Not enough U.S. steel, Trump told
Donald Trump’s allies in the oil industry are warning the president that his bid to promote U.S. steel-makers could backfire against their efforts to achieve his goal of “American energy dominance.”
The intense lobbying effort comes as the Commerce Department faces a Sunday deadline to give the president a plan to require that oil and gas pipelines use American-made steel, an idea Trump embraced in the initial days of his presidency. While the U.S. has imposed “Buy American” rules on government purchases for decades, it would be unprecedented to force those obligations on privately funded, commercial projects.
The blueprint from Commerce Secretary Wilbur Ross will set the stage for further protests from the oil industry, the U.S. Chamber of Commerce and developers, including The Williams Companies Inc. and Energy Transfer Partners.
“A core feature of the U.S. free enterprise system” is that “private businesses should be free to make purchasing decisions on their own,” the Chamber of Commerce, the biggestspending business lobby in Washington, said in its comments to Ross.
The effort illustrates how Trump’s “America-first” agenda pits his allies against one another and underscores the challenges of fulfilling the president’s protectionist stance.
Trump kicked off the pipeline-focused effort during his fourth day in office, by issuing a presidential memorandum compelling the Commerce Department to determine how to require American material in all retrofitted, repaired or expanded U.S. pipelines “to the extent permitted by law.” Under Trump’s directive, iron and steel only qualifies as American-made if it is fully produced in the United States, from its initial melting to the later application of coatings. The memo was hastily produced, not subject to lengthy administration debate or scrutiny.
Separately, the Trump administration is investigating whether foreign steel threatens U.S. national security — an inquiry that could lead to tariffs or quotas on those imports.
While pipeline developers have praised Trump’s approval of projects that stalled under President Barack Obama, including TransCanada Corp.’s Keystone XL and Energy Transfer’s Dakota Access, they warn America-made requirements could undercut that progress. More than three quarters of pipe used in oil and gas projects begins as imported steel, according to one industry study.
“Fewer new pipeline projects would run counter to the Trump administration’s goal of expanding U.S. energy production and infrastructure to support the economy, job growth and national security,” said a coalition of oil industry trade groups, including the American Petroleum Institute and the American Gas Association. Relying solely on U.S.produced pipeline-quality steel and components “could lead to long construction delays and higher costs, potentially canceling planned pipeline projects or blocking new pipeline projects.”
Bob Williams is vice president and managing director of Simmons First Investment Group. His title was incorrect in a story Tuesday about J.B. Hunt Transport Service’s quarterly earnings.