Trump’s steel tariffs announcement ignites oil and gas concerns

President Donald J. Trump said he plans to impose import tariffs of 25% on steel and 10% on aluminum imports next week. The White House did not issue a formal announcement, but the president, who reportedly wanted to act quickly following the US Department of Commerce’s Feb. 16 finding that excessively high steel and aluminum imports threaten US security, provided the details as a Mar. 1 media briefing concluded.

Oil and gas trade associations quickly reiterated concerns over possible higher costs for pipeline steel. “We are urging the administration to avoid killing U.S. jobs through a steel tariff that impacts pipelines,” Association of Oil Pipe Lines Pres. Andrew J. Black said. He previously pointed out that the US does not have adequate manufacturing capacity to make pipeline grade steel when Commerce Sec. Wilbur Ross announced his finding(OGJ Online, Feb. 19, 2018).

The report’s recommendation to increase tariffs on steel and aluminum imports does not make sense, American Petroleum Institute Pres. Jack N. Gerard said at the time. “It’s inconsistent with the Administration’s efforts to bolster the US economy, support US businesses, and strengthen US infrastructure,” he maintained. The domestic oil and gas industry also relies on global steel imports for drilling, onshore and offshore production, refineries, petrochemical plants, and liquefied natural gas facilities, Gerard added.

Charlie Riedl, Executive Director of the Center for Liquefied Natural Gas, expressed concern on Mar. 1 that the administration’s plan to impose tariffs on imported steel could have the unintended effect of endangering much-needed U.S. LNG export projects. “The administration had taken meaningful steps to improve the current permit review process for natural gas infrastructure, and it would be unfortunate if these steel tariffs created new and different barriers to projects,” he declared.

Tariffs also could increase pipeline costs for gas utilities, American Gas Association Pres. David K. McCurdy said. “Our member companies have identified a number of specific challenges with obtaining some pipeline materials and equipment that are American- made,” he indicated.

Some low-pressure lines can be replaced with plastic, which is readily available domestically, but larger diameter high-pressure lines carrying higher volumes over longer distances are typically made of steel, McCurdy said. “Additionally, many parts of our industry rely on steel valves that are not currently made in the US,” he pointed out.

Contact Nick Snow at[email protected]