has no existing contract or working relationship with TransCanada (the pipeline builder)."

But in truth, since at least 2011, ERM worked with TransCanada and ExxonMobil on the Alaska Pipeline Project, which would connect the gas fields of the North Slope to new markets. If ERM had answered the question State was asking, it would have been forced to admit it had done recent and considerable business with TransCanada. In fact, as calls for an investigation into ERM's ties to the company mounted, an adviser to ERM and a consultant to ExxonMobil on the Alaska project scrubbed his LinkedIn profile of any reference to the firm.

Nor did it mention it had done work as recently as 2012 for any number of companies invested in Alberta's oil sands, which would stand to benefit from the higher prices their crude could fetch at refineries on the Texas coast.

The way environmental assessments are set up is ripe for conflict. It makes sense that TransCanada should pay for its own studies rather than taxpayers, but that means the fortunes of firms like ERM that do the studies rise and fall with the approval or denial of the projects. In company literature, it describes its entire raison d'être as "gaining development approval and access to resources" for its "clients."

That's why these conflict-of-interest checks exist, though State seems to have done a poor job thus far of vetting them. In 2011, ERM's predecessor, Cardno Entrix, was found to have a clear conflict of interest, having counted TransCanada as a recent client. New conflict of interest rules were established, and a new environmental impact assessment was ordered, this time to be performed by ERM. Now it appears ERM's conflicts are as bad as -- and possibly more blatant than -- Cardno's.

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Meh, the reality is, any company that is really capable of completing an appropriate inquiry regarding the potential environmental impacts of the Keystone PL has a potential conflict, as only a company that works in the industry has the experience and knowledge to understand the actual risks.  Any consulting company in the industry that hasn't yet worked for ExxonMobil, TransCanada, Shell, or other another company with ties to the tarsands regularly bids on similar projects, and is always looking to get a master service agreement with one or all of them.


Thank you for writing this, Brantley.  The public tends to assume that having laws and regulations will protect us.  That is only true when those laws and regulations are enforced by dishing out big enough consequences to make compliance more economically feasible than non-compliance.  When the enforcers and regulators are on the same team as the industry, instead of being allied with the people, we are sacrificed for money and power - nothing new here.  

We can't assume that our elected and appointed officials will do their jobs responsibly and ethically, the people have to pay attention and holler when we find we are being betrayed.

holmantx topcommenter

"ERM is a leading global provider of environmental, health, safety, risk, and social consulting services. With sustainability at the heart of both our services and how we operate our business, we are committed to providing a service that is consistently of the highest quality.. With sustainability at the heart of both our services and how we operate our business, we are committed to providing a service that is consistently of the highest quality." - from ERM's website.

In short, they are independent consultants to energy companies (the private sector) and public entities (local, state and federal).

How is it a conflict of interest if they have consulted (gave their opinion for a fee) for TransCanada on "environmental, health, safety, risk, and social consulting services"?

It's what they friggin do!  Independent fiduciaries who give a third-party professional opinion on the above listed services having to do with all aspects of sustainability.

Of course they have been retained by TransCanada and ExxonMobil in the past.  Why would you hire them if they hadn't?  This is called e-x-p-e-r-i-e-n-c-e.  They are experts in their field.

What do you expect the the State Department to do?  Hire tree spikers?  Or Friends of the Earth?

It boils down to this - you want it stopped but you don't know why.  It's a pipeline for God's sake.

High speed rail is more invasive than this.

TheCredibleHulk topcommenter


Uh huh.

High speed rail that is carrying diluted bitumen at high temps and pressures.

TheCredibleHulk topcommenter

@holmantx @TheCredibleHulk 

Um . . . Are you trying to make my point for me?

This link confirms my concerns about using pipelines to transport dilbit in the section "The Many Problems With Tar Sands Pipelines". It also notes that this particular process is relatively new and there are only a few pipelines in the US now moving this material and also notes the myriad problems with it and the many spills already recorded since these lines were built.

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