Trump Authorizes Keystone XL and Dakota Access Pipelines

The invitation by the president does come with some strings, such as the requirement to use U.S. steel in the manufacturing of the pipeline. TransCanada did not make any comments regarding the proposal by Trump to renegotiate the terms of the Keystone XL agreement to ones more favorable toward the U.S.

The Canadian Association of Petroleum Producers welcomed the decision saying it was a “major economic step forward for Canada, the United States and for North American energy security.”

“Today’s announcement means responsibly-produced Canadian oil will have access to more markets, which means Canadians will be getting better value for their resources,” said CAPP president and CEO Tim McMillan. “As our largest trading partner, the relationship that Canadian producers share with the U.S. is a critical one. When given the option between granting access for Canadian oil to international markets and continuing to meet demand with Saudi Arabian, Venezuelan, Iraqi, and Nigerian oil, the choice is obvious.”

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute issued the following statement on the President’s executive actions to expedite the Keystone XL and Dakota Access pipeline projects

“We commend the President for his swift and decisive executive actions taken today,” said Gibson. “It is important the Keystone XL and Dakota Access pipelines be approved and completed soon. These pipelines will help ensure that reliable and plentiful domestic energy sources are fully utilized.

“The President’s actions today recognize the essential nature of the domestic steel industry to producing American energy resources and getting them to customers. They will expand markets for high-value steel products that are essential for oil, natural gas and electricity production and transmission. Exploring ways to reduce regulatory burdens for our manufacturing operations is sorely needed.

“Taken together, building these pipelines, ensuring key markets for domestic steel and pipe products, and lowering the burdens to manufacturing in the U.S., will help ensure that our industry remains highly productive and internationally competitive. The steel industry is grateful for the President’s commitment to enhancing American manufacturing and preserving steel industry jobs.”

The pipeline, according to President Trump, would create 28,000 jobs in the United States. CBS news reports that in 2011, TransCanada said the pipeline would create 20,000 direct jobs and support 118,000 indirect or jobs. The State Department said it was more likely that 42,000 direct and indirect jobs would be created. Even that number has been disputed by media and fact-checkers who say the numbers would be much lower. Once the pipeline is finished, TransCanada says only 50 people would be needed to maintain it.

In an interview in 2014, TransCanada told Steel Market Update that an estimated 821,000 tons of high strength line pipe would be used during construction of the pipeline with 660,000 tons of steel require for the U.S. portion. Another 35,000 tons of steel would be sourced as material used in fittings, valves, tanks, and for pump stations.

Environmentalists fear the Keystone XL and the Dakota Access Pipeline will pose significant environmental risk.

“The world’s climate scientists and its Nobel laureates explained over and over why it was unwise and immoral,” said Bill McKibben, the founder of activist group 350.org that has opposed both pipelines. “In one of his first actions as president, Donald Trump ignores all that in his eagerness to serve the oil industry. It’s a dark day for a reason, but we will continue to fight.”

Greenpeace Executive Director Annie Leonard said in a statement, “We all saw the incredible strength and courage of the water protectors at Standing Rock, and the people around the world who stood with them in solidarity,” she said. “We’ll stand with them again if Trump tries to bring the Dakota Access Pipeline, or any other fossil fuel infrastructure project, back to life.”

The 1,179-mile proposed pipeline, to be built by TransCanada, would carry oil from shale fields in Alberta to Nebraska and onward by already constructed pipe lines to Gulf Coast refineries.

The Keystone project applied for a presidential permit in March 2008 and what followed was a long battle by TransCanada for permission to cross the U.S. border. In February 2015 President Obama vetoed passage of the Keystone XL oil pipeline bill by Congress. The project was rejected despite five studies in which the U.S. government concluded that the proposed pipeline would not have a significant impact on greenhouse gas production. The decision was regard as a political move to gain favor for the administration regarding climate change.

TransCanada filed a suit under Chapter 11 of the North American Free Trade Agreement seeking to recover “costs and damages that it has suffered as a result of the U.S. Administration’s breach of its NAFTA obligations.” That suit is ongoing.