Keystone outrage now centred on Obama cronyism

Ever since Friday’s New York Times report saying the US State Department assigned an important environmental impact study of the Keystone XL pipeline to Cardno Entrix, a company with financial ties to the pipeline operator TransCanada, in contravention of federal law, opponents of the project have shifted the focus of their opposition to allegations of conflict of interest and corruption.

Two prominent names on the political left and in the green movement Naomi Klein and Bill McKibben put it most bluntly: Obama’s plan to transport oil from Canada to the Gulf Coast reeks of cronyism and it is quite possibly the biggest potential scandal of the Obama years. TransCanada officials meanwhile appear to have been caught off guard by the vociferous protests that weeks of Keystone hearings that ended on Friday have elicited, pointing out that TransCanada won approval for a similar pipeline three years ago with little opposition.

The NY Times reports 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.

Writing for the Daily Beast Klein and McKibben say there’s a danger that it will go ignored for three reasons: First, it’s so incredibly blatant that it’s hard to believe. Second, the Republicans will studiously ignore the Keystone scandal and third, the officials in charge seem utterly unconcerned about the conflicts of interest that have plagued this project from the start.

AP reports Cardno Entrix also played a substantial role in organizing the hearings on the project for the State Department, the last of which was held Friday in Washington. The proposal is open for public comment until midnight Sunday, and the department’s website directs comment to a Cardno Entrix email address.

The Calgary Herald reports Trans-Canada expects a slew of new questions from government departments that have 45 additional days of review, after which they must recommend whether its 2,700-kilometre project to ship bitumen from Hardisty, Alta., to the Texas Gulf Coast refining hub is in the national interest of the United States.

The Chronicle Herald reports the vociferous opposition has caught TransCanada officials off guard. “I did not expect this to become a lightning rod of the debate between fossil fuels and alternative fuels,” CEO Russ Girling said at a news conference held before the State Department hearing. “TransCanada won approval of a similar pipeline three years ago with little opposition.”

MINING.com reported on Wednesday that the lack of pipelines may not be the greatest threat to the oil sands: Even if both TransCanada’s (NYSE:TRP) Keystone XL and Enbridge’s (TSE:ENB) Northern Gateway pipelines are built bitumen is expensive to extract, upgrade and refine and cannot compete with the many new shale oil plays – particularly in the Bakken oil basin – which have pushed US production to its highest level in a decade and could see it become the planet’s number one producer of crude.

Click here for MINING.com’s dedicated Keystone XL page.

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