Solyndra and Keystone: Not All Environmental Scandals Are Created Equal
This unseasonably warm and unexpectedly lively autumn, the Obama administration finds itself embroiled in two environmental scandals. One, involving run-of-the-mill cronyism and bureaucratic ineptitude, we’ve been hearing about endlessly. The other, in which cronyism on a grand scale is imperiling the planet, is being swept under the rug.
First, there’s Solyndra. To the delight of Tea Partiers and climate change deniers everywhere, the Energy Department made some serious missteps when it guaranteed a $535 million loan to the shaky start-up solar company whose fortunes depended on the success of a quirky technology. An Energy official who avidly pushed the project had a blatant conflict of interest: his wife’s law firm represented the company. So what might have been written off as a bad bet also showed bad faith.
Even so, the Solyndra scandal is overblown. Companies routinely fail in every industry; the whole point of industrial policy is to provide backing for ventures that might produce big breakthroughs but can’t attract sufficient private investment precisely because they are too risky. Of all the green investment areas, solar is the most risky, since solar energy is nowhere close to being cost-competitive with conventional energy. The real lesson of Solyndra, lost in the right-wing hysterics, is that in the area of renewables, the government should be giving big subsidies to wind, not solar. And it should be more aggressive and sophisticated in its approach to developing clean energy technologies and markets.
Far more disturbing, and with far higher stakes, is the relatively underscrutinized scandal surrounding the Keystone pipeline project, which is pending administration approval by the end of the year. This one begins with cronyism of an even more odoriferous variety: Hillary Clinton’s former deputy campaign manager, Paul Elliott, is now chief lobbyist for TransCanada, the firm pushing the pipeline. Former State Department official David Goldwyn is a tar sands lobbyist who testified before Congress in favor of the Keystone pipeline. WikiLeaks cables show that he even coached Canadian officials on oil sands “messaging” while he was at State.
Unsurprisingly, given all this coziness, the State Department turned to TransCanada for advice when seeking an outside firm to perform an environmental review of the project. TransCanada recommended the consulting company Cardno Entrix, which lists TransCanada as a “major client”; State hired Cardno Entrix to conduct the review and help draft an Environmental Impact Statement, which found that the project would have “limited adverse environmental impacts”—a conclusion questioned by the EPA. Next, the State Department staged a series of public hearings on the project. As activists in Nebraska—deeply concerned about the danger the pipeline poses to the giant Ogallala Aquifer—soon discovered, the management of those hearings had been outsourced to none other than Cardno Entrix. You can’t make this stuff up.
As climate scientist James Hansen has warned, if the Canadian tar sands are aggressively exploited, “it’s essentially game over for the climate.” Obama’s EPA sees the danger ahead. Environmentalists are mounting pressure to stop the project. There is still time for Obama to do the right thing—and to deliver, in this one way at least, on his campaign promise to change the culture of Washington. The lesson of the Keystone scandal is painfully simple: our climate policy is being guided by the very forces that are destroying the climate. That has to change now.