On Tuesday President Trump gave the green light for construction of two oil pipelines, the Keystone XL and the Dakota Access, according to White House officials.
Obama stopped the Keystone pipeline and ordered work halted on the Dakota pipeline after Native American groups and other activists protested its route.
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. Environmentalists, concerned about climate change and damage to waters, land and Native-American cultural sites, now face an executive branch that’s less sympathetic to their efforts. For the oil industry, it heralds more freedom to expand infrastructure and ease transportation bottlenecks.
“We are going to renegotiate some of the terms,” Trump told reporters today in the Oval Office as he signed the two measures. “We will build our own pipelines we will build our own pipes.”
Foreshadowing Trump’s plans, the president told U.S. auto executives at a White House meeting Tuesday morning: “We’re going to make the process much more simple for the oil companies and everybody else that wants to do business in the United States.”
TransCanada climbed as much as 2.9 percent to C$64.36 at 11:24 a.m. in New York. Energy Transfer Equity LP and Energy Transfer Partners LP, the developers of the Dakota project, climbed as much as 4 percent and 2.4 percent, respectively.
TransCanada had no immediate comment on the president’s actions before they were announced, and Energy Transfer didn’t immediately respond to requests for comment. A spokeswoman for the Standing Rock tribe that opposes the Dakota project says she would comment “if it happens.”
White House press secretary Sean Spicer on Monday said both Dakota Access and Keystone are examples of projects that would “increase jobs, increase economic growth, and tap into America’s energy supply more.” He said Trump wanted to balance environmental protection with activity that can grow jobs and the economy.
It wasn’t immediately clear what mechanism the documents Trump signed today would take. But his advisers have urged the new president to direct the U.S. Army Corps of Engineers to grant an easement that would allow construction of the final portion of Dakota Access, reversing the Obama administration’s conclusion that more environmental scrutiny was needed.
The advisers had also urged the president to pave the way for Keystone XL by rescinding a 49-year-old directive from former President Lyndon B. Johnson that assigned the State Department responsibility for determining whether proposed cross-border energy projects serve the “national interest.”
TransCanada may need to submit another formal application to build the pipeline. The company’s plans for Keystone XL already have been vetted, with years of environmental scrutiny culminating in Obama’s 2015 decision that the pipeline was not in the U.S. interest.
TransCanada has not said it would reapply for permission to build the pipeline, but the day after Trump’s election, the Calgary-based company said it was looking for ways to convince the new administration of the project’s benefits to the U.S. economy. The company has previously said it remains “committed to Keystone XL.”
Environmentalists fiercely battled the project, making it a flashpoint in broader debates about U.S. energy policy and climate change. Landowners in the pipeline’s path warned that a spill of dense crude could contaminate the Ogallala aquifer, a source of drinking water that stretches from Texas to South Dakota. And activists said it would promote further development of oil sands in Alberta, Canada that generally require more energy to extract.Dakota Access opponents say the pipeline would damage sites culturally significant to Native Americans and pose an environmental hazard where it crosses the Missouri River. Earlier this month, the Department of the Army withheld the final easement necessary for construction beneath the lake.
Energy Transfer has argued it went through the full permitting process and has the necessary approvals. The company has said the line will be in service in the first quarter of this year, a delay from its original expectations that Dakota Access would be operational by the end of 2016.
Swift approval of Dakota Access could reinvigorate the sometimes violent protests at the site of the proposed construction. Environmental activists vowed to continue battling both projects.
“A powerful alliance of indigenous communities, ranchers, farmers, and climate activists stopped the Keystone pipeline the first time, and the same alliance will come together to stop Keystone again if Trump tries to raise it from the dead,” said Travis Nichols, a spokesman with Greenpeace.
Josh Nelson, the deputy political director of the CREDO activist group said the action would show Trump is “in the pocket of big corporations and foreign oil interests.”
“Fierce grassroots activism has stopped these pipelines over and over again,” he said. “CREDO will do everything in its power to stop the Dakota Access and Keystone XL pipelines, and keep dirty fossil fuels in the ground where they belong.”
Pipeline supporters said a final easement for the project would illustrate Trump’s commitment to building out energy infrastructure needed to ferry oil and gas around the U.S. Although Keystone XL would transport oil sands crude from Canada, some space on the line is slated to be filled by supplies from North Dakota’s Bakken shale play.
Dakota Access, likewise, is aimed at giving Bakken producers a new route to energy markets, allowing them to forgo more costly rail shipments that have been a backstop when existing pipes fill up. With a capacity of about 470,000 barrels a day, Dakota Access would ship about half of current Bakken crude production and enable producers to access Midwest and Gulf Coast markets.
Craig Stevens, spokesman for the Midwest Alliance for Infrastructure Now said moves to advance Keystone XL and Dakota Access would be a “positive development” for “our nation’s resource development energy infrastructure as a whole.
Energy Transfer owns the Dakota Access project with Phillips 66 and Sunoco Logistics Partners LP. Marathon Petroleum Corp. and Enbridge Energy Partners LP announced a venture in August that would also take a minority stake in the pipeline.
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