Trump gives OK to Keystone XL and Dakota Access pipelines

U.S. President Donald Trump has signed executive actions to move forward on construction of two controversial oil pipelines that affect Canada, giving his OK to the Keystone XL and Dakota Access projects.

Former president Barack Obama blocked the proposed Keystone XL pipeline in late 2015

Trump gives thumbs-up to pipelines

6 years ago
Duration 2:32
U.S. president signs orders to advance construction of the Keystone XL and Dakota Access projects

U.S. President Donald Trump has signed executive actions to move forward on construction of two controversial oil pipelines that affect Canada, giving his OK to the Keystone XL and Dakota Access projects.

Speaking in the Oval Office in the White House as he signed the presidential memorandums, Trump said that "we are going to renegotiate some of the terms" of TransCanada's Keystone XL project. "And if they like, we will see if we can get that pipeline built — a lot of jobs, 28,000 jobs, great construction jobs."

A presidential memorandum serves similar functions as an executive order in that it bypasses Congress and carries the same legal force, but with small differences such as not being numbered.

Trump signed a memorandum on the Dakota Access pipeline, saying it is also subject to terms and conditions "to be negotiated by us."

Trump did not elaborate about what he may be seeking in renegotiating the two projects.

Hundreds of kilometres of pipe intended for the Keystone XL pipeline are stored in a yard in Gascoyne, N.D., in this April 2015 photo. The pipeline was rejected by former U.S. president Barack Obama, but new President Donald Trump has signed an executive memorandum to move it forward. (Alex Panetta/Canadian Press)

The new U.S. president said that if pipelines are built in the United States, they should use U.S. steel. 

"From now we are going to start making pipelines in the United States," Trump said 

White House press secretary Sean Spicer later said Trump's presidential memorandum on Keystone XL invites TransCanada to resubmit its proposal for the project.

TransCanada said it is currently preparing to do that.

"[Keystone XL] represents the safest, most environmentally sound way to connect the American economy to an abundant energy resource," the company said in a release.

Reuters reported that the application will be reviewed by the U.S. State Department, which has 60 days to 
reach a decision.

Shares of Calgary-based TransCanada traded higher on the news. On the TSX, shares of the company rose $1.70, or 2.7 per cent, to close at $64.24.

The proposed Keystone XL pipeline was blocked by former U.S. president Barack Obama in late 2015, when he said it would have undercut U.S. efforts to clinch a global climate change deal that was a centrepiece of his environmental legacy.

The proposed 1,900-kilometre pipeline would run from Hardisty, Alta., to Steele City, Neb. The U.S. government needed to approve the pipeline because it crossed the border.

Speaking at a federal cabinet retreat in Calgary, Natural Resources Minister Jim Carr said the Keystone XL project would mean 4,500 jobs — with half of them in the construction sector —  for Canada, adding that all approvals are in place on the Canadian side for the pipeline.

"We have been supportive of this since the day we were sworn into government," Carr said. "We believe it's a good project for both Canada and the United States."

Chris Bloomer, the president and CEO of the Canadian Energy Pipeline Association, said the group was pleased with the move to approve Keystone XL.

"The United States is a key trading partner and major existing market for Canadian oil and gas," Bloomer said in a statement.

"While recent pipeline approvals will ensure our energy moves to tidewater, we must continue to maintain the long-standing, strong relationship that we have with our neighbours to the south. All pipeline projects in Canada remain critically important to North America's energy interests," he said.

Property owners to continue fight

The stroke of Trump's pen doesn't mean the Keystone XL project is a done deal. While the governor of Nebraska, Pete Ricketts, said the pipeline would create jobs in the state and bring tax relief to counties along the route, he added that state regulators must still conduct their own review of the project.

Some Nebraska landowners whose properties are affected by the proposed pipeline have vowed to continue to fight it. Jim Tarnick, a central Nebraska farmer who has rejected at least six financial offers from TransCanada ranging from $30,000 US to $58,000 US for access to his land, said he is confident landowners will keep blocking the pipeline through lawsuits and procedural challenges.

On the Dakota pipeline, the U.S. army decided last year to explore alternate routes for it after the Standing Rock Sioux tribe and its supporters said the pipeline threatened drinking water and Native American cultural sites.

The leader of the Standing Rock Sioux said Tuesday that Trump's actions violate tribal treaties.

  "We are not opposed to energy independence. We are opposed to reckless and politically motivated development projects, like DAPL, that ignore our treaty rights and risk our water," Dave Archambault II, chairman of the Standing Rock Sioux, said in a release.

With files from The Associated Press and Reuters