DOS conducts Keystone XL EIS conflict of interest inquiry

The US Department of State’s Office of Inspector General is studying whether a conflict of interest was created when a consultant that had done work for oil companies was hired to draft an environmental impact statement (EIS) for the proposed Keystone XL crude oil pipeline.

A spokesman confirmed to OGJ that an inquiry is under way, as the Washington Post reported in its Aug. 8 editions. This normally is the earliest stage of a federal department’s examination of allegations, but does not always lead to an investigation.

Environmental organizations have charged that DOS’s hiring ERM Group Inc., an environmental, health, safety, risk, and social consulting service, to draft the supplemental EIS for Keystone XL’s cross-border permit was improper because it previously did work for TransCanada Corp., the project’s sponsor.

ERM lied on its conflict of interest disclosure form when it said it had “no existing contract or working relationship with TransCanada” because it has been involved since at least 2011 in the Alaska Pipeline Project, a TransCanada-ExxonMobil Corp. joint venture, Friends of the Earth and 28 other environmental and public interest groups said in a July 30 letter to US Secretary of State John F. Kerry.

They alleged the consultancy also lied when it said it did not have a “direct or indirect relationship…with any business entity that could be affected in any way by the proposed work” because it has worked for more than a dozen companies with interests in Alberta’s oil sands.

The groups urged Kerry to fire ERM and disqualify it from future federal contracts, restart the supplemental EIS’s review with a qualified contractor, and order DOS’s OIG to conduct an investigation.

Contact Nick Snow at nicks@pennwell.com.

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