North American Oil & Gas Pipelines

MAY 2018

North American Oil & Gas Pipelines covers the news shaping the business of oil and gas pipeline construction and maintenance in North America, including pipeline installation methods, integrity management innovations and managerial strategies.

Issue link: http://digital.napipelines.com/i/976284

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lar, relies on specialty steel for many of its proj- ects that most U.S. steelmakers don't supply." Gerard added that the administration must consider the "important investments that have driven job creation and economic growth" that have been driven by the oil and natural gas industry. He added that tariffs would hurt the industry because of the reliance on global steel imports for the majority of its operations, including steel for drilling, production facilities onshore and offshore, pipelines, LNG terminals, refineries and petrochemical plants. As for the exclusion process announced by Trump and the U.S Commerce Department, Gerard stressed the importance of having clar- ity and flexibility regarding the steel and alumi- num import tariffs for U.S. companies. "We support an exclusion process from the Department of Commerce that is both trans- parent and flexible," Gerard said on March 19. "That will allow the U.S. oil and natural gas in- dustry to continue our significant investments in producing, transporting and refining U.S. en- ergy resources, building world-class infrastruc- ture and creating high-paying American jobs." Gerard added that the API expected that the Commerce Department would "acknowledge various market realities and take into consider- ation the complex supply chains of the U.S. oil and natural gas industry and the need for spe- cialty steel not available domestically for many of its projects." North American Oil & Gas Pipelines will con- tinue to follow this story and provide updates as they become available. Bradley Kramer is managing editor of Nor th American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com . napipelines.com MAY 2 018 | North American Oil & Gas Pipelines 35 Pipeline Industry Fears Negative Impacts from Presidential Proclamations Tariffs Pipeline Coalition Letter to President Trump In a March 7 joint letter, a group of pipeline industry advocates ex- pressed concern for the new steel and aluminum tariffs imposed by President Donald Trump. The coalition included AOPL president and CEO Andrew Black, INGAA president and CEO Don Santa, GPA Mid- stream Association president and CEO Mark Sutton, Texas Pipeline As- sociation president Thure Cannon, Natural Gas Supply Association pres- ident and CEO Dena Wiggins, Center for LNG executive director Charlie Riedl, Energy Equipment and Infrastructure Alliance president and CEO Toby Mack and American Exploration & Production Council president V. Bruce Thomson. The letter highlights the impact that oil and gas pipelines have on na- tional security and cites the lack of U.S. availability as reason to exempt the industry from these tariffs. The full text of the letter follows: Dear President Trump: National security requires pipelines to deliver the energy America needs, and pipelines require specialty steel products not always available in sufficient quantities and specifications from domestic manufacturers. Pipeline projects create construction jobs, bring affordable energy to millions of American consumers, and support American energy production. These projects may not go forward if a steel tariff makes pipeline steel unavailable on a reasonable timeline and at a competitive price. Just like in real estate, promising pipeline projects have not gone forward because the costs were too high, or the needed building materials not sufficiently available. We fear that broad tariffs on the specialty steels used by our industry would cause future projects to be delayed or canceled, thus threatening America's energy domi- nance and risking higher prices for families at the gas pump, natural gas ratepayers, and energy-consuming employers nationwide. Pipelines put Americans to work. Already, 75 percent of spending on a pipeline project ends up in the hands of American workers and businesses. A typical 300-mile pipeline project would generate approximately $1 billion in U.S. worker payroll and spending. Tariffs that include pipeline steel and lead to the cancellation of a pipeline project will deprive American workers and vendors of that $1 billion. Pipeline projects are also vital to national security. Due to insufficient pipeline capacity, certain areas of our country continue to rely on imported fuels to meet basic energy needs. As you weigh important concerns about broad steel market issues, we urge caution because American energy jobs depend on specialty pipeline steel products. We understand and respect your concern for domestic steel manu- facturers. We, too, hope to see domestic steel and pipe manufac- turers always able to supply products on the terms needed for the American pipeline expansion you have so well promoted. Pipeline- grade steel is a high-cost specialty product in a cyclical niche market that some domestic manufacturers have moved away from. In fact, for certain pipeline steel products, there is zero domestic availability today. Applying steel tariffs to transmission pipelines, oil country tubular goods, and other parts of oil and gas production and transportation cannot be the best way to help. While we discourage you from imposing steel tariffs, we urge you at least to allow exemptions when steel products needed for energy production, processing, refining, transportation, and distribution are not sufficiently available in domestic markets. Doing no less will threaten American energy workers and consumers.

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