Texas oil producers fight steel tariffs, import quotas


Texas oil and gas companies are pushing back against President Donald Trump’s pending steel tariffs, arguing they would cause job losses and the bankruptcies of some businesses.

The Texas Alliance of Energy Producers, which represents 2,600 smaller oil and gas companies, submitted its comments to the U.S. Commerce Department, asking for the elimination of import quotas and exemptions for countries that provide a lot of steel piping to the energy sector.  

Those requested exemptions include the European Union, Canada, Mexico, South Korea, Argentina, Brazil and Japan. However, China is not part of that request. Trump this week said he’s putting the steel tariffs on hold as trade negotiations with China continue.

If more sweeping steel tariffs are imposed, the Texas Alliance of Energy Producers said it is greatly concerned about the inevitable cost spikes and steel shortages. Steel can account for up to 20 percent of a producer’s bottom line because so much piping goes into each well to extract the oil and gas.

“Costs have already risen significantly and will likely continue to do so,” wrote John Tintera, the alliance president.

South Korea already has agreed to limit its steel exports through quotas in order to avoid greater tariffs. That could prove even more harmful, according to the alliance. The quotas would trigger shortages when there’s simply not enough domestic manufacturing to supply all the steel piping that goes into oil and gas wells.

“The imposition of quotas will very likely raise the cost of oilfield steel products to American domestic producers to a much greater extent than tariffs,” Tintera added.

The Texas alliance notes that independent producers combine to drill about 90 percent of American oil and gas wells, produce 54 percent of the oil and 85 percent of the natural gas.


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