Last week President Donald Trump signed an executive order that will make a major difference to the United States.  Depending on whether you are an environmentalist or an oil and gas capitalist, the perceived outcome of the executive order will be totally different.

President Trump didn’t just sign the executive order to allow the Keystone Pipeline to move forward, he removed the objections from the Obama administration that had stopped the development of this 1,000 + mile 36 inch pipeline from Canada to Houston, Texas.  On March 1st 2013 the United States State Department issued a finding that it had no objection to the construction of the pipeline.  That was four years ago, everyone thought the construction would soon begin but the Obama administration felt it best to prevent any potential environment damage from the increased production of crude in Canada and the construction was not approved.  In fact, the world is awash in oil and if it didn’t come from Canada to ports on the Louisiana Gulf Coast, the oil would come from somewhere else. It could have been Russia, Iran or Venezuela; the market doesn’t care what country it comes from as long as they get the crude.  Why allow countries that are not friendly to American values benefit from their oil sales while we sit idly by letting the budget deficit expand.

I am confident that the ink had not dried on the executive order when Trans Canada started moving the project forward.  The route has been selected and most of, if not all, of the design has been prepared.  This is no small task.  I was fortunate to have been on the Arabian East-West pipeline project that crossed Saudi Arabia with a 48” pipeline.  This was a massive project but there were few private objections to the line.  The Keystone pipeline will be going across thousands of tracts of private property so the legal logistics will be immense.  While many will feel their property is being infringed upon, all private property owners will eventually reap a new found income when lease payments for pipeline access begin to flow.

There are going to be several constraints that will need to be overcome to build the line.  President Trump was clear that the pipe will be manufactured in the United States.  This is no small task.  Contracts will have to be developed, manufacturing facilities will have to be upgraded and expanded, extra shifts brought in.  Steel suppliers will have to increase output and quality control inspectors will need to be trained.  Additional transport from the mills to the pipeline route will be required.  Rolling stock, railway cars, will be in demand to get the pipe to forward staging areas and trucks will then move the pipe to the pipeline route. To put this in perspective, a pipeline is constructed from pipe joints.  Each joint is 40 feet long.   Over 148,000 joints will be delivered to the pipeline route.  Once on site hundreds of pieces of construction equipment will be working digging huge trenches, placing the pipe and then testing the pipe and backfilling the trench.  Welders, trained and certified to perform the specialized welding will be on site working 24 hours a day, seven days a week; time is money and there is no time for time out.  Pipe inspectors will be inspecting the welds and hydrotest teams will be testing the structural integrity of the line.  Camp bosses will be running construction camps; camps that pack up and  move with the pipeline.  Support organizations will be paying salaries, coordinating shipments of material, tracking individual training and performing hundreds of jobs.  In other words, this segment of America will be at work.

Let’s look a little outside the box and expand the Keystone dream.  Today the crude will come from Canada and end up at the ports in Houston for transport to other countries.  Those countries will purchase the crude and refine it for their domestic use.  Why not tie a new pipeline into the 48” Keystone pipeline.  Let’s send a 16” pipeline from some point in Arkansas and send some of the Canadian oil to the large refineries between Baton Rouge and New Orleans.  Spend the money to expand one or several refineries and then ship the refined product to countries that need it.  Instead of other countries fining the crude, we will do it for them and transport to the other ports.  Since we are now shipping the refined products we will now need to build new ships in American ship yards.  This will also require more workers at the refineries, employed to refine the additional gasoline that will go to foreign countries.

Bottom line, America is working.

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