The “made in America” pipeline problem

The “made in America” pipeline problem July 24, 2017

Williston_North_Dakota_Oil_Pipeline_Pipes_(5894617854)

President Trump is pushing “Made in America” as part of his America-First initiative.  Having approved new oil pipelines, the president wants to require them all to be built with American steel.

But this is easier said than done.  According to an article from Bloomberg, one pipeline company has already exhausted the supply of American-built pipes.  American steel companies are not refitting their factories to produce the material that is needed.

While there are American pipe companies, three-quarters of them start with imported steel.  Industry experts say that simply using all-American-made material is simply not feasible.  To the point that the requirement would threaten the building of the pipelines.

Now, in time, I suspect that the market would adjust, with the demand calling forth the supply.  Though the protectionist policy would undoubtedly increase costs.

More basically, while the government can choose to “buy American,” there is no clear authority for the government to force private companies–such as those building the pipelines–to do so.  Officials might as well tell all of us private citizens what we are allowed to buy.

From Jennifer A. Dlouhy, Trump America-First Pipeline Plan Draws Ire of American Oil – Bloomberg:

Donald Trump’s allies in the oil industry are warning the president that his bid to boost U.S. steelmakers could backfire against their efforts to achieve his goal of “American energy dominance.”

The intense lobbying effort comes as the Commerce Department faces a Sunday deadline to give the president a plan to require oil and gas pipelines use American-made steel, an idea Trump embraced in the initial days of his presidency. While the U.S. has imposed “Buy American” rules on government purchases for decades, it would be unprecedented to force those obligations on privately funded, commercial projects.

The blueprint from Commerce Secretary Wilbur Ross will set the stage for further protests from the oil industry, the U.S. Chamber of Commerce and developers, including The Williams Companies Inc. and Energy Transfer Partners.

“A core feature of the U.S. free enterprise system” is that “private businesses should be free to make purchasing decisions on their own,” the Chamber of Commerce, the biggest-spending business lobby in Washington, said in its comments to Ross.

The effort illustrates how Trump’s “America-first” agenda pits his allies against one another and underscores the challenges of fulfilling the president’s protectionist stance.

[Keep reading. . .]

Photo by Lindsey G (Pipes) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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