Contractor assessing Keystone XL under fire

An ethics probe of the contractor assessing the environmental impact of TransCanada Corp.'s proposed Keystone XL oil pipeline has energized critics who say it should be grounds for the project to be delayed. The U.S. State Department inspector general's office said it is looking at conflict-of-interest complaints relating to the contractor writing the analysis of the $5.3-billion pipeline, which would connect Alberta's oilsands to refineries in the U.S. Gulf Coast. The review is "hopelessly tainted," because of conflicts between the contractor, ERM Group Inc., and Calgary-based TransCanada, said Ross Hammond, a campaign co-ordinator for Friends of the Earth in Berkeley, Calif. "The review should be tossed out and the review process started again." Known as a supplemental environmental-impact statement, the analysis gained new importance after U.S. President Barack Obama said in a June speech on climate change that he would reject Keystone if it was found to "significantly exacerbate" carbon pollution. Environmental groups criticized a draft analysis released in March that found Alberta's oilsands would be developed with or without Keystone, meaning the project would have little impact on the climate. Critics, including the San Francisco-based Sierra Club, say Keystone will promote development of oilsands, which have a larger carbon footprint than conventional crude oil. Friends of the Earth and the Checks and Balances Project, a watchdog group, allege the London-based ERM didn't disclose a financial tie to TransCanada through its venture with ExxonMobil Corp. in Irving, Texas, called the Alaska Pipeline Project. The project, underway since 2009, is developing a natural gas pipeline...more