In his first days as President, Donald Trump issued several directives to expedite pipeline and energy infrastructure projects and bring pipe steel manufacturing jobs back to the U.S. On January 24, 2017, the President signed executive memoranda jumpstarting the stalled Keystone XL and Dakota Access pipelines, stating “construction and operation of lawfully permitted pipeline infrastructure serves the national interest.” That same day, President Trump issued another memorandum directing the Secretary of Commerce to develop a plan requiring all new, retrofitted, repaired or expanded pipelines (or portions thereof) to use materials and equipment produced in the United States to the maximum extent possible.
By way of background, the Obama administration previously rejected Keystone XL’s application for a cross-border presidential permit, finding at the time that the 1,700-mile pipeline was not in the national interest. The United States Army Corps of Engineers (USACE) similarly decided last month that it would not issue an easement allowing the Dakota Access Pipeline (DAPL) to cross federal land in North Dakota, opting instead to consider alternative routes to reduce environmental and cultural impacts to the Standing Rock Sioux Tribe.
The Keystone Memorandum invites TransCanada to promptly resubmit its application to the Department of State for a Presidential permit to construct and operate the pipeline. The Executive Memorandum also directs the Secretary of State to reach a final permitting decision within 60 days of reapplication. President Trump further instructs the Secretary of the Army to take all actions necessary and appropriate to expeditiously review and, if warranted, approve requests for authorizations to use Nationwide Permit 12 under CWA Section 404(e) with respect to crossings of “waters of the United States.” The memorandum likewise directs the Department of the Interior to promptly review requests for rights-of-way and temporary use permits over federal lands.
The DAPL Memorandum primarily requires the Secretary of the Army to review and approve in an expedited manner, to the extent permitted by law, requests for approvals to construct and operate the pipeline, including easements or rights-of-way to cross federal lands, as well as permits or approvals under CWA Section 404 and Section 14 of the Rivers and Harbors Act. The memorandum further instructs the Secretary of the Army to consider rescinding its prior decision to not issue an easement to the pipeline to cross federal land, and to consider prior environmental reviews sufficient to satisfy USACE’s obligations under the National Environmental Policy Act (NEPA).
An additional executive memorandum directed the Secretary of Commerce to develop a plan requiring all new, retrofitted, repaired or expanded pipelines to use U.S. made materials and equipment produced to the maximum extent possible. A significant amount of steel pipe has been manufactured outside of the U.S. for decades and it is unclear whether the U.S. currently has the infrastructure in place to produce pipe in the quantities needed for new pipeline construction, replacement and repair. Most operators already have considerable stockpiles of pipe for repair, and existing/certificated construction projects have likely already purchased necessary pipe. This directive could therefore potentially be problematic and contrary to the directive’s intent to expedite pipeline infrastructure. Further, depending on its implementation this may infringe on existing international trade agreements.
In issuing these presidential directives, the new administration has furthered prior commitments to support pipeline infrastructure and domestic jobs. While the directives regarding pipeline infrastructure are a victory for the industry, these projects still face additional third party challenges associated with federal and state environmental reviews and permitting approvals. Further, the directive regarding pipe materials and equipment may prove to be problematic for the industry.