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Letter to Secretary Clinton Speaks Out Against Keystone XL Pipeline

Energy

Great Plains Alliance for Clean Energy

Scott Allegrucci, executive director of The Great Plains Alliance for Clean Energy, speaks out against the proposed TransCanada Keystone XL tar sands pipeline in his public comment to the U.S. Department of State in a letter to Secretary of State Hillary Rodham Clinton.

October 7, 2011
Hon. Secretary of State Hillary Rodham Clinton
United States Department of State
c/o Alexander Yuan
P.O. Box 96503-98500
Washington, D.C. 20090-6503
RE: Keystone XL EIS Project

Dear Madame Secretary:

As the Executive Director of the Great Plains Alliance for Clean Energy (GPACE), I write to you regarding the proposed TransCanada Keystone XL project and the process of administrative assessment related to the National Interest Determination (NID) and Presidential Permit review process for the project.

Briefly, GPACE is a Kansas non-profit organization formed in 2007 to support a clean, secure, prosperous energy economy benefiting Kansas businesses, farms, communities, and all future Kansans. We have coordinated grassroots education and outreach and legislative lobbying with a diverse alliance of partner organizations and communities, including private companies, other non-profit groups, student organizations, and religious congregations around Kansas and the Great Plains region. GPACE has approximately 2,000 active members and a direct, opt-in communications network of over 10,000 citizens.

In addition to our commitment related to current energy policy action, our diverse membership is united by an expectation of ethical conduct in the public interest on the part of our representatives in government, and by a commitment to the well being of future generations of Kansans when enacting policies that will determine their energy and economic realities. If results from multiple statewide, non-partisan polls conducted over the past four years are considered credible, the general views of GPACE reflect those of a majority of Kansas citizens. Of course, I write to you today representing the shared values of our organization and its members.

While we are a regional organization, based in and focused primarily on Kansas, we share the concerns expressed by hundreds of thousands of our fellow citizens around the country regarding the proposed Keystone XL tar sands pipeline project. Those concerns relating to the threat from the project to local communities, precious ecosystems, and critical shared resources (especially fossil and groundwater sources) are in our view legitimate and should in themselves be grounds for at least a revision of the current project EIS, which we consider inadequate.

Added to these concerns are the issues of questionable relationships, influence, and decision-making in the context of governmental ethics and statutory regulations put in place to protect the public interest in just such instances. Without further investigation into and resolution of these legal and ethical issues, we do not see how the Department of State or the President can make a legitimate or binding NID decision regarding the project.

Weighing upon all these credible concerns are significant questions of domestic energy and economic policy, and especially of national and international efforts to address the threats from anthropogenic global climate change. Jobs and economic development assertions in support of the project have been characteristically inflated, in some cases dramatically so, and as such they should not be the basis for credible expectations from or justifications for the project. The ultimate foreign destination of much or most of the refined product of the transported tar sands is a blatant refutation of assertions that the project will meaningfully enhance the national or energy security of the United States. And the direct and devastating contribution to greenhouse gases and subsequent global warming resulting from the extraction and use of dirty tar sands (not to mention the degradation of biomass resulting from mining and pipeline construction and maintenance) completely undermines any commitment or contribution on the part of the United States to prevent or mitigate the significant and unaffordable climate and hydrological disruptions caused by global climate change.

In particular, individual GPACE members (some of whom are landowners and residents living in counties in which the Kansas section of the project is already operational) have expressed the following concerns:

  1. High pressure, tar sands crude pipelines threaten groundwater supplies in the Ogallala aquifer and shallower groundwater supplies. Sensitive groundwater areas should be avoided and pipeline path changed. Water contamination is an avoidable and many cases irreversible risk from this project – and therefore an inexcusable outcome. TransCanada’s record to date related to pipeline safety and protection of water resources is cause for concern, in addition to the many recent high-profile spills and accidents that indicate widespread planning and compliance problems within the industry.
  2. In rural areas of pipeline construction, Keystone has been allowed to use thinner wall pipe than in more densely populated areas. Pipe thickness should be uniform and of maximum pressure rating for design pressures to insure safe operation for every environment and community along the pipeline. There have already been leaks detected in rural Kansas sections of the pipeline.
  3. Pipeline construction should bore under all perennial flow streams and rivers to preserve sensitive riparian areas and maintain bank integrity. Already, residents are seeing erosion and degradation of areas where the pipeline and related construction cross streams.
  4. Pipeline construction is disruptive to native fish, animal, and plant species, and potential leaks or spills could also devastate agricultural and ranching assets. Pre-construction surveys of fish and animal populations and habitat, as well as agricultural production assets, should have been required with subsequent mitigation plans and post-construction monitoring surveys in place. This has not occurred.
  5. Pipeline impact on the local economy should be honestly evaluated and reported. “Backroom deals” that result in local property tax giveaways and starve the communities along the pipeline corridor should be disallowed and reversed if in place. In Kansas, Keystone successfully obtained state incentives from the Department of Commerce, and then successfully lobbied state legislative leadership (though not all legislators representing the citizens in communities directly impacted by the project) to obtain long-term incentives in the form of local tax abatements on top of the state incentives. The local tax abatements were accomplished in secret and without any input from or notice to the local governmental entities, and the deals were secured under threat from Keystone that the project would be redirected without such incentives. In particular, the local revenue giveaway to TransCanada/Keystone undercuts assertions of long-term economic benefit from the project.
  6. Cardno ENTRIX has been working on behalf of the State Department to evaluate Keystone XL since the Bush Administration, and is the company that conducted the State Department’s inadequate environmental review of the Keystone XL pipeline, which was finalized by the State Department a few weeks ago, despite the EPA raising numerous concerns and warning that the review was “insufficient.” Cardno ENTRIX has previously worked on projects for TransCanada, and also worked for BP to conduct the environmental review of the Deepwater Horizon oilrig that exploded in the gulf last year. According to numerous reports, the Cardno ENTRIX representatives running the public hearings have consistently created or contributed to unfair conditions and bias against project opponents and “manufactured” public support for the project. On the heels of a corrupted permitting process for a proposed coal plant in Kansas, and intense pressure and financial expenditures by the out-of-state company that would own that plant and its power, our members are highly suspicious of the influence of special interests on this project, and therefore dubious about its true value to our national interest.
  7. Documents released recently reveal a cozy relationship between State Department officials and lobbyists for the Canadian pipeline company TransCanada. These documents include emails from a TransCanada lobbyist named Paul Elliot, who previously served as your Deputy Campaign Manager during the 2008 Presidential campaign. State Department officials appear to have coached Elliot and other TransCanada staff about how to build their case for approval, and even how to respond to questions and concerns about pipeline safety and environmental impact. It even appears that Mr. Elliot may have been lobbying illegally—failing to register as a lobbyist for over a year while working on behalf of TransCanada—a potential violation of the Foreign Agents Registration Act. We have had our fill of unethical misconduct by those sworn to fairness in the public interest, and our members are deeply concerned and disheartened by the ongoing apparent disregard for due process and the rule of law that seems to be occurring as part of the Keystone XL project.

As the State Department reviews a Presidential Permit for the Keystone XL pipeline, I ask you to consider the gravity of the risks associated with a pipeline that dramatically threatens our ability to combat climate change. Further expansion of a fuel that releases 17% more carbon pollution than conventional oil will push our climate system past the tipping point and beyond human control.

Keystone XL poses a direct threat to America’s land, air, and water as well as the health and livelihoods of our communities. This pipeline would put at risk sensitive land and water, including the Ogallala aquifer, which provides 30% of our agricultural water and drinking water to 2 million Americans. Allowing TransCanada, a foreign company, to profit from a dirty and dangerous tar sands oil pipeline at the expense of Americans’ drinking water, food supply and economy is not in our national interest.

Our nation has experienced the real impacts of our addiction to fossil fuels, in the multitude of oil spills still affecting communities today, in the rising gas prices across the country, and in the daily threats posed to our troops overseas. Keystone XL would deepen our dependence on oil. Proposed new vehicle fuel economy standards alone will save more than twice the amount of oil the pipeline is projected to deliver. Building the tar sands pipeline would undermine our progress in transitioning America to a clean energy future, send the wrong message to the world, and imperil our children’s future.

As you consider the NID related to the Keystone XL project, on behalf of current and future Kansans, and with respect for the many difficult priorities and objectives you undertake on our behalf, we ask you to consider the impacts of this decision upon our health and well-being, our economic and civic vitality, efforts to protect our natural resources and our economy, and the need for fiscal and environmental responsibility concerning long-term energy investments.

We understand that the current administration must take us in a new direction. Most of us are doing all we can to contribute and succeed in the current moment, but you have a legacy opportunity in this instance to provide our children and grandchildren a better chance to contribute and succeed when their moment comes. We ask you to show bold leadership by denying TransCanada the Presidential Permit. Keystone XL is not in our national interest.

Respectfully,

Scott Allegrucci, Executive Director

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Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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