TransCanada

The Checks and Balances Project has announced that the U.S. State Department's Office of Inspector General (OIG) has launched a conflicts-of-interest investigation into dirty dealings pertaining to the contractor tasked to perform the environmental review for the northern half of TransCanada's Keystone XL tar sands pipeline on behalf of State. 

Environmental Resources Management, Inc. (ERM Group) declared the northern portion of Keystone XL as environmentally safe and sound on behalf of State in March, in defiance of the U.S. Environmental Protection Agency's assessment, among others.

The northern half of Keystone XL will connect to the over 75-percent complete southern half and - if built - will carry Alberta's tar sands bitumen south to Texas refineries, with most of the final product shipped to the highest bidder on the global market. State and eventually President Barack Obama have the final say over the proposal because the northern section of pipeline crosses the international border. 

The overarching problem with that ERM assessment, as first revealed on Grist by Brad Johnson: ERM Group was chosen not by the State Dept., but by TransCanada itself. Furthermore, as first revealed on Mother Jones by Andy Kroll, the State Dept. redacted biographical portions of the EIS that pointed to ERM's ongoing close consulting relationship with ERM Group and TransCanada.

"The American public was supposed to get an honest look at the impacts of the Keystone XL pipeline," writes Checks and Balances' Gabe Elsner. "Instead...a fossil fuel contractor, hid its ties from the State Department so they could green light the project on behalf of its oil company clients."

Instead of an honest look, the public got deception, perhaps not surprisingly given ERM's historical contracting relationship with Big Tobacco, as first revealed here on DeSmogBlog. ERM seems to have blatantly lied to the State Dept. - which apparently did no homework of its own, or turned a blind eye at least - and answered "no" to the question shown in the screenshot below. 

ERM also told State it was not an energy interest, when the facts say otherwise.

"The State Department question defines an energy interest in part as any company or person engaged in research related to energy development," wrote Eslner. "Yet, ERM has worked for all of the top five oil companies and dozens of other fossil fuel companies. In other words, ERM is clearly an energy interest."

Double-dipping is a "no go" in the real world of eating chips and salsa with a circle of friends but an everyday reality in the world of lobbyists and PR professionals. 

Enter double-dipper Anita Dunn, former White House Communications Director for President Barack Obama who now runs the firm SKDKnickerbocker (Squier Knapp Dunn), a firm that "brings unparalleled strategic communications experience to Fortune 500 companies, political groups and candidates, non-profits, and labor organizations."

Dip one: TransCanada Corporation, which SKDK does public relations work for, as revealed in an Oct. 2012 New York Times investigation. TransCanada is the multinational corporation currently building the contentious southern half of the Keystone XL (KXL) tar sands pipeline, following the dictates of a March 2012 Obama Administration Executive Order. Within months, the fate of the border-crossing Alberta to Port Arthur, TX KXL export pipeline will also likely be decided by the U.S. State Department.

Dip two: Another SKDKnickerbocker client is the Association of American Railroads (AAR), the American Petroleum Institute trade association equivalent for the freight rail industry. Even without KXL - as covered previously on DeSmogBlog - tar sands crude can be moved to targeted markets via freight rail (coupled with pipeline capacity increases of other tubes and potential barging along Lake Superior).

Beneficiaries of tar sands transport via rail include AAR dues-paying member Burlington Northern Santa Fe (BNSF), owned by major Obama donor Warren Buffett via his holding company, Berkshire Hathaway. Shell Oil - a major Alberta tar sands extractor - also pays AAR member dues, which indicates Big Oil understands the strategic importance of rail transport.   

Dunn's firm, in short, stands to gain from tar sands extraction with or without a KXL northern half, a classic case of double-dipping.

There are four days left to submit a public comment to the State Department on the Keystone XL pipeline. As we’ve reported time and time again here on DeSmogBlog, the proposed Keystone XL tar sands pipeline would not improve America’s energy security as proponents of the pipeline insist. Nor would completion of the pipeline reduce gas prices here in America, another common claim.

Over a year ago, when the State Department was turning down TransCanada’s first bid, we took a look at why and how Keystone XL wouldn’t reduce gas prices here in the U.S.

This week, Public Citizen released a report that piles on a whole lot more evidence to support this fact. In fact, it makes a rock solid economic case that construction of the pipeline would almost certainly result in an increase in gas prices in the American Midwest. An increase. 

For the report, titled "America Can’t Afford the Keystone Pipeline" (PDF download here), Public Citizen analyzed an abundance of data and found that average U.S. gas prices over the past year would have been as much as 3.5-percent lower had there not been any exports of oil. Because Keystone XL would primarily be an export pipeline (as we’ve reported again and again, and as Canadian Energy Minister Ken Hughes has recently admitted), all evidence points to the fact that construction of the pipeline would actually increase gas prices.

Here’s a quick rundown of the report’s main takeaways.

Arkansas Attorney General Dustin McDaniel announced today that ExxonMobil's Pegasus pipeline suffered a 22 foot long gash that led to the rupture that gushed up to 294,000 gallons of tar sands dilbit down the streets of Mayflower on March 29.

McDaniel revealed the news of the 22-foot gash at a press conference this afternoon and stated that - to the best of his knowledge - ExxonMobil had complied with the dictates of the initial subpoena for documents he issued on April 4. 

That subpoena was issued in response to the March 29 rupture of Exxon's Pegasus Pipeline, a 20-inch tube carrying 95,000 barrels of tar sands crude per day - also known as diluted bitumen, or "dilbit" - from Patoka, Illinois to Nederland, Texas. 

"We received 12,587 pages of documents, including more than 200 blueprint-sized diagrams. Our investigation is ongoing," Aaron Sadler, Spokesman for McDaniel told DeSmogBlog.

The cause of the Pegasus gash is still unknown.

In February, the Tar Sands Blockade group revealed photographs that appear to indicate that TransCanada - which is now building the southern half of the Keystone XL pipeline in Texas - may be laying poorly-welded pipe there.

Could it be a faulty or corroded weld that led to the gash in the 65-year-old Pegasus pipeline? Did it corrode due to its age or as a result of error on Exxon's part?

The 12,587 pages of documents will hopefully have some answers.