Piping the Presidential Power into Private Oil Production

Lindsay Abbondandolo – When the Dakota Pipeline is mentioned on the news or in conversation, the first word that comes to many minds is “controversial.” The project is designed to bring crude oil from Canada through Montana, South Dakota and Nebraska to connect the pipeline to the U.S. Gulf Coast. This project has made quite a few enemies in Hollywood such as Ben Affleck, Leonardo Di Caprio and Shailene Woodley, who have all brought attention to associated issues such as the effect of the Dakota Pipeline on the Standing Rock Indian Reservation. Once the celebrity voices have piped down, the question remains: why does President Trump want this pipeline open for business?

The President has grand hopes for this project. He has stated that his policy is “to lower costs for American families and very significantly reduce our dependence on foreign oil and create thousands of jobs.” The main effects of the Dakota Pipeline on the U.S. economy are supposedly job creation and the use of American steel for the building of the project.

However, when looking at the numbers it is hotly debated on whether this pipeline is President Trump’s godsend that will create a boom of economic prosperity and jobs for all. The jobs created by this project will mainly be in direct and indirect construction of the XL Keystone Pipeline creating thousands of jobs. The troubling reveal of this seemingly positive job creator is that these 42,100 jobs will only last for the construction of the pipeline, which is projected to take about two years. The number of permanent jobs created would be about 50 positions, and about 15 of these long-term jobs would still be temporary contractors.

However, there could be long-term positive effects as well: specifically, the forcing of companies to use U.S. steel in the production of future pipelines. While President Trump paved the way for the XL Keystone Pipeline to move forward without delay, he also issued a Presidential Memo to the Commerce Department to create a plan that would force companies to use U.S. steel. In his memo, President Trump outlined that U.S. steel should be used in all parts of the pipeline’s steel production—“[f]rom the initial melting stage through the application of coatings.”

How powerful is a presidential memo on this topic? The American value of the free market is being tested in this scenario with threats from President Trump not to help with projects needing eminent domain, which is the government’s power to appropriate private land. How President Trump intends to force privately run corporations building pipelines to use U.S. steel in a market where steel is at high cost is unknown. Trump’s plan to bring American steel back will hopefully be outlined in the upcoming months with the presidential memo giving six months to have the plan set. Whatever the Commerce Department comes up with is sure to affect infrastructure business. If this memo is successful with pipelines and steel, the result might be an application of this strategy in other industries to create more U.S. jobs.

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