Trump’s ‘Buy American’ mandate on pipelines has ‘vanished’
WASHINGTON – A much-ballyhooed White House proposal to boost domestic manufacturing might be stuck in the pipeline.
More than a year after President Donald Trump demanded that oil and gas pipelines built in the U.S. be constructed with U.S.-made steel – roiling the energy industry in Texas and beyond – there is little evidence that the Trump administration is close to making that idea a reality.
A July deadline for the U.S. Commerce Department to produce such a plan went by without the release of any details. Trump has dropped the idea from his speeches, where it was once a prominent fixture. And groups tracking the proposal say it has just fallen off the radar.
“With little explanation, it has vanished,” said Scott Paul, president of the Alliance for American Manufacturing, which supported Trump’s “Buy American” effort.
Factors: That inaction could reflect concerns that the mandate would be unfeasible and potentially in violation of international trade law. Or it could result from resistance by companies like Dallas’ Energy Transfer Partners, which called the idea “well-intentioned” but “unworkable.”
But the jam doesn’t mean the push is altogether dead.
The Commerce Department, which didn’t respond to requests for comment, could always press ahead. The White House’s plan for a $1.5 trillion infrastructure package could be a new vehicle. And some trade cases involving steel imports could offer an indirect way to address the issue.
“We are always keeping ourselves ready for any sort of movement by the administration,” said Tori Whiting, a trade expert at the conservative Heritage Foundation, which has opposed the mandate. “And we are going to be ready and alert to call balls and strikes.”
Trump’s focus: Trump wasted little time as president in making energy pipelines a focus.
In his first week on the job, the Republican thrilled party faithful and industry boosters by signing executive actions to advance Energy Transfer Partners’ contentious Dakota Access pipeline and TransCanada’s long-delayed Keystone XL pipeline.
Trump, however, also insisted that an extra “one-sentence clause” be included.
“If we’re going to build pipelines in the United States, the pipe should be made in the United States,” he said, explaining his dismay that big chunks of the steel used in those projects were not made in America.
His resulting presidential memo asked the commerce secretary to create a plan by late July to require all new and expanded American pipelines to use U.S. materials and equipment to the “maximum extent possible” and to the “extent permitted by law.”
And that request sent shockwaves through the industry.
Not so fast: While “Buy American” is a well-established mechanism for federal procurement efforts or federally funded projects like highway overhauls, such a mandate on oil and gas pipelines would meddle deep into the business of privately funded endeavors.
So groups like the U.S. Chamber of Commerce, the Associated General Contractors and the American Petroleum Institute raised concerns about how it would work and if it was legal. And companies like Energy Transfer Partners, run by GOP megadonor Kelcy Warren, were blunt.
“The impacts of such a restriction are expected to severely delay project schedules, drive up costs, decrease availability and lower quality,” wrote the Dallas-based company, echoing other industry leaders in saying it already uses as much U.S. steel for its projects as possible.
Steelmakers countered by celebrating Trump’s push, with U.S. Steel saying there was capacity to “meet the needs of new and existing investment in American infrastructure and pipelines.”
But potential pitfalls were revealed in March, when the White House admitted that Keystone XL wouldn’t have to use all U.S. steel. The July deadline for the Commerce Department to submit a plan to the White House came and went. And Washington seemingly moved on to other issues.
“The pipeline stuff just quietly went away,” said Philip Bell, president of the Steel Manufacturers Association. “And there weren’t a lot of people, with the exception of the steel producers, really disturbed about it.”
Uncertain: The exact status of the “Buy American” pipelines proposal is unclear.
The White House, like the Commerce Department, did not respond to requests for comment. And industry stakeholders said they weren’t sure where it all stands, though they said they had not seen any such plan and agreed that there are few signs the idea will reemerge in its initial form.
But Trump could still have an influence.
That could come through the White House’s long-promised infrastructure plan. Or another potential flash point is in the area of trade, where Trump, for instance, is taking a long look at whether the U.S. should impose steep tariffs on imported steel.
And those kind of moves could again stir up the energy and manufacturing bases.
John Stoody of the Association of Oil Pipe Lines, for example, said some of Trump’s trade rhetoric is an “ongoing concern.” But Paul, the manufacturing alliance boss, said trade could be a way for Trump to “make good on his campaign promises and American-made inclinations.”
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