These Industry Titans Oppose Trump's Order to Build Pipelines with U.S. Steel

picture-7018-1583982147.png
on

The April 7 deadline has come and gone for public comments on President Donald Trump‘s executive order calling for U.S. pipelines to be made with U.S.-produced steel, and some of the most influential titans of industry have come out againstย it.

The list of heavy-hitters who have voiced their discontent includes the likes of Dakota Access pipeline-owner Energy Transfer Partners, Russian-owned pipe producersย Evraz North America and TMK IPSCO, and pipeline giants Williams Companies and EQT Midstream. It also includes the oil and gas industry at-large through its trade association and lobbying groups, such as theย American Petroleum Instituteย (API), Independent Petroleum Association of America (IPAA), Association of Oil Pipelines, American Fuel & Petrochemical Manufacturers (AFPM), and others such as Magnolia LNG.ย 

Noticeably absent from the list is TransCanada, owner of the recently approved Keystone XL pipeline, which the Trump administration has said is exempt from the order. Both Keystone XL and Dakota Accessย will use steel made by Evraz North America, whose parent company is owned by a close political ally of Russianย President Vladimir Putin, as previously reported byย DeSmog.

Evraz, Canada, EU Say No to โ€œBuyย Americaโ€

In comments submitted to the Department ofย Commerce, Evraz discussed what โ€œBuy Americaโ€ would mean to it as a company. Evrazย previously lobbied against a โ€œBuy Americaโ€ amendment tucked into a congressional bill calling for the approval of Keystone XL inย 2015.

โ€œThe specter of ‘Buy America’ being possibly implemented for pipeline projects has already created a negative impact on the pipeline market, and our business specifically,โ€ Brian Kristofic, trade and government affairs director for Evraz North America, wrote in the filing. โ€œEvraz operates a carefully integrated North American steel supply chain that depends on the free flow of goods between the U.S. and Canada to serve customers in both markets and preserve the viability of well-paying middle-class jobs in bothย countries.โ€

According to Evraz North America’s quarter one 2017 federal lobbying disclosure form, the company paid lobbyist John Stinson $50,000 during that time period to lobby Congress and the Commerce Department in opposition to Trump’sย order.


Credit:ย Office of the Clerk, U.S. House ofย Representatives

Both the Canadian government and theย Province of Saskatchewanย have also come out against Trump’s Buy America pipelineย order.ย Evraz has major operations in Canada, where pipeline products currently pour across the U.S.ย border.

โ€œEVRAZ Regina supplies customers in the U.S. and Canada. EVRAZ also has operations in the Canadian provinces of Alberta and Manitoba as well as in the U.S. states of Colorado, Oregon, North Dakota and Illinois, all of which are part of their integrated supply chain to manufacture their products,โ€ wroteย Brad Wall, the Premier ofย Saskatchewan, in his comment. โ€œImposing local content requirements on the construction of American pipelines puts these mutual benefits at risk as they negatively affect our cross-border supply chains and jeopardize millions of U.S. and Canadian jobs that depend on trade, including EVRAZ‘s jobs in the U.S. that depend on thriving Canadianย operations.โ€

Similarly, the Canadian governmentย pointed to the U.S. and Canadian pipeline industries as โ€œinterdependent,โ€ again mentioning Evraz in doingย so.

โ€œThey are an integral part of each otherโ€™s supply chains for finished and semi-finished products, especially in sectors such as automotive, construction and energy,โ€ it wrote. โ€œMany steel facilities operating in both countries are subsidiaries of the same parent companies, including ArcelorMittal, Tenaris, Evraz, Harris Steel andย others.โ€

The Government of Alberta, which oversees the massive tar sands reserves, stepped it up a notch,ย threatening potential legal action if Trump goes forward with the Buy Americaย order.

โ€œThe growth in energy development in Alberta over the past two decades has made our province one of the most important global markets for U.S. equipment and services companies,โ€ it wrote in its comment. โ€œShould the U.S. choose to impose measures that are counter to current trade agreements, Alberta will work with the Government of Canada to vigorously defend its interests within the appropriateย fora.โ€

Welspun, the Indian-owned company with aย subsidiary based in Little Rock, Arkansas, also produced some of the steel forย Keystone XL and Dakota Access. And like Evraz, it has come out against Trump’s order, writing,ย โ€œDomestic content requirements will reduce the number of steel mills in our supply chainย base.โ€

However, TMK, the other major Russian-owned oil and gas pipe-making company with U.S. operations besides Evraz, has actually offered support ofย the order. It says it will only serve to bolster the company’s bottom line.ย 

Beyond North American borders, opposition to Trump’s steel order hasย come fromย the Europeanย Union.ย 

โ€œThe EU is concerned that the memorandum and the subsequent Notice of request for comments refer to a very broad coverage of Buy American obligations which, if implemented, would reduce the opportunities of EU industries to contribute to any US pipeline construction or repair projects in the future,โ€ wrote EU Ambassador David O’Sullivan, later pointing out that the order itself is on shaky legal ground, given existing international tradeย agreements.

โ€œWe would โ€ฆ strongly encourage you to reflect on the negative implications of, and further precedent-setting effects of imposing domestic preference policies or regulations and to ensure full respect of the international obligations to which the US hasย committed.โ€

Energy Transfer Partners and Industryย Backlash

Energy Transfer Partners (ETP) justified its opposition to the Trump proposal by arguingย it likely would have a โ€œsignificant adverse impact on project execution schedulesโ€ because the current U.S. steel industry lacks theย capacity to build the considerable pipeline mileageย underย proposal.

โ€œThis has been evident in past years when construction activity was moderately high,โ€ wrote the company. โ€œThe impacts of such a restriction are expected to severely delay project schedules, drive up costs, decrease availability, and lower quality.ย In general we believe such a restriction or mandate should be thoughtfully crafted so that it sufficiently considers the best interest of public safety, the reliability of pipeline facilities and the financial interests of shareholders or unitholders, ratepayers andย employees.โ€

ETP also admits in its filing that the vast majority of the steel for its pipelines, 81 percent of it, is not sourcedย domestically.ย 


Credit: Regulations.gov

The American Fuel & Petrochemical Manufacturers (AFPM), of which Koch Industries is a member, did not come out against the order, butย rather offered a listย of things the Trump administration should consider about its proposal before introducing the final proposed rule. The lobbying group did note it was โ€œconcernedโ€ that the initiative would end upย โ€œinterfering with the freeย market.โ€

API and several other industry trade groups, including the Association of Oil Pipelines and the American Gas Association, also commented that theย industry was pleasedย with the flexible language found in the Trump executiveย order.

โ€œBecause the Presidential Memorandum recognizes that any domestic content requirement should be implemented ‘to the extent permitted by law,’ the Associations believe it is important that the plan address potential legal constraints,โ€ wrote the armada of trade associations and lobbying organs. โ€œThe Associations therefore respectfully request that interested stakeholders be provided a meaningful opportunity to provide advance comment on any possible domestic content requirement, including comments on possible legal limitations andย ramifications.โ€

The U.S. Department of Commerce will consider all of these commentsย as it inches towardย a draftย set of regulations required by the executive order and due onย Julyย 23.

Main image: Steel pipes for a gas pipeline.ย Credit: PROJECT_MANAGER,ย CC BYSAย 2.0

picture-7018-1583982147.png
Steve Horn is the owner of the consultancy Horn Communications & Research Services, which provides public relations, content writing, and investigative research work products to a wide range of nonprofit and for-profit clients across the world. He is an investigative reporter on the climate beat for over a decade and former Research Fellow for DeSmog.

Related Posts

The EU and many member states have set limits for how much manure farmers are allowed to apply in their fields, but crucial oversight is lacking.

The EU and many member states have set limits for how much manure farmers are allowed to apply in their fields, but crucial oversight is lacking.
on

Robert Wilkie was speaking at a conference co-hosted by the group behind the radical Project 2025 agenda.

Robert Wilkie was speaking at a conference co-hosted by the group behind the radical Project 2025 agenda.
on

Scope of corporate influence underscores concerns the technology will be used to prolong demand for planet-heating natural gas.

Scope of corporate influence underscores concerns the technology will be used to prolong demand for planet-heating natural gas.
on

A 1961 oil and gas well is the suspected source of a geyser eruption in the region where Permian wastewater disposal is causing a flurry of earthquakes.

A 1961 oil and gas well is the suspected source of a geyser eruption in the region where Permian wastewater disposal is causing a flurry of earthquakes.