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‘US Made’ Won’t Apply to Keystone XL

Wednesday, March 8, 2017

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Weeks after President Donald J. Trump issued presidential memos inviting TransCanada to re-apply for approval for its Keystone XL pipeline project and calling on pipeline companies to use U.S.-made materials on new projects, the White House has said that Keystone XL project will not be required to use only American steel.

White House spokesperson Sarah Huckabee Sanders said Friday (March 3) that because Keystone XL is not a new project, and because steel to make the pipeline was already on order, it does not fall under the category of “new pipelines” or “retrofitted, repaired or extended pipelines” specified in the memorandum on using U.S. materials.

TransCanada pipes
© TransCanada Corporation. All rights reserved.

During the lengthy review process before Keystone XL was rejected in 2015, TransCanada began planning and sourcing materials, including pipes, for the project.

Trump’s public comments in the past indicated that he expected Keystone XL to be made with U.S. steel if it comes to fruition. Bloomberg reports that on Feb. 23, Trump told U.S. Steel CEO Mario Longhi, “We put you heavy into the pipeline business because we approved, as you know, the Keystone Pipeline and Dakota. But they have to buy—meaning, steel, so I’ll say U.S. steel—but steel made in this country and pipelines made in this country.”

In several speeches in February, Trump associated the restart of Keystone XL and the stalled Dakota Access Pipeline with the order to use U.S. steel.

Where Keystone XL Will Come From

During the lengthy review process before Keystone XL was rejected in 2015, TransCanada began planning and sourcing materials, including pipes, for the project. That was part of the impetus for a $15 billion suit the company filed against the U.S. government last year.

According to the original plans for the pipeline, 75 percent of the pipe for the Keystone XL pipeline will be manufactured in North America, but none will be produced by companies headquartered in the United States.

TransCanada, the company building Keystone XL, said in 2012 that it would be building pipeline of about 50 percent pipe made in Arkansas at a plant run by India-based Welspun. Of the other half, 24 percent would be made in Canada by Evraz, 16 percent in Italy by ILVA, and 10 percent by Welspun at a facility in India.

The companies that make the pipes themselves source their own steel.

Keystone XL Background

Planning for Keystone XL, which would carry crude oil from the Alberta oil sands in Canada to Steele City, Nebraska, began in 2008. The 36-inch-diameter pipeline was proposed by TransCanada to supplement other parts of the Keystone system, which carries oil from Alberta to Illinois, Oklahoma and the Gulf Coast.

Keystone Xl route
Meclee, CC BY-SA 3.0, via Wikimedia Commons

The 36-inch-diameter Keystone XL, propsed route shown in green, was proposed by TransCanada to supplement other parts of the Keystone system, which carries oil from Alberta to Illinois, Oklahoma and the Gulf Coast.

The other segments of the Keystone pipeline have already been constructed, and are either online already or expected to go online this year. Keystone XL itself, however, never began construction. After a six-year review, it was rejected by the Obama administration in 2015.

In a flurry of presidential memoranda on Jan. 24, though, Trump revived the plan, formally inviting TransCanada to re-apply for permits to build the pipeline.

Dakota Access Green Light

Another memo issued the same day called for an expedited review of the Dakota Access Pipeline’s routing under Lake Oahe, which was later approved. A federal judge Tuesday (March 7) denied a challenge to the Dakota Access project, paving the way for construction of the last leg of pipeline to begin as soon as next week.

Dakota Access was already nearly complete when it faced a regulatory stall in December 2016. Because the pipeline was so far along already, the “American-made” rule would not apply to it either.

   

Tagged categories: Government; North America; Oil and Gas; Pipeline; Pipelines; President Trump; Program/Project Management; Steel

Comment from peter gibson, (3/8/2017, 2:08 PM)

Stating the obvious. The pipes were already purchased. TC can breath a sign of relief.Luckily for them a new fellow came along.How convenient! Greenies...have a nice day!


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