Energy

President Trump Seeks to Jumpstart Construction of Keystone XL and Dakota Access Pipelines

On Tuesday morning, President Donald J. Trump signed two memoranda seeking to jump start construction of the Keystone XL and Dakota Access pipelines. This news should come as no surprise since President Trump routinely spoke in favor of such infrastructure projects on the campaign trail.

TransCanada first proposed the Keystone XL pipeline in 2008 to transport 800,000 barrels of oil from the oil sands in Alberta, Canada (and light sweet crude from the Bakken Shale play) daily to refineries in Illinois and on the Texas gulf coast.  President Obama ultimately rejected the Keystone XL pipeline in late 2015, claiming its construction would symbolically undercut the U.S.’s leadership on climate action. This decision came after a State Department analysis suggested construction of the pipeline would not significantly alter the amount of oil extracted from the oil sands, thus having a minimal impact on climate.

President Trump’s memorandum invites TransCanada to resubmit its application to the State Department for a presidential permit. President Trump did also express an interest in renegotiating some of the terms of the pipeline, but appeared eager to help create 28,000 construction jobs. Within a matter of days, TransCanada resubmitted its permit application.

The Dakota Access Pipeline would originate in the Bakken shale play in North Dakota and travel in a southwesterly direction to an oil tank farm in Pakota, Illinois, a major hub for various oil pipelines that traverse the region. The pipeline is designed to increase public safety by reducing the amount of oil that would have to travel by truck or rail. Controversy over the project only arose after the Standing Rock Sioux expressed concern over the pipeline being constructed beneath Lake Oahe and within a mile of their reservation, after missing countless opportunities in prior years to provide comment. Despite the fact eight other pipelines already run underneath the lake, President Obama directed the Army Corps of Engineers to look for an alternate route for the pipeline in December 2016. President Trump’s memorandum directs the Corps to “review and approve” the pipeline “in an expedited manner” and, again, expressed an interest in renegotiating terms of the pipeline.

President Trump also signed a third memorandum directing the Secretary of Commerce to develop a plan to ensure pipelines built in the U.S. are also manufactured within the country to the greatest extent possible, perhaps providing some indication as to what terms President Trump would seek to renegotiate.


In Depth: Energy

It is difficult – and perhaps even impossible – to overstate the relationship between readily available access to safe, affordable and reliable energy and individual prosperity and economic wellbeing. This is because energy is an input to virtually everything we produce, consume and enjoy in society. Think for a minute …

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