The industry weighs in on import tariffs
President Donald Trump’s plan to impose tariffs on steel and aluminum imports drew swift reaction from the nation’s natural gas industry, whose leaders warned it could adversely affect supply, trade and, ultimately, operations.
“There is no doubt that a tariff on steel will increase the cost of certain pipelines and components. Our industry has identified a number of specific challenges with obtaining some pipeline materials and equipment that are American-made,” said American Gas Association President Dave McCurdy.
While the administration contends that steel and aluminum imports have helped erode the domestic industry to the point of threatening national security, McCurdy referenced a concerted effort by America’s natural gas utilities to upgrade and modernize the U.S. pipeline network to further enhance safety.
Low-pressure pipelines can be replaced with plastic, made largely in the United States, McCurdy said. However, larger-diameter high-pressure pipelines and components that carry higher volumes of gas across longer distances are typically made of steel. Many parts of the natural gas industry rely on steel valves that are not currently made in the United States, he noted.
McCurdy pledged the support of America’s natural gas utilities to Trump’s goals of increasing American jobs and enhancing economic growth, and to working with U.S. steelmakers and pipeline manufacturers to maintain an adequate supply for the industry’s operational needs.
The initial announcement that the United States would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum was later tempered to exclude some countries such as Mexico and Canada, where the United States has trade surpluses.
In a statement in mid-March, American Petroleum Institute President and CEO Jack Gerard highlighted the importance of having “clarity and flexibility” with such exclusions. “That will allow the U.S. oil and natural gas industry to continue our significant investments in producing, transporting and refining U.S. energy resources, building world-class infrastructure and creating high-paying American jobs,” he said.
The API had criticized the initial announcement of sweeping tariffs, saying the move “doesn’t make sense for the American economy” and that such tariffs would “undoubtedly raise costs for U.S. businesses that rely heavily on steel and aluminum for the majority of their products—and ultimately consumers.”
Charlie Riedl, executive director of the Center for Liquefied Natural Gas, released a statement expressing “deep disappointment” and warning that the imposed tariffs would “place over $100 billion of investment in U.S. LNG in jeopardy, kill jobs and damage valuable trade relationships with allies.”