Trump clears way for Dakota Access, Keystone XL pipelines

VANCOUVER (miningweekly.com) – Recently installed US President Donald Trump has cleared the way for the contentious Dakota Access Pipeline (DAPL) and TransCanada’s Keystone XL oil pipeline to be built in the US, after signing off on executive orders on Tuesday that overturned the Obama administration’s efforts to block these development projects.

Trump also issued a decree that only American steel should be used for pipelines built in the US.

The President further signed an executive action to expedite the environmental review and approval of high-priority infrastructure projects that he hopes to get moving as part of election campaign promises to rebuild US airports, roads and bridges.

During a televised press conference from the Oval Office, Trump noted as he signed the orders that he intended to renegotiate some of the terms of the Keystone XL project. "And if they like we will see if we can get that pipeline built - a lot of jobs, 28 000 jobs, great construction jobs,” he said.

The Dakota pipeline would be "subject to terms and conditions negotiated by us”, he stated.

Trump said his order on pipelines would "put a lot of steelworkers back to work. We are very insistent that if we are going to build pipelines in the United States, the pipes should be built in the United States".

The proponent of the Keystone XL pipeline, TransCanada, said in a statement to Mining Weekly Online on Tuesday that it appreciated the US President inviting it to reapply for the pipeline to be built.

"We are currently preparing the application and intend to do so. Keystone XL creates thousands of well-paying construction jobs and will generate tens of millions of dollars in annual property taxes to counties along the route, as well as more than $3-billion to the US gross domestic product.

"With best-in-class technology and construction techniques that protect waterways and other sensitive environmental resources, Keystone XL represents the safest, most environmentally sound way to connect the American economy to an abundant energy resource," a spokesperson stated.

The American Fuel & Petrochemical Manufacturers (AFPM) association applauded the actions, saying Trump's action to expedite the review and approval of the Dakota Access and Keystone XL pipelines was "good for the country, received the required environmental approvals, and never should have been delayed".

"Today marks an important step towards improving our nation's infrastructure, while signifying that this administration is serious about developing a rational energy plan that understands the important role of oil and natural gas to our country's prosperity,” the AFPM said in a statement.

CANADIAN BENEFIT
Trump’s action south of the Canadian border will potentially hold significant economic benefit for Canada, and its landlocked Alberta oil patch, which holds the third-largest oil reserves in the world and exports 99% of its output to the US market.

The Canadian Association of Petroleum Producers (CAPP) said on Tuesday the executive order advancing the Keystone XL pipeline project was a major economic step forward for Canada, the US and for North American energy security.

"This executive order for Keystone XL represents another major milestone for Canada as we look for market opportunities for our resources. Canadian resources have faced the disadvantage of being landlocked for too long, but that is starting to change,” CAPP president and CEO Tim McMillan stated.

"Today's announcement means responsibly-produced Canadian oil will have access to more markets, which means Canadians will be getting better value for their resources. As our largest trading partner, the relationship that Canadian producers share with the US is a critical one.

"When given the option between granting access for Canadian oil to international markets and continuing to meet demand with Saudi Arabian, Venezuelan, Iraqi and Nigerian oil, the choice is obvious,” McMillan said.

The Canadian oil and natural gas industry has been facing challenges to maintain competitiveness at home and abroad and pipeline approvals advance opportunities to make Canada an attractive place for investment.

By accessing new customers in new markets, Canadian oil producers can get a better world-price for their products. To this end, the federal government, under Prime Minister Justin Trudeau, on November 29 approved Kinder Morgan’s C$6.8-billion Trans Mountain Expansion project, which will match the existing 1953-built Trans Mountain pipeline system between Edmonton, Alberta, and Burnaby, British Columbia. This is expected to triple Canada’s access to new crude markets, as the country looks to diversify oil exports away from the US, its largest customer.

According to CAPP statistics, global demand for energy is expected to increase by 30% through 2040, with almost a quarter of that total energy demand expected to come from oil.

TransCanada jumped 2.7% to C$64.24 a share on the TSX on Tuesday, as Canada's main stock exchange itself rallied to within reach of its all-time high.

IMMEDIATE PROTEST
The Standing Rock Sioux Tribe said that President Trump’s executive action towards an approval of an easement for the DAPL risks contaminating tribal and American water supplies while disregarding treaty rights. It added that the Trump administration’s "politically motivated decision violates the law" and vowed to take legal action to fight it.

“President Trump is legally required to honour our treaty rights and provide a fair and reasonable pipeline process. The existing pipeline route risks infringing on our treaty rights, contaminating our water and the water of 17-million Americans downstream,” said Standing Rock Sioux Tribe chairperson Dave Archambault II in a statement.

The US Army Corp of Engineers had rejected DAPL’s request for an easement late last year, finding that the agency had failed to fully consider the impacts of the pipeline on the Standing Rock Sioux Tribe. The Department of the Army pledged to conduct a full environmental review of the Missouri river crossing and evaluate alternative sites, which would not put the tribe at risk of an oil spill.

However, the tribe fears that that environmental review will be circumvented under Tuesday’s executive memorandum, allowing the project to immediately resume construction.