President Trump will sign executive orders this morning to advance federal government approvals for the Keystone XL (KXL) pipeline ($TRP) and the Dakota Access (DAPL) pipeline ($ETP).
As we have explained in client notes prior to and after the election, pipelines and energy infrastructure will be tremendous beneficiaries of Trump’s election. Trump’s executive action today is in line with our forecasts that both KXL and DAPL would be approved in the first days of his administration.
KXL is the easiest for Trump to approve since it only requires approval of a Presidential permit for the cross border pipeline. Since KXL is the most studied pipeline in US history, it is unlikely that there is any lengthy procedural hurdle for its approval.
DAPL approval will require the White House to instruct the Army Corps of Engineers to approve the project. With Secretary of Defense James Mattis confirmed and on the job at the Pentagon, the Trump Administration should easily be able to advance the pipeline quickly.
The Corps had already approved the pipeline until the Obama White House got involved at the behest of environmental groups. In its final days, the Obama Administration imposed hurdles and delays to the pipeline, most recently with the announcement that the Corps is planning to conduct another Environmental Impact Study (EIS) of the proposed pipeline. The pipeline developer is fighting the new EIS in court.
Both pipelines will continue to see legal challenges in state and federal courts by environmental groups.
Under the Trump Administration, we expect that federal government approvals will become easier for pipelines, transmission projects, LNG export facilities and coal export facilities.
