NEW YORK - The U.S. State Department assigned an important environmental impact study of the proposed Keystone XL pipeline to a company with financial ties to the pipeline operator, flouting the intent of a federal law meant to ensure an impartial environmental analysis of major projects.
The department allowed TransCanada, the company seeking permission to build the 1,700-mile pipeline from the oil sands of northern Alberta to the Gulf Coast in Texas, to solicit and screen bids for the environmental study.
At TransCanada's recommendation, the department hired Cardno Entrix, an environmental contractor based in Houston, even though it had previously worked on projects with TransCanada and describes the pipeline company as a "major client" in its marketing materials.
While it is common for federal agencies to farm out environmental impact studies, legal experts said they were surprised the State Department was not more circumspect about the potential for real and perceived conflicts of interest on such a large and controversial project.
John D. Echeverria, an expert on environmental law, referred to the process as "outsourcing government responsibility."
The subsequent study, released at the end of August, found that the massive pipeline would have "limited adverse environmental impacts" if operated according to regulations. That positive assessment removed one of the last hurdles for approval of the pipeline.
Cardno Entrix also played a substantial role in organizing the hearings on the project for the State Department, the last of which was held Oct. 7 in Washington.