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Debate: State Dept Moves Keystone XL Closer to Approval, But Does Conflict of Interest Taint Report?

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A long-awaited report from the State Department has dealt a potential major blow to efforts to stop the Keystone XL oil pipeline. An impact assessment released Friday says the pipeline’s northern leg would not have a major impact on climate change. In a speech last year, President Obama said his approval of the project will be contingent upon assuring it “does not significantly exacerbate the problem of carbon pollution.” The proposed pipeline would transport 830,000 barrels of crude every day from Alberta’s oil sands to refineries on the U.S. Gulf Coast, which opponents say will have a devastating impact on the planet. The White House says it has yet to make a decision and will await additional feedback from federal agencies. Should the Obama administration approve the Keystone XL pipeline? We host a debate between Erich Pica of Friends of the Earth and Cindy Schild of the American Petroleum Institute.

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StoryFeb 25, 2015Obama Vetoes Keystone XL Bill, But Fight over Climate-Threatening Oil Pipeline Isn’t Over
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: The Obama administration is saying it has still not decided on whether it will approve the construction of the Keystone XL pipeline despite a new report playing down the impact the pipeline would have on climate change. On Friday, State Department said blocking Keystone XL would do little to slow the expansion of Canada’s vast oil sands and that it would not significantly exacerbate the problem of greenhouse gas emissions.

The proposed pipeline would transport 830,000 barrels of crude every day from Alberta’s oil sands to refineries on the U.S. Gulf Coast. Environmentalists and scientists have long warned about the devastating impact of further oil extraction from the tar sands in Alberta. In 2011, James Hansen, one of the country’s foremost climate scientists, said, quote, “Essentially, it’s game over for the planet.”

On Sunday, White House Chief of Staff Denis McDonough appeared on Meet the Press and was questioned by host David Gregory about the pipeline.

DAVID GREGORY: Here’s a few newsy items. One has to do with the Keystone pipeline, right? The ability to move all of that oil down through the middle of the country. Republicans have been calling for this. They say it’s big for jobs. There’s been a report now from the State Department saying that there’s no real impact on the climate. So, is this thing ready to be green-lighted by the president? What would hold him back from saying, “Yes, the Keystone pipeline should be built, should go forward”?

DENIS McDONOUGH: He laid out his view on this last summer, which is that his view is that if this is to go forward, it should not significantly exacerbate the climate crisis in this country. The Friday—

DAVID GREGORY: Didn’t the State Department answer that and said it won’t?

DENIS McDONOUGH: The Friday report is an important input into that process. We’ll hear from other Cabinet secretaries.

DAVID GREGORY: What would stop him from saying yes at this point, given his own State Department’s saying there’s not a big impact on the climate from doing this? It’s a—

DENIS McDONOUGH: He’s been very clear that he’s going to insulate this process from politics. Washington loves the politics. [inaudible]

DAVID GREGORY: I didn’t ask about politics. You’ve got a State Department study.

DENIS McDONOUGH: And we have one—we have one department with a study. Now we have other expert agencies—the EPA and many others—who have an opportunity—the Energy Department—an opportunity to look at this and make their determinations. The president wants to protect their ability to do that, make this decision based on the best analysis and most sound science.

AMY GOODMAN: White House Chief of Staff Denis McDonough appearing on Meet the Press Sunday.

To talk more about the Keystone XL pipeline, we’re joined by two guests in Washington, D.C. Erich Pica is president of Friends of the Earth. Cindy Schild is senior manager of the American Petroleum Institute’s refining and oil sands program.

Cindy Schild, let’s begin with you. Your response to the State Department report?

CINDY SCHILD: We certainly see it as promising and a good indication of where the administration should go in their approval over the next few months. You know, at this point, we have spent five years reviewing the environmental impacts time and time again, despite the five assessments and most transparent and thorough process to date on anything of its nature. We have seen the same conclusions: minimal impacts, negligible impacts. The climate answer, the environmental answer and concerns have been addressed. This is one factor to be considered amongst several, and it’s time to determine that the project’s in the nation’s interest.

You know, we can appreciate the politics. It was interest to say politics are taken out of this process, because, quite frankly, that’s clearly what has been happening here. And, you know, we can appreciate the pressure that the administration and the president are under, but when you look at the facts and the science, at this point, really, there is nothing left but to determine that it’s in the interest of American consumers and our nation to approve this project.

AMY GOODMAN: Erich Pica, you have a very different view.

ERICH PICA: Oh, absolutely. I mean, this is perhaps one of the most studied pipelines in U.S. history. The problem is, is that the State Department has been hiring oil consultants to actually assess the pipeline. We’ve been doing a significant amount of study on the contractor Environmental Resource Management, who failed to disclose many of the relationships with organizations and companies, such as TransCanada and American Petroleum Institute, that want this pipeline constructed. So, it’s really no wonder that the State Department EIS comes out saying that there’s minimal environmental impact. And that can be—that’s going to be contested, because the contractor that wrote this actually was—is a pipeline advocate.

AMY GOODMAN: Who is it?

ERICH PICA: It’s Environmental Resource Management, or ERM for short.

AMY GOODMAN: Now, this was a concern you had in an earlier assessment that was done—


AMY GOODMAN: —that embarrassed the administration. So, why hasn’t this changed?

ERICH PICA: Oh, absolutely. I mean, we had exposed the fact that Cardno ENTRIX, which was the original contractor three years ago who put together the first environmental impact statement—we had done some investigation and actually spurred an inspector-general report, and they threw out that old EIS. Now you have ERM, and you thought the State Department would have learned that they need to do better vetting of contractors. Well, through research we’ve done, ERM failed to disclose on their conflict-of-interest forms that they had worked for TransCanada over the last three years, that they were associated with organizations that advocated for the pipeline, including API, who is on today, who has spent $6 million in lobbying expenses in 2013. And so, from an environmental perspective, you know, look, the president is not getting the information he needs because the cards have been stacked against him in the State Department’s environmental review process.

AMY GOODMAN: Cindy Schild—

CINDY SCHILD: Can I respond?

AMY GOODMAN: —what about this conflict of interest?

CINDY SCHILD: Thank you. Thank you. I’ve been chomping at the bit to respond here. I mean, first of all, the first investigation that you’re discussing, what was the outcome of that? There’s no wrongdoing. The next one, which we’re about to see soon, I expect to see the same thing. If I am going to have an assessment conducted, a proper evaluation of something so significant, I want someone involved that has experience, that has knowledge of the industry, its operations and the concerns to look for. I don’t want somebody that builds bridges to assess a pipeline project. They’re going to have experience. If you look on our website, it’s fully disclosed as far as who—the fact that they have some experience with us. So, anyone that is going to assess a project is going to have a relationship or a history working with the industry.

What I would like to ask about, rather, is the disclosure that came out actually confirming the emails about the negotiations to kill the project with the EPA—with EPA officials, senior EPA officials, and some interest groups. So, that is a fact. While yet to date, the most transparent process in the history of pipeline approval—and, yes, this is, you said, perhaps the most thorough assessment—this is absolutely the most thorough assessment. And time and time again, the findings are the same. So, again, if we’re really going to move forward and look at where we are, this has job potential, the economic contributions, energy security, from Canada and the U.S.. That’s where we should be focusing the conversation.

AMY GOODMAN: Erich Pica, what about that? You want an entity, a consulting firm, that has experience with an oil pipeline to do this assessment for the State Department?

ERICH PICA: Well, you need to get the right people to assess the pipeline. The problem is, ERM lied on their conflict-of-interest statements before the State Department. And so, this isn’t about, you know, their ability to assess. This is about whether or not they’re truthful. And this has spurred another inspector-general report, which we’re expecting hopefully quite soon. You know, they lied about this. And, you know, we did a quick search, and the numerous conflicts—you know, the Western Energy Alliance, they’re a part of, the American Fuels Petrochemical Manufacturers, Louisiana Mid-Continent Oil and Gas Association, the State Petroleum Association—all are advocating for this pipeline. And in fact, on the last one, they have two board members of ERM sit on that board. And then you have the American Petroleum Institute. And then they failed to disclose the fact that they worked on TransCanada projects within the last three years, which is a big question mark, which is a big question in conflict-of-interest form. So, if the—

CINDY SCHILD: I think this is a lot of speculation until the findings come out. So, we could comment on the other thing that happened a few weeks ago, and the actual influence that some groups have with EPA, when the own—our own EPA administrator said, “This is not going to impact climate. The oil sands are being developed. It’s going to get to market. No single project is going to have that much of an impact.” So, this isn’t about climate. It’s about another agenda, and it’s about politics.

AMY GOODMAN: Erich, the head of the EPA saying it won’t have an impact on climate change?

ERICH PICA: Well, that’s not—the State Department’s EIS, the one that just came out, despite all of—

AMY GOODMAN: That’s environmental impact statement.

ERICH PICA: The environmental impact statement, despite the—you know, what we think is just the undue influence by the oil industry, actually says that you could have up to 27 million metric tons of carbon a year in addition released. That’s 5.7 million cars. And so, if you’re looking at the president’s test, when it says he will not approve a pipeline that adds significant carbon emissions, this pipeline can emit significant carbon emissions into the air.

AMY GOODMAN: Can we talk about what this tar sands pipeline will do? Let’s start with you, Erich, and then we’ll move on to Cindy. The issue of where the oil goes and who uses this oil that crosses the United States through Nebraska down to the Gulf Coast?

ERICH PICA: Right. Well, that’s an interesting question, because when we talk about energy security, it’s for who? And so, the head of TransCanada, before Congress, was asked, in testimony, whether or not this oil, this tar sands, will be used on American soil, will be used, you know, exclusively in the U.S. And he couldn’t testify under oath that it would. And then the State Department’s environmental impact statement kind of further clarifies that much of this oil and the refining of the tar sands is going to be used for export. So, kind of this whole energy security argument is really, you know, just like the Cardno—or, I’m sorry, ERM’s conflict-of-interest disclosure: It’s just bogus.

AMY GOODMAN: Cindy Schild, your response?

CINDY SCHILD: You know, you clearly know I’m going to disagree. I mean, initially, there was some criticism, or, you know, one line of attack was that this was an export pipeline, and we’re going to ship crude from Alberta province in Canada down to—1,700 miles down to the Gulf Coast. And, you know, when that didn’t hold up or have water, then it became, “Oh, now we’re going to export products.”

You know, there is a boom in U.S. production, which is a terrific opportunity, but there’s also the opportunity to increase our imports from Canada. By 2030, we would be able to import about four times as what we import right now from the Persian Gulf. So, that’s significant. And when you have reliable sources of oil and supplies—it’s our top trading partner, as well, so there’s a lot of benefits in reciprocities between the U.S. and Canada.

So right now we’ve got half of this line built. We need to finish it. And when you talk about energy security, it’s absolutely—you know, this is in the interest of consumers. We’re going to end up getting—demand is demand. So whether those refineries in the Gulf are fed supplies from the United States domestic production in Canada or it’s going to get it from less stable regions of the world, that’s what’s going to happen. And that oil that’s sitting in the ground in Canada, their largest source of GDP, it’s not going to stay there. It’s going to get to market. This is one of six significant pipeline projects, not to mention other modes of transportation. Rail transportation is increasing. Truck transportation is increasing. It’s not going to stay there. There’s two proposals to the west coast of Canada, two proposals to the east coast of Canada. One is just a reversal of a line, and one’s a conversion of natural gas line. This is getting to market. We have to consider the alternatives and what the most efficient and safe way to bring the oil to consumers.

AMY GOODMAN: The Canadian government hailed the State Department report. This is Minister of Natural Resources Joe Oliver.

JOE OLIVER: We welcome the U.S. State Department’s report and are encouraged that it concludes that Keystone XL would not have a significant environmental impact. The Keystone XL project is expected to support 42,000 jobs and billions of dollars in economic activity in both Canada and the United States, and revenues to government to contribute to social programs like healthcare, education and housing.

AMY GOODMAN: That was the minister of natural resources in Canada, Joe Oliver. Erich Pica, your response?

ERICH PICA: I think, from the U.S. perspective, let’s talk about jobs. I mean, the State Department finally just debunked this jobs myth. It’s like a thousand jobs, temporary jobs, and 50 permanent jobs here in the United States. And particularly with a country that employs over 150 million people, you know, the jobs question is just—it’s a minuscule benefit to the United States.

And I’d like to get back—I mean, when it comes to export energy security, there’s nothing that says that the tar sands oil is going to stay in the United States. And in fact, we should be keeping this oil in the ground and using other types of transportation alternatives—energy efficiency, public transit, renewable energy—to begin transferring our fleet to something that’s greener. You know, what will happen is that TransCanada will make tremendous profits out of shipping this oil. And so, that’s what this is about. This is about billions of dollars in revenue that TransCanada is going to benefit from by basically sticking a pipeline through the heartland of America for export.

AMY GOODMAN: And explain what this particular oil, tar sands, is.

ERICH PICA: This is the dirtiest of the oils. This stuff is—you know, it’s kind of—it’s worse than tar. It’s like this really kind of abrasive sludge that requires special handling, requires to be heated. It needs to be mixed with other chemicals. This is the oil that was spilled in Kalamazoo, Michigan. I’m from the Midwest and from the Kalamazoo area. You know, this is the oil that spilled in the Kalamazoo River that is costing almost a billion dollars to clean up because of the carelessness of these pipeline service companies.

AMY GOODMAN: Cindy Schild, can you expand on that, on what tar sands is?

CINDY SCHILD: Absolutely. I mean, first of all, you know, we had the debate about whether it’s oil sands or tar sands, and quite simply, we’re producing oil and oil and gas products. We are not—there’s no tar being produced here, so that’s just a terminology depending what side of the fence you sit on.

You know, I think as Erich mentioned—you know, he said it clearly—they want the oil to sit in the ground. And it’s not going to. The State Department said it, and as do many experts across the board. It’s not going to. So, we support all forms of energy, but you can’t preclude one from another. This is going to come to market, and demand in the United States is going to be what it is. It’s going to be met. So that crude source is going to come from somewhere. We believe it should come from Canada and the United States.

So, when you really—if the environment is the issue that you’re concerned with, it’s been put to rest. Again, right now, we’ve spent over five years discussing this. There’s been dozens of public hearings, over a million comments generated.

AMY GOODMAN: How is—Cindy—

CINDY SCHILD: So, at this point, every other pipeline has been approved, in less than two years.

AMY GOODMAN: Cindy, how is the American Petroleum Institute gearing up for the mass protests that are being planned all over the country in response to the State Department’s report?

CINDY SCHILD: Our plan is going to continue as it has been for the past five-some years. I mean, we’ve been trying to promote the benefits and the facts, and correct some of the misinformation that’s out there that can be easier to believe. I mean, it’s not heated, anything like that. It can be frustrating when you kind of are debating a battle that’s being fought with some political organizing and sound bites. And, you know, if some groups choose to engage in civil disobedience, that is their prerogative and right. You know, we’re certainly going to continue to stick with the facts and promote the reasons why this benefits the economy, consumers.

And again, it is a jobs creator. So, know what? However you want to cut it down, from which number you want to use or anything else, quite frankly, it is a fact that the southern portion of this line is just completed. That created 4,000 jobs. This portion is longer. So, those jobs that are done, they want their jobs to create—to get back to work on the northern leg. So—and that’s just the direct jobs that’s induced. You know, you’ve also got the benefits in reciprocity I mentioned earlier with our relationship with Canada. So, you know, for every dollar we spend on Canadian goods, 89 cents or up to 89 cents is returned to the United States’ economy. And that does not happen with any of our other trading partners. So—

AMY GOODMAN: Erich Pica, I want to get your response to Cindy Schild saying that the tar sands are not related to tar, that’s just rhetoric.

ERICH PICA: Well, look, I mean, what they do in Canada is—let’s be very specific. They log the land, and then they basically strip-mine this tarry, dense substance out of the soil. And then they—

AMY GOODMAN: More dense than other oil?

ERICH PICA: More dense. This is the densest. This is the densest oil that you’re going to produce.

CINDY SCHILD: That’s been disputed time and time again.

ERICH PICA: This is the bottom of the barrels. This is the—this is the dirtiest oil that they’re going to produce. And it’s coming out, and it’s strip-mining—I mean, if you look—

CINDY SCHILD: The State Department even just said it’s very comparable to other conventional crudes we refine in the United States.

ERICH PICA: If you look at the process, if you look at the pictures in Alberta, Canada, this looks like—you know, I’m a Lord of the Rings fan. This place looks like Mordor, because it’s just so polluted, so kind of destroyed, just to get this oil. It’s not the typical oil derrick that you see. This is strip-mined, and it’s then kind of mixed with other chemicals and then transported. Many of these chemicals are proprietary. We learned in the Kalamazoo spill that, you know, these companies don’t report all the chemicals they have to use to make this stuff viscous or kind of fluid enough to run through the pipelines.

AMY GOODMAN: We’re going to actually go to Kalamazoo in a minute, but I want to turn to President Obama’s remarks on climate change during his State of the Union address last week.

PRESIDENT BARACK OBAMA: We have to act with more urgency, because a changing climate is already harming Western communities struggling with drought and coastal cities dealing with floods. That’s why I directed my administration to work with states, utilities and others to set new standards on the amount of carbon pollution our power plants are allowed to dump into the air. The shift—the shift to a cleaner energy economy won’t happen overnight, and it will require some tough choices along the way. But the debate is settled: Climate change is a fact. And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say, “Yes, we did.”

AMY GOODMAN: I want to get both of your responses to President Obama’s State of the Union. Erich Pica, you were tweeting like crazy through the State of the Union. Explain.

ERICH PICA: Yeah, I was getting frustrated more and more as I listened to the speech. Look, the president has great rhetoric when it comes to climate change. And, you know, he’s in the process of implementing Clean Air Act rules. There’s a segment of that speech that occurred right before the climate change, which talked about all-of-the-above energy, and it talked about natural gas production. And so, you know, from my perspective, from Friends of the Earth’s perspective, the president cannot talk about making tough choices when it comes to addressing the nation’s carbon pollution emissions while also promoting an energy policy that is promoting oil production, natural gas production, coal production, you know, and all these other fossil fuel, dirty energies that will just add more carbon into the air. And so, in that regard, we are quite disappointed by the president’s speech, which kind of pushed these two concepts together, and many of them which we think are quite contradictory to each other.

AMY GOODMAN: Cindy Schild of American Petroleum Institute, your response to the speech?

CINDY SCHILD: Well, from a standpoint of carbon, we’ve reduced our carbon emissions levels by 20 percent largely due to natural gas. So, you know, we can’t pick winners and losers. There is a viable reason that any of these forms of energy exists, and it’s not going to be a flip of the switch to make those conversions. We’re making significant investments in the energy industry in those alternative resources, so—but we can’t preclude one and explain things maybe incorrectly or not so accurately when we’re trying to make these difficult decisions.

And, you know, when we’re talking about the ways to extract this resource, you know, the land that’s impact is a very small portion, and the amount of oil that comes from oil sands via strip mining is roughly less than 20 percent. Eighty percent is done in a—with a technology called in situ technology, which is quite similar to your typical well: You just go down in a hole, and you drill the oil out. So, that’s 80 percent of how the resources is being extracted, just to explain. And from the president’s standpoint—

AMY GOODMAN: Cindy, we’re going to—

CINDY SCHILD: —this certainly takes—sorry.

AMY GOODMAN: We’re going to have to leave it there, but I want to thank you both for being with us. Cindy Schild is with the American Petroleum Institute. And Erich, I’d like to ask you to stay after break, because I want to get a response on a very different issue from you before we go to Kalamazoo, and that’s the issue of the National Security—the NSA spying on foreign governments when it came to the climate change talks, going back to Copenhagen in 2009. This is Democracy Now! We’ll be back in a minute.

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