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Author: Subject: White House: Keystone exempt from 'Buy American' requirements

World Class Peach





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  posted on 3/3/2017 at 09:08 AM
http://www.politico.com/story/2017/03/keystone-pipeline-buy-american-exempt ion-235639?utm_source=huffingtonpost.com&utm_medium=referral&utm_ca mpaign=pubexchange

White House: Keystone exempt from 'Buy American' requirements
By BEN LEFEBVRE 03/02/17 09:41 PM EST

The Keystone XL Pipeline will not be subject to President Donald Trump's executive order requiring infrastructure projects to be built with American steel, a White House spokeswoman said today.

Trump signed the order calling for the Commerce Department to develop a plan for U.S. steel to be used in “all new pipelines, as well as retrofitted, repaired or expanded pipelines” inside the U.S. projects “to the maximum extent possible.”

By the White House’s judgment, that description would not include Keystone XL, which developer TransCanada first proposed in 2008.

“The Keystone XL Pipeline is currently in the process of being constructed, so it does not count as a new, retrofitted, repaired or expanded pipeline,” the White House spokeswoman said.

That interpretation removes one potential hurdle for Keystone, and it clarifies shifting rhetoric from Trump on the order.

“We put you heavy into the pipeline business because we approved, as you know, the Keystone Pipeline, but they have to buy ... steel made in this country and pipelines made in this country,” Trump told U.S. Steel Chief Executive Mario Longhi at a Feb. 23 meeting.

However, in his address to Congress earlier this week, Trump spoke of the order in the same sentence as Keystone but carefully described it as directing "that new American pipelines be made with American steel."

Removing the steel condition could help persuade TransCanada to fully drop the $15 billion NAFTA complaint against the U.S., which it suspended earlier this week.

A TransCanada spokesman declined today to comment on the NAFTA lawsuit.

 

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Maximum Peach



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  posted on 3/3/2017 at 09:59 AM
Not happy about that. But then it sounds that would have led to the lawsuit where Keystone would've said they do not have to adhere to the provision based on nafta language.

Either way, this was a wrong move by the administration unless there is more to the story.

 

World Class Peach



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  posted on 3/3/2017 at 10:30 PM
Question to be answered: Had they already purchased most of the steel pipe? Anybody know?

 

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Peach Extraordinaire



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  posted on 3/4/2017 at 02:09 AM
quote:
Not happy about that. But then it sounds that would have led to the lawsuit where Keystone would've said they do not have to adhere to the provision based on nafta language.

Either way, this was a wrong move by the administration unless there is more to the story.


Well, they are always free to not build the pipeline if they don't like it. I thought the whole idea of the GOP pushing this was to provide American jobs. If they're not providing American jobs, then why are we allowing them to build this thing?

And I thought Trump was scraping NAFTA anyway. Sounds like in their rush to approve this thing it was not thought out well.

 

Peach Extraordinaire



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  posted on 3/4/2017 at 05:23 AM
So, Russia is providing 25% of the steel for the Keystone XL Pipeline. Probably a payback for his buddy Putin. Make Russia Great Again.
 

Maximum Peach



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  posted on 3/4/2017 at 07:19 AM
In the ABC story below the White House says that the pipe is "literally sitting there" already purchased. I'll look to try and verify that elsewhere.

2112, where did you see that 25% was going to be supplied by Russia? Was it 25% of US pipe is produced by Russian owned companies, or that in fact 25% of the pipe was being imported from Russia?

Steel companies in the US have often been on the rocks, some of the US steel companies are owned by foreign companies, our local steel pipe plant in Youngstown, Vallourec is French owned and are absolutely essential to our area. Russia also owns steel plants in the US. Regardless of ownership, if the pipe is made here that provides the labor and community objectives in my mind. Nothing wrong with foreign investment in the US, we need more of it not less.

quote:
The Keystone XL pipeline will not be bound by the Donald Trump's Jan. 24 memo requiring new and retrofitted pipelines to use American steel, the White House said today -- and apparently contradicting promises made by the president.

"The way that executive order is written … it’s specific to new pipelines or those that are being repaired. And since this one is already currently under construction, the steel is already literally sitting there, it would be hard to go back," White House Principal Deputy Press Secretary Sarah Sanders told reporters aboard Air Force One. "But I know that everything moving forward would fall under that executive order."

The presidential directive requires "all new pipelines, as well as retrofitted, repaired, or expanded pipelines, inside the borders of the United States, including portions of pipelines, use materials and equipment produced in the United States, to the maximum extent possible and to the extent permitted by law."

In a Feb. 23 meeting with CEOs, Trump told U.S. Steel Corp CEO Mario Longhi that the Keystone and Dakota pipelines "have to" use "steel made in this country."

And in a speech to the Conservative Political Action Conference on Feb. 16, Trump said the material for the Keystone and Dakota pipelines "comes from the United States, or we're not building it ... If they want a pipeline in the United States, they're going to use pipe that's made in the United States."

In fact, ABC News has identified at least five instances since the Inauguration where Trump intimated the Keystone pipeline would be built with steel manufactured in America.

In a statement to ABC News, Keystone owner TransCanada -- which has estimated the U.S. portion of the pipeline will require about 660,000 tons of steel -- said, "we continue to be encouraged as our Presidential Permit application makes its way through the approval process. This project will support U.S. energy security, create thousands of well-paying U.S. jobs and provide substantial economic benefits."

According to a memo issued by the company in 2012, TransCanada asserted that roughly half of the pipe used to build Keystone would be manufactured in the U.S., with another quarter coming from Canada, and much of the rest from Italy and India. The memo also said the company "planned to purchase approx. 90% of "all other goods" for the $7.6 billion project from companies on the North American continent.
http://abcnews.go.com/Politics/keystone-pipeline-american-steel-trumps-repe ated-promises/story?id=45898255


 

Maximum Peach



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  posted on 3/4/2017 at 07:32 AM
Some of the steel was made in the US...half of the pipe was made in Arkansas by an Indian owned company, 25% was made in Canada by a Russian company and the balance was imported...

quote:
About half of the pipe was forged in Arkansas, at a plant owned by India's Welspun. About a quarter came from a Russian-owned plant in the Canadian province of Saskatchewan, and the rest came from Italy and India.


Full article from a month ago:

quote:

Commodities | Mon Jan 30, 2017 | 12:08pm EST
American steel unlikely to get Keystone boost despite Trump order

By Ernest Scheyder, Catherine Ngai and Terray Sylvester

When U.S. President Donald Trump signed orders to revive two controversial energy pipeline projects this week, he pledged to require new pipelines to use American-made steel, a gesture to workers in the hard-hit industry who helped propel him to power.

But U.S. steelmakers will receive negligible benefit from the multi-billion dollar Keystone XL project, one of the two projects Trump ordered to proceed, because they have limited ability to meet the stringent materials requirements for the TransCanada line.

Economists said Trump's order has many loopholes to enforcement and could violate international trade law.

Meanwhile, in the quiet prairie town of Gascoyne, North Dakota, deer wander among gleaming stacks of steel tubing intended for the Keystone pipeline. The company bought the material years ago when the U.S. debate was raging over whether the project should go ahead.

TransCanada tried for more than five years to build the 1,179-mile (1,897 km) pipeline, until then-President Barack Obama rejected it in 2015.

Since the materials were already purchased for Keystone, Trump's move to revive the project should not result in new large steel orders.

The profits for manufacturing that steel were booked by companies with corporate headquarters in Russia, India and Italy. Those companies own the steel mills in the United States that made about half of the pipeline for the $8 billion project.

Much of that steel has sat exposed to the elements in several giant stockyards along the pipeline's route for more than two years. Analysts said some of it will need to be replaced.

But that is unlikely to come from U.S. producers, such as U.S. Steel, AK Steel or Steel Dynamics, analysts and traders said, because of the specialized steel required for the big-ticket project.

Trump's directive on using U.S.-made steel is likely also inconsistent with long-standing World Trade Organization rules that require imported products to be given the same treatment as domestically produced goods.

The directive could well become the target of a challenge under WTO rules.

Trump's order also runs counter to the North American Free Trade Agreement (NAFTA), a pact that he said he wants to renegotiate but one that nevertheless remains in effect.

'NICE GESTURE'

TransCanada resubmitted its application Keystone project on Thursday, two days after Trump signed the orders.

The line is designed to link existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois en route to the Gulf of Mexico.

Around Gascoyne where the tubing has sat idle in a TransCanada yard, there is little sign among residents of the fierce opposition that stopped Keystone and led to the delay of the other controversial pipeline that Trump pushed forward on Tuesday - the Dakota Access Pipeline.

But townspeople were skeptical of Trump's made-in-America order.

"It's a nice gesture, but you can't renegotiate when the pipe's been bought already," said Dan Peterson, 47, a contractor from nearby Bowman, North Dakota, who supports the project.

About half of the pipe was forged in Arkansas, at a plant owned by India's Welspun. About a quarter came from a Russian-owned plant in the Canadian province of Saskatchewan, and the rest came from Italy and India.

Alberta-based TransCanada expects to use roughly 821,000 tons of pipe in Canada and 660,000 tons in the United States for the project. TransCanada representatives did not return a request for comment.

Trump's order pertains only to sections of pipelines built in the United States, and it said the directive should be followed to the "maximum extent" possible, which gives the administration wiggle room.

Steel manufacturers and analysts said that TransCanada's stringent requirements for the pipeline, including thickness and pressure requirements, already keeps most U.S.-based steelmakers out, given current forging and manufacturing processes.

That includes Nucor and Steel Dynamics, which can make pipeline that is thick enough but may not meet all the pressure parameters. For the main trunk line, experts say that Keystone requires welded line pipe between 36 inches to 42 inches (91 to 107 cm) in diameter.

Foreign-owned steelmakers with U.S. operations, such as India's Welspun and JSW as well as Russia's Evraz, are best able to produce the pipe.

To be sure, U.S. steelmakers have a large part of their business in producing pipe and tube for the oil and gas industry. But, analysts said that to meet Keystone's requirements, they will need to reinvest and retrofit their plants to reorient production. It's not clear if other pipeline projects would have the same standards as Keystone.

"There are people who make (this type of) steel pipe in the U.S., but they're mostly Indian and Russian" companies, said Charles Bradford, an analyst at New York-based Bradford Research.

(Reporting by Ernest Scheyder in Houston and Catherine Ngai in New York; Additional reporting by Terray Sylvester in Gascoyne, North Dakota; Editing by Cynthia Osterman)

 

Maximum Peach



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  posted on 3/4/2017 at 07:36 AM
Not all doom and gloom, steel company in Arkansas benefits from Keystone:

quote:
Arkansas pipe manufacturer cheers President Trump’s Keystone restart, ready to begin work

by Wesley Brown (wesbrocomm@gmail.com) 1 month ago

excerpt:

Welspun, based in Mumbai, India, has a large pipe production operation in Little Rock. To date, the Indian company’s plant at the Little Rock Port has manufactured 700 miles of the 36-inch-diameter steel pipe needed to complete the multistate pipeline. In a video on the TransCanada website, Welspun officials say that more than 350 miles of pipe now lay idle at the Little Rock plant awaiting approval of the project.

http://talkbusiness.net/2017/01/arkansas-pipe-manufacturer-cheers-president -trumps-keystone-restart-ready-to-begin-work/



So obviously US steel jobs are benefiting.

 
 


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