The U.S. Department of Commerce is moving forward on policy that would require pipeline builders and operators to source all iron and steel from domestic manufacturers, according to a March 16 request for comment.
President Donald Trump, in a January memorandum, directed the Department of Commerce to develop a plan to ensure that all new, retrofitted, repaired and expanded pipelines in the U.S. use domestically produced iron and steel "to the maximum extent possible and to the extent permitted by law."
The department put out a request for comments from the industries that manufacture, operate, distribute or build pipelines and pipeline materials. The agency said it was looking for more insight into pipeline construction technology, requirements, and domestic and foreign supply chains for materials, among other things. Respondents were also asked to estimate their pipe inventories and the portions of those inventories that are entirely U.S. made.
The request for comment cast a wide net. The notice asked for comment on all pipeline "materials," which the department defined as the iron, steel, precursors, alloys or substitutes used in the fabrication of pipelines and pipeline coatings, and all pipeline "equipment," which the agency defined as pipes, valves, fittings, connectors and other apparatus attached to pipe.
Law firm Hunton & Williams LLC said in a March 16 blog post that a broad interpretation of the memorandum could present significant logistical challenges for applying it.
"If the 'made in USA' mandate was interpreted to apply to all parts of a 'pipeline facility' or 'system,' the problems in determining manufacture and assembly locations for all components would be challenging enough, without then ensuring that all parts and assembly take place in America," the firm said.
The department asked for more information on pipe-manufacturing capacity in the U.S., which Hunton & Williams agreed is pertinent to creating a workable plan.
"[T]he Department of Commerce should ... acknowledge and make allowance for the frank reality that there is not sufficient pipe of all types (thickness and grade) currently manufactured in the U.S. to meet the existing and anticipated needs of the oil and gas pipeline industry," Hunton & Williams said.
The firm added that the "maximum extent possible" caveat in the memorandum should "allow the Commerce plan to clarify that in those situations where no pipe manufactured and/or assembled in the U.S. meets the specifications for a given construction, repair or replacement project, then other alternatives for sourcing the necessary materials may be used."
The American Iron and Steel Institute has said there is adequate manufacturing capacity for domestic steel producers to step up to fill an increase in demand.