Nolan Bill Would Require Universal “Buy American Steel” Preference for all U.S. Pipeline Construction

(EVELETH, MN) – Citing thousands of lost jobs due to illegal dumping of foreign steel into U.S. markets, and continued environmental threats from unsafe pipelines built with foreign steel, U.S Rep. Rick Nolan (D-MN) today announced introduction of The American Pipeline Jobs & Safety Act of 2014 (H.R.4441), to require that virtually all energy pipelines built and federally permitted in the United States contain 100 percent American steel – processed or reprocessed in America.

Nolan made the announcement at a press conference, surrounded by Steelworkers at United Steelworkers District 11 headquarters in Eveleth, MN.

“Simply put, this bill requires virtually all new pipeline constructed in America to use materials that are Made in America,” Nolan said.

“Our national interest requires that American jobs, America’s environment, and the health and safety of American pipeline workers and citizens be protected from the effects of foreign steel illegally dumped into our marketplace to undermine our domestic iron ore and steel industries.”

Nolan continued, “Although there are numerous laws requiring the federal government to procure U.S.-made products for projects using U.S. taxpayer funds, we continue to allow federally permitted pipelines to be built with foreign steel, while America’s steel industry is utilizing only about 75 percent of its production capacity – primarily because our manufacturers are being undercut on price. In fact, foreign imports of steel pipeline more than doubled from 2010 to 2012.”

“We cannot rebuild America’s economy and infrastructure with foreign steel. We must fix this glaring omission in federal law.”

The bill marks the first time American “iron ore and taconite” workers and mines are included in the federal “Buy American” steel provisions. And the first time private transactions are subject to American preference laws.  Because pipeline construction relies on eminent domain, and because they lie under U.S. schools, homes and communities, as well as under U.S. farms, rivers, and wetland areas, Nolan said the public has a right to insist that higher public safety standards be required.

Specifically, the Nolan bill requires the Secretary of Transportation and the Pipeline and Hazardous Materials Safety Administration responsible for pipeline construction approval to improve minimum safety standards for steel pipe used in the United States. Those standards would mandate use of steel produced in the U.S. that originates from iron ore and taconite mined and processed in America. Recycled steel would be permitted, provided it includes U.S. iron ore or taconite. Waivers for foreign steel would be permitted only to the extent U.S. capacity is not adequate to meet demand in a given year.

Nolan explained that the federal Pipeline and Hazardous Materials Safety Administration has the regulatory authority to permit pipeline construction, but is severely hampered by inability to inspect foreign steel pipe manufacturing operations, or to independently verify engineering data to assure that all pipe laid within U.S. borders is truly safe.

To help remedy that situation, the bill authorizes up to $10 million annually for the Pipeline and Hazardous Materials Safety Administration to randomly pull and independently test pipeline from stockpiles to be used in the USA, rather than be forced to simply accept manufacturers’ safety documentation.

Late last month, Nolan and other members of the Congressional Steel Caucus heard testimony from United Steelworkers Union president Leo Gerard and other Union and industry representatives urging Congress to take action to stop China, India, Russia, and Korea, among others, from illegal dumping that threatens U.S. jobs, the health and safety of workers and the public, and the environment. Among the points they cited:

• The U.S. steel industry is the safest, most efficient and environmentally friendly in the world, having reduced greenhouse gas emissions by 35% since 1990.
   
• Foreign steel now accounts for 25% of the entire U.S. market – more than doubling between 2010 and 2012.
   
• The Keystone Pipeline project, being built with primarily foreign-produced steel piping, has already incurred at least 30 serious spills and accidents.
   
• TransCanada imported almost 100% of the steel pipe used for the U.S. portion of Keystone Phase I from Welspun, a multi-national corporation based in India.
   
• The Russian company, EVRAZ, is scheduled to manufacture about 40% of the steel pipeline set for future Keystone construction at its mills located in Canada.
   
• The Chinese government annually subsidizes production of more than one billion metric tons of steel, of which 250 million metric tons are in excess. Much of that subsidized steel is dumped into the U.S. market illegally – depressing prices here and around the world.
   
• Substantial amounts of pipeline now being used in the U.S. are reprocessed here from pipes originally sourced from Korean or Indian steel.
   
• Korea manufactured more than 800,000 tons of 36 inch steel pipeline (the principle product being used in Phases I and II of the Keystone Pipeline project) last year, virtually all of which found its way to the U.S. market. If this continues, 10 to 12 American steel pipe mills could be forced to close in the near future, causing a direct job loss of 10,000 and indirect loss of some 50,000 U.S. jobs.

Nolan’s bill has been jointly referred to the Transportation and Infrastructure Committee, of which he is a member, and to the Energy and Commerce Committee. Action would likely come during reauthorization of the Pipeline and Hazardous Materials Safety Administration, required by September 30, 2015.