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Executive Orders More Symbolic Than Material for Pipelines

We're not changing our outlook for our midstream coverage.

Stephen Ellis
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President Donald Trump has issued two executive orders addressing state-driven delays in oil and gas pipeline approvals. We believe the impact of these orders will be more symbolic than material for the midstream energy companies we cover, so we’re not changing our fair value estimates or economic moat ratings.

Executive orders are more limited than actual laws, as they are only binding for employees of federal agencies, whereas laws are ratified by Congress and apply to all U.S. citizens, private companies, and nonfederal agencies. The distinction is important, because Trump is trying to expedite pipeline approvals that are being blocked by the states via permit denials and delays, resulting in a variety of court battles. High-profile pipelines affected by permit delays include  Williams’ (WMB) Constitution,  TransCanada’s (TRP) Keystone XL,  Enbridge’s (ENB) Line 3, and  Dominion (D) and  Duke’s (DUK) Atlantic Coast pipeline.

Stephen Ellis does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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