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Keystone Cancellation Casts A Shadow at the Little Rock Port

3 min read

President Joe Biden revoked the federal permit for the on-again, off-again Keystone XL oil pipeline on Wednesday, a move that will have ripple effects on Welspun Tubular LLC of Little Rock and the Little Rock Port. 

The 1,700-mile pipeline would have carried 800,000 barrels of oil a day from Alberta to the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. In his executive order revoking the permit, Biden said the project was inconsistent with his economic and environmental agenda.

Welspun employs 500 people at the Little Rock Port. In August, it announced a contract to make 1 million feet of 36-inch pipe for the pipeline.

The effect of the Keystone cancellation on the company is unclear. Contacted by Arkansas Business on Wednesday, Welspun COO Rajesh Chokhani declined to comment. Keystone XL President Richard Prior told the Associated Press that more than 1,000 jobs will be eliminated in the coming weeks.

Bryan Day, executive director of the Little Rock Port Authority, told Arkansas Business on Tuesday that he didn’t know what the full impact on the port would be but he was certain it would feel the effects.

“Obviously, it’s going to impact Welspun and their business model,” Day said. “Welspun, being one of our larger flagship industries, when they do well, we do well. … We likely will have to adjust our projected revenues and make adjustments as we fully grasp what that impact might be. I don’t have a number today.”

Since it was first proposed in 2008, the Keystone pipeline has been dogged by lawsuits and political hurdles. The Obama administration rejected it, but President Donald Trump revived it and had been a strong supporter.

Biden’s plan to revoke the permit was not a surprise. TC Energy of Calgary, the company behind the pipeline, halted work on Wednesday, Inauguration Day.

“This, the Keystone pipeline, has been on and off again for years,” Day said. “We were super excited when they announced the Keystone pipeline — gosh that was eight or 10 years ago — that Welspun was one of the makers of the product,” Day said. “They were one of the factories that produced the gas pipeline. It had a huge impact on our port. It had a huge impact on jobs and the economy, and we were excited for Little Rock to be a part of that.”

Day said he told the port’s board of directors earlier this week that the project could be canceled. He said the port had always been hesitant to count on the project in its annual budget and operating plans because it’s been “sporadic.” 

But Day said he was “optimistic” that Welspun will continue to grow its business without Keystone. The company is involved in building and repairing other pipelines across the country. He also said Welspun has a good relationship with the port and relies on its river access to receive raw materials and its railroads to ship out finished products.

“And then, thirdly, our job — our purpose — when we were created was to grow jobs, and Welspun is a large employer,” he said. “Welspun is our largest industry partner in terms of an industry that uses the river and the rail and has employment.”

(The Associated Press contributed to this report.)

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