Inspector general says no conflict of interest in pro-Keystone report

Posted by Sean Cockerham on February 26, 2014 

— The State Department’s inspector general is dismissing complaints that the department’s favorable review of the Keystone XL pipeline was tainted by a contractor with a conflict of interest.

The inspector general concluded in a report released Wednesday evening that federal conflict rules were followed in the State Department’s selection of contractor Environmental Resources Management, despite the contractor’s previous work for the company seeking to build the controversial pipeline.

The long-awaited results of the investigation come as President Obama weighs whether to approve the pipeline to bring crude from the Canadian oil sands to American refineries on the Gulf coast.

The pipeline would tap thick Alberta oil that produces more planet-warming gases than conventional sources of crude, and environmentalists have staged massive protests urging the president to block it.

The State Department concluded last month that Keystone would have minimal environmental effect because the tar sands oil would likely be taken to market by other pipelines or rail even without it.

Environmental groups complained the State Department's review was biased by the contractor’s ties to the oil industry and TransCanada, the pipeline company seeking to build Keystone.

But the inspector general said Wednesday that the State Department followed federal conflict of interest rules, and that Environmental Resources Management disclosed its previous work.

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