American Oil flays Trump pipeline plan
About 77% of steel used in US pipelines today begins abroad with roughly half of the pipe foreign-sourced
Donald Trump’s allies in the oil industry are warning the president that his bid to boost US steelmakers could backfire against their efforts to achieve his goal of “American energy dominance.”
The intense lobbying effort comes as the Commerce Department faces a deadline today to give the president a plan to require oil and gas pipelines use American-made steel, an idea Trump embraced in the initial days of his presidency. While the US has imposed “Buy American” rules on government purchases for decades, it would be unprecedented to force those obligations on privately funded, commercial projects.
“A core feature of the US free enterprise system” is that “private businesses should be free to make purchasing decisions on their own,” the Chamber of Commerce, the biggest-spending business lobby in Washington, said in its comments to Commerce Secretary Wilbur Ross.
The effort illustrates how Trump’s agenda pits his allies against one another and underscores the challenges of fulfilling his protectionist stance. Trump kicked off the pipelinefocused effort during his fourth day in office, compelling the Commerce Department to determine how to require American material in all, retrofitted, repaired or expanded US pipelines.
Warning
While pipeline developers have praised Trump’s approval of projects that stalled under Obama, including TransCanada Corp’s Keystone XL and Energy Transfer’s Dakota Access, they warn Americamade requirements could undercut that progress.
“Fewer new pipeline projects would run counter to the Trump administration’s goal of expanding US energy production and infrastructure to support the economy, job growth and national security,” said a coalition of oil industry trade groups, including the American Petroleum Institute and the American Gas Association. Relying solely on US-produced pipelinequality steel and components “could lead to long construction delays and higher costs, potentially cancelling planned pipeline projects or blocking new pipeline projects.”
Many steel producers, including ArcelorMittal USA LLC, Nucor Corp, and US Steel Corp, say Trump’s plans could help revive the industry.
But pipeline builders argue many steel mills have elected not to invest in producing a specialised pipe that meets industry standards for integrity and strength that make it usable in oil and gas pipelines. About 77 per cent of steel used in US pipelines today begins abroad — with roughly half of the pipe foreign sourced and the remaining half made in the US, using imported steel, according to a study.
The Alliance for American Manufacturing told the Trump administration it shouldn’t be swayed by arguments there isn’t enough capacity to churn out the steel pipe the oil and gas industry requires. Supporters point to Philadelphia-based Sunoco Logistics’ plans to fully source its 350-mile Mariner East 2 pipeline with 75,000 tonnes of domestically produced steel. That project is evidence that US companies can meet the oil industry’s needs, the manufacturing alliance said.