In the wake of President Trump’s executive order earlier this week regarding the Keystone XL Pipeline and the Dakota Access Pipeline, TransCanada announced it has submitted a Presidential Permit application to the U.S. Department of State for approval of the controversial Keystone XL Pipeline.
TransCanada asserts the pipeline project will create tens of thousands of well-paying jobs and “generate substantial economic benefit throughout the U.S. and Canada,” according to its press release. The same release stated that independent forecasts by the U.S. Department of State estimate the Keystone XL will contribute approximately $3.4 Billion to the U.S. GDP.
However, CNBC reported Thursday that free market economists say the President’s statement that the pipelines be built with American steel are rules they described as “dictatorial” and “a bad idea.” An presidential memo that instructed the Secretary of Commerce to develop a plan requiring any company that builds a pipeline within U.S. borders to use American-made products could “spark retaliation by trade partners and make the United States less prosperous.” This is the opposite effect that many who support Trump’s made-in-America ideals believe such directives would do. While advocating products be American, thus supporting American manufacturers, CNBC said such a policy would “violate a bedrock of international trade deals” that rely on the principle “a government cannot treat foreign companies any differently than domestic companies.” CNBC quoted Dan Ikenson, director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies:
First of all, this is private investment, so there’s no legal authority for the government to require a private company to use domestic materials.
Ikenson also noted that it’s very likely that TransCanada would have used U.S. and Canadian steel, because the United States has imposed tariffs on steel imports to prevent a number of countries from dumping low-cost supplies. In addition, it’s likely that Trump’s American-made directive was purposely penned to intentionally to continue to direct policy towards increasing U.S. manufacturing overall, furthering his “America First” ideology as well as to create manufacturing jobs.
Disdain for the pipeline’s potential contribution to carbon emissions and its effects on climate change also continue to add to the controversy surrounding the Keystone XL project. Former President Barack Obama vetoed the Keystone XL project in February 2015 after the Senate’s approval delivered the bill to his desk. The House passed it in a 270-152 vote in January 2015. The House was four votes short of the ability to override the veto.
Obama marked the Keystone veto as one of they key accomplishments of his tenure as President. Trump’s executive order to allow the pipeline project to proceed was followed by stark disappointment among Obama’s supporters as well as environmentalists who consider the project as a mistake, citing the project would contribute to global warming by encouraging oil extraction from Canadian oil sands.
The pipeline would carry 830,000 barrels a day of petroleum, mostly from the Canadian oil sands to Nebraska where it would continue to refineries along the Gulf of Mexico. The controversial project has been in limbo for about 8 years.