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.

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6 North American Oil & Gas Pipelines | MAY 2 018 U nless something changes in the next couple days, President Donald Trump's steel tariffs will take complete ef- fect on May 1. Proposed in March, the tariffs on imported steel and aluminum will force companies to find a domestic source of steel pipe for oil and gas projects or face hefty price increases. Citing national security in a March 1 Presidential Proclama- tion, Trump announced that a 25 percent tariff on imported steel and a 10 percent tariff for imported aluminum, regardless of the coun- try of origin, would take effect on March 23. On March 22, the presi- dent announced a modification to the tariffs, suspending them for countries like Brazil, Canada, Mexico, EU members, South Korea and others. Unless those countries managed to satisfy unspecified conditions, this brief suspension of tariffs would end May 1. There is a process in place for directly affected parties to apply for an exclusion for specific steel or aluminum products. Accord- ing to the March 22 White House statement, Secretary of Commerce Wilbur Ross, along with other ad- ministration officials, will evalu- ate exclusion requests for products, "taking into account national se- curity considerations." In that evaluation, Ross will apparently consider whether a product is produced in the Unit- ed States of a "satisfactory qual- ity or in a sufficient and reason- ably available amount." Steel pipe could very well fall under this exemption category, but so far de- tails are not clear. What is clear is that these tar- iffs could negatively impact the construction industry in general, and the oil and gas pipeline indus- try in particular. Aside from pur- chasing steel pipe, heavy equip- ment manufacturers would face serious cost increases that could be passed onto the contractors who use the machines. For instance, Caterpillar Inc. shares fell 11 percent on April 24, after gaining a bump earlier that same day, according to a Reuters article by Rajesh Kumar Singh. The article also reported that steel costs for the equipment industry were up almost 15 percent in the March quarter, and Cat would be increas- ing prices by the middle of the year to compensate. With energy production at re- cord levels in the Permian Basin and elsewhere, there's a greater need for pipeline expansions to transport oil and gas to market and to relieve longstanding bottleneck issues in West Texas and the U.S. Northeast. Not only will these projects require steel pipe, but they will need heavy equipment to install it. These tar- iffs could hamper an industry that the Trump administration has oth- erwise championed. Singing the Steel Tariff Blues PUBLISHER Bernard P. Krzys bkrzys@benjaminmedia.com EDITORIAL Editor: James W. Rush jrush@benjaminmedia.com Managing Editor: Brad Kramer bkramer@benjaminmedia.com Contributing Staff Editors: Sharon Bueno • Chris Crowell • Andrew Farr Keith Gribbins • Mike Kezdi • Pam Kleineke SALES+MARKETING Marketing Director: Kelly Dadich kdadich@benjaminmedia.com Advertising Sales Manager: Ryan Sneltzer rsneltzer@benjaminmedia.com Advertising Account Manager: Todd Miller tmiller@benjaminmedia.com Events Sales Manager: Brittany Cline bcline@benjaminmedia.com PRODUCTION+FULFILLMENT Production Manager: Chris Slogar cslogar@benjaminmedia.com Graphic Artists: Sarah Haughawout • Deb McManus • Joan Satow Director of Web/Audience Development: Mark Gorman mgorman@benjaminmedia.com Audience Development and Sustainability Coordinator: Cayla Poteete cpoteete@benjaminmedia.com REPRINTS Wright's Media Ph: (877) 652-5295 • Fax: (281) 419-5712 EDITORIAL ADVISORY BOARD Mark Bridgers Principal, Continuum Capital Matt Fleming Director, Business Development, Industrial Products, The Lincoln Electric Co. Butch Graham Senior Auctioneer, Ritchie Bros. Auctioneers Eric Kleinhenz Executive Vice President, Managing Director — Pipeline Operations, Mott MacDonald Tara Podnar McMahan Head of Section, Integrity Solutions, DNV-GL Bob Osborn Senior Vice President, Pipeline Division, Michels Corp. Neil Waugh Senior Vice President, NPL Canada Ltd. John Weaver Corporate Business Manager, John Deere Construction & Forestry Division Chris Yoxall Senior Executive Vice President, ROSEN Group Chief Executive Officer: Bernard P. Krzys bkrzys@benjaminmedia.com President: Robert Krzys robk@benjaminmedia.com Controller: Marianne Saykes msaykes@benjaminmedia.com 10050 Brecksville Rd. Brecksville, OH 44141 USA Change of Address/Subscription Updates (330) 467-7588 www.napipelines.com subscriptions@benjaminmedia.com Brad Kramer | Managing Editor bkramer@benjaminmedia.com Twitter: @NAOGP1 Editor's Message

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