American steel unlikely to get Keystone boost despite Trump order

Fri Jan 27, 2017 6:44pm EST
 
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By Ernest Scheyder, Catherine Ngai and Terray Sylvester

(Reuters) - When U.S. President Donald Trump signed orders to revive two controversial energy pipeline projects this week, he pledged to require new pipelines to use American-made steel, a gesture to workers in the hard-hit industry who helped propel him to power.

But U.S. steelmakers will receive negligible benefit from the multi-billion dollar Keystone XL project, one of the two projects Trump ordered to proceed, because they have limited ability to meet the stringent materials requirements for the TransCanada line.

Economists said Trump's order has many loopholes to enforcement and could violate international trade law.

Meanwhile, in the quiet prairie town of Gascoyne, North Dakota, deer wander among gleaming stacks of steel tubing intended for the Keystone pipeline. The company bought the material years ago when the U.S. debate was raging over whether the project should go ahead.

TransCanada tried for more than five years to build the 1,179-mile (1,897 km) pipeline, until then-President Barack Obama rejected it in 2015.

Since the materials were already purchased for Keystone, Trump's move to revive the project should not result in new large steel orders.

The profits for manufacturing that steel were booked by companies with corporate headquarters in Russia, India and Italy. Those companies own the steel mills in the United States that made about half of the pipeline for the $8 billion project.

Much of that steel has sat exposed to the elements in several giant stockyards along the pipeline's route for more than two years. Analysts said some of it will need to be replaced.   Continued...

 
Deer gather at a depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline in Gascoyne, North Dakota, January 25, 2017.  REUTERS/Terray Sylvester