State Dept Contractor ERM Lied About TransCanada Ties, Another Fatal Flaw of Environmental Review

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The contractor the Obama U.S. State Department hired for the Supplemental Environmental Impact Statement (SEIS) of the northern half of TransCanada's Keystone XL (KXL) tar sands export pipeline overtly lied on its conflict-of-interest disclosure form that it signed and handed to State in June 2012.

A major research dossier unfurled today by Friends of the Earth-U.S. (FOE-U.S.) and The Checks & Balances Project (CBP) shows that Environmental Resources Management, Inc. (ERM Group) played “Pinocchio” in explaining its ties - or as they say, lack thereof - to Big Oil, tar sands and TransCanada in particular on its conflict-of-interest form.

The two groups dug deep and revealed State's contractor ERM and its subsidiary Oasis Environmental both have ongoing contractual relationships with the Alaska Gas Project - now known as the South Central LNG Project - co-owned by TransCanada, ExxonMobil, ConocoPhillips and BP. Further, ERM's Socioeconomic Advisor Mark Jennings served as a “Consultant to ExxonMobil Development Company for the Alaska Pipeline Project, according to his now-scrubbed LinkedIn profile

ERM's own documents - FOE-U.S. and CBP further explain - also reveal the multinational firm has business ties with over a dozen companies active in the Alberta tar sands, including Exxon, Shell, Chevron, Conoco Phillips, Total and Syncrude.

On its conflict-of-interest form, ERM said it had no “direct or indirect relationship … with any business entity that could be affected in any way by the proposed work.” Clearly, that's far from the case. 

In March, ERM Group - a City of London-based dues-paying member of the American Petroleum Institute (API) with a history of rubber-stamping ecologically hazardous oil and gas infrastructure projects - said KXL's northern half “is unlikely to have a substantial impact on the rate of development” of the tar sands in its SEIS. Thus, it will also have little impact on climate change, according to ERM's SEIS, contracted out by TransCanada on behalf of the State Department.

FOE-U.S. says these most recent developments further call the entire SEIS into question, and that doesn't include the fact that State recently revealed it's clueless as to the exact route of the Keystone XL.

“From the beginning, the State Department's review of Keystone has been plagued by influence peddling and conflicts of interest,” said FOE-U.S.'s Ross Hammond in a press statement.

“This is more serious: If ERM lied about its relationship with TransCanada, how can Secretary Kerry, President Obama or the American people believe anything the company says about the pipeline's environmental impact?”

As PLATFORM London explains, ERM Group - also a dues-paying member of fracking industry lobbying force Marcellus Shale Coalition up until Oct. 2011 - is part of the “Carbon Web.” That's shorthand for “the network of relationships between oil and gas companies and the government departments, regulators, cultural institutions, banks and other institutions that surround them.” 

Given the state of play, both FOE-U.S. and CBP have called for State's Office of the Inspector General to conduct a thorough investigation, examining how and why ERM was chosen. They've also called for a complete halt in the KXL review process until that transpires. 

Secretary Kerry must halt this flawed review process and direct the State Department to conduct a full, unbiased review of the Keystone XL pipeline’s impact,” Gabe Elsner, director of CBP said in a press statement.

“In addition, the State Department Inspector General should pursue a full investigation into how a contractor with clear conflicts of interest was allowed to write the U.S. government’s assessment of Keystone XL and why the State Department failed to bring those conflicts of interest to light. Finally, the State Department should determine appropriate disciplinary actions for ERM to discourage contractors from lying to the federal government in the future.” 

Friends of the Earth U.S. has set up an action page where concerned citizens can send letters to State Secretary John Kerry calling for an investigation into the many conflicts of interest scandals within the environmental review process.

Image credit: Dirk Ercken via Shutterstock

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While the contracting arrangement between DOS and ERM seems curious, it's hardly unique. Environmental consulting firms work for both industry and government agents. Some made a decision to only do government work, while others focus separately on industry. Many of the firms went through mergers and aquisitions over the past 30 years so the resulting entity may have precieved and real conflicts. It's usually the client's decision to act on a potential conflict - assuming full disclosure by the contractor. I believe the onus is on the Obama administration in general and Hillary Clinton's DOS staff specifically to justify its decision for hiring ERM for SEIS work.

Hiring a third party reviewer could mean DOS is looking for cover, has no idea how to evaluate environmental impacts and/or other government agents didn't answer their phones. DOS should have hired US EPA, USGS and other DOI departments for third party review and if one of these groups got over its head, hired an independent consultant for specific expertise. 

DOS and the Keystone XL contracting background is located below:

Here's the statement from DOS's Keystone XL website:

On May 4, 2012, the Department of State received a new application from TransCanada Corp. for a proposed pipeline that would run from the Canadian border to connect to a pipeline in Steele City, Nebraska. The new application includes proposed new routes through the state of Nebraska.

The Department’s responsibility, under Executive Order 13337, is to determine if granting a permit for the proposed pipeline would serve the national interest. The Department is considering this new application on its merits. Consistent with the Executive Order, this involves consideration of many factors, including energy security, health, environmental, cultural, economic, and foreign policy concerns.

In accordance with its interim guidance, the Department of State selected Environmental Resources Management (known as “ERM”) to serve as an independent third-party contractor for its environmental review of the proposed Keystone XL pipeline project. ERM is assisting the Department in conducting a thorough analysis of both the new route in Nebraska (in cooperation with the State of Nebraska) and any other information relevant to the environmental review that has become available.

On September 7, 2012, the Department of State received an environmental report from the applicant, TransCanada Corp. It is a normal part of the federal environmental review process for the private company applying for a permit to submit its own initial analysis of the environmental issues relevant to its proposal.

On January 22, 2013, the Department of State received notice from Governor Heineman of the State of Nebraska that he had accepted the route recommended by the Nebraska state route review process.

On March 1, 2013, the Department of State:

On March 8, 2013, the Environmental Protection Agency (EPA) announced the availability of the Draft SEIS on its website, starting the 45 day public comment period.

On April 18, 2013, the Department of State held a public meeting in Grand Island, Nebraska.

On April 22, 2013, the comment period on the Draft Supplemental Environmental Impact Statement closed.

The Department is reviewing the comments we received during the public comment period and will make revisions to the Draft SEIS as appropriate. Next, the Department will seek the views of other agencies identified in Executive Order 13337, and make a determination as to whether issuance of a Presidential Permit for the Keystone XL pipeline would serve the national interest. The Department intends to provide an additional opportunity for the public to comment during the National Interest Determination (NID) period that will begin with the release the Final SEIS. This additional public comment period will provide a further opportunity for the public to provide input on this proposed project. The Department will provide the details on the NID comment period at a later date.

On May 15, 2013, the U.S. Fish and Wildlife Service issued their Biological Opinion for the proposed Keystone XL pipeline to the Department, which was prepared consistent with the Endangered Species Act. The Department posted the Biological Opinion at


On May 23, 2013, the Department posted the first set of approximately 100,000 comments, out of the more than 1.2 million received, on the Draft Supplemental Environmental Impact Statement (SEIS) for the proposed Keystone XL pipeline to, a public website. The comments can be viewed at!docketDetail;D=DOS-2013-0011.

The Department plans to post subsequent sets of comments of a similar size weekly. All comments will be posted prior to completion of the Final SEIS.

The Department continues to review the Presidential Permit application for the proposed Keystone XL pipeline in a rigorous, transparent, and efficient manner.