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Did Keystone contractor follow federal rules?

Published: February 26, 2014
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A consulting firm that helped write an environmental review of the proposed Keystone XL oil pipeline complied with federal rules regarding possible conflict of interest, the State Department’s inspector general said Wednesday in a report that buoyed supporters of the controversial pipeline and disappointed critics.

The report said the contractor, Environmental Resources Management, fully disclosed that some staff members who worked on the State Department report had previously done work with the pipeline operator, Calgary-based TransCanada. None of the work for TransCanada involved Keystone XL, and all of it occurred before the staff members began work at ERM, the report said.

The State Department followed federal guidelines regarding use of outside contractors, the report said, “and at times was more rigorous than that guidance.”

Still, the report said the State Department’s process for hiring outside contractors can be improved, adding that requirements for documenting how contractors are selected were “minimal.”

London-based ERM largely wrote the State Department’s Jan. 31 environmental report on the $5.3 billion pipeline, which would carry oil derived from tar sands in western Canada through the U.S. heartland to the Texas Gulf Coast. The report raised no major environmental objections to the pipeline and was seen as a major victory for pipeline supporters.

Environmental groups have criticized the State Department’s hiring of ERM, saying the firm should be disqualified because of its previous work for TransCanada.

A spokesman for House Speaker John Boehner, a strong Keystone supporter, said the inspector general’s report was the latest study to find no reason for the Obama administration to continue blocking the project. The pipeline was first proposed in 2008.

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