US group calls for tariff exemption of natgas pipeline steel

09 March 2018 18:37 Source:ICIS News

HOUSTON (ICIS)--Steel products used for constructing natural gas pipelines should be exempt from impending US tariffs because of insufficient domestic capacity and natural security considerations, industry group Interstate Natural Gas Association of America (INGAA) said on Friday.

INGAA is asking the administration to exempt those products, after US President Donald Trump signed proclamations on Thursday calling for tariffs of 25% on steel and 10% on aluminium.

Federal safety requirements and industry standards require strict steel specifications, and it is a niche product with limited domestic capacity, INGAA President and CEO Don Santa said.

About 65% of high-strength plate/coil and large-diameter line pipe imports are from North Atlantic Treaty Organization (NATO) countries, Santa said. With treaty nations such as Japan and South Korea, that import figure grows to about 80%.

Additionally, US national security depends on pipelines to deliver the energy needed to heat homes and fuel businesses, power plants and manufacturing, Santa said.

“The ability to expand pipeline infrastructure in an efficient and predictable manner is critical to the US realising the full potential of its domestic energy abundance,” Santa said. “Imports of both pipeline-quality steel, and pipe products, are necessary for timely construction of the new pipeline infrastructure needed to link natural gas producers with industrial, power generation and residential customers, and ensure our national security.”

Prior to Trump’s proclamation on Thursday, industry groups such as the American Chemistry Council (ACC) had urged the president not to impose tariffs on those metals.

With companies considering expanding petrochemical capacity, steel and aluminium tariffs would make those projects more expensive.

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By Tracy Dang