Trump Administration Denies Pipeline Company Tariff Exemption

[ABX]

Seems there has been an approach to address this, what with the recent lessening of unions' power in the courts and the election of a President who does not prop them up.

Which will get you to 1981 levels. The you have to update all the plants and processes (huge capital investment in an area that has low margins), implement the new processes, find buyers at competitive price points that covers these capital investments, and deliver. In the mean time, we have oil companies who need pipe now who can't wait a decade hoping this will happen.

The alternative, get the government out of it and let these businesses source the products and materials in the best, most cost effective fashion they can, be that from Kentucky, Canada, or Greece.

Protecting American industry should not be about government interventionism but just the opposite, protecting the freedom of these businesses to operate in the fashion they need in the markets they are in. If you want to protect American workers, stop this tariff and central planning nonsense.

[Bigun]

Which will get you to 1981 levels. The you have to update all the plants and processes (huge capital investment in an area that has low margins), implement the new processes, find buyers at competitive price points that covers these capital investments, and deliver. In the mean time, we have oil companies who need pipe now who can't wait a decade hoping this will happen.

The alternative, get the government out of it and let these businesses source the products and materials in the best, most cost effective fashion they can, be that from Kentucky, Canada, or Greece.

Protecting American industry should not be about government interventionism but just the opposite, protecting the freedom of these businesses to operate in the fashion they need in the markets they are in. If you want to protect American workers, stop this tariff and central planning nonsense.

Get our own damned house in order and all that will take care of itself! 

http://fairtax.org

[ABX]

Get our own damned house in order and all that will take care of itself! 

http://fairtax.org

Absolutely. But in the mean time, more taxation, regulation, and protectionism is not the answer.

[thackney]

You overlooked the word 'potential' here.

Where?

https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff

The Commerce Department says it denied the request because suitable product is available from domestic producers for the company's Cactus II pipeline project; Plains claimed in its application that only three steel mills in the world could produce the material it needs, and none are in the U.S.

[Smokin Joe]

Where?

https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff

The Commerce Department says it denied the request because suitable product is available from domestic producers for the company's Cactus II pipeline project; Plains claimed in its application that only three steel mills in the world could produce the material it needs, and none are in the U.S.

Consider the government regulates flaring, regulates gas emissions, regulates rail transport of natural gas, NGLs, and other VOCs, and can put a tariff on the grade/type of tubulars needed to make a pipeline, I reckon the monopoly here is in the cards held by the government, whose members will promptly point fingers at the industry over any price increases which result from government policy and actions.
The oil company pays the tariff and passes that cost on, OR reduces production and the upstream end slips into the doldrums as the price of oil goes up. 

One thing about the oil industry, you need what you need, when you need it. Less just isn't less, it;s nothing if it won't do the job.

[Fishrrman]

I don't have any problems with the steel tariffs. None at all.

So there aren't any steel producers that can make this specialized pipe?
Why the heck not?

Well... because in years past the LACK OF tariffs enabled foreign producers (perhaps subsidized by their governments) to undercut American prices and whatever market we might have had either disappeared or never got started to begin with.

Don't tell me that U.S. Steel producers can't make this stuff because they don't have the ability or capacity. That's b.s.

The technology exists.
Apply it here.
Get the mills up-to-speed.
Roll that pipe.

[Bigun]

Consider the government regulates flaring, regulates gas emissions, regulates rail transport of natural gas, NGLs, and other VOCs, and can put a tariff on the grade/type of tubulars needed to make a pipeline, I reckon the monopoly here is in the cards held by the government, whose members will promptly point fingers at the industry over any price increases which result from government policy and actions.
The oil company pays the tariff and passes that cost on, OR reduces production and the upstream end slips into the doldrums as the price of oil goes up. 

One thing about the oil industry, you need what you need, when you need it. Less just isn't less, it;s nothing if it won't do the job.

I once worked on an island that had lots of proof of that statement in any direction you looked all made from production tubing that had mostly been fished out of the 31 wells offshore of that Island because it couldn't handle the hostile environment of those wells.

That cheap tubing ultimately cost the consortium that owned those wells many times what they would have spent buying the correct tubing to begin with.

[roamer_1]

Don't tell me that U.S. Steel producers can't make this stuff because they don't have the ability or capacity. That's b.s.

The technology exists.
Apply it here.
Get the mills up-to-speed.
Roll that pipe.

@Fishrrman
I can't speak to steel, but I can speak to Forest Products, and what you said is pretty damn wrong...

American Lumber is *GONE* in the Rockies. There used to be 10 mills in my region - five huge ones, and hundreds of jippo mills.... Now there is only the plywood mill.

Even with tariff protections in place, the investment to put all that back - not just the mills, but the labor, the truckers, the cats/skidders/loaders and operators, hundreds of miles of gravel roads long unkept... And all the equipment to do that...

Not only do the money-pockets need long term guarantees (which are not there), but physically getting all that stuff back in place would take five years just to get to a workable disorder... It would take a couple decades to get the northern forests back to trim operations and real profit potential.

And lumber tech is a whole lot easier to do than steel, I bet.

[Fishrrman]

roamer wrote:
"Not only do the money-pockets need long term guarantees (which are not there), but physically getting all that stuff back in place would take five years just to get to a workable disorder... It would take a couple decades to get the northern forests back to trim operations and real profit potential."

Your argument as to why it can't be done calls to mind similar arguments made by the democrat-communists in recent years that it wasn't worth opening new oil fields because it would take "five years" just to get them going...

So... it TAKES five years.
And then things are up-and-running again.
Do you expect to get such things accomplished in a week, a month, even six of 'em?

[roamer_1]

Your argument as to why it can't be done calls to mind similar arguments made by the democrat-communists in recent years that it wasn't worth opening new oil fields because it would take "five years" just to get them going...

So... it TAKES five years.
And then things are up-and-running again.
Do you expect to get such things accomplished in a week, a month, even six of 'em?

@Fishrrman
I ain't saying that... I am saying that without a long term commitment from the feds, NONE of it will happen.
Nobody is going to invest (to the tune of billions) just to have the gates back up and the land sales dry up with the next administration. You'd have to be an idiot to make that bet on 4 or even 8 years. Without it, Tump's tariffs are a waste of time.

The same thing goes with steel mills. who the heck is going to build a state-of-the-art steel mill, to include all the rail and supply side of it, just to have it regulated out of existence in less than a decade?

And, it does nothing at all to effect the short term anyway... The short term is what pipe layers need.

[Smokin Joe]

roamer wrote:
"Not only do the money-pockets need long term guarantees (which are not there), but physically getting all that stuff back in place would take five years just to get to a workable disorder... It would take a couple decades to get the northern forests back to trim operations and real profit potential."

Your argument as to why it can't be done calls to mind similar arguments made by the democrat-communists in recent years that it wasn't worth opening new oil fields because it would take "five years" just to get them going...

So... it TAKES five years.
And then things are up-and-running again.
Do you expect to get such things accomplished in a week, a month, even six of 'em?

In the mean time just tell all those oilfield hands to go home and come back in five years?

That dog won't hunt.

 If the mills want to compete, let them gear up and I'm sure the oil/pipeline companies would be more than happy to buy pipe up to spec in the US as soon as the mills can produce it. In the meantime, though, the need is there now. Or we can shut in wells and go back to $5 gas.

As we saw with the Obama Administration, the ability to complete a pipeline is a perishable commodity any more.

[Smokin Joe]

Just interlinking related topics.
Permian region natural gas prices fall as production continues to grow
http://www.gopbriefingroom.com/index.php/topic,324986.new.html#new

Bakken oil suffered from a $30/bbl 'discount' because of transportation problems, even as drilling costs skyrocketed.
Considering it is similar to WTI, the spread was huge. Increased takeaway capacity since then has all but eliminated that spread.

[thackney]

Consider the government regulates flaring, regulates gas emissions, regulates rail transport of natural gas, NGLs, and other VOCs, and can put a tariff on the grade/type of tubulars needed to make a pipeline, I reckon the monopoly here is in the cards held by the government, whose members will promptly point fingers at the industry over any price increases which result from government policy and actions.
The oil company pays the tariff and passes that cost on, OR reduces production and the upstream end slips into the doldrums as the price of oil goes up. 

One thing about the oil industry, you need what you need, when you need it. Less just isn't less, it;s nothing if it won't do the job.

In this one specific case, the terms are even worse.  The pipeline company already had the contracts to buy the steel.  Already went through contracts to move the oil; prices set, papers signed.  Now, before it can be constructed, prices of the steel jumps 25%.

[ABX]

There are two companies on the US that could potentially scale up for pipe production. Welspun and Tenaris. The problem, Welspun is Indian owned and Tenaris is owned by a Luxembourg parent company. Both companies would be subject to tariffs to bring in machining into the US to scale up US manufacturing for pipeline. They would face issues BMW is having, even though they assemble here, they get parts and supplies from Europe making it not financially viable to bring in those parts. They are hurting US employees by applying tariffs to EU parent companies.

[darroll]

We can't produce steel anymore with our coal burning antiquated plants. They are so old that they mix the ingredients with a measuring cup.
We have one modern plant in Oregon but they make fence posts.

[IsailedawayfromFR]

Where?

https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff

The Commerce Department says it denied the request because suitable product is available from domestic producers for the company's Cactus II pipeline project; Plains claimed in its application that only three steel mills in the world could produce the material it needs, and none are in the U.S.

As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage?  If so, that is some real condemnation on that industry
http://www.gopbriefingroom.com/index.php/topic,324866.msg1746052.html#msg1746052

[thackney]

As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage?  If so, that is some real condemnation on that industry
http://www.gopbriefingroom.com/index.php/topic,324866.msg1746052.html#msg1746052

Potential sure.  But we need more steel based pipelines today.  In an environment where the government is selecting winners and losers in the commercial market, I would be reluctant to invest. 

There is a reason there is only three manufactures in the world making that particular steel.  The global market for the continuous production of it is not big enough to create demand for a couple dozen.

Invest those dollars for a specialized pipe producing company.  And easily after the next election, you have no market to sell to for 4 or 8 years.  Too much possibilities of government intervention going the other way.  The public needs to stand up and not accept this type of selective manipulation in markets, regardless of which party does it.

If tariffs are good, then apply equal tariffs to all goods.  Not selectively punishing specific industries while benefiting others.

[IsailedawayfromFR]

Potential sure.  But we need more steel based pipelines today.  In an environment where the government is selecting winners and losers in the commercial market, I would be reluctant to invest. 

There is a reason there is only three manufactures in the world making that particular steel.  The global market for the continuous production of it is not big enough to create demand for a couple dozen.

Invest those dollars for a specialized pipe producing company.  And easily after the next election, you have no market to sell to for 4 or 8 years.  Too much possibilities of government intervention going the other way.  The public needs to stand up and not accept this type of selective manipulation in markets, regardless of which party does it.

If tariffs are good, then apply equal tariffs to all goods.  Not selectively punishing specific industries while benefiting others.

I will always support selective tariffs on goods that are being dumped into this country by unfair subsidizing, particularly if it is those industries which we require for strategic defense of this country.  Example of an industry that do not need subsidy for defense is the sugar industry.

That is a generalization, of course and does not mean I support either union demands for hiking up wages unrealistically nor for tariffs whose express purpose if to solely strengthen domestic industries for profit.

[Smokin Joe]

I will always support selective tariffs on goods that are being dumped into this country by unfair subsidizing, particularly if it is those industries which we require for strategic defense of this country.  Example of an industry that do not need subsidy for defense is the sugar industry.

That is a generalization, of course and does not mean I support either union demands for hiking up wages unrealistically nor for tariffs whose express purpose if to solely strengthen domestic industries for profit.

Lest we forget, the tariff is a revenue generation device for government. Protection of specific industrial capabilities is a spinoff, and even an excuse, but in the end the money is a tax, and once funded the Federal Government.