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Trump ends Obama’s block on Keystone pipeline

President Donald Trump has quickly moved to reverse another of Barack Obama’s signature policies, backing two multibillion-dollar oil pipeline projects that became test cases for Washington’s commitment to addressing climate change.

Mr Trump said the Keystone XL and Dakota Access pipelines would help to meet his campaign promise of producing new blue-collar jobs at home, insisting that any portions built in the US would have to use domestically produced steel.

“We will build our own pipes, like we used to in the old days,” the president said in the Oval Office as he signed presidential memoranda to advance construction on both projects.

In recent years, oil pipelines emerged as totems in a wider war between the fossil fuel industry and environmentalists. Keystone XL was the most controversial such project, and the Obama administration delayed its final verdict on the scheme for four years, rejecting it only on the eve of 2015 global climate talks in Paris.

The $8bn pipeline is designed to carry crude from oil sands in Alberta, Canada, to refineries in the US, and pitted opponents who feared more greenhouse gas pollution against an energy industry that promised to create US jobs. Oil sands generate more greenhouse emissions than many conventional oil and gas sources due to the energy required to extract and process the heavy crude.

“We are going to renegotiate some of the terms [with Canada], and if they’d like, we’ll see if we can get that pipeline built,” Mr Trump said.

The $3.8 billion Dakota Access pipeline, which is already more than 92 per cent complete, also drew months of fierce protests, including from Native Americans who fear the 1,100-mile pipeline would endanger their water supplies. Mr Trump said approval for the last remaining section would be “subject to terms and conditions, to be negotiated by us”.

The decision was made a day after Mr Trump formally withdrew from a 12-nation Pacific trade pact that had been a cornerstone of Mr Obama’s “pivot” to Asia, and comes amid efforts to scupper his predecessor’s healthcare plan, widely seen as central to his presidential legacy.

Even after Mr Trump’s action, Keystone XL builder TransCanada still faces a lengthy approval process before construction can begin. The Dakota Access pipeline, which Energy Transfer Partners is building, is expected to proceed more quickly. In both cases, however, additional legal skirmishing is anticipated.

Annie Leonard, executive director of Greenpeace USA, said protesters would now resume their fight against both projects. “A powerful alliance of indigenous communities, ranchers, farmers, and climate activists stopped the Keystone and the Dakota Access pipelines the first time around, and the same alliances will come together to stop them again if Trump tries to raise them from the dead,” she said. 

Tuesday’s presidential memoranda, which included new conditions on the environmentally sensitive projects, fulfilled campaign promises while risking renewed protests and legal challenges from environmental campaigners. These and the new conditions proposed by Mr Trump could delay their completion further. 

Mr Trump signed additional orders requiring American-made steel to be used in any US pipeline project, reducing regulatory burdens for domestic manufacturing and expediting environmental reviews for new infrastructure projects. “We’re going to put a lot of steelworkers back to work,” the president promised.

Shares in US Steel and TransCanada each rose more than 2 per cent, while Energy Transfer Partners was up almost 4 per cent in afternoon trading.

Keystone XL would create 28,000 “great construction jobs”, Mr Trump said. The State Department concluded in 2014 that construction would support about 42,000 jobs for a year, including 16,000 directly in construction and the supply chain, with the rest coming from additional spending by individuals and companies working on the project.

Mr Trump’s intention to prioritise growth over the environment was clear earlier on Tuesday, when he met US auto industry chief executives and assured them of an “extremely hospitable” environment for new investments. Mr Trump vowed to simplify environmental regulations in order to speed up the hoped-for return of manufacturing jobs from abroad.

The president provided no new details of his plans and, while describing himself as “an environmentalist”, focused his ire on regulations he blamed for stalling investment. Environmental regulations are “out of control”, Mr Trump said, telling the carmakers: “We’re going to be very friendly.”

Mary Barra, chief executive officer of GM, later called the meeting “a very constructive and wide-ranging discussion”.

Meanwhile, Senator Jeff Sessions must wait a week for the Senate Judiciary Committee to vote on his nomination to become US Attorney General. Senator Dianne Feinstein, the committee’s senior Democrat, asked for the delay to review Sessions’ written answers to members’ questions.

In an aside as reporters were being ushered from the Oval Office, Mr Trump said after signing the memoranda that he would announce a “truly great Supreme Court justice” next week. He was due to meet Senate leaders on Tuesday afternoon to discuss his thinking about the nomination.

Via FT