Keystone Pipeline Critics To Obama: Reject Crony Capitalism

Keystone Pipeline Critics To Obama: Reject Crony Capitalism

The heads of more than a dozen major environmental, health and other non-profit groups called on President Barack Obama Tuesday to strip the State Department of its authority to permit the controversial oil pipeline project known as Keystone XL. In a letter addressed to the president, they argued that recently released emails suggest the agency has had a clear bias toward the oil industry in weighing the virtues of the proposed project, which would deliver crude oil harvested from Canada to refineries in Texas.

“Mr. President, given this substantial evidence of pro-industry bias within your administration –- evidence that the State Department was acting in partnership with the oil industry and Canadian government to secure pipeline approval prior to conducting an environmental review,” the groups state in the letter, “it would be irresponsible for you to follow the State Department’s guidance as you make your determination about whether the pipeline is in the national interest.”

Both the State Department and the company behind the pipeline, Calgary-based TransCanada, have called the charges of bias unfounded.

The groups — which include the Sierra Club, Greenpeace USA, Physicians for Social Responsibility, Friends of the Earth and 13 other organizations — point to batches of email messages, obtained by Friends of the Earth, which suggest that a lobbyist for TransCanada enjoyed a warm relationship with some members of the State Department.

That lobbyist, Paul Elliott, was previously the deputy campaign manager for Secretary of State Hillary Clinton’s failed 2008 presidential bid.

The groups also cite a Los Angeles Times report from July, based on leaked cables obtained by the whistleblower organization Wikileaks, that another State Department envoy, David Goldwyn, traveled to Canada in 2009 and coached officials there on talking points related to the proposed pipeline. Goldwyn left the State Department earlier this year, but appeared for testimony before a House Foreign Affairs subcommittee in March, where he argued strongly in favor of the project.

Clinton also stated publicly in October of last year that her agency was “inclined” to approve the Keystone XL project, even though the department’s first environmental impact assessment for the pipeline was under review, having been deemed “inadequate” by the Environmental Protection Agency.

The organizations argue that a variety of potential problems await the proposed $7 billion pipeline, which would deliver a heavy form of crude oil extracted from a thick mixture of sand, clay and bitumen in Alberta, Canada, to refineries on the Texas Gulf Coast. These problems include: polluting drinking water supplies of indigenous populations surrounding the oil patch; voluminous greenhouse gas emissions associated with processing its hydrocarbons; and potential for leaks and spills along the pipeline’s proposed 1,700-mile route through the American heartland — particularly in ecologically sensitive areas like the vast Ogallala aquifer.

A previous leg of TransCanada’s Keystone pipeline network, which links Canada’s oil sands to the American Midwest and which went into operation in June of 2010, suffered more than a dozen leaks in its first year of operation.

“Mr. President, when you ran for office, you inspired millions with your call to ‘change the way that Washington’ works by curbing the influence of lobbyists and corporate cash,” Tuesday’s letter states. “During your campaign you said, ‘I am running to tell the lobbyists in Washington that their days of setting the agenda are over.’ It is not too late to live up to your promises. Reject this oil lobby influence and ignore the State Department’s biased conclusions. Consider independent experts’ analyses instead.”

The State Department last week concluded a series of public meetings in states along the pipeline’s proposed route. A final public meeting is scheduled for Washington, D.C. on Friday. The department would then deliberate on whether to recommend a so-called “Presidential Permit” for the Keystone XL line — required of infrastructure projects that would cross an international border.

Supporters of the pipeline, which include the U.S. Chamber of Commerce and the pipeline construction industry, as well as Republicans in Congress, argue that the myriad environmental concerns raised by opponents are overwrought. They say that the pipeline represents a vital tool in getting Americans back to work and the country weaned off of more volatile sources of foreign oil.

Critics have questioned, however, whether job estimates associated with the project are themselves overstated, as well as whether importing oil from Canada will directly benefit American consumers.

Representatives of both TransCanada and the State Department have also dismissed charges of bias or undue influence-peddling related to the project. In a press briefing on Monday, State Department spokeswoman Victoria Nuland said the email exchanges between Elliott and State Department staff offer only one side of the story.

“We do not believe that there is any issue here with regard to affecting in an inappropriate manner the decisions that the Secretary needs to make,” Nuland said. “I would also note that the Department maintains close relations with Friends of the Earth. They’ve been in a couple of times at the assistant secretary level. We’ve met with them repeatedly at lower levels as well. We meet at the assistant secretary level with all participants in this process. So we have endeavored to run a very transparent and even-handed process, and that effort is ongoing.”

Shawn Howard, a spokesman for TransCanada, also said in an email message that “countless” groups, including many of the environmental groups behind today’s letter, had sought and secured an audience with State Department officials regarding the Keystone project.

“We challenge Friends of the Earth and other environmental groups to release any emails from their over 60 registered lobbyists sent to the Department of State and the EPA,” Howard said. “This should not be an issue unless there may be something untoward in these emails.”

“The environmentalists continue to use sound bites over substance and facts, attacking anyone who disagrees with their point of view,” Howard said. “I suspect average Americans find this approach very disappointing.”

But in a phone conference accompanying the release of Tuesday’s letter, Michael Brune, executive director of the Sierra Club, said it was the Obama administration that has proved disappointing. Brune called the State Department’s permitting process thus far a form of “crony capitalism” more closely associated with the previous administration of George W. Bush.

“We had hoped for something different from President Obama and Secretary Clinton,” Brune said, “and we still do.”

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