The State Department was cleared of any wrongdoing in selecting a contractor to perform the environmental review for the Keystone XL oil sands pipeline, according to a report released Wednesday by the department's internal watchdog.
The finding is a blow to environmental groups that oppose the pipeline, which would bring oil sands from Canada to the Gulf Coast. They had alleged that the findings in State's draft and final reviews were flawed because the contractor it used, London-based Environmental Resources Management, had previously done work for Keystone XL-builder TransCanada Corp.
The inspector general report said that wasn't the case, as it concluded State had followed proper procedures to root out a potential conflict of interest.
"Based on the information provided and interviews conducted, [the Office of Inspector General] found that the process the Department used to select [Environmental Resources Management] ... substantially followed its prescribed guidance and at times was more rigorous than that guidance," the report said.
The State environmental review found that Keystone XL would not significantly contribute to climate change because demand would bring oil sands to market, by rail or other pipelines, regardless of whether the pipeline got built.
Supporters of the pipeline, which include Republicans, centrist Democrats, business groups and labor unions, said the inspector general report validated that review, and urged President Obama to green-light the project.
"Another day and another government report that finds no reason to continue blocking this common-sense, job-creating project. It's long past time the president stop pandering to his extremist allies and just approve it so we can get people back to work," said Brendan Buck, as spokesman for House Speaker John Boehner, R-Ohio.
Keystone XL foes had for months said Environmental Resources Management's involvement tainted the environmental review's conclusion.
But that argument appears dead with Wednesday's clearance from Foggy Bottom's internal watchdog — though some Democrats are still applying pressure, as Rep. Raul Grijalva, D-Ariz., asked the Government Accountability Office on Tuesday to look into the inspector general review.
State is currently overseeing a 90-day interagency review of the pipeline that will be used to determine whether building it is in the national interest. While that process will wrap up by June, there's no timeline for a final decision from the White House -- though Republican Oklahoma Gov. Mary Fallin said Monday that Obama told her a ruling would come "in a couple months."
Keystone XL opponents said they would double down on pushing Obama and Secretary of State John Kerry to scrap the project.
They said State's environmental report concluded the pipeline would raise greenhouse gas emissions. They said that gives Obama, who said he'd reject the pipeline if it "significantly exacerbates" carbon pollution, enough reason to nix it. They also noted -- as has the White House -- that the report is only one input used to determine whether the pipeline is in the national interest.
"Even the oil-soaked Final Supplemental Environmental Impact Statement (FSEIS) found that Keystone XL would increase carbon pollution in certain scenarios," said Rachel Wolf, a spokeswoman for All Risk, No Reward, a coalition of groups that opposes the pipeline.