Big Win for Keystone Opponents: State Dept. Probe of Consultant's Conflict of Interest Could Delay Decision Until 2014

News that the State Department won't complete until January an investigation into conflicts of interest by a consulting firm that reviewed the proposed Keystone XL pipeline is another nail in the project's coffin. But President Obama already has enough evidence to kill it outright, said Friends of the Earth.

Friends of the Earth first revealed last month that Environmental Resources Management, the London-based consultant the State Department hired to review the pipeline's environmental impact, lied on its disclosure form when it said it had no ties to any entity with an interest in its completion. In fact, Environmental Resources Mangement has not only worked for pipeline builder TransCanada, but for ExxonMobil, Shell, Chevron, and other oil companies that would profit from Keystone XL's construction.

The evidence uncovered by Friends of the Earth -- supported by a July 29 letter to the State Department from more than two dozen environmental, religious and consumer groups -- has helped trigger an investigation by the State Department's inspector general into the failure to follow screening guidelines that should have caught ERM's blatant lies. On Friday, Bloomberg, The Hill, National Journal and other outlets reported that the investigation will last until January. The State Department had been expected to issue this fall its recommendation to the president on whether to issue a permit for the pipeline, but it now seems highly unlikely that will happen before the conflict of interest investigation is complete.

"The inspector general must do a complete and thorough investigation before the State Department finalizes its environmental impact statement," said Ross Hammond, senior campaigner with Friends of the Earth. "But the evidence is clear: ERM lied and has no business advising the Obama administration about the pipeline."

Hammond said it's also clear that, despite Environmental Resources Management's tainted claims that the project would not have serious environmental impact, the dirty tar sands oil carried by Keystone XL would wreak havoc with efforts to rein in climate change.

"President Obama doesn't need to wait for the results of the investigation into Environmental Resources Management," said Hammond. "He has all the evidence he needs to deny the permit right now."

The July 29 letter from environmental and other groups said the State Department's failure to catch Environmental Resources Management lies violated its own conflict of interest screening guidelines, issued by the inspector general last year after members of Congress complained that the previous Keystone XL environmental review was plagued by bias and conflicts of interest. A State Department spokeswoman later admitted to Postmedia News of Canada that there was no attempt to verify whether the consulting firm was telling the truth when it certified that it had no business ties to TransCanada.