TransCanada buys another favorable pipeline report

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Why no one should believe Deloitte’s report on the latest tar sands pipeline plan

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It’s a scandal in the U.S. — it turns out that the State Department’s favorable report on the Keystone XL was written by a company that works for TransCanada and over a dozen other companies that have stakes in the Alberta tar sands.

Buying favorable reports is standard practice for oil companies. This month there’s a case in Canada.

On September 10, TransCanada released a report prepared by Deloitte & Touche, purporting to show that the EnergyEast tar sands pipeline project will produce huge benefits, including $35 billion in additional GDP, 10,000 full-time jobs, and $10 billion in tax revenues.

The report received favorable coverage in virtually all media. After all, Deloitte the largest professional services firm in the world: they wouldn’t risk their reputation by producing a biased or untrustworthy analysis, would they?

Maybe not, but they would cover their asses in the small print. Not one of the press reports I’ve seen mentioned this paragraph, from the first page of Deloitte’s report:

“We have relied upon the completeness, accuracy and fair presentation of all the financial and other information, data, advice, opinions or representations obtained from management of TransCanada  (‘Management) and/or their agents and advisors (collectively, the ‘Information’). The report is conditional upon the completeness, accuracy and fair presentation of such Information.”

In short, Deloitte was paid to swallow whatever TransCanada told them, and to regurgitate it for consumption by the press. That’s what they did.

Even so, they had to extend their forecasts an absurd 45 years into the future to produce the impressive numbers TransCanada is bragging about. (Imagine a report written in 1968: how accurate would its predictions of the oil industry’s position in 2013 have been?)

The press was silent about that. Nor did they mention this passage, from the same page of the report:

“Deloitte provides Audit, Financial Advisory, Consulting, Enterprise Risk and Tax services to … Canada’s most prominent entities and industries, including many entities in the oil and gas industry.”

Deloitte didn’t get to be Canada’s biggest accounting firm by producing reports that its rich corporate clients don’t like — and TransCanada surely counted on that.

You can download Deloitte’s report here (pdf). As you do, bear in mind the old saying, garbage in, garbage out. It’s not analysis, it’s pro-pipeline propaganda, bought and paid for by pipeline promoters.


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