DENVER (AP) — President Donald Trump’s tariffs on European steel and Chinese goods pose a multi-billion-dollar threat to America’s energy industry, though a truce between the United States and Europe offers hope that trade tensions eventually will de-escalate, the head of a prominent U.S. energy trade group said Thursday.
Jack Gerard, the outgoing president and CEO of the American Petroleum Institute, said 25 percent tariffs on European steel will significantly drive up the cost of specialized imports — especially from Germany — long used by U.S. energy firms to strengthen domestic oil and gas pipelines.
“We have companies that have announced multi-billion-dollar projects in this country that have already paid for the steel or have the steel under contract. Now it’s being put on the water to come over here and — boom — the economics change by 25 percent,” Gerard said in an interview. “It sends a chilling effect throughout the industry — particularly for the big players that use a lot of steel for a lot of infrastructure.”
China has warned it may slap tariffs on growing U.S. crude oil and liquefied natural gas exports to retaliate for U.S. trade sanctions. The Trump administration imposed tariffs on $34 billion in Chinese goods in a dispute over high-tech industrial policies and has threatened to eventually target $500 billion.
Most Read Business Stories
- The Amazon that customers don’t see: Inside a key warehouse during the pandemic
- More money coming to some unemployed workers in Washington thanks to a quirk
- GE and Safran tout new 'open rotor' engine future for sustainable aviation
- Cancellations, delays continue at Southwest Airlines
- The seven industries most desperate for workers
China accounted for 20 percent of total U.S. crude exports and 15 percent of its liquefied natural gas exports in 2017, according to the U.S. Energy Information Administration.
Gerard said he hopes the trade truce reached Wednesday between Trump and European Commission President Jean-Claude Juncker is a harbinger of things to come. New trade agreements would validate Trump’s repeated promises to deliver trade pacts more favorable to U.S. workers, Gerard said.
Gerard reiterated industry support for Trump administration moves to accelerate permitting for oil and gas drilling, promote offshore drilling and eliminate environmental regulations considered excessively burdensome by the industry.
He welcomed the April opening of a large LNG terminal in Maryland and advocated for another proposed terminal in Oregon that would tap reserves in the Rocky Mountain West for export to Asia.
Significant advances in hydraulic fracturing have produced the U.S. natural gas boom — one partly driven by Colorado, the nation’s No. 5 natural gas producer and No. 7 producer of oil.
The state’s $32 billion oil and gas industry, whose natural gas output has doubled since 2001, hosted an annual roundtable in which Gerard made his last public appearance as API head before stepping down to assume a leadership position with the Mormon Church in his native Utah.
He and Tracee Bentley, executive director of the Colorado Petroleum Council, attacked a citizens’ campaign to ask Colorado voters whether to drastically limit future energy development on non-federal lands. A Boulder-based organization, Colorado Rising, is seeking enough voter signatures to place the initiative on the November ballot.
Two state analyses suggest the initiative would rule out 85 percent of non-federal land to development and drastically reduce property taxes paid by the industry. Those taxes totaled $470 million in fiscal year 2016-17.
It’s the latest attempt to harness drilling along Colorado’s metropolitan Denver area, whose rapid expansion over the past decade has led to housing and commercial development alongside once-isolated oil and gas fields. Previous efforts have failed, despite advocates’ concerns about health and drilling rigs close to schools.
“We tend to be a breeding ground” for similar efforts, Bentley said, expressing hope that Coloradans would reject such an initiative.
In agreement were panelists David Bernhardt, deputy U.S. interior secretary, and former Interior Secretary Ken Salazar, who served under President Barack Obama. Both are native Coloradans.