But a group of six oil and gas associations warns the plan would disrupt established supply chains and send rising steel prices even higher. In some cases, American mills would simply be unable to meet the demand, they said.
"Relying solely on U.S. pipeline grade steel and pipe production could lead to long construction delays and higher costs, potentially canceling planned pipeline projects or blocking new pipeline projects," the associations said in comments to the U.S. Department of Commerce.
The organizations that contributed to the dozens of pages of analysis, submitted as part of a request for comments by Commerce, include the American Petroleum Institute, the American Gas Association and the Association of Oil Pipelines.
The U.S. steel industry does not currently make the type of steel used in many pipelines, but it says it is ready, willing and able.
"We have all the necessary high-cost materials that would go into cost-effectively making steel, but we've got to have a leveled playing field to compete," Doug Matthews, senior vice president at U.S. Steel, told CNBC. "That's [why] we're excited about with the administration's push right now."
The oil and gas associations argue that the government may have to incentivize steel makers and manufacturers to make pipeline-quality steel and line pipes because they are "among the slowest, most expensive products for domestic mills to produce." Consequently, many mills would prefer to use their facilities to make less time- and cost-intensive products.
There are 40 to 50 mills that make line pipe for U.S. projects, about half of which are located in the United States, the trade groups estimate. When it comes to making large, technically sophisticated pipes, there are just a handful of American providers.
A boom in U.S. shale oil and gas production has driven an increase in construction of mills capable of churning out these products, but there are still only eight mills that make pipes with a diameter of 30 inches or larger. For pipes of that size that need to be a certain thickness, that number falls to three. No American mills make pipes of the highest grade, size and thickness.