Canadian Manufacturing

Keystone XL pipeline will not use American steel, despite Trump pledge

The White House appears to have granted the KXL an exemption from the U.S. president's Buy American order, clearing a major roadblock



Trump recently ordered thew new U.S. pipelines be built with American steel, but TransCanada’s Keystone pipeline seems to have escaped that requirement

OTTAWA—The White House has delivered welcome news to proponents of the long-delayed Keystone XL pipeline project, suggesting it’s likely to be exempted from a requirement involving the use of American steel that might have complicated its approval.

A spokeswoman for President Donald Trump suggested late last week that his recent order that U.S. pipelines be built with American steel did not apply to the hotly debated project linking Alberta and Texas.

“The way that executive order is written ? it’s specific to new pipelines or those that are being repaired,” Sarah Huckabee Sanders told media travelling with Trump to Florida March 4.

“And since this one is already currently under construction, the steel is already literally sitting there, it would be hard to go back. But I know that everything moving forward (in future projects) would fall under that executive order.”

The issue stems from two executive orders in Trump’s first week in office.

He signed one that suggested he would soon approve Keystone XL, after years of delay and rejection by the former Obama administration. But Trump signed another order that said his commerce secretary would draw up plans to use American steel in pipeline projects wherever possible, and wherever permitted by law.

The president followed that up by claiming in speeches that he’d insisted on U.S. steel; if that were true for Keystone, it might have presented a challenge given that much of its material is sourced from outside the U.S.

But the White House now appears to have removed that steel-related hurdle. That news brought derision from people who oppose the president and the pipeline in the U.S.—accusing him of double-speak.

However, the Canadian government welcomed the news.

Prime Minister Justin Trudeau’s office says that “if confirmed,” the exemption would be a welcome recognition that the Canada and U.S. steel industries are deeply integrated and support jobs on both sides of the border.

“We will continue to work with the United States as they examine the steel industry,” said spokesman Olivier Duchesneau.

“Canada imported $6 billion of U.S. steel in 2015, supporting jobs on both sides of the border.”

Duchesneau said Canada has always supported Keystone because it will create “thousands of well-paying, middle-class jobs for Canadians and Americans” while helping North America become more energy secure.

The prospects for Keystone XL, first proposed by Calgary-based pipeline giant TransCanada nearly 10 years ago, have been whipsawed for nearly a decade by Canada-U.S. politics, an increasingly powerful environmental lobby and collapsing oil prices.

Former president Barack Obama cited environmental concerns when he cancelled the project in the fall of 2015.

Cheryl Oates, Alberta Premier Rachel Notley’s press secretary, said that if Keystone is exempt from the Trump order, it would speed up the start of the long-delayed, on-again, off-again project.

A Buy American requirement “would hold up the project, which isn’t good for Alberta,” Oates said. “We would advocate for it to move forward in a timely fashion, which would mean being exempt.”

The pipeline would take oilsands bitumen from Alberta to refineries on the U.S. Gulf Coast, carrying about 830,000 barrels a day.

With files from Alexander Panetta in Washington

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