By Timothy Gardner
WASHINGTON Feb 26 The U.S. State Department
acted properly in its choice of an outside contractor to review
the Keystone XL oil pipeline, the agency's inspector general
said on Wednesday, clearing it of accusations by
environmentalists there was undue influence by the pipeline's
TransCanada Corp had recommended four companies to
the State Department to do an environmental review, including
Environmental Resources Management, Inc, or ERM, but did not
tell the department it had previously worked with the company.
Under U.S. law, major industrial projects like Keystone,
which would carry 800,000 barrels a day of crude oil from Canada
to the U.S. Gulf, must undergo an environmental review.
The process the State Department used to select ERM to help
prepare the report on TransCanada's contentious pipeline project
"substantially followed" guidance, the inspector general said in
a long-awaited report.
At times, the State Department was more rigorous than it
needed to be, the report added.
Wednesday's report said the contractor selection process
"can be improved," as very little documentation is required by
regulations. Still, the State Department met the minimal
requirements, it said.
It was the second major hurdle that Keystone, which would
link Canada's oil sands to refineries in Texas, had cleared in
as many months. In January, the State Department said in a final
environmental review that the pipeline would not cause undue
environmental harm and would not speed up development of the oil
Several agencies, including the Environmental Protection
Agency, and the Departments of Homeland Security and Commerce
have been working with the State Department to decide whether
the pipeline is in the national interest since the environmental
review was published. The process is due to last through April.
Secretary of State John Kerry and President Barack Obama are
expected to make a final decision on Keystone after the agencies
finish their work, but they are under no timeline to do so.