Obama’s Pipeline Mess

Obama's plan to transport oil from Canada to the Gulf Coast reeks of cronyism. Naomi Klein and Bill McKibben on how there’s still time for the president to step in and stop it.

10.08.11 9:46 PM ET

There’s no denying that the Solyndra drama stinks—when you have executives taking the Fifth and a political appointee pushing for loan restructuring while his wife works for the company’s law firm, it’s pretty clear that it won’t end well. The fact that the company made solar panels doesn’t make it any better—green cronyism is still cronyism.

But there’s a far, far bigger Obama cronyism scandal breaking—and in this case, there’s still time for the president to step in and stop it.

The story started coming out a few weeks ago when Nebraska activists preparing for State Department hearings on the Keystone XL pipeline noticed something odd. The hearings were actually being run by a private company called Cardno Entrix—their name was even at the bottom of the State Department official website. If you wanted to send in public comments, you sent them to the company.

Upon further investigation, they learned two things: Cardno Entrix had in fact been contracted to run the entire environmental-review process for the pipeline. And if you go to the Cardno Entrix corporate website, it lists one of their major clients as TransCanada, the very company building the pipeline. That’s almost unbelievable.

But The New York Times took the story a step further yesterday. It turns out that TransCanada actually recommended the firm to the State Department, and that TransCanada had “managed the bidding process” that ended up picking Entrix. As the Times put it, with considerable understatement, the arrangement involved “flouting the intent of a federal law meant to ensure an impartial environmental analysis of major projects.” They quoted a Tulane law professor who specializes in environmental oversight who spoke in plainer language: Cardno Entrix had a “financial interest in the outcome of the project. Their primary loyalty is getting this project through, in the way the client wants.”

In other words: The pipeline company recommended the firm they wanted to review them, a firm that listed the pipeline company as one of their major clients. Perhaps—just perhaps—that explains why the review found that Keystone XL would have “limited adverse environmental impacts,” a finding somewhat at odds with the conclusion of 20 of the nation’s top scientists who wrote the president this summer to say it would be an environmental disaster.

And perhaps it’s why the report notes only briefly in an addendum the disastrous spill of tar sands oil in the Kalamazoo River last year—35 miles of the river remains closed, and so far the taxpayers have shelled out $500 million to help clean up. Is there any way (besides reading the newspapers and talking to local officials) that Cardno Entrix could possibly have known about the Kalamazoo spill? Well yes. Cardno Entrix—get ready for it—was in fact hired by that pipeline company to assess the damage of that spill.

This is quite possibly the biggest potential scandal of the Obama years. But there’s a danger that it will go ignored for three reasons

First, it’s so incredibly blatant that it’s hard to believe—neither of us are naifs, but we are still astonished that they’d show their industry bias this clearly.  There were plenty of other signs, of course—emails released last week, for instance, showed Department officials cheerleading for the pipeline. But the Entrix connection is truly mind-boggling. It’s the kind of thing Dick Cheney might have done, on a particularly sloppy day.

Second, the Republicans that have done such a noisy job of drawing attention to Solyndra will, we predict, studiously ignore the Keystone scandal. Why? Because the project’s biggest backers include the Chamber of Commerce and the Koch Brothers. We’re guessing cronyism gets a pass when it’s on behalf of the oil industry—in slightly less obvious guises, the old boy network has been steering subsidies to the fossil-fuel industry for decades.

Third, the officials in charge seem utterly unconcerned about the conflicts of interest that have plagued this project from the start. Hillary Clinton has stood by while her former deputy campaign manager took a job as TransCanada’s chief lobbyist; stories late last week on DeSmogBlog found several big-money bundlers from Hillary Clinton’s presidential campaign working for lobbyists under contract to TransCanada.

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And Obama? Obama’s said nothing about Keystone all year long. Not when 1,253 people were arrested outside his door in late summer, the biggest civil-disobedience protests in 30 years. Not when 10 of his fellow Nobel Peace laureates wrote to tell him the pipeline was immoral. Not now that this scandal is breaking, even though he promised the “most transparent” administration ever.

We already knew that Keystone XL was filthy in environmental terms. James Hansen, our foremost climatologist, said earlier this year that if the Canadian tar sands are heavily tapped, it’s “essentially game over for the climate.”

But now it turns out to be just as filthy politically. Filthy on a scale that demands real action—at the very least, Barack Obama must demand a new, thoroughly independent, expert review of the project. Better yet, he should use it as the perfect excuse to pull the plug on the whole damn project.

Think about how lousy Obama looks in those pictures celebrating Solynda’s brand-new factory. Now imagine how much worse he will look after Keystone XL spills for the first time, and the media remembers that TransCanada got to pick a company it had in its back pocket to conduct the environmental review.

Here’s the little bit of contingent good news: The crime is still in progress. It’s as if TransCanada has robbed the bank, but the getaway car is stuck in traffic. Obama can still make the arrest. If he doesn’t, we’ll know an awful lot about him. Maybe more than we really want to.