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Emails reveal 'gentleman's agreement' between State and TransCanada for Keystone XL tar sands pipeline

Anthony Swift

Posted October 4, 2011 in Curbing Pollution, Moving Beyond Oil, U.S. Law and Policy

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By Anthony Swift and Susan Casey-Lefkowitz

Recently released emails show that the State Department is aware that TransCanada intends to use the 57 conditions it ‘voluntarily’ agreed to operate the proposed Keystone XL  tar sands pipeline at higher pressures than minimum safety standards allow. Despite this knowledge, the State Department has been publicly trumpeting these conditions as proof that TransCanada would go beyond what is legally required to ensure the safety of this pipeline. Instead, TransCanada in a gentleman’s agreement with the State Department set up these so-called safety conditions so that later when public scrutiny has died down, they can endanger our rural areas as they move forward with higher pressure levels for the corrosive tar sands oil. Many politicians and their constituents have relied on State Department’s good faith and objectivity as they considered their position on Keystone XL. These emails show that reliance was misplaced. It is time for the Obama Administration to step in before the State Department puts its rubber stamp on a scandal.

We know this now from the documents gained by Friends of the Earth in their freedom of information request to the State Department.

When TransCanada originally proposed to build Keystone XL, it wanted to operate the pipeline at higher pressures that allowed by minimum safety standards for conventional oil pipelines – especially in rural or “non-high consequence” areas. Pipeline regulators came up with a set of 57 conditions that TransCanada had to agree with in return for a permit to operate Keystone XL at higher pressures than regulations allowed. This met with significant public opposition.

TransCanada attempted to diffuse public concern by announcing that it was withdrawing its special permit application – while seeming to leave open a window to reapply later. After its first Keystone pipeline had a dozen spills and was shut down by pipeline regulators as an imminent threat to public safety, TransCanada agreed to voluntarily use to the  57 special conditions. The State Department has joined TransCanada in portraying  these conditions as fixes designed to address the problems in its first pipeline. Instead these conditions are simply a way to keep the door open to increasing the pipeline risk in the future – and both the State Department and TransCanada seem to have planned the waiver withdrawal to trick the public.

The recent emails reveal three things that suggest the State Department was working with TransCanada. First, TransCanada and the State Department discussed ways to get the most media impact from its withdrawal of a special permit. Second, the State Department was aware that TransCanada intends to reapply for a special permit after Keystone XL was permitted and public scrutiny is off. Finally, even as the State Department asserted the 57 conditions will make Keystone XL safer, the agency knew the conditions would be the minimum required in the future if the pipeline were run under higher pressure.

On July 26, 2010, Marja Verloop, a State Department official, emailed TransCanada lobbyist Paul Elliott asking for a status report on Keystone XL. The lobbyist described a conversation that TransCanada had with two State Department officials in which the company informed State that it decided to withdraw the special permit. They then discussed TransCanada’s public release strategy. When Ms. Verloop asked whether withdrawing the request would allow TransCanada to resubmit the application in the future, TransCanada lobbyist Paul Elliott said:

“You are correct, in withdrawing our request for a special permit at this time, allows TransCanada to submit a request for a special permit at a later date.” (FOIA documents, Adobe pg. 85)

When Paul Eliott complained about the attention he was getting as a lobbyist for Keystone XL with ties with Hillary Clinton, State Department official Ms. Verloop consoles him by saying that it is because of his connections with Clinton that TransCanada hired him and mentions that while Keystone XL wasn’t raised at Clinton’s visit to Ottawa, Canadian Ambassador and Keystone XL proponent Gary Doer flew back on the plane with her. (FOIA documents, Adobe pg. 105)

These emails reveal clear bias on the part of the State Department and seem to go as far as showing complicity in a campaign to mislead lawmakers and the public regarding the safety and impact of the pipeline. For example, when considering their position on Keystone XL, Senator Baucus, Senator Tester and Governor Schweitzer of Montana relied on the assumption that TransCanada and the State Department were acting in good faith when announcing the withdrawal of a special permit and the adoption of 57 additional conditions for Keystone XL. Unfortunately, these emails suggest that both TransCanada and the State Department were misdirecting these politicians and their constituents. Now that these documents have come to light, we hope these elected officials will  ask hard questions of the State Department and of TransCanada.

 We have shown that the majority of the 57 conditions simply restate minimum safety standards. But the State Department has trumpeted these as a cornerstone of its finding that Keystone XL will have limited environmental impact – fully aware that rather than making Keystone XL safer, they would only support running Keystone XL using more hazardous methods. This is consistent with a company that built Keystone I, a pipeline which has been so problem prone that a former Keystone inspector called it “a Deepwater Horizon disaster waiting to happen.” But rather than being an objective assessor, the State Department has proven to be an interested party incapable of doing to objective scientific review that President Obama promised.

The Obama Administration promised objective evaluation. The State Department has demonstrated it is simply not capable of conducting that evaluation. State has ignored calls by Senators, Congressmen, landowners, farmers and pipeline safety advocates for an objective review of this project while engaging in inappropriate conversations with TransCanada. It is time for the President to intervene in this process before it becomes a badge of corruption for his Administration. The American people are watching.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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