The Franken Amendment to Keystone XL Pipeline

I’ve been watching some of the debates around the Keystone XL pipeline and I wanted to say some things about the Franken Amendment, which requires that if built, steel for the pipeline be made in America, which sounds good for jobs, but with the environmental consequences is just making sure American companies profit from making more money on global warming.  But Republicans killed the amendment (I think) because of a caveat placed in the bill about cost

MinnPost

The American-made steel debate will be familiar to those who paid attention to Franken’s re-election campaign last year. Franken has said he opposes bypassing the regulatory process for Keystone, but, either way, it should be constructed with American steel. During the campaign his Republican opponent, businessman Mike McFadden, said he didn’t think that should be a precondition to constructing Keystone, a comment the DFL used against him throughout the campaign, especially on Minnesota’s Iron Range.
Franken’s amendment is short, requiring that: “to the maximum extent consistent with the obligations of the United States under international trade agreements, none of the iron, steel or manufactured goods used in construction of the Keystone XL Pipeline and facilities approved by this act may be produced outside of the United States.” The big caveat: the amendment wouldn’t apply if using American-made products would increase the price of the project by more than 25 percent.

Here is the full text of the Franken Amendment

(Purpose: To requie the use of iron, steel, and manufactured goods 
 produced in the United States in the construction of the Keystone XL 
                        Pipeline and facilities)

       After section 2, insert the following:

     SEC. __. USE OF UNITED STATES IRON, STEEL, AND MANUFACTURED 
                   GOODS.

       (a) Limitation.--Subject to subsection (b), to the maximum 
     extent consistent with the obligations of the United States 
     under international trade agreements, none of the iron, 
     steel, or manufactured goods used in the construction of the 
     Keystone XL Pipeline and facilities approved by this Act may 
     be produced outside of the United States.
       (b) Nonapplication.--Subsection (a) shall not apply to the 
     extent that the President finds that--
       (1) iron, steel, and the applicable manufactured goods are 
     not produced in the United States in sufficient and 
     reasonably available quantities with a satisfactory quality; 
     or
       (2) inclusion of iron, steel, or any manufactured good 
     produced in the United States will increase the cost of the 
     iron, steel, or any manufactured good used in the Pipeline 
     and facilities by more than 25 percent.

The Hill

Senate Democrats are pressing amendments to legislation that would approve the Keystone XL pipeline, arguing their proposals would “actually make it an American jobs bill.”

Because Keystone is a private company, CBO does not look at costs, writing in it’s report 

Based on information from affected agencies, CBO estimates that enacting this legislation would have no significant effect on federal spending for regulatory activities related to the proposed pipeline. (Any such regulatory activities are subject to the availability of appropriated funds.) Enacting the legislation would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

The Keystone XL Pipeline Approval Act contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.

so I am having a hard time finding out how much 100% American steel and iron would cost, if it would actually increase the price of the project by more than 25%.

Senator Franken talked about his amendment on the Senate floor

Congress has had a long history of using “Buy American” provisions in order to maximize the economic benefits of infrastructure projects. “Buy American” provisions ensure that more goods and manufactured items used in infrastructure and other projects are produced here at home. In fact, as recently as 2013 Congress passed a provision in the WRDA Act–the Water Resources Development Act–to require the use of iron, steel, and other domestically produced goods in water infrastructure projects. That is important because it means that we keep jobs and profits here at home instead of sending them abroad.

Unfortunately, there is no such requirement when it comes to construction of the Keystone XL Pipeline. In fact, according to TransCanada itself, half of the pipe for the U.S. portion of the pipeline would be sourced from foreign countries. And for the other half that would be put together here in the United States, much of the raw material, such as the steel that goes into the pipe, could be sourced from overseas. This is the problem our amendment addresses. Our amendment would require the use of domestic iron, steel, and other manufactured goods in the construction of the Keystone XL Pipeline, provided the material is readily available and affordable.

If adopted, the amendment would create jobs for iron ore miners, such as the ones across the Iron Range in my State of Minnesota. It would create more jobs for shippers who ship the ore across the Great Lakes or by rail or down the Mississippi River. It would create more jobs for our steelworkers who work in steel mills across this country.

At the same time, we specify in our amendment that these requirements would be implemented consistent with our trade agreements.

Some of my colleagues on the other side of the aisle have said we shouldn’t put such restrictions on a private company. But we have to remember that this isn’t your typical private company. The underlying bill to authorize the pipeline would throw out the established approval process for the construction of a cross-border pipeline by a foreign corporation. That means all of the important assessments regarding things such as safety and the environment that our Federal agencies might have made on this project are tossed by the wayside. So if Congress is going to intervene on behalf of this foreign company, then the least we can do is to make sure the company building the pipeline uses American-made iron and steel. This is a very pragmatic amendment . We all have different views on the approval process for this pipeline, and while I believe Congress should not circumvent the approval process we have in place, I think we can all agree that we want jobs here in America.

Alaska Senator Murkowski who supports Keystone, added that TransCanada already committed to using 75% American steel

This pipeline is a private project. This is not a federally funded infrastructure project. This would be the first time that Congress has directed or forced private parties to purchase domestic goods and materials.

We actually asked the Congressional Research Service to look into this to see if there was any other instance at the Federal level where private parties were told that they must purchase 100-percent domestic goods and materials, and so far the answer to that inquiry has been that they can find no instance of that.

I think we need to be careful about this as a precedent because if we are going to direct this particular project–the Keystone XL–to have this requirement on it, where do we go next? What will happen to the next project that we have? Will it be the next pipeline or the next renewable energy project? Where does this slippery slope go?

I think it is fair to note that TransCanada has made a commitment to have 75 percent of the pipes for this project come from North America, and fully half of that–more than 332,000 tons of steel will come from the State of Arkansas.

I am with the Senator from Minnesota. We want to make sure we get as many jobs as we absolutely can and make sure they are good-paying jobs–whether it is in steel making or widget making or welders. This is about jobs. This is what we want to do to encourage jobs. I think we need to be very cognizant of what this particular amendment would do. This amendment –for the first time ever–would direct a private entity to utilize all American-made products throughout the process of the construction. It is important to note that the American Iron and Steel Institute has been a strong supporter of the Keystone XL Pipeline. We have all received a letter–they called it a Steelgram–from the American Iron and Steel Institute. They let us know very clearly and in no uncertain terms that they support Keystone XL. They said it is essential that Congress act to ensure the approval of the Keystone XL Pipeline

Senator Durbin spoke about Republican hypocrisy concerning Keystone amendments (there are 247 by the way)

When the Democrats insisted that this pipeline’s product–the oil that is refined and used for consumption–be sold in the United States, the Republicans voted no. The Republicans voted no. I have a lengthy memo on my desk of all of the Republican Senators who have come to the floor insisting that the Keystone Pipeline was going to create more gasoline, more diesel fuel, and help the American economy. Yet, when Senator Markey of Massachusetts offered an amendment to say keep the products coming from the Keystone Pipeline in the United States, the Republicans, to a person, voted no.

Then Senator Franken came forward and said, Well, let’s agree that if this is about jobs in America that the Keystone Pipeline will use American steel. That seems reasonable to me, and I voted for it. The Republicans voted no. They defeated the notion that we would use American steel to build this pipeline.

This pipeline is Senate Bill 1 for the Senate Republicans. It is their highest priority. One would think that if it truly is a jobs bill, they would want American steel to be used to build the pipeline; let our steel mills build this pipeline in the future, create the jobs in America, and they voted no.

Yesterday I offered an amendment as well. We know at the end of this pipeline, if tar sands reach the United States through this means or otherwise, it is a pretty nasty process taking the tar and sand out of the oil, and what is left over is a nasty product known as petcoke.

Petcoke is now being stored in three-story-high piles in the city of Chicago. I have seen it. And the city is trying to get to the point where it is at least contained and covered. Yet, the company that owns it, which incidentally is a company owned by the Koch brothers–what an irony–this company has resisted the idea of covering these petcoke piles, so this nasty black substance blows through the community in southeast Chicago. The city of Chicago is in a battle.

I tried to put in an effort yesterday so that we would establish standards for transportation and storage of petcoke, and the Republicans insisted it was a benign substance, it isn’t hazardous, not dangerous, don’t worry about it. If some of the Senators who voted against my amendment , tomorrow, God forbid, face this issue in their community, I think they will have a little different view of petcoke and what it can do to people, the impact it has on respiratory disease and asthma.

Yesterday I didn’t prevail. But I can tell my colleagues how over the years, as I fought the tobacco companies and they insisted there was nothing dangerous about tobacco, I heard those arguments from industry just as we are hearing the petcoke arguments from the petcoke industry. Ultimately, good sense prevailed, public health prevailed, and we moved toward regulation of tobacco products. We should do the same–basic regulation–to protect the public from any negative impact on their health relative to petcoke.

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