Keystone XL pipeline: Can John Kerrys State Department finally get it right?

In February John Kerry took over at the State Department, providing a glimmer of hope to those demanding that the agency finally serve as an honest broker on the review of the controversial Keystone XL pipeline. Kerry, a fierce advocate for bold action on climate change, certainly has his work cut out for him.

Since the Canadian pipeline company TransCanada first submitted its application in 2008, the State Department’s handling of the Keystone review has been plagued by conflicts of interest, insider influence and a heavy pro-pipeline bias. It began almost immediately after the State Department allowed TransCanada to solicit and screen bids to conduct the initial environmental review of the pipeline. On TransCanada’s recommendation, the State Department hired the consulting firm CardnoEntrix, even though the firm listed TransCanada as a major client (a fact which should have disqualified it under the National Environmental Policy Act).

Not surprisingly, CardnoEntrix’s review – which the EPA politely called “insufficient” — downplayed the climate impacts of the pipeline and the risks of potentially catastrophic spills. A Freedom of Information Act request by Friends of the Earth uncovered documents showing that State Department officials had been working closely with TransCanada on its permit application. Multiple e-mails showed State Department employees coaching TransCanada lobbyist (and former Hillary Clinton campaign official) Paul Elliott in his efforts to build support for the pipeline.

Following an outcry by environmental groups and members of Congress, the State Department’s Inspector General investigated the agency’s handling of the review process. In February 2012, it recommended changes in the contractor selection process. Yet given how the State Department has handled the most recent environmental review of the pipeline, it’s clear that those recommendations have been ignored and that TransCanada is still calling the shots.

The new environmental review, released late on a Friday afternoon in March, was conducted by Environmental Resources Management which, incredibly, also counts TransCanada as a client. State Department employees made a clumsy attempt to cover up the firm’s ties to TransCanada by redacting the company’s conflict of interest filing. To make matters worse, ERM subcontracted critical parts of its report to consulting firms with deep ties to oil and pipeline companies that stand to benefit if Keystone is built. This “new” review, which is now an official government document, also downplays the climate impacts of the pipeline. State has refused to turn over the supporting documents that provide the analytical basis for the report’s controversial finding that the tar sands would be fully exploited whether or not the pipeline is built.

To reject this flawed review, Secretary Kerry will have to tune out an army of Washington lobbyists and public relations firms that TransCanada and the Province of Alberta have hired to make sure that the Obama administration rubber stamps the permit application. These include three former U.S. ambassadors to Canada as well as former Kerry, Obama and Hillary Clinton staffers such as Kerry presidential campaign staff members David Castagnetti and Broderick Johnson. They also include former White House Communications Director Anita Dunn (who once worked under Kerry at the Democratic Senatorial Campaign Committee). Dunn’s firm SKDKnickerbocker, which is stocked with many former Kerry and Obama staffers, is being paid an undisclosed amount by TransCanada to help with its efforts to secure approval for the pipeline. According to The New York Times, Dunn has met with top White House officials more than 100 times since leaving the administration in 2009.

Speaking on the floor of the Senate last year, then-Senator Kerry spoke sharply against “coalitions of politicians and special interests that peddle science fiction over science fact. A paid-for, multi-million dollar effort that twists and turns the evidence until it’s gnarled beyond recognition. And tidal waves of cash that back a status quo of recklessness and inaction over responsibility and change.” Although Kerry was speaking about the Senate’s failure to pass comprehensive climate legislation, he could just have easily been talking about the expensive disinformation campaign that TransCanada and the Province of Alberta have mounted to guarantee that pipeline construction proceeds without any further delay.

It is now clear that Secretary Kerry has inherited a fatally flawed review process in which TransCanada and Alberta continue to call the shots. How he responds to the State Department’s scandalous handling of the environmental review will signal whether he is willing, as he said in his speech last year, to “confront the conspiracy of silence head-on and allow complacence to yield to common sense, and narrow interests to bend to the common good. Future generations are counting on us.