Trump bailing on another promise – using US steel for pipelines

  • Published on May 5th, 2017

Just four days after he took office, Pr*sident Donald Trump fulfilled one of his campaign promises by issuing a memorandum calling for a Non-US steel ready for Transcanada's KXL pipelineCommerce Department study on using American steel for pipelines – all-new, retrofitted, repaired, or expanded U.S. pipelines. The problem for Trump is that it’s likely no way can be found to craft a domestic-steel-only policy that’s legal. And even if that obstacle could be overcome, a majority of Congress opposes the idea.

By Meteor Blades

The White House soon exempted the Keystone XL pipeline because it is underway, with much of the pipe already stacked ready for installation. According to KXL builder TransCanada, about half the pipeline’s steel will come from abroad, half from a plant in Arkansas.

Trump is used to breaking promises, of course. And his vow in this matter has all along had nothing to do with invigorating the U.S. steel industry but in getting more pipelines built. Standard fakery.

This time, he has the World Trade Organization to give him an excuse for reneging. The WTO allows domestic content rules for government projects. But for the Trump Regime to impose such a requirement on private projects would be illegal unless it can persuade the WTO the domestic content mandate is being imposed for national security reasons. A tough sell.

Exempting one pipeline definitely isn’t enough for the industry. Pipeline companies and the American Petroleum Institute are fighting the plan. They claim that requiring that only domestic steel be used “would run counter to the Trump administration’s goal of expanding U.S. energy production and infrastructure,” according to a letter to the Commerce Department by several groups, including the Association of Oil Pipe Lines and the American Petroleum Institute.

The requirement would, they also claim, kill jobs, the standard rap for the past 80 years or so when any new regulation is proposed.

The companies argue that U.S. steelmakers do not manufacture some of the parts they need to build their projects and that requiring them to buy American-made steel could prove too expensive. “Does the domestic industry have the ability to quickly come in and replicate that capability? The answer is: not easily, or not quickly,” says John Mothersole, an analyst at IHS Global Insight.

Joe Romm at Climate Progress points out that the oil industry—which has received $38 billion in taxpayer subsidies over the past decade to support domestic production and create jobs—is once again complaining about government regulations mucking up their business:

The company building the Dakota Access pipeline, Energy Transfers Partners (ETP), wrote to the Department of Commerce that forcing the company to build pipelines from American steel would “severely delay project schedules, drive up costs, decrease availability, and lower quality.”

Amy Harder at Axios reports that IHS and the International Trade Association say that U.S. pipelines are now made with about 30 percent domestic steel components.

Romm writes:

ETP, which received approval from the Trump administration for the Dakota Access pipeline in February, said that while the president’s idea was “well-intended,” it is, sadly, “unworkable and not in the best interests of pipeline safety and integrity.” Ironically, this statement comes from a company that spilled over 2 million gallons of drilling fluids into Ohio wetlands just last month.

(Originally appeared at DailyKos)

About the Author

Meteor Blades is a writer and contributing editor at DailyKos. He believes there is something profoundly wrong with our system. - the unchecked accumulation of wealth and power into the hands of a very small group of corporate business interests has contributed to the wholesale corruption of our political system. For an understanding about the level of corruption in our country, he encourages you to view these two PBS documentaries: (1). ,The Untouchables; (2) The United States of ALEC.