The Nexus Behind the Dakota Access and Keystone XL Pipelines

U.S. President Donald Trump recently approved the long-delayed Keystone XL pipeline, calling it a “great day for American jobs” in a victory for energy advocates on both sides of the U.S.-Canada border. The executive order comes shortly after the White House moved to restart construction of the Dakota Access Pipeline, another international multi-billion dollar project that has been characterized by the battle between economic development and environmental conservation.

Trump’s formal approval hardly comes as a surprise. On the campaign trail, he repeatedly promised to restart work on both the Dakota Access and Keystone XL pipelines. Less than a week after Inauguration Day, the president signed two memoranda: one ordering the U.S. Army to complete an “expedited” review of the Dakota Access Pipeline route, and another encouraging a Canadian company to reapply for building permits for the Keystone XL Pipeline.

Both pipeline projects had been embroiled in controversy during the last years of the Obama administrationThe Dakota Access Pipeline was temporarily stalled after months of mass protests, while the Keystone XL was effectively killed by the State Department and White House in 2015. Trump’s rush to put both projects back on the table was a signal to protesters and environmentalists that their worst fears could soon be realized.

DAKOTA ACCESS

Construction of the Dakota Access Pipeline (DAPL) project ground to a halt in 2016, a result of peaceful protests orchestrated by the Standing Rock Sioux Tribe that drew international attention. When completed, the $3.7 billion project  would run from North Dakota to Illinois and move 470,000 barrels of crude oil a day. The pipeline is nearly finished, except for the portion running under Lake Oahe, located less than a mile upstream from the Standing Rock Sioux Tribe’s North Dakota reservation. In December, the U.S. Army said it would pause construction to reevaluate the pipeline route.

In 2016, activists damaged several U.S. pipelines owned by Canadian companies to support the Standing Rock protests. Members of the Climate Direct Action network were arrested in Montana, Minnesota, Washington, and North Dakota after manually closing pipeline safety valves, temporarily shutting down 15 percent  of U.S. oil imports.

Canadian protesters organized a boycott of several banksincluding RBC Royal Bank, TD Bank, and Scotiabankthat are funding the Dakota Access Pipeline. Activists in Ontario smashed TD Bank ATMs with hammers and marked them with the words “No DAPL.”

As  president, Trump cannot singlehandedly advance the DAPL project, but can issue memoslike those he signed in Januaryto show administrative support. Shortly after President Trump issued the executive order expediting the review of the Dakota Access route, the U.S. Army Corps of Engineers notified Congress that it had completed the review and would move to complete the Dakota Access Pipeline. The Standing Rock Tribe has promised to fight the government’s review in court.

KEYSTONE XL

The planned route for the $8 billion Keystone XL Pipeline stretches 1,200 miles from Canada’s oil sands to U.S. refineries on the Gulf Coast. The Canadian government pressured former President Barack Obama to approve the project, arguing that the pipeline would create jobs for both countries. However, a 2015 State Department study concluded that, after construction was completed, the pipeline would only create around 50 permanent U.S.-based jobs. Shortly after the State Department report was released, President Obama vetoed legislation that would have begun construction on the Keystone XL.  

After issuing both pro-pipeline memos on January 24, President Trump explicitly stated that the Keystone XL project would use only U.S.-made steel, “or we’re not building one.” But days later, the White House clarified that the order would only apply to new pipelines, not those already under construction.

If the Trump administration stands by this policy reversal, it would renew a substantial opportunity for the Canadian steel manufacturing industry, particularly Evraz North America. Evraz, a company owned primarily by Russian billionaire Roman Abramovich, has consistently lobbied against any provisions that would prevent Canadian steel from being used to build the Keystone XL. In fact, forty percent of the steel needed to build the pipeline has already been manufactured in Canada by none other than Evraz North America. Abramovicha close ally of Russian President Vladimir Putin and friend of the Trump familystands to benefit directly from the White House’s change of heart.

During his presidential campaign, Trump said he would move to build the Keystone XL only if the U.S. government would receive at least 25 percent of the eventual profits. The new TransCanada permit, recently issued by the White House, does not mention this provision.

WHERE ARE WE NOW?

Opponents of both the Dakota Access and Keystone XL projects have pointed to a variety of environmental concerns that the pipelines would allegedly exacerbate. The Keystone XL would extract crude oil from oil sands in Alberta, a process that releases 17 percent more harmful greenhouse gases into the air than standard extraction methods. Indigenous tribes, environmentalists, and allies alike protested the Dakota Access Pipeline for months, camping at the pipeline construction site in freezing temperatures to halt the project. Fearing the possible contamination of their water supply and the destruction of sacred cultural sites, the Standing Rock Sioux Tribe became the leaders of an international movement to prevent the Dakota Access from being finished.

Climate scientists have argued that extracting fuel from Canada’s oil sands would potentially be catastrophic for the environment. The origin point of the Keystone XL Pipelinethe Albertan tar sandsis the third biggest oil reserve in the world, but the process of removing the oil from the sands causes three to four times more carbon emissions per barrel than conventional extraction methods. Conservationists have accused the Canadian government of putting the interests of corporations and profits from an energy relationship with the United States ahead of environmental concerns and the wellbeing of the general public. In November 2016, 85 First Nations tribes and organizations called on Prime Minister Trudeau to condemn the involvement of Canadian-based companies in the construction of the Dakota Access Pipeline, to no avail.

Investment in vast international construction projects by corporations is not a revolutionary concept, particularly in Canada. The Canadian economy depends heavily on both the finance and mining industries; more than half of the world’s mining companies are based in Canada. Oil and gas extraction companies make up the country’s largest, and arguably most powerful, lobbying group.

Continuation of both the Keystone XL and Dakota Access projects is a good sign for those invested in the U.S.-Canada energy relationship. TransCanada, the corporation that has now been approved to build the Keystone XL, first applied for a U.S. construction permit in 2008. The pipeline was backed by the Canadian government, and Prime Minister Justin Trudeau publicly expressed his disappointment with the Obama administration after the pipeline was vetoed in 2015.

President Trump previously had investments in Energy Transfer Partners, the primary company building the Dakota Access Pipeline, and received $100,000 in campaign donations from the company’s owner. He reportedly sold his stakes in the company before Inauguration Day to avoid allegations of a conflict of interest. Trump has denied that he has any financial involvement in the project.

Earlier this year, the Trump administration promised to negotiate with all parties involved in both the Keystone XL and Dakota Access projects. Press Secretary Sean Spicer said that the president would “make sure that he is looking or working with all parties involved” on both sides of the Dakota Access dispute, including Native American tribes. Yet, when construction on the project was reauthorized in February, Standing Rock Sioux Tribe chairman Dave Archambault II was en route to Washington for what he thought would be negotiations with the White House. Archambault canceled the meeting after landing in Washington and learning of the decision.

Coupled with the Trump administration’s latest rollbacks of Obama-era environmental regulations, the approval of the Dakota Access and Keystone XL pipelines is a stinging defeat for conservationists and climate activists. The U.S.-Canada relationship is largely characterized by the oil and gas industry, and it appears Trump is happy to nourish that partnership, even if that means contradicting his past promises. For now, the administration has chosen an unambiguous stance in the debate over global warming and environmental protection.

Image: TransCanada Keystone Oil Pipeline. February 16, 2013. (Flickr, ShannonPatrick17, Creative Commons)


Audrey Bowler works at the Council on Foreign Relations in Washington, D.C. She is a recent graduate of Gettysburg College, where she majored in political science and peace & justice studies. Bowler previously worked as a journalist and social media editor for The Eisenhower Institute, and interned for PolitiFact and the Office of U.S. Senator Tim Kaine (D-VA). She can be found at @aud_bowler on Twitter.

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