Conflicts of Interest and Weak Oversight Plague Keystone XL Pipeline

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.