The Nickel Report

President Trump has already issued several executive memoranda directing federal agencies to expedite environmental reviews and approvals for all infrastructure projects (as noted in our post yesterday), with emphasis on high-priority matters, such as pipeline construction and an aim to boost steel manufacturing in the United States.  Specifically, he seeks to renew and expedite the approval of two oil pipeline construction projects, the Keystone XL Pipeline (Keystone) and the Dakota Access Pipeline (DAPL).  He has further directed the Commerce Department to prepare a plan under which all new and repaired pipe used in the United States would be manufactured stateside.

As to Keystone, the administration has invited the controversial project — which was rejected by the Obama administration in 2015 — to “promptly” resubmit its application for a cross-border construction permit.  The memorandum provides explicit directions to the Secretary of State, the Army Corps of Engineers and the Department of the Interior to expedite reviews, approvals and permits.  The executive memorandum on DAPL directs the Army Corps of Engineers to expedite review and approval, including an easement to cross the Missouri River, and to rely on the prior environmental assessment that found no significant environmental impacts.  Both these executive memoranda emphasize that such reviews and approvals are to be expedited “to the extent permitted by law” and “as warranted.”

The separate pipe manufacturing executive memorandum directs the Commerce Department to develop a plan within 180 days under which all new pipelines, as well as retrofitted, repaired or expanded pipelines, inside the borders of the United States, will be required to use materials and equipment produced in the United States “to the maximum extent possible and to the extent permitted by law.”  For decades, a significant amount of steel pipe has been manufactured outside the country.  It is unclear whether the United States currently has the infrastructure in place to produce pipe in the quantities needed for new pipeline construction, replacement and repair.  Most operators already have considerable stockpiles of pipe for repair, and existing/certificated construction projects have likely already purchased necessary pipe.  Accordingly, it remains to be seen how much of an immediate impact this directive will have for the pipe manufacturing and steel industries, and how the memorandum will be reconciled with existing international trade agreements.

The new directives are designed to follow through on campaign commitments by the President to support pipeline infrastructure and domestic jobs. Issuing such memoranda and executive orders is not unprecedented.  In fact, President Obama issued more than two hundred fifty (250) executive memoranda and two hundred ninety-two (292) executive orders by the end of his second term.  The executive memoranda and orders are not fully self-implementing, and have no legal effect beyond the executive branch.  As such, any projects are potentially subject to judicial challenges, and NGOs have already signaled an intent to challenge these projects.