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Keystone XL would be exempt from needing U.S.-made steel, reports say

The Keystone XL oil pipeline does not need to be made from U.S. steel, despite an executive order by President Donald Trump days after he took office requiring domestic steel in new pipelines, the White House said on Friday.

Statement stops short of confirming that the project has been granted the exemption.

U.S. President Donald Trump displays an executive order to move forward construction on the Keystone XL pipeline. A White House official said Friday the pipeline would be exempt from 'Buy American' rules according to a report in Politico. (Shawn Thew/Bloomberg)

The Keystone XL oil pipeline does not need to be made from U.S. steel, despite an executive order by President Donald Trump days after he took office requiring domestic steel in new pipelines, the White House said on Friday.

"It's specific to new pipelines or those that are being repaired," White House spokeswoman Sarah Sanders told reporters on Air Force One, when asked about a report by Politico that Keystone would not need to use U.S. steel, despite Trump's executive order issued on Jan. 24.

"Since this one is already currently under construction, the steel is already literally sitting there, it's hard to go back. Everything moving forward would fall under that executive order," Sanders said. The southern leg of the Keystone project is completed and started pumping oil in 2013. 

Some pipe segments that could be used for Keystone XL, which would bring 830,000 barrels of oil a day from Alberta to Nebraska, have already been built. Former Democratic president Barack Obama rejected TransCanada Corp.'s multi-billion dollar Keystone XL pipeline, saying it would not benefit U.S. drivers and would contribute emissions linked to global warming.

Then Trump's order expedited the path forward for TransCanada to reapply to build the line.

In a statement, TransCanada struck a cautiously optimistic tone. "We continue to be encouraged as our Presidential Permit application makes its way through the approval process," the company said. "This project will support U.S. energy security, create thousands of well-paying U.S. jobs and provide substantial economic benefits."

Economists told Reuters days after Trump issued the order on U.S. steel requirements that it had many loopholes, would not be easily enforceable, and could violate international trade law. Even if there were no loopholes, U.S. steelmakers would receive negligible benefit from Keystone XL, because they have limited ability to meet the stringent materials requirements for the project.

The office of Canadian Prime Minister Justin Trudeau on Friday said it welcomes the allowance of non-U.S. steel, calling it a "recognition that the integrated Canadian and U.S. steel industries are mutually beneficial." 

Canadian Public Safety Minister Ralph Goodale said on Twitter that allowing non-U.S. steel was "important for companies like Evraz Steel," a local subsidiary of Russia's Evraz PLC, which had signed on to provide 24 per cent of the steel before Keystone XL's rejection by Obama.

With files from CBC News

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