Decision on Keystone in danger of being delayed until 2014

The State Department’s decision on the Keystone XL pipeline is in danger of being pushed into 2014.

State’s internal watchdog on Friday said it won’t complete until January a review of allegations that the department hired a contractor with a conflict of interest to review the pipeline project.

{mosads}It’s unclear whether State would need to wait for its Office of Inspector General to release that report before deciding whether to recommend approval of the Canada-to-Texas pipeline. State did not return a request for comment from The Hill.

Doug Welty, a spokesman for the department’s internal watchdog, told The Hill that his office wanted to determine whether the “newly adopted process in selecting a third party-contractor” was “effective in assessing potential organizational conflicts of interest.”

The news of a January release for the report raised the specter of another delay for Keystone, which is under review at State for a cross-border permit to complete the pipeline’s northern leg.

At issue is whether the contractor the department selected to perform a draft environmental review of Keystone had ties to pipeline builder TransCanada Corp.

Pipeline opponents say that firm, Environmental Resources Management (ERM), had previously done consulting work for the pipeline company. They say the review ERM conducted was flawed.

The draft review from ERM said Keystone wouldn’t accelerate growth of Canada’s oil sands, and therefore wouldn’t substantially boost greenhouse gas emissions. It concluded that rail transport and other pipelines would bring the oil sands to market.

That finding has become a flashpoint in the debate over the pipeline in light of President Obama’s June comments that he’d oppose Keystone if it “significantly exacerbates” carbon pollution.

Keystone’s industry and congressional backers pointed to the draft State report to say that the pipeline wouldn’t ramp up emissions, and urged Obama to approve it.

But green groups and left-leaning organizations say the pipeline would facilitate oil sands growth that wouldn’t occur without Keystone. They’ve urged a redo of the review, contending ERM had a conflict of interest.

The Natural Resources Defense Council weighed in on the news, saying the State Department should wait for the inspector general report before proceeding on Keystone.

“[I]t would be improper for the State Department to issue a Final Environmental Impact Statement before its Inspector General completes an inquiry into the integrity of the process,” Danielle Droitsch, director of the environmental group’s Canada program, said Friday in a blog post.

–This report was updated at 4:44 p.m.


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