In his first days as President, Donald Trump has issued several directives to expedite pipeline and energy infrastructure projects and bring pipe steel manufacturing jobs back to the U.S. Through an executive order, the President directed federal agencies to expedite environmental reviews and approvals for all infrastructure projects, with emphasis on “high priority” projects such as pipelines. In addition, the President issued two executive memoranda to renew and expedite the approval of two oil pipeline construction projects, the Keystone XL Pipeline and the Dakota Access Pipeline (DAPL). In another executive memo, Trump directed the Commerce Department to prepare a plan under which all new and repaired pipe used in the U.S. would be manufactured stateside. In issuing these presidential directives, the new administration has furthered prior commitments to support pipeline infrastructure and domestic jobs, but whether these directives can truly expedite the necessary remaining approvals for Keystone XL and DAPL remains uncertain in light of limited consequence of these executive directives (beyond the executive branch) and the inevitable legal challenges.
The executive order related to expediting permitting and approval of energy infrastructure generally outlines the policy of the executive branch to “streamline and expedite in a manner consistent with law, environmental reviews and approvals” all infrastructure projects, and high priority projects in particular “such as improving the U.S. electric grid and telecommunications systems and repairing and upgrading critical port facilities, airports, pipelines, bridges and highways.” Further, the directive to agencies is broad: “shall give highest priority to completing such reviews and approvals by the established deadlines using all necessary and appropriate means.”
With respect to the executive memorandum regarding the Keystone XL Pipeline, the administration invited the controversial Keystone XL pipeline project – which was rejected by the Obama administration in 2015 – to “promptly” resubmit its application for a cross-border construction permit. It directs the Secretary of State to (1) “take all actions necessary and appropriate to facilitate its expeditious review;” (2) reach a final permitting decision within 60 days of its receipt; and that (3) “to the maximum extent permitted by law” the Final Environmental Impact Statement (FEIS) from January 2014 shall be considered to satisfy National Environmental Policy Act (NEPA) and other environmental reviews. If a permit is issued, the memorandum directs the Army Corps of Engineers and the Department of the Interior to similarly expeditiously review and approve “as warranted” authorizations for water crossings and other approvals and permits respectively.
As to DAPL, the President’s executive memorandum states “I believe that construction and operation of lawfully permitted pipeline infrastructure serve the national interest” and directs the Army Corps of Engineers to expedite the review and approval to construct the Dakota Access Pipeline, including the easement to cross the Missouri River, and rely on the prior environment assessment finding no significant environmental impacts. Both the Keystone XL and the DAPL executive memorandum are carefully drafted to provide that such reviews and approvals are conducted “to the extent permitted by law” and “as warranted.” Further, they each expressly note that the directives do not alter existing eminent domain laws (phrased as Federal, State or local conditions necessary to secure access from private property owners for pipeline construction).
Finally, the executive memorandum that targets pipe manufacturing 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 U.S., including portions of pipelines, use materials and equipment produced in the US. “to the maximum extent possible and to the extent permitted by law.” A significant amount of steel pipe has been manufactured outside of the U.S. for decades and it is unclear whether the U.S. 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. This directive could therefore potentially be problematic and contrary to the directives intended to expedite pipeline infrastructure. Further, depending on its implementation this may infringe on existing international trade agreements.
It is not unprecedented for a President to issue executive memoranda and executive orders. In fact, President Obama issued over two hundred fifty (250) executive memoranda and two hundred ninety two (292) executive orders by the end of his second term. Executive memoranda and executive orders are not self-implementing and while they are legally binding on the executive branch, they have no policy or legal effect beyond the executive branch. As such, judicial challenges that are lodged must be cleared before they are finalized and environmentalists have already signaled their intent to challenge these projects. In statements made during the signing of the Keystone XL and DAPL executive memoranda, the President said he projects that both projects can be “renegotiated” by his administration. Given the involvement of the courts in both projects, and what is intractable opposition, “renegotiation” seems an unlikely prospect. In addition, the renewal of these two projects is likely to end other projects that were brought as alternatives to bring crude oil to markets when those projects were delayed.
With these executive actions, the new administration has signaled support for oil and gas pipeline infrastructure projects to bring product to markets and meet existing demand. While the directives regarding pipeline infrastructure are a victory for the industry, it remains unclear whether these projects will in fact be expedited in light of the inevitable challenges from opposition, which are likely to be brought under the NEPA as well as other required federal and state environmental reviews and permitting approvals. Further, the directive regarding pipe materials and equipment may prove to be problematic for the industry.