Inquiry Launched Into Keystone Environmental Report

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State Department watchdog officially examines conflicts of interest of consultant who produced KXL report

The State Department’s internal watchdog has “initiated an inquiry” into whether the contractor Foggy Bottom used for a draft environmental analysis on the proposed Keystone XL pipeline had a conflict of interest.

The move is a response to allegations from several outside groups, Doug Welty, a spokesman with the State Department Office of Inspector General, told The Hill on Friday.

The development raises the possibility of another redo of the analysis assessing Keystone’s environmental impact.Several green and left-leaning groups have claimed the consultancy State picked to conduct the draft environmental review had financial ties to Keystone builder TransCanada Corp. and the American Petroleum Institute, a Keystone supporter.

Bloomberg first reported news of the inquiry. Welty explained that an “inquiry” is more of a fact-finding mission than an investigation, which is reserved for criminal matters.

The Canada-to-Texas pipeline is currently under federal review at State. TransCanada needs a cross-border permit to complete the project’s northern leg.

The draft State analysis in question said Keystone wouldn’t significantly exacerbate carbon emissions. It found that demand was great enough to bring oil sands to market even without the pipeline.

Pipeline opponents have questioned the results of the draft review, which State released in March. The Environmental Protection Agency also criticized its conclusions.

Those concerns make up some of the 1.2 million comments submitted on the draft review that State is currently addressing.

The inquiry comes as Keystone detractors have pressed President Obama and State to go back to the drawing board for the environmental review.

They want the pipeline’s greenhouse gas emissions impact to be given more weight in light of Obama’s June comments that he’d oppose the pipeline if it “significantly exacerbates” carbon pollution.

Keystone’s supporters in industry, labor unions and Congress have pointed to the draft State review as proof that the pipeline wouldn’t have a substantial impact on emissions.