Keystone Pipeline Approved for Construction -- with Russian Steel?
March 25, 2017
The Huffington Post & Snopes.com
Donald Trump's administration has greenlighted the construction of the Keystone XL pipeline. Trump previously promised the pipeline would be constructed with domestic steel but abandoned that pledge and granted TransCanada an exemption to use foreign steel during construction. The DeSmogBlog reports that 40 percent of the steel was manufactured by a Canadian subsidiary of Evraz, a company 31-percent owned by Russian oligarch Roman Abramovich, who is a close ally of Putin and a Trump family friend.
State Department Approves Keystone XL Pipeline
The battle now moves to Nebraska, which must approve or reject a Keystone section
Michael McLaughlin / The Huffington Post
(March 25, 2017) -- President Donald Trump's administration, as expected, has officially greenlighted the construction of the Keystone XL pipeline.
Undersecretary of State Tom Shannon on Friday signed a presidential permit for the controversial project ahead of a Monday deadline for evaluating it. Secretary of State Rex Tillerson, the former CEO of Exxon Mobil, had recused himself from the process.
The developer, TransCanada, confirmed the news in a move that would undo one of former President Barack Obama's defining environmental decisions.
Trump has been a vocal cheerleader of the 1,700-mile pipeline to bring Canadian tar sands oil through Montana and South Dakota to Nebraska, where it would link up with existing pipelines. Like other advocates for the project, the president has said it will create construction jobs and strengthen the country's energy security.
In a statement from the Oval Office on Friday morning, Trump said the pipeline had been delayed too long.
"TransCanada will finally be allowed to complete this long overdue project with efficiency and with speed," Trump said. "The fact is that this $8 billion in investment in American energy was delayed for so long demonstrates how our government has too often failed its citizens and companies over the past long period of time."
He added that TransCanada shouldn't pay its consultants, because they didn't help the company get approval for the pipeline. Trump has a history about refusing to pay people for work he is unhappy with.
"I hope you don't pay your consultants anything, because they have nothing to do with the approval. You should ask for the hundreds of millions of dollars back that you paid them because they didn't do a damn thing except get you a no vote," he said.
As an extra lift to American workers, Trump had previously promised the pipeline would be constructed with domestic steel. The administration earlier this month abandoned that pledge and granted TransCanada an exemption to use foreign steel during construction.
Winning the support of the Trump administration, though crucial, is not the final barrier TransCanada officials need to clear. The Nebraska Public Service Commission must also sign off on the plans for building there. Their review is expected to take months.
Part of the fight there may hinge on the use of eminent domain. Some landowners are resisting orders to sell their property to TransCanada. The company has said it has agreements for more than 90 percent of the route on the US side, according to The Washington Post.
Environmentalists opposing the project argue it will contribute too much to climate change, because extracting oil from tar sands is a particularly intensive process.
TransCanada president and CEO Russ Girling said the company would seek more communication with the pipeline's opponents.
"We will work closer with the communities to best understand what their concerns are," Girling said in a video statement after receiving the permit. "But the fact that they understand North America needs energy, they need energy and the safest way to get energy is through a safe and modern pipeline."
The Sierra Club's Lena Moffit, director of the organization's Beyond Dirty Fuels campaign, threatened to file lawsuits against the federal government, saying they'd possibly argue the Trump administration rushed through necessary environmental checks.
Soon after taking office, Trump signed an executive action that gave the State Department 60 days to issue an opinion on Keystone. That deadline is set to expire Monday.
Obama rejected the pipeline in 2015, after years of debate. He did so saying it was not in the national interest and that approving it would undercut the country's leading role combating climate change.
Samuel Levine contributed reporting.
Is Russian Steel Being Imported
To Make Keystone Pipeline?
CLAIM: Russian steel is currently being imported to complete Dakota Access and Keystone XL pipelines. See Example(s)
EXAMPLES: Is Russian steel being used for the pipeline by trump
ORIGIN: In early March 2017, after various publications reported that President Donald Trump had walked back vows to require that controversial Dakota Access and Keystone XL pipelines be completed with American-made steel, some headlines and accounts to intimated that steel for the pipelines' construction was instead being imported from Russia.
The public perception that Russian steel is pouring into the United States to complete the two pipelines seems to have been drawn from an MSNBC segment hosted by Joy Reid and a report in the environmental publication DeSmogBlog, both of which were widely shared on Facebook.
DeSmogBlog reported that some of the steel used for KXL was manufactured in Canada by the Russian subsidiary Evraz:
DeSmog has uncovered that 40 percent of the steel created so far was manufactured in Canada by a subsidiary of Evraz, a company 31-percent owned by Russian oligarch Roman Abramovich, who is a close ally of Putin and a Trump family friend. Evraz has also actively lobbied against provisions which would mandate that Keystone XL's steel be made in the US.
And on the 5 March 2017 broadcast of the MSNBC show "AM Joy," Reid said:
One pipeline that will be exempted from Trump's 'buy American' rule, the Keystone XL. A White House spokesperson confirmed this week that the Keystone will not be required to be built with American steel. Instead, much of the steel pipe is being provided by Mumbai-based Welspun Corp and by a subsidiary of Evraz PLC, a Russian company partly owned by the Russian billionaire Roman Abramovich whose wife Dasha Zhukova is a friend of Ivanka Trump even reportedly attending the inauguration as her guest.
But although those reports discussed the fact that the Keystone XL (KXL) pipeline will be exempted from a presidential order of 24 January 2017 requiring that, whenever possible, new pipelines in the US must be constructed with domestically-produced steel, they didn't state that steel manufactured in Russia was currently being imported in the US for use in building those pipelines. And company representatives told us materials for both pipelines were purchased years before Russia was accused of meddling in the 2016 presidential election.
Social media users also shared what appeared to be an unrelated local news report about the opening of a new port in New Jersey in which officials mentioned that a cargo ship was carrying steel slabs from Russia, raw material to be used in US-based manufacturing:
Doric Warrior made its final leg of a long journey to Paulsboro from Russia. The ship, 230 meters long, carried the first shipment of steel to the Paulsboro Marine Terminal. Crews worked tirelessly to unload some of the steel before Senate President Steve Sweeney and Assemblyman John Burzichelli, the men who envisioned and backed the port since day one, would welcome guests to mark the occasion.
In 2012 TransCanada, the firm building Keystone XL, published a press release saying 50 percent of the pipeline steel would be manufactured in Arkansas by Welspun, a Mumbai-based company, and 24 percent would be manufactured in Canada by Evraz, a subsidiary of Russia-based Evraz PLC.
DeSmogBlog linked to a 2012 study published by Cornell University that put the Evraz number far higher, saying it the company would manufacture 40 percent of the steel for KXL.
Terry Cunha, spokesman for TransCanada, told us that all of the materials for the project are purchased already and that none of them came from Russia:
It's been sitting in storage across the US and Canada and that material will be used if we get a presidential permit. When we bought the material it was all Canadian, not Russian steel.
In the case of the Dakota Access pipeline, Energy Transfer Partners spokeswoman Vicki Granado told us the materials were also already purchased, saying: "Because of the manufacturing timeline required for a 1,172-mile pipeline all the pipeline was purchased and manufactured well in advance of construction, which has been underway since May of 2016."
Lisa Dillinger, another spokeswoman for ETS, told us just over 40 percent of the steel was manufactured in Canada but said information about which company made it was not immediately available:
57% of the pipeline was manufactured in the US (Stupp in Baton Rouge and Welspun in Little Rock), which at the time of the order represented all the available US capacity. The remaining pipe was manufactured in Canada.
Because the materials for the two pipelines in question have already been purchased, it's doubtful that the steel aboard the cargo ship in New Jersey was imported for the purpose of building either.
According to the International Trade Administration, Russia is the world's fourth largest exporter of steel (sending between 400,000 and 1 million metric tons to the United States) so a shipment of the material from that country is not automatically cause for suspicion:
Russia is the world's fourth-largest steel exporter. In year to date 2016 (through September), further referred to as YTD 2016, Russia exported 22.7 million metric tons of steel, a 4.2 percent increase from 21.8 million metric tons in YTD 2015. Russia's exports represented about 6.5 percent of all steel exported globally in 2015.
The volume of Russia's 2015 steel exports was almost equal to the world's third-largest exporter, South Korea, and less than a third of the volume shipped by the world's largest exporter, China. In value terms, steel represented just 3.5 percent of the total amount of goods Russia exported in 2015.
Although it's apparent that the Russian company Evraz manufactured some of the pipeline for the Keystone XL project, it's unclear whether they also manufactured steel for Dakota Access. Shortly after President Trump signed orders allowing the completion of the pipelines to proceed, the Evraz's North American subsidiary posted an approving tweet:
EVRAZ North America @evrazna
EVRAZ NA applauds the Trump administration for advancing the Keystone XL and Dakota Access pipelines. #KeystoneXL #DAPL 1:38 PM - 24 Jan 2017
Because Russia is a major steel exporter, it is probable that some product from that country will be used in a variety of American infrastructure projects. We found no evidence that Russia is currently shipping steel to the United States for KXL or Dakota Access pipeline construction, although some of the steel used for KXL cames from Canada, where Evraz has subsidiaries in Regina and Camrose.
Further, according to company representatives the material for both pipelines was purchased years before the Kremlin was accused of interfering in the 2016 US presidential election.
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