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Energy Blog

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Sean Hackbarth President Donald Trump signed executive orders to advance construction of the Keystone XL and Dakota Access pipelines.President Donald Trump took steps to advance construction of the Keystone XL and Dakota Access pipelines.Photo credit: Shawn Thew/Pool via Bloomberg.

When it comes to pipelines, Inauguration Day brought quite a change at the White House:

President Donald Trump took steps to advance construction of the Keystone XL and Dakota Access pipelines, marking the start of an era with fewer constraints on the oil industry to the chagrin of environmentalists who have bitterly fought the projects.

The moves, among Trump’s first actions since taking office, are a major departure from the Obama administration, which rejected TransCanada Corp.’s Keystone proposal in 2015 and has kept Dakota Access blocked since September.

Contrast this to the Obama administration appeasing extreme, “keep it in the ground” groups.

It’s great seeing a president who treats North American energy abundance as a benefit to producing jobs and growth.

“For too long, private infrastructure investment has been held hostage by government interference driven by fringe interests,” said Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy. “Today’s Executive Orders on the Dakota Access pipeline and Keystone XL pipeline demonstrate that we finally have an administration that is serious about putting American energy to work for the entire economy.”

Speaker of the House Paul Ryan (R-Wis.) agreed.

It's about time. https://t.co/rHPbOwhjio

— Paul Ryan (@PRyan) January 24, 2017

Both pipeline projects have been unfairly held up. On multiple occasions, the Obama administration used federal agencies to put up barriers blocking the Dakota Access Pipeline’s completion. All that’s needed is for the Army Corps of Engineers to issue an easement to allow construction under the Missouri River.

And with the Keystone XL pipeline, even with seven years of reviews finding it was safe, President Obama flat-out rejected it in 2015.

Both projects would create jobs and boost economic growth.

For instance, the Dakota Access Pipeline, which would transport oil from North Dakota to refineries in Illinois, has already created 12,000 jobs and will “inject $156 million in sales and income taxes to local economies,” according to Energy Transfer Partners, the company building the pipeline.

As for the Keystone XL pipeline, it would transport 800,000 barrels a day of Canadian and North Dakota oil to Gulf Coast refineries produce big economic benefits:

According to the FSEIS [the State Department’s environmental analysis], 42,100 Americans will be employed in direct, indirect, and induced jobs during construction of Keystone XL, generating $2.02 billion in earnings for workers.  In addition, the $3.3 billion project will generate $66 million in sales tax for goods and services during construction that will infuse economic vitality into local communities.  The FSEIS also states that $3.1 billion will be spent on construction contracts, materials, and other support for Keystone XL – much-needed revenue for companies still struggling to recover from a hard recession.  It will also provide $55.6 million in new property tax revenue in 17 counties with Keystone facilities…. Overall, the project will contribute $3.4 billion during construction to the U.S. Gross Domestic Product (GDP).

With the strokes of President Trump’s pen, the attack on modernizing American energy infrastructure is over. Now, we can get on with using American energy to create more good-paying jobs and boost economic growth.

Sean Hackbarth Construction of the Dakota Access Pipeline near in New Salem, North Dakota.Construction of the Dakota Access Pipeline near in New Salem, North Dakota.Photo credit: Tony Webster. Licensed under a Creative Commons Attribution-ShareAlike 2.0 Generic license.

The Obama era is drawing to a close, but the saga of the Dakota Access Pipeline continues.

As President Barack Obama and his administration packs up and leaves office, they threw a wrench in the works of finishing the beneficial energy infrastructure project:

The Army published a notice Wednesday of its intent to prepare an environmental impact statement on the Lake Oahe crossing. Texas-based developer Energy Transfer Partners won't be able to lay pipe under the reservoir while the study is ongoing — it is currently blocked from doing so anyway. A study could take up to two years, according to the Energy Department.

ETP asked U.S. District Judge James Boasberg on Tuesday to block the study; he scheduled a hearing for Wednesday afternoon in Washington, D.C.

Judge Boasberg allowed the Corps to proceed:

A federal judge said Wednesday he won't keep the U.S. Army Corps of Engineers from launching a full environmental study of the $3.8 billion Dakota Access pipeline's disputed crossing under a Missouri River reservoir in North Dakota.

U.S. District Judge James Boasberg denied Texas-based Energy Transfer Partners' request to stop the Corps from proceeding until he rules on whether the company already has the necessary permission to lay pipe under Lake Oahe, the water source for the Standing Rock Sioux tribe.

The Associated Press reports, “The study notice can be withdrawn if Boasberg were to eventually rule that ETP has permission for the crossing.”

Rob Port at SayAnythingBlog.com correctly explains the president’s strategy:

At this point, which just days left in his last term in office, President Obama knows he cannot unilaterally stop the pipeline. So what this is about is setting the stage for more legal warfare against the project under Donald Trump. By initiating this process now, environmental extremist groups can argue in court that it would somehow be illegal for Trump to allow the project to be completed until it plays out.

Potentially, an environmental review could mean years of delay when all that’s left to finish the pipeline is drilling underneath Lake Oahe. The Associated Press reports, Energy Transfer Partners (ETP) “has said in court documents there is already oil in a portion of the pipeline leading up to the lake in anticipation of finishing the project.”

Gumming up the works for the next administration does not make for a “smooth and effective” transition.

So much has already been invested in a project that has already been approved by the Corps. In June 2016, the Corps signed off on an easement, allowing pipeline construction under the Missouri River. However, it didn't finalize it. 

Now, President Obama’s political appointees have complicated things even more and put the agency in a bind, say pipeline supporters.

“It’s unfortunate that the outgoing administration would try to hamstring the professionals at the Army Corps of Engineers who worked diligently for years to ensure the Dakota Access Pipeline was sited and constructed in the environmentally and culturally sensitive manner,” said Craig Stevens, Midwest Alliance for Infrastructure Now (MAIN) Coalition spokesman.

A frustrating aspect to the Obama administration’s action is it runs counter to what the Corps did recently when it reissued its nationwide permit procedures. Matt Koch at the Institute for 21st Century Energy explains [emphasis mine]:

The Corps Nationwide Permit (NWP) procedures create a streamlined authorization process ("general permit") for construction projects deemed to have minimal environmental impacts to waterways, with the goal of protecting the environment while reducing administrative burdens and delays.  

Highlighted by the Dakota Access pipeline protest, pipeline protestors and the anti-fossil energy "keep it in the ground" movement called on the Army Corps to abandon the long established NWP program and expand the Army Corps role in regulating oil and gas pipelines in their effort to slow and stop pipeline and other energy infrastructure projects.

Instead, the Army Corps is sticking with its process to review utility line and oil and gas pipeline construction projects “limited to regulating discharges of dredged or fill material into waters of the U.S. and structures or work in navigable waters of the U.S.” The Army Corps stated, “We do not have the authority to regulate the operation of oil and gas pipelines.”

But for this politically-charged project, Obama political appointees want the Corps to regulate an oil pipeline.

Apparently coherence gets tossed aside when you’re helping extreme, "keep it in the ground," anti-energy groups.

Hopefully under the new Trump administration, the Corps will issue all outstanding permits to allow this complicated legal struggle to come to a conclusion. And hopefully this beneficial, job-creating energy project will be allowed to be completed.

Sean Hackbarth State of American Business Issue Series

Last week to a full crowd at the U.S. Chamber, president and CEO Tom Donohue delivered the State of American Business address. While forecasting 2%-2.5% economic growth in 2017, he spelled out the need for faster economic growth and laid out an agenda—the American Growth Agenda—that will help businesses and consumers produce faster economic growth that creates jobs and boosts wages.

We do it with growth—sound, long-term economic growth https://t.co/FNBBq5d2ml #LetsGrow pic.twitter.com/MhBcVdTOib

— U.S. Chamber (@USChamber) January 11, 2017

Unfortunately one can only go into so much detail in a speech. To help the public and policymakers better understand what needs to be done to generate vigorous economic growth, we’re launching State of American Business Issue Series.

Over the next few weeks, the U.S. Chamber’s policy experts will dig into the issues like infrastructure, energy, health care, and taxes, and explain what pro-growth policies are needed.

Here’s how it will work. Starting next week on Monday, there will be a post explaining the issue (for example, “The State of American Infrastructure”) and laying out some policy solutions. The following Thursday, we’ll host a Facebook Live chat to talk with a U.S. Chamber policy expert about that issue and answer some questions from the public. 

We hope this will be useful to educating the public, lawmakers, and federal officials about concrete solutions for improving our roads and bridges, producing more American energy, reforming our complicated tax system, and unleashing our economic potential.

Make sure you drop by Above the Fold next Monday when the series begins. And follow the conversation on Twitter with the #LetsGrow hashtag.